diff --git a/packages/esm-patient-registration-app/src/patient-registration/field/id/id-field.component.tsx b/packages/esm-patient-registration-app/src/patient-registration/field/id/id-field.component.tsx
index cfd27ba5e..9fb88e79e 100644
--- a/packages/esm-patient-registration-app/src/patient-registration/field/id/id-field.component.tsx
+++ b/packages/esm-patient-registration-app/src/patient-registration/field/id/id-field.component.tsx
@@ -25,14 +25,16 @@ export function setIdentifierSource(
   selectedSource: IdentifierSource;
 } {
   const autoGeneration = identifierSource?.autoGenerationOption?.automaticGenerationEnabled;
+  const manualEntryEnabled = identifierSource?.autoGenerationOption?.manualEntryEnabled;
   return {
     selectedSource: identifierSource,
     autoGeneration,
-    identifierValue: autoGeneration
-      ? 'auto-generated'
-      : identifierValue !== 'auto-generated'
-        ? identifierValue
-        : initialValue,
+    identifierValue:
+      autoGeneration && !manualEntryEnabled
+        ? 'auto-generated'
+        : identifierValue !== 'auto-generated'
+          ? identifierValue
+          : initialValue,
   };
 }
 
diff --git a/packages/esm-patient-registration-app/src/patient-registration/field/id/id-field.test.tsx b/packages/esm-patient-registration-app/src/patient-registration/field/id/id-field.test.tsx
index 0b9e2ab20..49f28bc4b 100644
--- a/packages/esm-patient-registration-app/src/patient-registration/field/id/id-field.test.tsx
+++ b/packages/esm-patient-registration-app/src/patient-registration/field/id/id-field.test.tsx
@@ -1,13 +1,14 @@
-import React from 'react';
-import userEvent from '@testing-library/user-event';
+import { getDefaultsFromConfigSchema, useConfig } from '@openmrs/esm-framework';
 import { render, screen } from '@testing-library/react';
+import userEvent from '@testing-library/user-event';
 import { Form, Formik } from 'formik';
-import { getDefaultsFromConfigSchema, useConfig } from '@openmrs/esm-framework';
-import { Identifiers } from './id-field.component';
-import { mockOpenmrsId, mockIdentifierTypes, mockPatient, mockSession } from '__mocks__';
-import { type RegistrationConfig, esmPatientRegistrationSchema } from '../../../config-schema';
-import { type Resources, ResourcesContext } from '../../../offline.resources';
+import React from 'react';
+import { mockIdentifierTypes, mockOpenmrsId, mockPatient, mockSession } from '__mocks__';
+import { esmPatientRegistrationSchema, type RegistrationConfig } from '../../../config-schema';
+import { ResourcesContext, type Resources } from '../../../offline.resources';
 import { PatientRegistrationContext, type PatientRegistrationContextProps } from '../../patient-registration-context';
+import { type IdentifierSource } from '../../patient-registration.types';
+import { Identifiers, setIdentifierSource } from './id-field.component';
 
 const mockUseConfig = jest.mocked(useConfig<RegistrationConfig>);
 
@@ -120,3 +121,21 @@ describe('Identifiers', () => {
     expect(screen.getByRole('button', { name: 'Close overlay' })).toBeInTheDocument();
   });
 });
+
+describe('setIdentifierSource', () => {
+  describe('auto-generation', () => {
+    it('should return auto-generated as the identifier value', () => {
+      const identifierSource = { autoGenerationOption: { automaticGenerationEnabled: true } } as IdentifierSource;
+      const { identifierValue } = setIdentifierSource(identifierSource, '', '');
+      expect(identifierValue).toBe('auto-generated');
+    });
+
+    it('should return the identifier value when manual entry enabled', () => {
+      const identifierSource = {
+        autoGenerationOption: { automaticGenerationEnabled: true, manualEntryEnabled: true },
+      } as IdentifierSource;
+      const { identifierValue } = setIdentifierSource(identifierSource, '10001V', '');
+      expect(identifierValue).toBe('10001V');
+    });
+  });
+});
diff --git a/packages/esm-patient-registration-app/src/patient-registration/form-manager.test.ts b/packages/esm-patient-registration-app/src/patient-registration/form-manager.test.ts
index ae625319e..e2e6eea63 100644
--- a/packages/esm-patient-registration-app/src/patient-registration/form-manager.test.ts
+++ b/packages/esm-patient-registration-app/src/patient-registration/form-manager.test.ts
@@ -1,8 +1,11 @@
 import { FormManager } from './form-manager';
 import { type FormValues } from './patient-registration.types';
+import { generateIdentifier } from './patient-registration.resource';
 
