diff --git a/.changeset/fresh-numbers-yawn-1.md b/.changeset/fresh-numbers-yawn-1.md
new file mode 100644
index 00000000000..7a5cc5bfff4
--- /dev/null
+++ b/.changeset/fresh-numbers-yawn-1.md
@@ -0,0 +1,5 @@
+---
+'@itwin/itwinui-react': patch
+---
+
+`<Select multiple>` now renders the tag container outside the select-button. While this shouldn't make a noticeable difference in most cases, it might affect the use of `selectedItemRenderer`.
diff --git a/.changeset/fresh-numbers-yawn.md b/.changeset/fresh-numbers-yawn.md
new file mode 100644
index 00000000000..73ccfc5fb67
--- /dev/null
+++ b/.changeset/fresh-numbers-yawn.md
@@ -0,0 +1,29 @@
+---
+'@itwin/itwinui-css': major
+---
+
+Multi-select with now requires the tag-container to be rendered outside the select-button, and also requires an additional `data-iui-multi` attribute on the select-button.
+
+<details>
+<summary>Diff</summary>
+
+```diff
+  <div class='iui-input-with-icon'>
+    <div
+      role='combobox'
+      tabindex='0'
+      class='iui-select-button iui-field'
++     data-iui-multi
+    >
+-   <span class='iui-content'>
+-     <div class='iui-select-tag-container'>…</div>
+-   </span>
+    </div>
+    <svg class='iui-end-icon'>…</svg>
++   <span class='iui-content'>
++     <div class='iui-select-tag-container'>…</div>
++   </span>
+  </div>
+```
+
+</details>
diff --git a/apps/css-workshop/src/pages/select.astro b/apps/css-workshop/src/pages/select.astro
index 611c4a49696..7c6eb12f405 100644
--- a/apps/css-workshop/src/pages/select.astro
+++ b/apps/css-workshop/src/pages/select.astro
@@ -507,56 +507,55 @@ import Icon_ from '../components/Icon.astro';
 
   <section id='demo-multi'>
     <div class='iui-input-with-icon'>
-      <div tabindex='0' class='iui-select-button iui-field' data-iui-size='small'>
-        <span class='iui-content'>
-          <div class='iui-select-tag-container'>
-            <multi-select-tag value='Option 1' dismissible></multi-select-tag>
-            <multi-select-tag value='Option 2' dismissible></multi-select-tag>
-            <multi-select-tag value='Option 3' dismissible></multi-select-tag>
-          </div>
-        </span>
+      <div tabindex='0' class='iui-select-button iui-field' data-iui-size='small' data-iui-multi>
       </div>
       <Icon_ svg='caret-down-small' class='iui-end-icon' />
+      <span class='iui-content'>
+        <div class='iui-select-tag-container'>
+          <multi-select-tag value='Option 1' dismissible></multi-select-tag>
+          <multi-select-tag value='Option 2' dismissible></multi-select-tag>
+          <multi-select-tag value='Option 3' dismissible></multi-select-tag>
+        </div>
+      </span>
     </div>
 
     <div class='iui-input-with-icon'>
-      <div tabindex='0' class='iui-select-button iui-field'>
-        <span class='iui-content'>
-          <div class='iui-select-tag-container'>
-            <multi-select-tag value='Option 1' dismissible></multi-select-tag>
-            <multi-select-tag value='Option 2' dismissible></multi-select-tag>
-            <multi-select-tag value='Option 3' dismissible></multi-select-tag>
-          </div>
-        </span>
-      </div>
+      <div tabindex='0' class='iui-select-button iui-field' data-iui-multi></div>
       <Icon_ svg='caret-down-small' class='iui-end-icon' />
+      <span class='iui-content'>
+        <div class='iui-select-tag-container'>
+          <multi-select-tag value='Option 1' dismissible></multi-select-tag>
+          <multi-select-tag value='Option 2' dismissible></multi-select-tag>
+          <multi-select-tag value='Option 3' dismissible></multi-select-tag>
+        </div>
+      </span>
     </div>
 
     <div class='iui-input-with-icon'>
-      <div tabindex='0' class='iui-select-button iui-field' data-iui-size='large'>
-        <span class='iui-content'>
-          <div class='iui-select-tag-container'>
-            <multi-select-tag value='Option 1' dismissible></multi-select-tag>
-            <multi-select-tag value='Option 2' dismissible></multi-select-tag>
-            <multi-select-tag value='Option 3' dismissible></multi-select-tag>
-          </div>
-        </span>
+      <div tabindex='0' class='iui-select-button iui-field' data-iui-size='large' data-iui-multi>
       </div>
       <Icon_ svg='caret-down-small' class='iui-end-icon' />
+      <span class='iui-content'>
+        <div class='iui-select-tag-container'>
+          <multi-select-tag value='Option 1' dismissible></multi-select-tag>
+          <multi-select-tag value='Option 2' dismissible></multi-select-tag>
+          <multi-select-tag value='Option 3' dismissible></multi-select-tag>
+        </div>
+      </span>
     </div>
 
