diff --git a/packages/@headlessui-react/CHANGELOG.md b/packages/@headlessui-react/CHANGELOG.md
index 9086dd5168..bd9dbba6e0 100644
--- a/packages/@headlessui-react/CHANGELOG.md
+++ b/packages/@headlessui-react/CHANGELOG.md
@@ -21,6 +21,7 @@ and this project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0
 - Respect `selectedIndex` for controlled `<Tab/>` components ([#3037](https://github.com/tailwindlabs/headlessui/pull/3037))
 - Prevent unnecessary execution of the `displayValue` callback in the `ComboboxInput` component ([#3048](https://github.com/tailwindlabs/headlessui/pull/3048))
 - Expose missing `data-disabled` and `data-focus` attributes on the `TabsPanel`, `MenuButton`, `PopoverButton` and `DisclosureButton` components ([#3061](https://github.com/tailwindlabs/headlessui/pull/3061))
+- Fix cursor position when re-focusing the `ComboboxInput` component ([#3065](https://github.com/tailwindlabs/headlessui/pull/3065))
 
 ### Changed
 
diff --git a/packages/@headlessui-react/src/components/combobox/combobox.tsx b/packages/@headlessui-react/src/components/combobox/combobox.tsx
index 4e5f0073c6..061cdbe58a 100644
--- a/packages/@headlessui-react/src/components/combobox/combobox.tsx
+++ b/packages/@headlessui-react/src/components/combobox/combobox.tsx
@@ -32,6 +32,7 @@ import { useIsoMorphicEffect } from '../../hooks/use-iso-morphic-effect'
 import { useLatestValue } from '../../hooks/use-latest-value'
 import { useOutsideClick } from '../../hooks/use-outside-click'
 import { useOwnerDocument } from '../../hooks/use-owner'
+import { useRefocusableInput } from '../../hooks/use-refocusable-input'
 import { useResolveButtonType } from '../../hooks/use-resolve-button-type'
 import { useSyncRefs } from '../../hooks/use-sync-refs'
 import { useTrackedPointer } from '../../hooks/use-tracked-pointer'
@@ -1381,6 +1382,8 @@ function ButtonFn<TTag extends ElementType = typeof DEFAULT_BUTTON_TAG>(
   } = props
   let d = useDisposables()
 
+  let refocusInput = useRefocusableInput(data.inputRef)
+
   let handleKeyDown = useEvent((event: ReactKeyboardEvent<HTMLUListElement>) => {
     switch (event.key) {
       // Ref: https://www.w3.org/WAI/ARIA/apg/patterns/menu/#keyboard-interaction-12
@@ -1392,7 +1395,7 @@ function ButtonFn<TTag extends ElementType = typeof DEFAULT_BUTTON_TAG>(
           actions.openCombobox()
         }
 
-        return d.nextFrame(() => data.inputRef.current?.focus({ preventScroll: true }))
+        return d.nextFrame(() => refocusInput())
 
       case Keys.ArrowUp:
         event.preventDefault()
@@ -1405,7 +1408,7 @@ function ButtonFn<TTag extends ElementType = typeof DEFAULT_BUTTON_TAG>(
             }
           })
         }
-        return d.nextFrame(() => data.inputRef.current?.focus({ preventScroll: true }))
+        return d.nextFrame(() => refocusInput())
 
       case Keys.Escape:
         if (data.comboboxState !== ComboboxState.Open) return
@@ -1414,7 +1417,7 @@ function ButtonFn<TTag extends ElementType = typeof DEFAULT_BUTTON_TAG>(
           event.stopPropagation()
         }
         actions.closeCombobox()
-        return d.nextFrame(() => data.inputRef.current?.focus({ preventScroll: true }))
+        return d.nextFrame(() => refocusInput())
 
       default:
         return
@@ -1430,7 +1433,7 @@ function ButtonFn<TTag extends ElementType = typeof DEFAULT_BUTTON_TAG>(
       actions.openCombobox()
     }
 
-    d.nextFrame(() => data.inputRef.current?.focus({ preventScroll: true }))
+    d.nextFrame(() => refocusInput())
   })
 
   let labelledBy = useLabelledBy([id])
@@ -1629,6 +1632,8 @@ function OptionFn<
   let data = useData('Combobox.Option')
   let actions = useActions('Combobox.Option')
 
+  let refocusInput = useRefocusableInput(data.inputRef)
+
   let active = data.virtual
     ? data.activeOptionIndex === data.calculateIndex(value)
     : data.activeOptionIndex === null
@@ -1701,7 +1706,7 @@ function OptionFn<
     // But right now this is still an experimental feature:
     // https://developer.mozilla.org/en-US/docs/Web/API/Navigator/virtualKeyboard
     if (!isMobile()) {
-      requestAnimationFrame(() => data.inputRef.current?.focus({ preventScroll: true }))
+      requestAnimationFrame(() => refocusInput())
     }
 
     if (data.mode === ValueMode.Single) {
diff --git a/packages/@headlessui-react/src/hooks/use-refocusable-input.ts b/packages/@headlessui-react/src/hooks/use-refocusable-input.ts
new file mode 100644
index 0000000000..a13b2438ca
--- /dev/null
+++ b/packages/@headlessui-react/src/hooks/use-refocusable-input.ts
@@ -0,0 +1,57 @@
+import { useRef, type MutableRefObject } from 'react'
+import { useEvent } from './use-event'
+import { useEventListener } from './use-event-listener'
+
+/**
+ * The `useRefocusableInput` hook exposes a function to re-focus the input element.
+ *
+ * This hook will also keep the cursor position into account to make sure the
+ * cursor is placed at the correct position as-if we didn't loose focus at all.
+ */
+export function useRefocusableInput(ref: MutableRefObject<HTMLInputElement | null>) {
+  // Track the cursor position and the value of the input
+  let info = useRef({
+    value: '',
+    selectionStart: null as number | null,
+    selectionEnd: null as number | null,
+  })
+
+  useEventListener(ref.current, 'blur', (event) => {
+    let target = event.target
+    if (!(target instanceof HTMLInputElement)) return
+
+    info.current = {
+      value: target.value,
+      selectionStart: target.selectionStart,
+      selectionEnd: target.selectionEnd,
+    }
+  })
+
+  return useEvent(() => {
+    let input = ref.current
+    if (!(input instanceof HTMLInputElement)) return
+    if (!input.isConnected) return
+
+    // Focus the input
+    input.focus({ preventScroll: true })
+
+    // Try to restore the cursor position
+    //
+    // If the value changed since we recorded the cursor position, then we can't
+    // restore the cursor position and we'll just leave it at the end.
+    if (input.value !== info.current.value) {
+      input.setSelectionRange(input.value.length, input.value.length)
+    }
+
+    // If the value is the same, we can restore to the previous cursor position.
+    else {
+      let { selectionStart, selectionEnd } = info.current
+      if (selectionStart !== null && selectionEnd !== null) {
+        input.setSelectionRange(selectionStart, selectionEnd)
+      }
+    }
+
+    // Reset the cursor position
+    info.current = { value: '', selectionStart: null, selectionEnd: null }
+  })
+}