diff --git a/packages/bruno-app/src/components/StatusBar/ThemeDropdown/StyledWrapper.js b/packages/bruno-app/src/components/StatusBar/ThemeDropdown/StyledWrapper.js
index 8ee95f244..b3366f445 100644
--- a/packages/bruno-app/src/components/StatusBar/ThemeDropdown/StyledWrapper.js
+++ b/packages/bruno-app/src/components/StatusBar/ThemeDropdown/StyledWrapper.js
@@ -2,79 +2,149 @@ import styled from 'styled-components';
 import { rgba } from 'polished';
 
 const StyledWrapper = styled.div`
+  /* Main container */
   .theme-menu {
-    min-width: 160px;
-    padding: 4px 0;
+    min-width: 200px;
+    height: 325px;
+    padding: 8px;
     background: ${(props) => props.theme.dropdown.bg};
-    border: 1px solid ${(props) => props.theme.dropdown.separator};
-    border-radius: ${(props) => props.theme.border.radius.md};
-    box-shadow: ${(props) => props.theme.dropdown.shadow};
+    border-radius: 6px;
+    box-shadow: 0px 1px 4px 0px #0000000D;
+    outline: none;
+
+    &.two-columns {
+      min-width: 400px;
+    }
   }
 
-  .menu-label {
-    padding: 6px 12px 4px;
-    font-size: 11px;
-    font-weight: 500;
-    text-transform: uppercase;
+  /* Mode section */
+  .mode-section {
+    padding: 0 8px 12px 8px;
+    margin: 0 -8px;
+    border-bottom: 1px solid ${(props) => props.theme.dropdown.separator};
+  }
+
+  .mode-label {
+    font-size: 12px;
     color: ${(props) => props.theme.dropdown.mutedText};
-    letter-spacing: 0.5px;
+    margin-bottom: 8px;
   }
 
-  .menu-item {
+  .mode-buttons {
+    display: flex;
+    gap: 10px;
+  }
+
+  .mode-button {
+    display: flex;
+    align-items: center;
+    justify-content: center;
+    width: 24px;
+    height: 24px;
+    padding: 8px 4px;
+    border: 1px solid ${(props) => props.theme.dropdown.separator};
+    border-radius: 4px;
+    background: transparent;
+    color: ${(props) => props.theme.dropdown.mutedText};
+    cursor: pointer;
+    transition: all 0.15s ease;
+
+    &:hover {
+      background: ${(props) => props.theme.dropdown.hoverBg};
+      color: ${(props) => props.theme.dropdown.color};
+    }
+
+    &.focused {
+      background: ${(props) => props.theme.dropdown.hoverBg};
+      color: ${(props) => props.theme.dropdown.color};
+      outline: none;
+    }
+
+    &.active {
+      background: ${(props) => rgba(props.theme.dropdown.selectedColor, 0.08)};
+      border-color: ${(props) => props.theme.dropdown.selectedColor};
+      color: ${(props) => props.theme.dropdown.selectedColor};
+
+      &.focused {
+        background: ${(props) => rgba(props.theme.dropdown.selectedColor, 0.15)};
+        outline: none;
+      }
+    }
+  }
+
+  /* Theme lists container */
+  .theme-lists {
+    display: flex;
+    gap: 24px;
+
+    &.two-columns {
+      gap: 0;
+
+      .theme-list {
+        flex: 1;
+        padding: 8px 0;
+
+        &:first-child {
+          padding-right: 12px;
+          border-right: 1px solid ${(props) => props.theme.dropdown.separator};
+        }
+
+        &:last-child {
+          padding-left: 12px;
+        }
+      }
+    }
+  }
+
+  /* Individual theme list */
+  .theme-list {
+    min-width: 180px;
+    padding-top: 8px;
+  }
+
+  .theme-list-label {
+    font-size: 12px;
+    color: ${(props) => props.theme.dropdown.mutedText};
+    margin-bottom: 8px;
+  }
+
+  /* Theme item */
+  .theme-item {
     display: flex;
     align-items: center;
     justify-content: space-between;
-    padding: 6px 12px;
+    height: 26px;
+    padding: 4px 8px;
+    border-radius: 4px;
     cursor: pointer;
+    outline: none;
     color: ${(props) => props.theme.dropdown.color};
     font-size: ${(props) => props.theme.font.size.sm};
 
