diff --git a/packages/angular/src/components.ts b/packages/angular/src/components.ts
index e83db0ea00..14a3976d97 100644
--- a/packages/angular/src/components.ts
+++ b/packages/angular/src/components.ts
@@ -817,7 +817,7 @@ export declare interface IxDrawer extends Components.IxDrawer {
 
 
 @ProxyCmp({
-  inputs: ['anchor', 'closeBehavior', 'enableTopLayer', 'header', 'placement', 'positioningStrategy', 'show', 'suppressAutomaticPlacement', 'trigger'],
+  inputs: ['anchor', 'closeBehavior', 'container', 'enableTopLayer', 'header', 'placement', 'positioningStrategy', 'show', 'suppressAutomaticPlacement', 'trigger'],
   methods: ['updatePosition']
 })
 @Component({
@@ -825,7 +825,7 @@ export declare interface IxDrawer extends Components.IxDrawer {
   changeDetection: ChangeDetectionStrategy.OnPush,
   template: '<ng-content></ng-content>',
   // eslint-disable-next-line @angular-eslint/no-inputs-metadata-property
-  inputs: ['anchor', 'closeBehavior', 'enableTopLayer', 'header', 'placement', 'positioningStrategy', 'show', 'suppressAutomaticPlacement', 'trigger'],
+  inputs: ['anchor', 'closeBehavior', 'container', 'enableTopLayer', 'header', 'placement', 'positioningStrategy', 'show', 'suppressAutomaticPlacement', 'trigger'],
   outputs: ['showChanged'],
   standalone: false
 })
diff --git a/packages/angular/standalone/src/components.ts b/packages/angular/standalone/src/components.ts
index e49ac03d8f..f8881f4b77 100644
--- a/packages/angular/standalone/src/components.ts
+++ b/packages/angular/standalone/src/components.ts
@@ -918,7 +918,7 @@ export declare interface IxDrawer extends Components.IxDrawer {
 
 @ProxyCmp({
   defineCustomElementFn: defineIxDropdown,
-  inputs: ['anchor', 'closeBehavior', 'enableTopLayer', 'header', 'placement', 'positioningStrategy', 'show', 'suppressAutomaticPlacement', 'trigger'],
+  inputs: ['anchor', 'closeBehavior', 'container', 'enableTopLayer', 'header', 'placement', 'positioningStrategy', 'show', 'suppressAutomaticPlacement', 'trigger'],
   methods: ['updatePosition']
 })
 @Component({
@@ -926,7 +926,7 @@ export declare interface IxDrawer extends Components.IxDrawer {
   changeDetection: ChangeDetectionStrategy.OnPush,
   template: '<ng-content></ng-content>',
   // eslint-disable-next-line @angular-eslint/no-inputs-metadata-property
-  inputs: ['anchor', 'closeBehavior', 'enableTopLayer', 'header', 'placement', 'positioningStrategy', 'show', 'suppressAutomaticPlacement', 'trigger'],
+  inputs: ['anchor', 'closeBehavior', 'container', 'enableTopLayer', 'header', 'placement', 'positioningStrategy', 'show', 'suppressAutomaticPlacement', 'trigger'],
   outputs: ['showChanged'],
 })
 export class IxDropdown {
diff --git a/packages/core/src/components.d.ts b/packages/core/src/components.d.ts
index 93367cd85f..65678cda2b 100644
--- a/packages/core/src/components.d.ts
+++ b/packages/core/src/components.d.ts
@@ -1342,6 +1342,11 @@ export namespace Components {
           * @default 'both'
          */
         "closeBehavior": CloseBehavior;
+        /**
+          * Define a container element to constrain dropdown within.
+          * @since 4.3.0
+         */
+        "container"?: ElementReference;
         /**
           * @default false
          */
@@ -7313,6 +7318,11 @@ declare namespace LocalJSX {
           * @default 'both'
          */
         "closeBehavior"?: CloseBehavior;
+        /**
+          * Define a container element to constrain dropdown within.
+          * @since 4.3.0
+         */
+        "container"?: ElementReference;
         /**
           * @default false
          */
diff --git a/packages/core/src/components/dropdown/dropdown-controller.ts b/packages/core/src/components/dropdown/dropdown-controller.ts
index 9372d0c722..5145f4e1b3 100644
--- a/packages/core/src/components/dropdown/dropdown-controller.ts
+++ b/packages/core/src/components/dropdown/dropdown-controller.ts
@@ -95,7 +95,10 @@ class DropdownController {
   }
 
