diff --git a/common/src/app/common/types/token.cljc b/common/src/app/common/types/token.cljc
index c55aa9cf77..619bc5e2b8 100644
--- a/common/src/app/common/types/token.cljc
+++ b/common/src/app/common/types/token.cljc
@@ -721,7 +721,7 @@
           (or (nil? last-space-left)   (> (dm/number open-pos) (dm/number last-space-left)))
           (or (nil? first-space-right) (< (dm/number close-pos) (dm/number first-space-right)))))))
 
-(defn- build-result
+(defn build-result
   "Builds the result map for `insert-ref` by replacing the substring of `value`
    between `prefix-end` and `suffix-start` with a formatted reference `{name}`.
    Returns a map with:
diff --git a/frontend/playwright/ui/specs/tokens/crud.spec.js b/frontend/playwright/ui/specs/tokens/crud.spec.js
index 05fd55fe06..3ce9047f3c 100644
--- a/frontend/playwright/ui/specs/tokens/crud.spec.js
+++ b/frontend/playwright/ui/specs/tokens/crud.spec.js
@@ -113,6 +113,80 @@ test.describe("Tokens - creation", () => {
     ).toBeVisible();
   });
 
+  test("User creates a token referencing another via combobox, replacing existing text", async ({
+    page,
+  }) => {
+    const { tokensUpdateCreateModal } = await setupEmptyTokensFileRender(page, {
+      flags: ["enable-token-combobox", "enable-feature-token-input"],
+    });
+
+    const tokensTabPanel = page.getByRole("tabpanel", { name: "tokens" });
+
+    const addTokenButton = tokensTabPanel.getByRole("button", {
+      name: "Add Token: Border Radius",
+    });
+
+    await addTokenButton.click();
+    await expect(tokensUpdateCreateModal).toBeVisible();
+
+    const nameField = tokensUpdateCreateModal.getByLabel("Name");
+    const valueField = tokensUpdateCreateModal.getByRole("combobox", {
+      name: "Value",
+    });
+    const submitButton = tokensUpdateCreateModal.getByRole("button", {
+      name: "Save",
+    });
+
+    // Create first token
+    await nameField.fill("my-token");
+    await valueField.fill("1 + 2");
+    await expect(
+      tokensUpdateCreateModal.getByText("Resolved value: 3"),
+    ).toBeVisible();
+    await expect(submitButton).toBeEnabled();
+    await submitButton.click();
+
+    await unfoldTokenType(tokensTabPanel, "border radius");
+    await expect(
+      tokensTabPanel.getByRole("button", { name: "my-token" }),
+    ).toBeEnabled();
+
+    // Create second token — type text first, then replace it via combobox
+    await addTokenButton.click();
+
+    await nameField.fill("my-token-2");
+    await valueField.fill("4 + 4");
+      await expect(
+      tokensUpdateCreateModal.getByText("Resolved value: 8"),
+    ).toBeVisible();
+
+    const toggleDropdownButton = tokensUpdateCreateModal.getByRole("button", {
+      name: "Open token list",
+    });
+    await toggleDropdownButton.click();
+
+    const option = page.getByRole("option", { name: "my-token" });
+    await expect(option).toBeVisible();
+    await option.click();
+
+    // The typed text should have been replaced by {my-token}
+    await expect(valueField).toHaveValue("{my-token}");
+    await expect(
+      tokensUpdateCreateModal.getByText("Resolved value: 3"),
+    ).toBeVisible();
+
+    // Original text must no longer be present
+    await expect(valueField).not.toHaveValue("some text to replace");
+
+    await expect(submitButton).toBeEnabled();
+    await submitButton.click();
+
+    await unfoldTokenType(tokensTabPanel, "border radius");
+    await expect(
+      tokensTabPanel.getByRole("button", { name: "my-token-2" }),
+    ).toBeEnabled();
+  });
+
   test("User creates dimensions token", async ({ page }) => {
     await testTokenCreationFlow(page, {
       tokenLabel: "Dimensions",
diff --git a/frontend/src/app/main/ui/workspace/tokens/management/forms/controls/combobox.cljs b/frontend/src/app/main/ui/workspace/tokens/management/forms/controls/combobox.cljs
index e62729b77d..c69d877aaf 100644
--- a/frontend/src/app/main/ui/workspace/tokens/management/forms/controls/combobox.cljs
+++ b/frontend/src/app/main/ui/workspace/tokens/management/forms/controls/combobox.cljs
@@ -147,12 +147,14 @@
         toggle-dropdown
         (mf/use-fn
          (mf/deps is-open)
-         (fn [event]
+         (fn [event & [select-text?]]
            (dom/prevent-default event)
            (swap! is-open* not)
            (reset! selected-id* (get-selected-id))
-           (let [input-node (mf/ref-val ref)]
-             (dom/focus! input-node))))
+           (when select-text?
+             (let [input-node (mf/ref-val ref)]
+               (dom/select-text! input-node)
+               (dom/focus! input-node)))))
 
