diff --git a/CHANGELOG.md b/CHANGELOG.md
index ea3d1d6980f..60a4fec74cd 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -7,7 +7,8 @@
 - Fixed bug in `EuiPagination` showing wrong page count when `compressed` prop is true. ([#3827](https://github.com/elastic/eui/pull/3827))
 - Fixed bug in EUI's input field components where their `inputRef` couldn't be a `RefObject` ([#3822](https://github.com/elastic/eui/pull/3822))
 - Moved `react-view` and `html-format` to be `devDependencies` ([#3828](https://github.com/elastic/eui/pull/3828))
-- Fix `EuiComboBox` keyboard selection when `sortMatchesBy=startsWith` ([#3823](https://github.com/elastic/eui/pull/3823))
+- Fixed `EuiComboBox` keyboard selection when `sortMatchesBy=startsWith` ([#3823](https://github.com/elastic/eui/pull/3823))
+- Fixed `EuiCodeEditor` not exiting edit mode with `esc` when `enableLiveAutocompletion=true` ([#3833](https://github.com/elastic/eui/pull/3833))
 
 ## [`27.3.0`](https://github.com/elastic/eui/tree/v27.3.0)
 
diff --git a/src/components/code_editor/code_editor.test.tsx b/src/components/code_editor/code_editor.test.tsx
index 101475b0100..a4e3ecf4faf 100644
--- a/src/components/code_editor/code_editor.test.tsx
+++ b/src/components/code_editor/code_editor.test.tsx
@@ -112,6 +112,10 @@ describe('EuiCodeEditor', () => {
       });
 
       test('pressing escape in ace textbox will enable overlay', () => {
+        // We cannot simulate the `commands` path, but this interaction still
+        // serves as a fallback in cases where `commands` is unavailable.
+        // @ts-ignore onFocusAce is known to exist
+        component.instance().onFocusAce();
         // @ts-ignore onKeydownAce is known to exist and its params' values are unimportant
         component.instance().onKeydownAce({
           preventDefault: () => {},
diff --git a/src/components/code_editor/code_editor.tsx b/src/components/code_editor/code_editor.tsx
index 94f89c65ebc..fb6c7d50aab 100644
--- a/src/components/code_editor/code_editor.tsx
+++ b/src/components/code_editor/code_editor.tsx
@@ -114,17 +114,26 @@ export class EuiCodeEditor extends Component<
     }
   };
 
+  onEscToExit = () => {
+    this.stopEditing();
+    if (this.editorHint) {
+      this.editorHint.focus();
+    }
+  };
+
   onKeydownAce = (event: KeyboardEvent) => {
     if (event.key === keys.ESCAPE) {
-      // If the autocompletion context menu is open then we want to let ESCAPE close it but
-      // **not** exit out of editing mode.
-      if (this.aceEditor !== null && !this.aceEditor.editor.completer) {
-        event.preventDefault();
-        event.stopPropagation();
-        this.stopEditing();
-        if (this.editorHint) {
-          this.editorHint.focus();
-        }
+      event.preventDefault();
+      event.stopPropagation();
+      // Handles exiting edit mode when `isReadOnly` is set.
+      // Other 'esc' cases handled by `stopEditingOnEsc` command.
+      // Would run after `stopEditingOnEsc`.
+      if (
+        this.aceEditor !== null &&
+        !this.aceEditor.editor.completer &&
+        this.state.isEditing
+      ) {
+        this.onEscToExit();
       }
     }
   };
@@ -210,13 +219,14 @@ export class EuiCodeEditor extends Component<
     const {
       width,
       height,
-      onBlur, // eslint-disable-line no-unused-vars
+      onBlur,
       isReadOnly,
       setOptions,
       cursorStart,
       mode = DEFAULT_MODE,
       'data-test-subj': dataTestSubj = 'codeEditorContainer',
       theme = DEFAULT_THEME,
+      commands = [],
       ...rest
     } = this.props;
 
@@ -230,7 +240,7 @@ export class EuiCodeEditor extends Component<
 
     let filteredCursorStart;
 
-    const options = { ...setOptions };
+    const options: IAceEditorProps['setOptions'] = { ...setOptions };
 
     if (isReadOnly) {
       // Put the cursor at the beginning of the editor, so that it doesn't look like
@@ -312,6 +322,16 @@ export class EuiCodeEditor extends Component<
             $blockScrolling: Infinity,
           }}
           cursorStart={filteredCursorStart}
+          commands={[
+            // Handles exiting edit mode in all cases except `isReadOnly`
+            // Runs before `onKeydownAce`.
+            {
+              name: 'stopEditingOnEsc',
+              bindKey: { win: 'Esc', mac: 'Esc' },
+              exec: this.onEscToExit,
+            },
+            ...commands,
+          ]}
           {...rest}
         />
       </div>