     <div class='iui-input-with-icon' style='width: 480px'>
-      <div tabindex='0' class='iui-select-button iui-field' data-iui-size='large'>
-        <span class='iui-content'>
-          <div class='iui-select-tag-container'>
-            <multi-select-tag value='Option 1' dismissible></multi-select-tag>
-            <multi-select-tag value='Option 2' dismissible></multi-select-tag>
-            <multi-select-tag value='Option 3' dismissible></multi-select-tag>
-            <multi-select-tag value='+5 more'></multi-select-tag>
-          </div>
-        </span>
+      <div tabindex='0' class='iui-select-button iui-field' data-iui-size='large' data-iui-multi>
       </div>
       <Icon_ svg='caret-down-small' class='iui-end-icon' />
+      <span class='iui-content'>
+        <div class='iui-select-tag-container'>
+          <multi-select-tag value='Option 1' dismissible></multi-select-tag>
+          <multi-select-tag value='Option 2' dismissible></multi-select-tag>
+          <multi-select-tag value='Option 3' dismissible></multi-select-tag>
+          <multi-select-tag value='+5 more'></multi-select-tag>
+        </div>
+      </span>
     </div>
   </section>
 </Layout>
diff --git a/packages/itwinui-css/src/select/select.scss b/packages/itwinui-css/src/select/select.scss
index 723f38060f1..d75d1cea326 100644
--- a/packages/itwinui-css/src/select/select.scss
+++ b/packages/itwinui-css/src/select/select.scss
@@ -55,6 +55,18 @@
     color: inherit;
   }
 
+  &:where([data-iui-multi]) ~ :where(.iui-content) {
+    grid-area: 1 / -1;
+    padding-inline-start: var(--iui-size-s);
+    padding-inline-end: var(--iui-component-height);
+    z-index: 1;
+    pointer-events: none; // to prevent blocking clicks on the select-button
+
+    > * {
+      pointer-events: auto; // this is mainly for custom renderer (as a fallback).
+    }
+  }
+
   &.iui-placeholder,
   &:has(option[value='']:checked) {
     color: var(--iui-color-text-placeholder);
@@ -88,6 +100,7 @@
   align-items: center;
   gap: var(--iui-size-2xs);
   overflow: hidden;
+  pointer-events: none; // to prevent blocking clicks on the select-button (nested container)
 
   > * + * {
     margin-inline-start: var(--iui-size-2xs);
@@ -105,6 +118,7 @@
   block-size: 80%;
   max-inline-size: 100%;
   max-block-size: calc(var(--iui-size-s) * 3);
+  pointer-events: auto; // parent has pointer-events: none
 }
 
 @mixin iui-select-tag-label {
diff --git a/packages/itwinui-react/src/core/Select/Select.tsx b/packages/itwinui-react/src/core/Select/Select.tsx
index 9e61f2dbf3d..db668e7d56d 100644
--- a/packages/itwinui-react/src/core/Select/Select.tsx
+++ b/packages/itwinui-react/src/core/Select/Select.tsx
@@ -456,23 +456,14 @@ const CustomSelect = React.forwardRef((props, forwardedRef) => {
             },
             triggerProps?.className,
           )}
+          data-iui-multi={multiple}
         >
           {(!selectedItems || selectedItems.length === 0) && (
             <Box as='span' className='iui-content'>
               {placeholder}
             </Box>
           )}
-          {isMultipleEnabled(selectedItems, multiple) ? (
-            <MultipleSelectButton
-              selectedItems={selectedItems}
-              selectedItemsRenderer={
-                selectedItemRenderer as (
-                  options: SelectOption<unknown>[],
-                ) => JSX.Element
-              }
-              tagRenderer={tagRenderer}
-            />
-          ) : (
+          {!isMultipleEnabled(selectedItems, multiple) ? (
             <SingleSelectButton
               selectedItem={selectedItems}
               selectedItemRenderer={
@@ -481,12 +472,21 @@ const CustomSelect = React.forwardRef((props, forwardedRef) => {
                 ) => JSX.Element
               }
             />
+          ) : (
+            <AutoclearingHiddenLiveRegion text={liveRegionSelection} />
           )}
         </SelectButton>
         <SelectEndIcon disabled={disabled} isOpen={isOpen} />
-
-        {multiple ? (
-          <AutoclearingHiddenLiveRegion text={liveRegionSelection} />
+        {isMultipleEnabled(selectedItems, multiple) ? (
+          <MultipleSelectButton
+            selectedItems={selectedItems}
+            selectedItemsRenderer={
+              selectedItemRenderer as (
+                options: SelectOption<unknown>[],
+              ) => JSX.Element
+            }
+            tagRenderer={tagRenderer}
+          />
         ) : null}
       </InputWithIcon>
 
@@ -774,12 +774,13 @@ const MultipleSelectButton = <T,>({
 
   return (
     <>
-      {selectedItems &&
-        selectedItemsRenderer &&
-        selectedItemsRenderer(selectedItems)}
-      {selectedItems && !selectedItemsRenderer && (
+      {selectedItems && (
         <Box as='span' className='iui-content'>
-          <SelectTagContainer tags={selectedItemsElements} />
+          {selectedItemsRenderer ? (
+            selectedItemsRenderer(selectedItems)
+          ) : (
+            <SelectTagContainer tags={selectedItemsElements} />
+          )}
         </Box>
       )}
     </>