         resolve-stream
         (mf/with-memo [token]
@@ -264,7 +266,7 @@
                                      :tab-index "-1"
                                      :aria-label (tr "ds.inputs.numeric-input.open-token-list-dropdown")
                                      :on-mouse-down dom/prevent-default
-                                     :on-click toggle-dropdown}]))})
+                                     :on-click #(toggle-dropdown % true)}]))})
         props
         (if (or extra-error (and error touched?))
           (mf/spread-props props {:hint-type "error"
diff --git a/frontend/src/app/main/ui/workspace/tokens/management/forms/controls/combobox_navigation.cljs b/frontend/src/app/main/ui/workspace/tokens/management/forms/controls/combobox_navigation.cljs
index 3508833797..be078ed2da 100644
--- a/frontend/src/app/main/ui/workspace/tokens/management/forms/controls/combobox_navigation.cljs
+++ b/frontend/src/app/main/ui/workspace/tokens/management/forms/controls/combobox_navigation.cljs
@@ -65,7 +65,7 @@
                      ;; Dropdown closed with options: open and focus first
                      (seq focusables)
                      (do
-                       (toggle-dropdown event)
+                       (toggle-dropdown event false)
                        (when get-selected-id
                          (get-selected-id))
                        (reset! focused-id* (first-focusable-id focusables)))
diff --git a/frontend/src/app/main/ui/workspace/tokens/management/forms/controls/token_parsing.cljs b/frontend/src/app/main/ui/workspace/tokens/management/forms/controls/token_parsing.cljs
index 1c317ff3e3..b06486b9aa 100644
--- a/frontend/src/app/main/ui/workspace/tokens/management/forms/controls/token_parsing.cljs
+++ b/frontend/src/app/main/ui/workspace/tokens/management/forms/controls/token_parsing.cljs
@@ -50,9 +50,12 @@
 (defn select-option-by-id
   [id options-ref input-node value]
   (let [cursor     (dom/selection-start input-node)
+        sel-end    (dom/selection-end input-node)
         options    (mf/ref-val options-ref)
         options    (if (delay? options) @options options)
 
         option     (get-option options id)
         name       (:name option)]
-    (cto/insert-ref value cursor name)))
\ No newline at end of file
+    (if (= cursor sel-end)
+      (cto/insert-ref value cursor name)
+      (cto/build-result value cursor sel-end name))))
\ No newline at end of file
diff --git a/frontend/src/app/util/dom.cljs b/frontend/src/app/util/dom.cljs
index b80a385ad5..f4be22b6c9 100644
--- a/frontend/src/app/util/dom.cljs
+++ b/frontend/src/app/util/dom.cljs
@@ -299,6 +299,11 @@
   (when (some? node)
     (.-selectionStart node)))
 
+(defn selection-end
+  [^js node]
+  (when (some? node)
+    (.-selectionEnd node)))
+
 (defn set-selection-range!
   [^js node start end]
   (when (some? node)