diff --git a/docs/pages/components/AnchoredOverlay.mdx b/docs/pages/components/AnchoredOverlay.mdx
index 13bd6cfd4..17b6af5d1 100644
--- a/docs/pages/components/AnchoredOverlay.mdx
+++ b/docs/pages/components/AnchoredOverlay.mdx
@@ -173,6 +173,16 @@ function AnchoredOverlayWithOffsetExample() {
       type: 'number',
       description: 'An optional offset number to position the anchor element from its anchored target.'
     },
+    {
+      name: 'focusTrap',
+      type: 'boolean',
+      description: 'When set, traps focus within the AnchoredOverlay.'
+    },
+    {
+      name: 'focusTrapOptions',
+      type: 'object',
+      description: 'When `focusTrap` is true, optional arguments to configure the focus trap.'
+    },
     {
       name: 'as',
       type: 'React.ElementType',
diff --git a/packages/react/src/components/AnchoredOverlay/AnchoredOverlay.test.tsx b/packages/react/src/components/AnchoredOverlay/AnchoredOverlay.test.tsx
index 4fdbd385b..53bb799b3 100644
--- a/packages/react/src/components/AnchoredOverlay/AnchoredOverlay.test.tsx
+++ b/packages/react/src/components/AnchoredOverlay/AnchoredOverlay.test.tsx
@@ -1,5 +1,5 @@
 import React from 'react';
-import { render, screen } from '@testing-library/react';
+import { render, screen, within } from '@testing-library/react';
 import userEvent from '@testing-library/user-event';
 import AnchoredOverlay from './';
 import axe from '../../axe';
@@ -123,6 +123,76 @@ test('should call onPlacementChange with initial placement', () => {
   expect(onPlacementChange).toHaveBeenCalledWith('top');
 });
 
+test('should not trap focus when focusTrap is false', async () => {
+  const targetRef = { current: document.createElement('button') };
+  const user = userEvent.setup();
+
+  render(
+    <>
+      <button>Outside Before</button>
+      <AnchoredOverlay target={targetRef} open focusTrap={false}>
+        <button>Inside</button>
+      </AnchoredOverlay>
+      <button>Outside After</button>
+    </>
+  );
+
+  const buttons = screen.getAllByRole('button');
+
+  buttons[0].focus();
+  expect(buttons[0]).toHaveFocus();
+  await user.tab();
+  expect(buttons[1]).toHaveFocus();
+  await user.tab();
+  expect(buttons[2]).toHaveFocus();
+});
+
+test('should trap focus when focusTrap is true', async () => {
+  const targetRef = { current: document.createElement('button') };
+  const user = userEvent.setup();
+
+  render(
+    <>
+      <button>Outside Before</button>
+      <AnchoredOverlay target={targetRef} open focusTrap data-testid="overlay">
+        <button>First</button>
+        <button>Second</button>
+        <button>Third</button>
+      </AnchoredOverlay>
+      <button>Outside After</button>
+    </>
+  );
+
+  const buttons = within(screen.getByTestId('overlay')).getAllByRole('button');
+
+  expect(buttons[0]).toHaveFocus();
+  await user.tab();
+  expect(buttons[1]).toHaveFocus();
+  await user.tab();
+  expect(buttons[2]).toHaveFocus();
+  await user.tab();
+  expect(buttons[0]).toHaveFocus();
+});
+
+test('should restore focus when focusTrap is unmounted', async () => {
+  const targetRef = { current: document.createElement('button') };
+  const outsideButton = document.createElement('button');
+  document.body.appendChild(outsideButton);
+  outsideButton.focus();
+
+  const { unmount } = render(
+    <AnchoredOverlay target={targetRef} open focusTrap data-testid="overlay">
+      <button>Inside Button</button>
+    </AnchoredOverlay>
+  );
+
+  expect(screen.getByText('Inside Button')).toHaveFocus();
+  unmount();
+  expect(outsideButton).toHaveFocus();
+
+  document.body.removeChild(outsideButton);
+});
+
 test('should support ref prop', () => {
   const targetRef = { current: document.createElement('button') };
   const ref = React.createRef<HTMLDivElement>();
diff --git a/packages/react/src/components/AnchoredOverlay/index.tsx b/packages/react/src/components/AnchoredOverlay/index.tsx
index 74b40379d..4934bda75 100644
--- a/packages/react/src/components/AnchoredOverlay/index.tsx
+++ b/packages/react/src/components/AnchoredOverlay/index.tsx
@@ -10,6 +10,7 @@ import { type PolymorphicProps } from '../../utils/polymorphicComponent';
 import resolveElement from '../../utils/resolveElement';
 import useSharedRef from '../../utils/useSharedRef';
 import useEscapeKey from '../../utils/useEscapeKey';
+import useFocusTrap from '../../utils/useFocusTrap';
 
 type AnchoredOverlayProps<
   Overlay extends HTMLElement,
@@ -27,6 +28,10 @@ type AnchoredOverlayProps<
   onPlacementChange?: (placement: Placement) => void;
   /** An optional offset number to position the anchor element from its anchored target. */
   offset?: number;
+  /** When set, traps focus within the AnchoredOverlay. */
+  focusTrap?: boolean;
+  /** When `focusTrap` is true, optional arguments to configure the focus trap. */
+  focusTrapOptions?: Parameters<typeof useFocusTrap>[1];
   children?: React.ReactNode;
 } & PolymorphicProps<React.HTMLAttributes<Overlay>>;
 
@@ -56,6 +61,8 @@ const AnchoredOverlay = forwardRef(
       style,
       open = false,
       offset,
+      focusTrap,
+      focusTrapOptions,
       onOpenChange,
       onPlacementChange,
       ...props
@@ -99,6 +106,8 @@ const AnchoredOverlay = forwardRef(
       }
     });
 
+    useFocusTrap(ref, !focusTrap ? { disabled: true } : focusTrapOptions);
+
     useEffect(() => {
       if (typeof onPlacementChange === 'function') {
         onPlacementChange(placement);