-    &:hover {
+    &:hover,
+    &.focused {
       background: ${(props) => props.theme.dropdown.hoverBg};
     }
 
     &.active {
       color: ${(props) => props.theme.dropdown.selectedColor};
-      background: ${(props) => rgba(props.theme.dropdown.selectedColor, 0.07)};
-    }
+      background: ${(props) => rgba(props.theme.dropdown.selectedColor, 0.08)};
 
-    &.has-submenu {
-      padding-right: 8px;
+      &.focused {
+        background: ${(props) => rgba(props.theme.dropdown.selectedColor, 0.15)};
+      }
     }
   }
 
-  .menu-item-icon {
-    margin-right: 8px;
-    opacity: 0.7;
-  }
-
-  .menu-item-label {
+  .theme-item-label {
     flex: 1;
+    white-space: nowrap;
   }
 
   .check-icon {
+    flex-shrink: 0;
+    margin-left: 12px;
     color: ${(props) => props.theme.dropdown.selectedColor};
-    margin-left: 8px;
-  }
-
-  .chevron-icon {
-    opacity: 0.6;
-    margin-left: 8px;
-  }
-
-  .menu-divider {
-    height: 1px;
-    background: ${(props) => props.theme.dropdown.separator};
-    margin: 4px 0;
-  }
-
-  .submenu {
-    min-width: 180px;
-    padding: 4px 0;
-    background: ${(props) => props.theme.dropdown.bg};
-    border: 1px solid ${(props) => props.theme.dropdown.separator};
-    border-radius: ${(props) => props.theme.border.radius.md};
-    box-shadow: ${(props) => props.theme.dropdown.shadow};
   }
 `;
 
diff --git a/packages/bruno-app/src/components/StatusBar/ThemeDropdown/index.js b/packages/bruno-app/src/components/StatusBar/ThemeDropdown/index.js
index a25c1f680..cdd59ffe6 100644
--- a/packages/bruno-app/src/components/StatusBar/ThemeDropdown/index.js
+++ b/packages/bruno-app/src/components/StatusBar/ThemeDropdown/index.js
@@ -1,17 +1,36 @@
-import React, { useState } from 'react';
+import React, { useState, useRef, useCallback, useEffect } from 'react';
 import Tippy from '@tippyjs/react';
-import { IconChevronRight, IconCheck, IconSun, IconMoon, IconDeviceDesktop } from '@tabler/icons';
+import { IconCheck, IconSun, IconMoon, IconDeviceDesktop } from '@tabler/icons';
 import ToolHint from 'components/ToolHint';
 import { useTheme } from 'providers/Theme';
 import { getLightThemes, getDarkThemes } from 'themes/index';
 import StyledWrapper from './StyledWrapper';
 
+// Constants
+const MODES = ['light', 'dark', 'system'];
+const MODE_BUTTONS = [
+  { mode: 'light', icon: IconSun, title: 'Light' },
+  { mode: 'dark', icon: IconMoon, title: 'Dark' },
+  { mode: 'system', icon: IconDeviceDesktop, title: 'System' }
+];
+
 const ThemeDropdown = ({ children }) => {
+  // Dropdown state
   const [isOpen, setIsOpen] = useState(false);
-  const [lightSubmenuOpen, setLightSubmenuOpen] = useState(false);
-  const [darkSubmenuOpen, setDarkSubmenuOpen] = useState(false);
   const [tooltipEnabled, setTooltipEnabled] = useState(true);
 
+  // Keyboard navigation state
+  const [focusedSection, setFocusedSection] = useState('mode');
+  const [focusedIndex, setFocusedIndex] = useState(0);
+  const [isKeyboardNav, setIsKeyboardNav] = useState(false);
+
+  // Refs for focus management
+  const menuRef = useRef(null);
+  const modeButtonRefs = useRef([]);
+  const lightItemRefs = useRef([]);
+  const darkItemRefs = useRef([]);
+
+  // Theme context
   const {
     storedTheme,
     setStoredTheme,
@@ -21,156 +40,263 @@ const ThemeDropdown = ({ children }) => {
     setThemeVariantDark
   } = useTheme();
 
+  // Theme data
   const lightThemes = getLightThemes();
   const darkThemes = getDarkThemes();
+  const isSystemMode = storedTheme === 'system';
 