   present(dropdown: DropdownInterface) {
-    if (!dropdown.isPresent() && dropdown.willPresent?.()) {
+    if (
+      !dropdown.isPresent() &&
+      (!dropdown.willPresent || dropdown.willPresent())
+    ) {
       this.submenuIds[dropdown.getId()] = dropdown.getAssignedSubmenuIds();
       dropdown.present();
     }
@@ -112,7 +115,10 @@ class DropdownController {
   }
 
   dismiss(dropdown: DropdownInterface) {
-    if (dropdown.isPresent() && dropdown.willDismiss?.()) {
+    if (
+      dropdown.isPresent() &&
+      (!dropdown.willDismiss || dropdown.willDismiss())
+    ) {
       this.dismissChildren(dropdown.getId());
       dropdown.dismiss();
       delete this.submenuIds[dropdown.getId()];
diff --git a/packages/core/src/components/dropdown/dropdown.scss b/packages/core/src/components/dropdown/dropdown.scss
index ac92019acb..d67def6e48 100644
--- a/packages/core/src/components/dropdown/dropdown.scss
+++ b/packages/core/src/components/dropdown/dropdown.scss
@@ -38,6 +38,7 @@ $dropdown-offset: 3rem;
 :host(.overflow) {
   max-height: calc(50vh - $dropdown-offset);
   overflow-y: auto;
+  overscroll-behavior: contain;
 }
 
 :host(:not(.show)) {
@@ -58,12 +59,9 @@ $dropdown-offset: 3rem;
   box-shadow: var(--theme-shadow-4);
   overflow-x: visible;
   overflow-y: visible;
-
   inset: unset;
-
   color-scheme: inherit;
   color: var(--theme-color-std-text);
-
   box-sizing: border-box;
 
   *,
diff --git a/packages/core/src/components/dropdown/dropdown.tsx b/packages/core/src/components/dropdown/dropdown.tsx
index 552a374284..9a3c2c8c15 100644
--- a/packages/core/src/components/dropdown/dropdown.tsx
+++ b/packages/core/src/components/dropdown/dropdown.tsx
@@ -15,6 +15,7 @@ import {
   inline,
   offset,
   shift,
+  limitShift,
 } from '@floating-ui/dom';
 import {
   Component,
@@ -130,6 +131,12 @@ export class Dropdown implements ComponentInterface, DropdownInterface {
   /** @internal */
   @Prop() suppressOverflowBehavior = false;
 
+  /**
+   * Define a container element to constrain dropdown within.
+   * @since 4.3.0
+   */
+  @Prop() container?: ElementReference;
+
   /**
    * Enable Popover API rendering for top-layer positioning.
    *
@@ -206,6 +213,7 @@ export class Dropdown implements ComponentInterface, DropdownInterface {
       this.autoUpdateCleanup();
       this.autoUpdateCleanup = undefined;
     }
+    this.removeVisibilityListeners();
   }
 
   getAssignedSubmenuIds() {
@@ -363,6 +371,30 @@ export class Dropdown implements ComponentInterface, DropdownInterface {
     }
   }
 
+  private autoCloseTimeout?: ReturnType<typeof setTimeout>;
+  private containerElement?: HTMLElement | null;
+
+  private visibilityHandler?: () => void;
+  private scrollableParent?: HTMLElement;
+
+  private findScrollableParent(
+    element: HTMLElement | null
+  ): HTMLElement | null {
+    let el = element;
+    while (el) {
+      const style = globalThis.getComputedStyle(el);
+      const overflowY = style.overflowY;
+      if (
+        (overflowY === 'auto' || overflowY === 'scroll') &&
+        el.scrollHeight > el.clientHeight
+      ) {
+        return el;
+      }
+      el = el.parentElement;
+    }
+    return null;
+  }
+
   @Watch('show')
   async changedShow(newShow: boolean) {
     if (!newShow) {
@@ -371,8 +403,39 @@ export class Dropdown implements ComponentInterface, DropdownInterface {
       if (this.enableTopLayer) {
         await this.hideDropdownAsync();
       }
+      this.clearAutoCloseTimeout();
+      this.removeVisibilityListeners();
       return;
     }
+    if (!this.enableTopLayer) {
+      await this.resolveContainerElement();
+      this.removeVisibilityListeners();
+      this.scrollableParent =
+        this.findScrollableParent(this.hostElement.parentElement) || undefined;
+
+      this.visibilityHandler = () => {
+        if (this.isDropdownFullyNotVisible()) {
+          this.dismiss();
+        }
+      };
+
+      window.addEventListener('scroll', this.visibilityHandler, true);
+      window.addEventListener('resize', this.visibilityHandler, true);
+      if (this.scrollableParent) {
+        this.scrollableParent.addEventListener(
+          'scroll',
+          this.visibilityHandler,
+          true
+        );
+      }
+
+      this.clearAutoCloseTimeout();
+      this.autoCloseTimeout = setTimeout(() => {
+        if (this.isDropdownFullyNotVisible()) {
+          this.dismiss();
+        }
+      }, 300);
+    }
 