 jest.mock('./patient-registration.resource');
 
+const mockGenerateIdentifier = generateIdentifier as jest.Mock;
+
 const formValues: FormValues = {
   patientUuid: '',
   givenName: '',
@@ -66,5 +69,19 @@ describe('FormManager', () => {
         },
       ]);
     });
+    it('should generate identifier if it has autoGeneration and manual entry disabled', async () => {
+      formValues.identifiers.foo.autoGeneration = true;
+      formValues.identifiers.foo.selectedSource.autoGenerationOption.manualEntryEnabled = false;
+      mockGenerateIdentifier.mockResolvedValue({ data: { identifier: '10001V' } });
+      await FormManager.savePatientIdentifiers(true, undefined, formValues.identifiers, {}, 'Nyc');
+      expect(mockGenerateIdentifier.mock.calls).toHaveLength(1);
+    });
+
+    it('should not generate identifiers if manual entry enabled and identifier value given', async () => {
+      formValues.identifiers.foo.autoGeneration = true;
+      formValues.identifiers.foo.selectedSource.autoGenerationOption.manualEntryEnabled = true;
+      await FormManager.savePatientIdentifiers(true, undefined, formValues.identifiers, {}, 'Nyc');
+      expect(mockGenerateIdentifier.mock.calls).toHaveLength(0);
+    });
   });
 });
diff --git a/packages/esm-patient-registration-app/src/patient-registration/form-manager.ts b/packages/esm-patient-registration-app/src/patient-registration/form-manager.ts
index b682d038f..d1b9c9c05 100644
--- a/packages/esm-patient-registration-app/src/patient-registration/form-manager.ts
+++ b/packages/esm-patient-registration-app/src/patient-registration/form-manager.ts
@@ -241,11 +241,15 @@ export class FormManager {
           initialValue,
         } = patientIdentifier;
 
-        const identifier = !autoGeneration
-          ? identifierValue
-          : await (
-              await generateIdentifier(selectedSource.uuid)
-            ).data.identifier;
+        const autoGenerationManualEntry =
+          autoGeneration && selectedSource?.autoGenerationOption?.manualEntryEnabled && !!identifierValue;
+
+        const identifier =
+          !autoGeneration || autoGenerationManualEntry
+            ? identifierValue
+            : await (
+                await generateIdentifier(selectedSource.uuid)
+              ).data.identifier;
         const identifierToCreate = {
           uuid: identifierUuid,
           identifier,
diff --git a/packages/esm-patient-registration-app/src/patient-registration/input/custom-input/identifier/identifier-input.component.tsx b/packages/esm-patient-registration-app/src/patient-registration/input/custom-input/identifier/identifier-input.component.tsx
index 3a3166ceb..3a8dd0490 100644
--- a/packages/esm-patient-registration-app/src/patient-registration/input/custom-input/identifier/identifier-input.component.tsx
+++ b/packages/esm-patient-registration-app/src/patient-registration/input/custom-input/identifier/identifier-input.component.tsx
@@ -26,7 +26,8 @@ const IdentifierInput: React.FC<IdentifierInputProps> = ({ patientIdentifier, fi
     () => identifierTypes.find((identifierType) => identifierType.uuid === patientIdentifier.identifierTypeUuid),
     [patientIdentifier, identifierTypes],
   );
-  const { autoGeneration, initialValue, identifierValue, identifierName, required } = patientIdentifier;
+  const { autoGeneration, initialValue, identifierValue, identifierName, required, selectedSource } = patientIdentifier;
+  const manualEntryEnabled = selectedSource?.autoGenerationOption?.manualEntryEnabled;
   const [hideInputField, setHideInputField] = useState(autoGeneration || initialValue === identifierValue);
   const name = `identifiers.${fieldName}.identifierValue`;
   const [identifierField, identifierFieldMeta] = useField(name);
@@ -46,8 +47,8 @@ const IdentifierInput: React.FC<IdentifierInputProps> = ({ patientIdentifier, fi
     setFieldValue(`identifiers.${fieldName}`, {
       ...patientIdentifier,
       identifierValue: initialValue,
-      selectedSource: null,
-      autoGeneration: false,
+      selectedSource,
+      autoGeneration,
     } as PatientIdentifierValue);
     // eslint-disable-next-line react-hooks/exhaustive-deps
   }, [initialValue, setHideInputField]);
@@ -57,6 +58,7 @@ const IdentifierInput: React.FC<IdentifierInputProps> = ({ patientIdentifier, fi
     setFieldValue(`identifiers.${fieldName}`, {
       ...patientIdentifier,
       ...setIdentifierSource(identifierType?.identifierSources?.[0], initialValue, initialValue),
+      ...(autoGeneration && manualEntryEnabled && { identifierValue: initialValue ?? '' }),
     });
   };
 
