diff --git a/.changeset/old-cherries-smile.md b/.changeset/old-cherries-smile.md
new file mode 100644
index 00000000000..0f43cd49973
--- /dev/null
+++ b/.changeset/old-cherries-smile.md
@@ -0,0 +1,7 @@
+---
+"@primer/react": patch
+---
+
+Automatically reposition `InlineAutocomplete` suggestions depending on available space
+
+<!-- Changed components: InlineAutocomplete -->
diff --git a/src/drafts/InlineAutocomplete/InlineAutocomplete.features.stories.tsx b/src/drafts/InlineAutocomplete/InlineAutocomplete.features.stories.tsx
index 2e467e5d3f8..3f2f9c5a6ae 100644
--- a/src/drafts/InlineAutocomplete/InlineAutocomplete.features.stories.tsx
+++ b/src/drafts/InlineAutocomplete/InlineAutocomplete.features.stories.tsx
@@ -105,3 +105,64 @@ export const CustomRendering = ({loading, tabInserts}: ArgProps) => {
     </FormControl>
   )
 }
+
+export const AbovePositioning = () => {
+  const [suggestions, setSuggestions] = useState<Suggestions | null>(null)
+
+  const onShowSuggestions = (event: ShowSuggestionsEvent) => {
+    setSuggestions(
+      filteredUsers(event.query).map(user => ({
+        value: user.login,
+        render: props => <UserSuggestion user={user} {...props} />,
+      })),
+    )
+  }
+
+  const onHideSuggestions = () => setSuggestions(null)
+
+  return (
+    <FormControl sx={{position: 'absolute', bottom: '15px'}}>
+      <FormControl.Label>Inline Autocomplete Demo</FormControl.Label>
+      <FormControl.Caption>Try typing &apos;@&apos; to show user suggestions.</FormControl.Caption>
+      <InlineAutocomplete
+        triggers={[{triggerChar: '@'}]}
+        suggestions={suggestions}
+        onShowSuggestions={onShowSuggestions}
+        onHideSuggestions={onHideSuggestions}
+        suggestionsPlacement="above"
+      >
+        <Textarea sx={{height: '70px'}} />
+      </InlineAutocomplete>
+    </FormControl>
+  )
+}
+
+export const AutoPositioning = () => {
+  const [suggestions, setSuggestions] = useState<Suggestions | null>(null)
+
+  const onShowSuggestions = (event: ShowSuggestionsEvent) => {
+    setSuggestions(
+      filteredUsers(event.query).map(user => ({
+        value: user.login,
+        render: props => <UserSuggestion user={user} {...props} />,
+      })),
+    )
+  }
+
+  const onHideSuggestions = () => setSuggestions(null)
+
+  return (
+    <FormControl sx={{position: 'absolute', bottom: '15px'}}>
+      <FormControl.Label>Inline Autocomplete Demo</FormControl.Label>
+      <FormControl.Caption>Try typing &apos;@&apos; to show user suggestions.</FormControl.Caption>
+      <InlineAutocomplete
+        triggers={[{triggerChar: '@'}]}
+        suggestions={suggestions}
+        onShowSuggestions={onShowSuggestions}
+        onHideSuggestions={onHideSuggestions}
+      >
+        <Textarea sx={{height: '70px'}} />
+      </InlineAutocomplete>
+    </FormControl>
+  )
+}
diff --git a/src/drafts/InlineAutocomplete/InlineAutocomplete.tsx b/src/drafts/InlineAutocomplete/InlineAutocomplete.tsx
index ddc287d7a81..f9d797823ad 100644
--- a/src/drafts/InlineAutocomplete/InlineAutocomplete.tsx
+++ b/src/drafts/InlineAutocomplete/InlineAutocomplete.tsx
@@ -5,7 +5,14 @@ import {BetterSystemStyleObject} from '../../sx'
 import {useSyntheticChange} from '../hooks/useSyntheticChange'
 import {getAbsoluteCharacterCoordinates} from '../utils/character-coordinates'
 
