diff --git a/code/ui/manager/src/components/sidebar/Sidebar.tsx b/code/ui/manager/src/components/sidebar/Sidebar.tsx
index 6f4c6eee2b8c..2c98f1a5c695 100644
--- a/code/ui/manager/src/components/sidebar/Sidebar.tsx
+++ b/code/ui/manager/src/components/sidebar/Sidebar.tsx
@@ -152,7 +152,21 @@ export const Sidebar = React.memo(function Sidebar({
             isLoading={isLoading}
             onMenuClick={onMenuClick}
           />
-          <TagsFilter api={api} />
+          <TagsFilter
+            api={api}
+            index={index}
+            updateQueryParams={(params) => {
+              const url = new URL(window.location.href);
+              Object.entries(params).forEach(([key, value]) => {
+                if (value) {
+                  url.searchParams.set(key, value);
+                } else {
+                  url.searchParams.delete(key);
+                }
+              });
+              window.history.pushState({}, '', url);
+            }}
+          />
           <Search
             dataset={dataset}
             enableShortcuts={enableShortcuts}
diff --git a/code/ui/manager/src/components/sidebar/TagsFilter.stories.tsx b/code/ui/manager/src/components/sidebar/TagsFilter.stories.tsx
new file mode 100644
index 000000000000..73892a531968
--- /dev/null
+++ b/code/ui/manager/src/components/sidebar/TagsFilter.stories.tsx
@@ -0,0 +1,44 @@
+import type { Meta, StoryObj } from '@storybook/react';
+import { findByRole, fn } from '@storybook/test';
+
+import { TagsFilter } from './TagsFilter';
+
+const meta = {
+  component: TagsFilter,
+} satisfies Meta<typeof TagsFilter>;
+
+export default meta;
+
+type Story = StoryObj<typeof meta>;
+
+export const Closed: Story = {
+  args: {
+    api: {
+      experimental_setFilter: fn(),
+    } as any,
+    index: {
+      story1: { type: 'story', tags: ['A', 'B', 'C', 'dev'] } as any,
+    },
+    updateQueryParams: fn(),
+  },
+};
+
+export const ClosedWithSelection: Story = {
+  args: {
+    ...Closed.args,
+    initialSelectedTags: ['A', 'B'],
+  },
+};
+
+export const Open: Story = {
+  ...Closed,
+  play: async ({ canvasElement }) => {
+    const button = await findByRole(canvasElement, 'button');
+    await button.click();
+  },
+};
+
+export const OpenWithSelection: Story = {
+  ...ClosedWithSelection,
+  play: Open.play,
+};
diff --git a/code/ui/manager/src/components/sidebar/TagsFilter.tsx b/code/ui/manager/src/components/sidebar/TagsFilter.tsx
index e8ec89c0252a..1945459da7a3 100644
--- a/code/ui/manager/src/components/sidebar/TagsFilter.tsx
+++ b/code/ui/manager/src/components/sidebar/TagsFilter.tsx
@@ -1,60 +1,82 @@
 import React, { useState, useEffect } from 'react';
+import { IconButton, WithTooltip } from '@storybook/components';
+import { FilterIcon } from '@storybook/icons';
 import type { API } from '@storybook/manager-api';
 import type { Tag, API_IndexHash } from '@storybook/types';
-import { IconButton } from '@storybook/components';
-import { FilterIcon } from '@storybook/icons';
+import { TagsFilterPanel } from './TagsFilterPanel';
 
-interface TagsFilterProps {
+const TAGS_FILTER = 'tags-filter';
+
+export interface TagsFilterProps {
   api: API;
   index: API_IndexHash;
+  updateQueryParams: (params: Record<string, string | null>) => void;
+  initialSelectedTags?: Tag[];
 }
 
-const UI_FILTER = 'ui-filter';
-
-export const TagsFilter = ({ api }: TagsFilterProps) => {
-  const [includeTags, setIncludeTags] = useState([]);
-  const [excludeTags, setExcludeTags] = useState([]);
-  const tagsActive = includeTags.length + excludeTags.length > 0;
-
-  const updateTag = (tag: Tag, selected: boolean, include: boolean) => {
-    const [filter, setFilter, queryParam] = include
-      ? [includeTags, setIncludeTags, 'includeTags']
-      : [excludeTags, setExcludeTags, 'excludeTags'];
-
-    // no change needed for state/url if the tag is already in the correct state
-    if ((selected && filter.includes(tag)) || (!selected && !filter.includes(tag))) return;