@@ -83,9 +85,12 @@ const IdentifierInput: React.FC<IdentifierInputProps> = ({ patientIdentifier, fi
     }
   };
 
+  const showEditButton = !required && hideInputField && (!!initialValue || manualEntryEnabled);
+  const showResetButton =
+    (!!initialValue && initialValue !== identifierValue) || (!hideInputField && manualEntryEnabled);
   return (
     <div className={styles.IDInput}>
-      {!autoGeneration && !hideInputField ? (
+      {!hideInputField ? (
         <Input
           id={name}
           labelText={identifierName}
@@ -99,8 +104,10 @@ const IdentifierInput: React.FC<IdentifierInputProps> = ({ patientIdentifier, fi
         />
       ) : (
         <div className={styles.textID}>
-          <p className={styles.label}>{identifierName}</p>
-          <p data-testid="identifier-label" className={styles.bodyShort02}>
+          <p data-testid="identifier-label" className={styles.label}>
+            {required ? identifierName : `${t('optionalIdentifierLabel', { identifierName })}`}
+          </p>
+          <p data-testid="identifier-placeholder" className={styles.bodyShort02}>
             {autoGeneration ? t('autoGeneratedPlaceholderText', 'Auto-generated') : identifierValue}
           </p>
           <input data-testid="identifier-input" type="hidden" {...identifierField} disabled />
@@ -111,9 +118,10 @@ const IdentifierInput: React.FC<IdentifierInputProps> = ({ patientIdentifier, fi
         </div>
       )}
       <div style={{ marginBottom: '1rem' }}>
-        {!patientIdentifier.required && patientIdentifier.initialValue && hideInputField && (
+        {showEditButton && (
           <UserHasAccess privilege="Edit Patient Identifiers">
             <Button
+              data-testid="edit-button"
               size="md"
               kind="ghost"
               onClick={handleEdit}
@@ -124,7 +132,7 @@ const IdentifierInput: React.FC<IdentifierInputProps> = ({ patientIdentifier, fi
             </Button>
           </UserHasAccess>
         )}
-        {initialValue && initialValue !== identifierValue && (
+        {showResetButton && (
           <UserHasAccess privilege="Edit Patient Identifiers">
             <Button
               size="md"
diff --git a/packages/esm-patient-registration-app/src/patient-registration/input/custom-input/identifier/identifier-input.test.tsx b/packages/esm-patient-registration-app/src/patient-registration/input/custom-input/identifier/identifier-input.test.tsx
index 2647c6ee3..78e1e9e68 100644
--- a/packages/esm-patient-registration-app/src/patient-registration/input/custom-input/identifier/identifier-input.test.tsx
+++ b/packages/esm-patient-registration-app/src/patient-registration/input/custom-input/identifier/identifier-input.test.tsx
@@ -2,6 +2,8 @@
 import React from 'react';
 import { render, screen } from '@testing-library/react';
 import { Form, Formik } from 'formik';
+import { getDefaultsFromConfigSchema, useConfig } from '@openmrs/esm-framework';
+import { esmPatientRegistrationSchema, type RegistrationConfig } from '../../../../config-schema';
 import { ResourcesContext, type Resources } from '../../../../offline.resources';
 import {
   PatientRegistrationContext,
@@ -11,16 +13,6 @@ import type { AddressTemplate, FormValues, PatientIdentifierValue } from '../../
 import IdentifierInput from './identifier-input.component';
 import userEvent from '@testing-library/user-event';
 