-import {ShowSuggestionsEvent, Suggestions, TextInputCompatibleChild, TextInputElement, Trigger} from './types'
+import {
+  ShowSuggestionsEvent,
+  Suggestions,
+  SuggestionsPlacement,
+  TextInputCompatibleChild,
+  TextInputElement,
+  Trigger,
+} from './types'
 import {augmentHandler, calculateSuggestionsQuery, getSuggestionValue, requireChildrenToBeInput} from './utils'
 
 import {useRefObjectAsForwardedRef} from '../../hooks'
@@ -52,6 +59,18 @@ export type InlineAutocompleteProps = {
    * thrown.
    */
   children: TextInputCompatibleChild
+  /**
+   * Control which side of the insertion point the suggestions list appears on by default. This
+   * should almost always be `"below"` because it typically provides a better user experience
+   * (the most-relevant suggestions will appear closest to the text). However, if the input
+   * is always near the bottom of the screen (ie, a chat composition form), it may be better to
+   * display the suggestions above the input.
+   *
+   * In either case, if there is not enough room to display the suggestions in the default direction,
+   * the suggestions will appear in the other direction.
+   * @default "below"
+   */
+  suggestionsPlacement?: SuggestionsPlacement
 }
 
 const getSelectionStart = (element: TextInputElement) => {
@@ -79,6 +98,7 @@ const InlineAutocomplete = ({
   sx,
   children,
   tabInsertsSuggestions = false,
+  suggestionsPlacement = 'below',
   // Forward accessibility props so it works with FormControl
   ...forwardProps
 }: InlineAutocompleteProps & React.ComponentProps<'textarea' | 'input'>) => {
@@ -108,7 +128,6 @@ const InlineAutocomplete = ({
           (getSelectionStart(inputRef.current) ?? 0) - showEventRef.current.query.length,
         )
       : {top: 0, left: 0, height: 0}
-  const suggestionsOffset = {top: triggerCharCoords.top + triggerCharCoords.height, left: triggerCharCoords.left}
 
   // User can blur while suggestions are visible with shift+tab
   const onBlur: React.FocusEventHandler<TextInputElement> = () => {
@@ -198,10 +217,10 @@ const InlineAutocomplete = ({
         inputRef={inputRef}
         onCommit={onCommit}
         onClose={onHideSuggestions}
-        top={suggestionsOffset.top || 0}
-        left={suggestionsOffset.left || 0}
+        triggerCharCoords={triggerCharCoords}
         visible={suggestionsVisible}
         tabInsertsSuggestions={tabInsertsSuggestions}
+        defaultPlacement={suggestionsPlacement}
       />
 
       <Portal>
diff --git a/src/drafts/InlineAutocomplete/_AutocompleteSuggestions.tsx b/src/drafts/InlineAutocomplete/_AutocompleteSuggestions.tsx
index 4483757ba15..3d9bdfa51c6 100644
--- a/src/drafts/InlineAutocomplete/_AutocompleteSuggestions.tsx
+++ b/src/drafts/InlineAutocomplete/_AutocompleteSuggestions.tsx
@@ -1,24 +1,25 @@
-import React, {useCallback, useState} from 'react'
+import React, {useCallback, useRef, useState} from 'react'
 import Spinner from '../../Spinner'
 import {ActionList, ActionListItemProps} from '../../ActionList'
 import Box from '../../Box'
 import {ComboboxCommitEvent, useCombobox} from '../hooks/useCombobox'
 import Overlay from '../../Overlay'
 