-  const handleModeSelect = (mode) => {
-    setStoredTheme(mode);
+  // Helper to get class names for focusable items
+  const getFocusedClass = (section, index) => {
+    return isKeyboardNav && focusedSection === section && focusedIndex === index ? 'focused' : '';
   };
 
+  // Handlers
+  const handleModeSelect = (mode) => setStoredTheme(mode);
+
   const handleThemeSelect = (themeId, isLight) => {
     if (isLight) {
       setThemeVariantLight(themeId);
     } else {
       setThemeVariantDark(themeId);
     }
-    setIsOpen(false);
-    setLightSubmenuOpen(false);
-    setDarkSubmenuOpen(false);
   };
 
-  const renderSubmenu = (themes, isLight, currentVariant) => (
-    <div className="submenu">
-      {themes.map((theme) => (
-        <div
-          key={theme.id}
-          className={`menu-item ${currentVariant === theme.id ? 'active' : ''}`}
-          onClick={() => handleThemeSelect(theme.id, isLight)}
-        >
-          <span className="menu-item-label">{theme.name}</span>
-          {currentVariant === theme.id && (
-            <IconCheck size={14} strokeWidth={2} className="check-icon" />
-          )}
-        </div>
-      ))}
-    </div>
-  );
-
-  const menuContent = (
-    <StyledWrapper>
-      <div className="theme-menu">
-        {/* Mode Section */}
-        <div className="menu-label">Mode</div>
-        <div
-          className={`menu-item ${storedTheme === 'light' ? 'active' : ''}`}
-          onClick={() => handleModeSelect('light')}
-        >
-          <IconSun size={14} strokeWidth={1.5} className="menu-item-icon" />
-          <span className="menu-item-label">Light</span>
-          {storedTheme === 'light' && (
-            <IconCheck size={14} strokeWidth={2} className="check-icon" />
-          )}
-        </div>
-        <div
-          className={`menu-item ${storedTheme === 'dark' ? 'active' : ''}`}
-          onClick={() => handleModeSelect('dark')}
-        >
-          <IconMoon size={14} strokeWidth={1.5} className="menu-item-icon" />
-          <span className="menu-item-label">Dark</span>
-          {storedTheme === 'dark' && (
-            <IconCheck size={14} strokeWidth={2} className="check-icon" />
-          )}
-        </div>
-        <div
-          className={`menu-item ${storedTheme === 'system' ? 'active' : ''}`}
-          onClick={() => handleModeSelect('system')}
-        >
-          <IconDeviceDesktop size={14} strokeWidth={1.5} className="menu-item-icon" />
-          <span className="menu-item-label">System</span>
-          {storedTheme === 'system' && (
-            <IconCheck size={14} strokeWidth={2} className="check-icon" />
-          )}
-        </div>
-
-        <div className="menu-divider" />
-
-        {/* Light Themes with Submenu */}
-        <Tippy
-          content={renderSubmenu(lightThemes, true, themeVariantLight)}
-          placement="right-start"
-          interactive={true}
-          arrow={false}
-          offset={[0, 2]}
-          animation={false}
-          visible={lightSubmenuOpen}
-          onClickOutside={() => setLightSubmenuOpen(false)}
-          appendTo="parent"
-        >
-          <div
-            className="menu-item has-submenu"
-            onMouseEnter={() => {
-              setLightSubmenuOpen(true);
-              setDarkSubmenuOpen(false);
-            }}
-          >
-            <span className="menu-item-label">Light Themes</span>
-            <IconChevronRight size={14} strokeWidth={2} className="chevron-icon" />
-          </div>
-        </Tippy>
-
-        {/* Dark Themes with Submenu */}
-        <Tippy
-          content={renderSubmenu(darkThemes, false, themeVariantDark)}
-          placement="right-start"
-          interactive={true}
-          arrow={false}
-          offset={[0, 2]}
-          animation={false}
-          visible={darkSubmenuOpen}
-          onClickOutside={() => setDarkSubmenuOpen(false)}
-          appendTo="parent"
-        >
-          <div
-            className="menu-item has-submenu"
-            onMouseEnter={() => {
-              setDarkSubmenuOpen(true);
-              setLightSubmenuOpen(false);
-            }}
-          >
-            <span className="menu-item-label">Dark Themes</span>
-            <IconChevronRight size={14} strokeWidth={2} className="chevron-icon" />
-          </div>
-        </Tippy>
-      </div>
-    </StyledWrapper>
-  );
-
   const handleOpen = () => {
     setTooltipEnabled(false);
     setIsOpen(true);
+    setFocusedSection('mode');
+    setFocusedIndex(0);
+    setIsKeyboardNav(false);
   };
 