     this.arrowFocusController = new ArrowFocusController(
       this.dropdownItems,
@@ -399,11 +462,59 @@ export class Dropdown implements ComponentInterface, DropdownInterface {
     }
   }
 
+  private removeVisibilityListeners() {
+    if (this.visibilityHandler) {
+      window.removeEventListener('scroll', this.visibilityHandler, true);
+      window.removeEventListener('resize', this.visibilityHandler, true);
+      if (this.scrollableParent) {
+        this.scrollableParent.removeEventListener(
+          'scroll',
+          this.visibilityHandler,
+          true
+        );
+        this.scrollableParent = undefined;
+      }
+      this.visibilityHandler = undefined;
+    }
+  }
+
+  private isDropdownFullyNotVisible(): boolean {
+    const rect = this.hostElement.getBoundingClientRect();
+    const vw = window.innerWidth || document.documentElement.clientWidth;
+    const vh = window.innerHeight || document.documentElement.clientHeight;
+    return (
+      rect.bottom <= 0 || rect.top >= vh || rect.right <= 0 || rect.left >= vw
+    );
+  }
+
+  private clearAutoCloseTimeout() {
+    if (this.autoCloseTimeout) {
+      clearTimeout(this.autoCloseTimeout);
+      this.autoCloseTimeout = undefined;
+    }
+  }
+
   @Watch('trigger')
   changedTrigger(newTriggerValue: ElementReference) {
     this.registerListener(newTriggerValue);
   }
 
+  @Watch('container')
+  async changedContainer() {
+    await this.resolveContainerElement();
+    await this.applyDropdownPosition();
+  }
+
+  private async resolveContainerElement() {
+    if (this.container) {
+      this.containerElement = (await findElement(
+        this.container
+      )) as HTMLElement;
+    } else {
+      this.containerElement = null;
+    }
+  }
+
   private destroyAutoUpdate() {
     if (this.autoUpdateCleanup) {
       this.autoUpdateCleanup();
@@ -477,8 +588,9 @@ export class Dropdown implements ComponentInterface, DropdownInterface {
     const referenceElement = this.anchorElement;
     const isSubmenu = this.isAnchorSubmenu();
 
+    const useAbsolute = !!this.containerElement;
+
     let targetElement: HTMLElement = this.hostElement;
-    let strategy: 'fixed' | 'absolute' = this.positioningStrategy;
 
     if (this.enableTopLayer) {
       const dialog = await this.dialogRef.waitForCurrent();
@@ -486,11 +598,10 @@ export class Dropdown implements ComponentInterface, DropdownInterface {
         return;
       }
       targetElement = dialog;
-      strategy = 'fixed';
     }
 
     let positionConfig: Partial<ComputePositionConfig> = {
-      strategy,
+      strategy: useAbsolute ? 'absolute' : this.positioningStrategy,
       middleware: [],
     };
 