-
-    // update state
-    const newFilter = selected ? [...filter, tag] : filter.filter((t) => t !== tag);
-    setFilter(newFilter);
-
-    // update URL
-    const url = new URL(window.location.href);
-    if (newFilter.length === 0) {
-      url.searchParams.delete(queryParam);
-    } else {
-      url.searchParams.set(queryParam, newFilter.join(','));
-    }
-    window.history.pushState({}, '', url);
-  };
-
-  const toggleTags = () => {
-    // updateTag('bar', !includeTags.includes('bar'), true);
-    updateTag('bar', !excludeTags.includes('bar'), false);
-  };
+export const TagsFilter = ({
+  api,
+  index,
+  updateQueryParams,
+  initialSelectedTags = [],
+}: TagsFilterProps) => {
+  const [selectedTags, setSelectedTags] = useState(initialSelectedTags);
+  const [exclude, setExclude] = useState(false);
+  const [expanded, setExpanded] = useState(false);
+  const tagsActive = selectedTags.length > 0;
 
   useEffect(() => {
-    api.experimental_setFilter(UI_FILTER, (item) => {
+    api.experimental_setFilter(TAGS_FILTER, (item) => {
       const tags = item.tags ?? [];
-      if (excludeTags.some((tag) => tags.includes(tag))) return false;
-      if (!includeTags.every((tag) => tags.includes(tag))) return false;
-      return true;
+      return exclude
+        ? !selectedTags.some((tag) => tags.includes(tag))
+        : selectedTags.every((tag) => tags.includes(tag));
     });
-  }, [api, includeTags, excludeTags]);
+
+    const tagsParam = selectedTags.join(',');
+    const [includeTags, excludeTags] = exclude ? [null, tagsParam] : [tagsParam, null];
+    updateQueryParams({ includeTags, excludeTags });
+  }, [api, selectedTags, exclude, updateQueryParams]);
+
+  const allTags = Object.values(index).reduce((acc, entry) => {
+    if (entry.type === 'story') {
+      entry.tags.forEach((tag: Tag) => acc.add(tag));
+    }
+    return acc;
+  }, new Set<Tag>());
 
   return (
-    <IconButton key="tags" title="Tag filters" active={tagsActive} onClick={toggleTags}>
-      <FilterIcon />
-    </IconButton>
+    <WithTooltip
+      placement="top"
+      trigger="click"
+      onVisibleChange={setExpanded}
+      tooltip={() => (
+        <TagsFilterPanel
+          allTags={Array.from(allTags)}
+          selectedTags={selectedTags}
+          exclude={exclude}
+          toggleTag={(tag) => {
+            if (selectedTags.includes(tag)) {
+              setSelectedTags(selectedTags.filter((t) => t !== tag));
+            } else {
+              setSelectedTags([...selectedTags, tag]);
+            }
+          }}
+          toggleExclude={() => setExclude(!exclude)}
+        />
+      )}
+    >
+      <IconButton
+        key="tags"
+        title="Tag filters"
+        active={tagsActive}
+        onClick={(event) => {
+          event.preventDefault();
+          setExpanded(!expanded);
+        }}
+      >
+        <FilterIcon />
+      </IconButton>
+    </WithTooltip>
   );
 };
diff --git a/code/ui/manager/src/components/sidebar/TagsFilterPanel.stories.tsx b/code/ui/manager/src/components/sidebar/TagsFilterPanel.stories.tsx
new file mode 100644
index 000000000000..b97093b2d0e1
--- /dev/null
+++ b/code/ui/manager/src/components/sidebar/TagsFilterPanel.stories.tsx
@@ -0,0 +1,52 @@
+import type { Meta, StoryObj } from '@storybook/react';
+import { fn } from '@storybook/test';
+
+import { TagsFilterPanel } from './TagsFilterPanel';
+
+const meta = {
+  component: TagsFilterPanel,
+  args: {
+    exclude: false,
+    toggleTag: fn(),
+    toggleExclude: fn(),
+  },
+} satisfies Meta<typeof TagsFilterPanel>;
+
+export default meta;
+
+type Story = StoryObj<typeof meta>;
+
+export const Empty: Story = {
+  args: {
+    allTags: [],
+    selectedTags: [],
+  },
+};
+
+export const Default: Story = {
+  args: {
+    allTags: ['tag1', 'tag2', 'tag3'],
+    selectedTags: ['tag1', 'tag3'],
+  },
+};
+
+export const Exclude: Story = {
+  args: {
+    ...Default.args,
+    exclude: true,
+  },
