diff --git a/packages/mui-base/src/AutocompleteUnstyled/useAutocomplete.js b/packages/mui-base/src/AutocompleteUnstyled/useAutocomplete.js
index 4ce10260898306..fbc53df429c480 100644
--- a/packages/mui-base/src/AutocompleteUnstyled/useAutocomplete.js
+++ b/packages/mui-base/src/AutocompleteUnstyled/useAutocomplete.js
@@ -309,7 +309,9 @@ export default function useAutocomplete(props) {
   }
 
   const setHighlightedIndex = useEventCallback(({ event, index, reason = 'auto' }) => {
-    highlightedIndexRef.current = index;
+    if (reason !== 'mouse') {
+      highlightedIndexRef.current = index;
+    }
 
     // does the index exist?
     if (index === -1) {
@@ -326,9 +328,8 @@ export default function useAutocomplete(props) {
       return;
     }
 
-    const prev = listboxRef.current.querySelector('[role="option"].Mui-focused');
-    if (prev) {
-      prev.classList.remove('Mui-focused');
+    const prev = listboxRef.current.querySelector('[role="option"].Mui-focusVisible');
+    if (prev && reason !== 'mouse') {
       prev.classList.remove('Mui-focusVisible');
     }
 
@@ -350,9 +351,10 @@ export default function useAutocomplete(props) {
       return;
     }
 
-    option.classList.add('Mui-focused');
-    if (reason === 'keyboard') {
+    if (reason !== 'mouse') {
       option.classList.add('Mui-focusVisible');
+    } else {
+      option.classList.add('Mui-focused');
     }
 
     // Scroll active descendant into view.
@@ -905,6 +907,10 @@ export default function useAutocomplete(props) {
     }
   };
 
+  const handleOptionMouseLeave = (event) => {
+    event.currentTarget.classList.remove('Mui-focused');
+  };
+
   const handleOptionMouseOver = (event) => {
     setHighlightedIndex({
       event,
@@ -1078,6 +1084,7 @@ export default function useAutocomplete(props) {
         tabIndex: -1,
         role: 'option',
         id: `${id}-option-${index}`,
+        onMouseLeave: handleOptionMouseLeave,
         onMouseOver: handleOptionMouseOver,
         onClick: handleOptionClick,
         onTouchStart: handleOptionTouchStart,
diff --git a/packages/mui-material/src/Autocomplete/Autocomplete.test.js b/packages/mui-material/src/Autocomplete/Autocomplete.test.js
index f9676895da5a6a..fb1cd75fe555c7 100644
--- a/packages/mui-material/src/Autocomplete/Autocomplete.test.js
+++ b/packages/mui-material/src/Autocomplete/Autocomplete.test.js
@@ -21,7 +21,7 @@ import { paperClasses } from '@mui/material/Paper';
 import { iconButtonClasses } from '@mui/material/IconButton';
 
 function checkHighlightIs(listbox, expected) {
-  const focused = listbox.querySelector(`.${classes.focused}`);
+  const focused = listbox.querySelector(`.${classes.focusVisible}`);
 
   if (expected) {
     if (focused) {
@@ -1607,6 +1607,35 @@ describe('<Autocomplete />', () => {
       fireEvent.keyDown(textbox, { key: 'Enter' });
       expect(handleChange.callCount).to.equal(1);
     });
+
+    it('should select keyboard highlighted option when enter is pressed', () => {
+      render(
+        <Autocomplete
+          autoSelect
+          openOnFocus
+          options={['one', 'two', 'three']}
+          renderInput={(params) => <TextField {...params} />}
+        />,
+      );
+
+      const textbox = screen.getByRole('combobox');
+
+      fireEvent.click(textbox);
+
+      const listItemOne = screen.getByText('one');
+      const listItemTwo = screen.getByText('two');
+
+      fireEvent.keyDown(textbox, { key: 'ArrowDown' });
+
+      fireEvent.mouseOver(listItemTwo);
+
+      expect(listItemOne).to.have.class(classes.focusVisible);
+      expect(listItemTwo).to.have.class(classes.focused);
+
+      fireEvent.keyDown(textbox, { key: 'Enter' });
+
+      expect(document.activeElement.value).to.equal('one');
+    });
   });
 
   describe('prop: autoComplete', () => {