   const handleClose = () => {
     setIsOpen(false);
-    setLightSubmenuOpen(false);
-    setDarkSubmenuOpen(false);
-    // Small delay before re-enabling tooltip to prevent flash
     setTimeout(() => setTooltipEnabled(true), 100);
   };
 
+  const handleMouseEnter = (section, index) => {
+    setIsKeyboardNav(false);
+    setFocusedSection(section);
+    setFocusedIndex(index);
+  };
+
+  // Get available sections based on current mode
+  const getAvailableSections = useCallback(() => {
+    if (isSystemMode) return ['mode', 'light', 'dark'];
+    return storedTheme === 'light' ? ['mode', 'light'] : ['mode', 'dark'];
+  }, [isSystemMode, storedTheme]);
+
+  // Get max index for a section
+  const getMaxIndex = useCallback((section) => {
+    switch (section) {
+      case 'mode': return 2;
+      case 'light': return lightThemes.length - 1;
+      case 'dark': return darkThemes.length - 1;
+      default: return 0;
+    }
+  }, [lightThemes.length, darkThemes.length]);
+
+  // Get mode index for returning to mode section
+  const getModeIndex = useCallback(() => {
+    return MODES.indexOf(storedTheme);
+  }, [storedTheme]);
+
+  // Focus element based on current section and index
+  useEffect(() => {
+    if (!isOpen) return;
+
+    const timer = setTimeout(() => {
+      const refs = {
+        mode: modeButtonRefs,
+        light: lightItemRefs,
+        dark: darkItemRefs
+      };
+      refs[focusedSection]?.current[focusedIndex]?.focus();
+    }, 0);
+
+    return () => clearTimeout(timer);
+  }, [isOpen, focusedSection, focusedIndex]);
+
+  // Keyboard navigation handler
+  const handleKeyDown = useCallback((e) => {
+    if (!isOpen) return;
+
+    const sections = getAvailableSections();
+    const maxIndex = getMaxIndex(focusedSection);
+
+    const navigationHandlers = {
+      'Escape': () => {
+        e.preventDefault();
+        handleClose();
+      },
+
+      'ArrowDown': () => {
+        e.preventDefault();
+        setIsKeyboardNav(true);
+        if (focusedSection === 'mode') {
+          setFocusedSection(sections[1]);
+          setFocusedIndex(0);
+        } else if (focusedIndex < maxIndex) {
+          setFocusedIndex(focusedIndex + 1);
+        }
+      },
+
+      'ArrowUp': () => {
+        e.preventDefault();
+        setIsKeyboardNav(true);
+        if (focusedSection !== 'mode') {
+          if (focusedIndex > 0) {
+            setFocusedIndex(focusedIndex - 1);
+          } else {
+            setFocusedSection('mode');
+            setFocusedIndex(getModeIndex());
+          }
+        }
+      },
+
+      'ArrowLeft': () => {
+        e.preventDefault();
+        setIsKeyboardNav(true);
+        if (focusedSection === 'mode') {
+          if (focusedIndex > 0) setFocusedIndex(focusedIndex - 1);
+        } else if (isSystemMode && focusedSection === 'dark') {
+          setFocusedSection('light');
+          setFocusedIndex(Math.min(focusedIndex, lightThemes.length - 1));
+        }
+      },
+
+      'ArrowRight': () => {
+        e.preventDefault();
+        setIsKeyboardNav(true);
+        if (focusedSection === 'mode') {
+          if (focusedIndex < 2) setFocusedIndex(focusedIndex + 1);
+        } else if (isSystemMode && focusedSection === 'light') {
+          setFocusedSection('dark');
+          setFocusedIndex(Math.min(focusedIndex, darkThemes.length - 1));
+        }
+      },
+
+      'Enter': () => {
+        e.preventDefault();
+        if (focusedSection === 'mode') {
+          handleModeSelect(MODES[focusedIndex]);
+        } else if (focusedSection === 'light') {
+          handleThemeSelect(lightThemes[focusedIndex].id, true);
+        } else if (focusedSection === 'dark') {
+          handleThemeSelect(darkThemes[focusedIndex].id, false);
+        }
+      },
+
+      ' ': () => navigationHandlers.Enter(),
+
+      'Tab': () => handleClose()