@@ -505,7 +616,9 @@ export class Dropdown implements ComponentInterface, DropdownInterface {
     positionConfig.middleware = [
       ...(positionConfig.middleware?.filter(Boolean) || []),
       inline(),
-      shift(),
+      shift({
+        limiter: this.containerElement ? limitShift() : undefined,
+      }),
     ];
 
     if (this.offset) {
@@ -523,13 +636,36 @@ export class Dropdown implements ComponentInterface, DropdownInterface {
           targetElement,
           positionConfig
         );
-        Object.assign(targetElement.style, {
-          top: '0',
-          left: '0',
-          transform: `translate(${Math.round(computeResponse.x)}px,${Math.round(
-            computeResponse.y
-          )}px)`,
-        });
+        let x = Math.round(computeResponse.x);
+        let y = Math.round(computeResponse.y);
+
+        if (useAbsolute && this.containerElement) {
+          if (
+            this.hostElement.parentElement !== this.containerElement &&
+            this.hostElement.isConnected &&
+            this.containerElement.isConnected
+          ) {
+            this.containerElement.appendChild(this.hostElement);
+          }
+          Object.assign(this.hostElement.style, {
+            position: 'absolute',
+            top: `${y}px`,
+            left: `${x}px`,
+            transform: '',
+            zIndex: `var(--theme-z-index-dropdown)`,
+            pointerEvents: 'auto',
+          });
+        } else {
+          Object.assign(targetElement.style, {
+            top: '0',
+            left: '0',
+            transform: `translate(${Math.round(computeResponse.x)}px,${Math.round(
+              computeResponse.y
+            )}px)`,
+            position: this.positioningStrategy,
+            zIndex: `var(--theme-z-index-dropdown)`,
+          });
+        }
 
         if (this.overwriteDropdownStyle) {
           const overwriteStyle = await this.overwriteDropdownStyle({
@@ -569,11 +705,13 @@ export class Dropdown implements ComponentInterface, DropdownInterface {
     }
 
     this.changedTrigger(this.trigger);
+    await this.resolveContainerElement();
   }
 
   async componentDidRender() {
     await this.applyDropdownPosition();
     await this.resolveAnchorElement();
+    await this.resolveContainerElement();
   }
 
   private isTriggerElement(element: HTMLElement) {
diff --git a/packages/core/src/components/dropdown/test/dropdown.ct.ts b/packages/core/src/components/dropdown/test/dropdown.ct.ts
index 96ed4ecf7d..94a1ff2b56 100644
--- a/packages/core/src/components/dropdown/test/dropdown.ct.ts
+++ b/packages/core/src/components/dropdown/test/dropdown.ct.ts
@@ -884,3 +884,24 @@ regressionTest(
     await expect(dynamicItem).not.toHaveAttribute('disabled');
   }
 );
+
+regressionTest(
+  'auto-close when dropdown is fully not visible',
+  async ({ mount, page }) => {
+    await mount(`
+    <ix-button id="trigger">Open</ix-button>
+    <ix-dropdown id="dropdown" trigger="trigger">
+      <ix-dropdown-item label="Item 1"></ix-dropdown-item>
+    </ix-dropdown>
+  `);
+    const trigger = page.locator('#trigger');
+    const dropdown = page.locator('#dropdown');
+    await trigger.click();
+    await expect(dropdown).toBeVisible();
+    await dropdown.evaluate((el: HTMLElement) => {
+      el.style.transform = 'translate(-10000px, -10000px)';
+    });
+    await page.waitForTimeout(350);
+    await expect(dropdown).not.toBeVisible();
+  }
+);
diff --git a/packages/react/src/components.server.ts b/packages/react/src/components.server.ts
index 657d47a8ae..7e52222b46 100644
--- a/packages/react/src/components.server.ts
+++ b/packages/react/src/components.server.ts
@@ -690,6 +690,7 @@ export const IxDropdown: StencilReactComponent<IxDropdownElement, IxDropdownEven
         discoverAllSubmenus: 'discover-all-submenus',
         ignoreRelatedSubmenu: 'ignore-related-submenu',
         suppressOverflowBehavior: 'suppress-overflow-behavior',
+        container: 'container',
         enableTopLayer: 'enable-top-layer'
     },
     hydrateModule: import('@siemens/ix/hydrate') as Promise<HydrateModule>,
diff --git a/packages/vue/src/components.ts b/packages/vue/src/components.ts
index ed464e3c96..35274d6c3b 100644
--- a/packages/vue/src/components.ts
+++ b/packages/vue/src/components.ts
@@ -536,6 +536,7 @@ export const IxDropdown: StencilVueComponent<JSX.IxDropdown> = /*@__PURE__*/ def
   'discoverAllSubmenus',
   'ignoreRelatedSubmenu',
   'suppressOverflowBehavior',
+  'container',
   'enableTopLayer',
   'showChanged'
 ], [