-import {Suggestion, Suggestions, TextInputElement} from './types'
+import {Suggestion, Suggestions, SuggestionsPlacement, TextInputElement} from './types'
 import {getSuggestionKey, getSuggestionValue} from './utils'
+import {CharacterCoordinates} from '../utils/character-coordinates'
+import useIsomorphicLayoutEffect from '../../utils/useIsomorphicLayoutEffect'
 
 type AutoCompleteSuggestionsProps = {
   suggestions: Suggestions | null
   portalName?: string
-  // make top/left primitives instead of a Coordinates object to avoid extra re-renders
-  top: number
-  left: number
+  triggerCharCoords: CharacterCoordinates
   onClose: () => void
   onCommit: (suggestion: string) => void
   inputRef: React.RefObject<TextInputElement>
   visible: boolean
   tabInsertsSuggestions: boolean
+  defaultPlacement: SuggestionsPlacement
 }
 
 const LoadingIndicator = () => (
@@ -54,14 +55,16 @@ const SuggestionListItem = ({suggestion}: {suggestion: Suggestion}) => {
 const AutocompleteSuggestions = ({
   suggestions,
   portalName,
-  top,
-  left,
+  triggerCharCoords,
   onClose,
   onCommit: externalOnCommit,
   inputRef,
   visible,
   tabInsertsSuggestions,
+  defaultPlacement,
 }: AutoCompleteSuggestionsProps) => {
+  const overlayRef = useRef<HTMLDivElement | null>(null)
+
   // It seems wierd to use state instead of a ref here, but because the list is inside an
   // AnchoredOverlay it is not always mounted - so we want to reinitialize the Combobox when it mounts
   const [list, setList] = useState<HTMLUListElement | null>(null)
@@ -85,6 +88,32 @@ const AutocompleteSuggestions = ({
     defaultFirstOption: true,
   })
 
+  const [top, setTop] = useState(0)
+  useIsomorphicLayoutEffect(
+    function recalculateTop() {
+      const overlayHeight = overlayRef.current?.offsetHeight ?? 0
+
+      const belowOffset = triggerCharCoords.top + triggerCharCoords.height
+      const wouldOverflowBelow = belowOffset + overlayHeight > window.innerHeight
+
+      const aboveOffset = triggerCharCoords.top - overlayHeight
+      const wouldOverflowAbove = aboveOffset < 0
+
+      // Only override the default if it would overflow in the default direction and it would not overflow in the override direction
+      const result = {
+        below: wouldOverflowBelow && !wouldOverflowAbove ? aboveOffset : belowOffset,
+        above: wouldOverflowAbove && !wouldOverflowBelow ? belowOffset : aboveOffset,
+      }[defaultPlacement]
+
+      // Sometimes the value can be NaN if layout is not available (ie, SSR or JSDOM)
+      const resultNotNaN = Number.isNaN(result) ? 0 : result
+
+      setTop(resultNotNaN)
+    },
+    // this is a cheap effect and we want it to run when pretty much anything that could affect position changes
+    [triggerCharCoords.top, triggerCharCoords.height, suggestions, visible, defaultPlacement],
+  )
+
   // Conditional rendering appears wrong at first - it means that we are reconstructing the
   // Combobox instance every time the suggestions appear. But this is what we want - otherwise
   // the textarea would always have the `combobox` role, which is incorrect (a textarea should
@@ -98,7 +127,9 @@ const AutocompleteSuggestions = ({
       preventFocusOnOpen
       portalContainerName={portalName}
       sx={{position: 'fixed'}}
-      {...{top, left}}
+      top={top}
+      left={triggerCharCoords.left}
+      ref={overlayRef}
     >
       <ActionList ref={setList}>
         {suggestions === 'loading' ? (
diff --git a/src/drafts/InlineAutocomplete/types.ts b/src/drafts/InlineAutocomplete/types.ts
index ff174170172..2c4d22fb4f9 100644
--- a/src/drafts/InlineAutocomplete/types.ts
+++ b/src/drafts/InlineAutocomplete/types.ts
@@ -49,3 +49,5 @@ export type TextInputCompatibleChild = React.ReactElement<
   JSX.IntrinsicElements['textarea'] | JSX.IntrinsicElements['input']
 > &
   React.RefAttributes<HTMLInputElement & HTMLTextAreaElement>
+
+export type SuggestionsPlacement = 'above' | 'below'