+};
+
+export const BuiltInTags: Story = {
+  args: {
+    allTags: [...Default.args.allTags, 'dev', 'autodocs'],
+    selectedTags: ['tag1', 'tag3'],
+  },
+};
+
+export const BuiltInTagsSelected: Story = {
+  args: {
+    ...BuiltInTags.args,
+    selectedTags: ['tag1', 'tag3', 'autodocs'],
+  },
+};
diff --git a/code/ui/manager/src/components/sidebar/TagsFilterPanel.tsx b/code/ui/manager/src/components/sidebar/TagsFilterPanel.tsx
new file mode 100644
index 000000000000..5ab710d928e0
--- /dev/null
+++ b/code/ui/manager/src/components/sidebar/TagsFilterPanel.tsx
@@ -0,0 +1,135 @@
+import type { ChangeEvent } from 'react';
+import React, { useState } from 'react';
+import { transparentize } from 'polished';
+import { styled } from '@storybook/theming';
+import { CollapseIcon } from './components/CollapseIcon';
+
+const BUILT_IN_TAGS = new Set(['dev', 'autodocs', 'test', 'attached-mdx', 'unattached-mdx']);
+
+const CollapseButton = styled.button(({ theme }) => ({
+  all: 'unset',
+  display: 'flex',
+  padding: '0px 8px',
+  borderRadius: 4,
+  transition: 'color 150ms, box-shadow 150ms',
+  gap: 6,
+  alignItems: 'center',
+  cursor: 'pointer',
+  height: 28,
+
+  '&:hover, &:focus': {
+    outline: 'none',
+    background: transparentize(0.93, theme.color.secondary),
+  },
+}));
+
+const Text = styled.span({
+  '[aria-readonly=true] &': {
+    opacity: 0.5,
+  },
+});
+
+const Label = styled.label({
+  lineHeight: '20px',
+  alignItems: 'center',
+  marginBottom: 8,
+
+  '&:last-child': {
+    marginBottom: 0,
+  },
+
+  input: {
+    margin: 0,
+    marginRight: 6,
+  },
+});
+
+interface TagsFilterPanelProps {
+  allTags: Tag[];
+  selectedTags: Tag[];
+  exclude: boolean;
+  toggleTag: (tag: Tag) => void;
+  toggleExclude: () => void;
+}
+
+interface TagsListProps {
+  tags: Tag[];
+  selectedTags: Tag[];
+  toggleTag: (tag: Tag) => void;
+}
+
+const TagsList = ({ tags, selectedTags, toggleTag }: TagsListProps) => {
+  return tags.map((tag) => {
+    const checked = selectedTags.includes(tag);
+    const id = `tag-${tag}`;
+    return (
+      <Label key={id} htmlFor={id}>
+        <input
+          type="checkbox"
+          id={id}
+          name={id}
+          value={tag}
+          onChange={(e: ChangeEvent<HTMLInputElement>) => {
+            toggleTag(e.target.value);
+          }}
+          checked={checked}
+        />
+        <Text>{tag}</Text>
+      </Label>
+    );
+  });
+};
+
+const Wrapper = styled.div({
+  label: {
+    display: 'flex',
+  },
+});
+
+export const TagsFilterPanel = ({
+  allTags,
+  selectedTags,
+  exclude,
+  toggleTag,
+  toggleExclude,
+}: TagsFilterPanelProps) => {
+  const userTags = allTags.filter((tag) => !BUILT_IN_TAGS.has(tag)).toSorted();
+  const builtInTags = allTags.filter((tag) => BUILT_IN_TAGS.has(tag)).toSorted();
+  const [builtinsExpanded, setBuiltinsExpanded] = useState(
+    selectedTags.some((tag) => BUILT_IN_TAGS.has(tag))
+  );
+
+  return (
+    <div>
+      {userTags.length === 0 ? (
+        'No tags defined'
+      ) : (
+        <Wrapper>
+          Tags <span onClick={toggleExclude}>{exclude ? 'does not contain' : 'contains'}</span>
+          <TagsList tags={userTags} selectedTags={selectedTags} toggleTag={toggleTag} />
+        </Wrapper>
+      )}
+      {builtInTags.length > 0 && (
+        <>
+          <CollapseButton
+            type="button"
+            data-action="collapse-root"
+            onClick={(event) => {
+              event.preventDefault();
+              setBuiltinsExpanded(!builtinsExpanded);
+            }}
+            aria-expanded={builtinsExpanded}
+          >
+            <CollapseIcon isExpanded={builtinsExpanded} />
+            Built-in tags
+          </CollapseButton>
+          {builtinsExpanded ? (
+            <Wrapper>
+              <TagsList tags={builtInTags} selectedTags={selectedTags} toggleTag={toggleTag} />
+            </Wrapper>
+          ) : null}
+        </>
+      )}
+    </div>
+  );
+};