-const predefinedAddressTemplate = {
-  uuid: 'test-address-template-uuid',
-  property: 'layout.address.format',
-  description: 'Test Address Template',
-  display:
-    'Layout - Address Format = <org.openmrs.layout.address.AddressTemplate>\n     <nameMappings class="properties">\n       <property name="postalCode" value="Location.postalCode"/>\n       <property name="address2" value="Location.address2"/>\n       <property name="address1" value="Location.address1"/>\n       <property name="country" value="Location.country"/>\n       <property name="stateProvince" value="Location.stateProvince"/>\n       <property name="cityVillage" value="Location.cityVillage"/>\n     </nameMappings>\n     <sizeMappings class="properties">\n       <property name="postalCode" value="10"/>\n       <property name="address2" value="40"/>\n       <property name="address1" value="40"/>\n       <property name="country" value="10"/>\n       <property name="stateProvince" value="10"/>\n       <property name="cityVillage" value="10"/>\n     </sizeMappings>\n     <lineByLineFormat>\n       <string>address1</string>\n       <string>address2</string>\n       <string>cityVillage stateProvince country postalCode</string>\n     </lineByLineFormat>\n   </org.openmrs.layout.address.AddressTemplate>',
-  value:
-    '<org.openmrs.layout.address.AddressTemplate>\r\n     <nameMappings class="properties">\r\n       <property name="postalCode" value="Location.postalCode"/>\r\n       <property name="address2" value="Location.address2"/>\r\n       <property name="address1" value="Location.address1"/>\r\n       <property name="country" value="Location.country"/>\r\n       <property name="stateProvince" value="Location.stateProvince"/>\r\n       <property name="cityVillage" value="Location.cityVillage"/>\r\n     </nameMappings>\r\n     <sizeMappings class="properties">\r\n       <property name="postalCode" value="4"/>\r\n       <property name="address1" value="40"/>\r\n       <property name="address2" value="40"/>\r\n       <property name="country" value="10"/>\r\n       <property name="stateProvince" value="10"/>\r\n       <property name="cityVillage" value="10"/>\r\n       <asset name="cityVillage" value="10"/>\r\n     </sizeMappings>\r\n     <lineByLineFormat>\r\n       <string>address1 address2</string>\r\n       <string>cityVillage stateProvince postalCode</string>\r\n       <string>country</string>\r\n     </lineByLineFormat>\r\n     <elementDefaults class="properties">\r\n            <property name="country" value=""/>\r\n     </elementDefaults>\r\n     <elementRegex class="properties">\r\n            <property name="address1" value="[a-zA-Z]+$"/>\r\n     </elementRegex>\r\n     <elementRegexFormats class="properties">\r\n            <property name="address1" value="Countries can only be letters"/>\r\n     </elementRegexFormats>\r\n   </org.openmrs.layout.address.AddressTemplate>',
-};
-
 const mockIdentifierTypes = [
   {
     fieldName: 'openMrsId',
@@ -44,7 +36,7 @@ const mockIdentifierTypes = [
 ];
 
 const mockResourcesContextValue: Resources = {
-  addressTemplate: predefinedAddressTemplate as unknown as AddressTemplate,
+  addressTemplate: {} as AddressTemplate,
   currentSession: {
     authenticated: true,
     sessionId: 'JSESSION',
@@ -68,18 +60,23 @@ const mockContextValues: PatientRegistrationContextProps = {
   values: {} as FormValues,
 };
 