+    };
+
+    navigationHandlers[e.key]?.();
+  }, [
+    isOpen, focusedSection, focusedIndex, getAvailableSections,
+    getMaxIndex, getModeIndex, isSystemMode, lightThemes, darkThemes
+  ]);
+
+  // Set up keyboard listener
+  useEffect(() => {
+    if (!isOpen) return;
+    document.addEventListener('keydown', handleKeyDown);
+    return () => document.removeEventListener('keydown', handleKeyDown);
+  }, [isOpen, handleKeyDown]);
+
+  // Render theme list
+  const renderThemeList = (themes, isLight, currentVariant, label) => {
+    const refs = isLight ? lightItemRefs : darkItemRefs;
+    const section = isLight ? 'light' : 'dark';
+
+    return (
+      <div className="theme-list" role="listbox" aria-label={label}>
+        <div className="theme-list-label">{label}</div>
+        {themes.map((theme, index) => {
+          const isActive = currentVariant === theme.id;
+          return (
+            <div
+              key={theme.id}
+              ref={(el) => (refs.current[index] = el)}
+              className={`theme-item ${isActive ? 'active' : ''} ${getFocusedClass(section, index)}`}
+              role="option"
+              aria-selected={isActive}
+              tabIndex={-1}
+              onClick={() => handleThemeSelect(theme.id, isLight)}
+              onMouseEnter={() => handleMouseEnter(section, index)}
+            >
+              <span className="theme-item-label">{theme.name}</span>
+              {isActive && <IconCheck size={14} strokeWidth={2} className="check-icon" />}
+            </div>
+          );
+        })}
+      </div>
+    );
+  };
+
+  // Render mode buttons
+  const renderModeButtons = () => (
+    <div className="mode-buttons" role="radiogroup" aria-labelledby="mode-label">
+      {MODE_BUTTONS.map((btn, index) => {
+        const Icon = btn.icon;
+        const isActive = storedTheme === btn.mode;
+        return (
+          <button
+            key={btn.mode}
+            ref={(el) => (modeButtonRefs.current[index] = el)}
+            className={`mode-button ${isActive ? 'active' : ''} ${getFocusedClass('mode', index)}`}
+            role="radio"
+            aria-checked={isActive}
+            tabIndex={-1}
+            onClick={() => handleModeSelect(btn.mode)}
+            onMouseEnter={() => handleMouseEnter('mode', index)}
+            title={btn.title}
+          >
+            <Icon size={18} strokeWidth={1.5} />
+          </button>
+        );
+      })}
+    </div>
+  );
+
+  // Menu content
+  const menuContent = (
+    <StyledWrapper>
+      <div
+        ref={menuRef}
+        className={`theme-menu ${isSystemMode ? 'two-columns' : ''}`}
+        role="dialog"
+        aria-label="Theme selector"
+      >
+        <div className="mode-section">
+          <div className="mode-label" id="mode-label">Mode</div>
+          {renderModeButtons()}
+        </div>
+
+        <div className={`theme-lists ${isSystemMode ? 'two-columns' : ''}`}>
+          {(storedTheme === 'light' || isSystemMode)
+            && renderThemeList(lightThemes, true, themeVariantLight, 'Light theme')}
+          {(storedTheme === 'dark' || isSystemMode)
+            && renderThemeList(darkThemes, false, themeVariantDark, 'Dark theme')}
+        </div>
+      </div>
+    </StyledWrapper>
+  );
+
   return (
     <ToolHint text="Theme" toolhintId="ThemeDropdown" place="top" offset={10} hidden={!tooltipEnabled}>
       <Tippy
         content={menuContent}
         placement="top-start"
-        interactive={true}
+        interactive
         arrow={false}
         animation={false}
         visible={isOpen}
         onClickOutside={handleClose}
         appendTo="parent"
       >
-        <div onClick={() => isOpen ? handleClose() : handleOpen()}>
+        <div onClick={() => (isOpen ? handleClose() : handleOpen())}>
           {children}
         </div>
       </Tippy>