+const mockUseConfig = jest.mocked(useConfig<RegistrationConfig>);
+
 describe('identifier input', () => {
+  mockUseConfig.mockReturnValue({
+    ...getDefaultsFromConfigSchema(esmPatientRegistrationSchema),
+  });
+
   const fieldName = 'openMrsId';
   const openmrsID = {
     identifierTypeUuid: '05a29f94-c0ed-11e2-94be-8c13b969e334',
     initialValue: '',
-    identifierValue: '',
     identifierName: 'OpenMRS ID',
     selectedSource: {
       uuid: '01af8526-cea4-4175-aa90-340acb411771',
       name: 'Generator 2 for OpenMRS ID',
       autoGenerationOption: {
-        manualEntryEnabled: true,
+        manualEntryEnabled: false,
         automaticGenerationEnabled: true,
       },
     },
@@ -88,10 +85,10 @@ describe('identifier input', () => {
     required: true,
   };
 
-  const setupIdentifierInput = async (patientIdentifier: PatientIdentifierValue) => {
+  const setupIdentifierInput = (patientIdentifier: PatientIdentifierValue, initialValues = {}) => {
     render(
       <ResourcesContext.Provider value={mockResourcesContextValue}>
-        <Formik initialValues={{}} onSubmit={jest.fn()}>
+        <Formik initialValues={initialValues} onSubmit={jest.fn()}>
           <Form>
             <PatientRegistrationContext.Provider value={mockContextValues}>
               <IdentifierInput patientIdentifier={patientIdentifier} fieldName={fieldName} />
@@ -100,56 +97,102 @@ describe('identifier input', () => {
         </Formik>
       </ResourcesContext.Provider>,
     );
-
-    let identifierLabel: HTMLParagraphElement;
-    let identifierInput: HTMLInputElement;
-    if (patientIdentifier.autoGeneration) {
-      identifierLabel = screen.getByTestId('identifier-label');
-      identifierInput = screen.getByTestId('identifier-input');
-    } else {
-      identifierLabel = screen.getByText(patientIdentifier.identifierName);
-      identifierInput = screen.getByLabelText(patientIdentifier.identifierName);
-    }
-    return {
-      identifierLabel,
-      identifierInput,
-    };
   };
 
-  it('shows the identifier input', async () => {
-    const { identifierInput } = await setupIdentifierInput(openmrsID);
-    expect(identifierInput).toBeInTheDocument();
+  it('shows the identifier input', () => {
+    openmrsID.autoGeneration = false;
+    setupIdentifierInput(openmrsID);
+    expect(screen.getByLabelText(openmrsID.identifierName)).toBeInTheDocument();
   });
 
-  describe('Auto-generated identifier', () => {
-    openmrsID.autoGeneration = true;
+  it('displays an edit button when there is an initial value', async () => {
+    // setup
+    openmrsID.autoGeneration = false;
+    openmrsID.required = false;
+    openmrsID.initialValue = '1002UU9';
+    openmrsID.identifierValue = '1002UU9';
+    // replay
+    setupIdentifierInput(openmrsID);
+    expect(screen.getByText('Edit')).toBeInTheDocument();
+  });
 
-    it('hides the input when the identifier is auto-generated', async () => {
-      const { identifierInput } = await setupIdentifierInput(openmrsID);
-      expect(identifierInput.type).toBe('hidden');
-    });
+  it('hides the edit button when the identifier is required', async () => {
+    // setup
+    openmrsID.autoGeneration = false;
+    openmrsID.required = true;
+    openmrsID.initialValue = '1002UU9';
+    openmrsID.identifierValue = '1002UU9';
+    // replay
+    setupIdentifierInput(openmrsID);
+    expect(screen.queryByText('Edit')).not.toBeInTheDocument();
+  });
 
-    it("displays 'Auto-Generated' when the indentifier has auto generation", async () => {
-      const { identifierLabel, identifierInput } = await setupIdentifierInput(openmrsID);
-      expect(identifierLabel.innerHTML).toBe('Auto-generated');
-      expect(identifierInput.disabled).toBe(true);
+  it('displays a delete button when the identifier is not a default type', () => {
+    // setup
+    openmrsID.required = false;
+    // replay
+    setupIdentifierInput(openmrsID);
+    expect(screen.getByText('Delete')).toBeInTheDocument();
+  });
+
+  describe('auto-generated identifier', () => {
+    it('hides the input when the identifier is auto-generated', () => {
+      openmrsID.autoGeneration = true;
+      setupIdentifierInput(openmrsID);
+      expect(screen.getByTestId('identifier-input').type).toBe('hidden');
     });
 
-    it('displays an edit button when there is an initial value', async () => {
-      // setup
-      openmrsID.required = false;
-      openmrsID.initialValue = '1002UU9';
-      // replay
-      await setupIdentifierInput(openmrsID);
-      expect(screen.getByText('Edit')).toBeInTheDocument();
+    it("displays 'Auto-Generated' when the indentifier has auto generation", () => {
+      openmrsID.autoGeneration = true;
+      setupIdentifierInput(openmrsID);
+      expect(screen.getByTestId('identifier-placeholder').innerHTML).toBe('Auto-generated');
+      expect(screen.getByTestId('identifier-input')).toBeDisabled();
     });
 
-    it('displays a delete button when the identifier is not a default type', async () => {
-      // setup
-      openmrsID.required = false;
-      // replay
-      await setupIdentifierInput(openmrsID);
-      expect(screen.getByText('Delete')).toBeInTheDocument();
+    describe('manual entry allowed', () => {
+      openmrsID.selectedSource = {
+        autoGenerationOption: {
+          manualEntryEnabled: true,
+        },
+      };
+
+      it('shows the edit button', () => {
+        openmrsID.autoGeneration = true;
+        setupIdentifierInput(openmrsID);
+        expect(screen.getByText('Edit')).toBeInTheDocument();
+      });
+
+      describe('edit button clicked', () => {
+        it('displays an empty input field', async () => {
+          const user = userEvent.setup();
+          openmrsID.autoGeneration = true;
+          openmrsID.required = false;
+          openmrsID.selectedSource = {
+            autoGenerationOption: {
+              manualEntryEnabled: true,
+            },
+          };
+          setupIdentifierInput(openmrsID);
+          const editButton = screen.getByTestId('edit-button');
+          await user.click(editButton);
+          expect(screen.getByLabelText(new RegExp(`${openmrsID.identifierName}`)).value).toBe('');
+        });
+
+        it('displays an input field with the identifier value if it exists', async () => {
+          const user = userEvent.setup();
+          openmrsID.autoGeneration = true;
+          openmrsID.required = false;
+          openmrsID.selectedSource = {
+            autoGenerationOption: {
+              manualEntryEnabled: true,
+            },
+          };
+          setupIdentifierInput(openmrsID, { identifiers: { [fieldName]: { identifierValue: '10001V' } } });
+          const editButton = screen.getByTestId('edit-button');
+          await user.click(editButton);
+          expect(screen.getByLabelText(new RegExp(`${openmrsID.identifierName}`)).value).toBe('10001V');
+        });
+      });
     });
   });
 });
diff --git a/packages/esm-patient-registration-app/translations/en.json b/packages/esm-patient-registration-app/translations/en.json
index ff2890d24..ebc875ad9 100644
--- a/packages/esm-patient-registration-app/translations/en.json
+++ b/packages/esm-patient-registration-app/translations/en.json
@@ -77,6 +77,7 @@
   "numberInNameDubious": "Number in name is dubious",
   "obsFieldUnknownDatatype": "Concept for obs field '{{fieldDefinitionId}}' has unknown datatype '{{datatypeName}}'",
   "optional": "optional",
+  "optionalIdentifierLabel": "{{identifierName}} (optional)",
   "other": "Other",
   "patientNameKnown": "Patient's Name is Known?",
   "patientRegistrationBreadcrumb": "Patient Registration",