diff --git a/packages/propel/src/calendar/calendar.stories.tsx b/packages/propel/src/calendar/calendar.stories.tsx
index a6a7a7a3fd0..85c427c7db3 100644
--- a/packages/propel/src/calendar/calendar.stories.tsx
+++ b/packages/propel/src/calendar/calendar.stories.tsx
@@ -97,7 +97,7 @@ export const DisabledWeekends: Story = {
           mode="single"
           selected={date}
           onSelect={setDate}
-          disabled={(date) => date.getDay() === 0 || date.getDay() === 6}
+          disabled={(day) => day.getDay() === 0 || day.getDay() === 6}
           className="rounded-md border"
         />
       </div>
@@ -121,7 +121,7 @@ export const MinMaxDates: Story = {
           mode="single"
           selected={date}
           onSelect={setDate}
-          disabled={(date) => date < tenDaysAgo || date > tenDaysFromNow}
+          disabled={(day) => day < tenDaysAgo || day > tenDaysFromNow}
           className="rounded-md border"
         />
       </div>
@@ -198,3 +198,22 @@ export const Uncontrolled: Story = {
     );
   },
 };
+
+export const WithMonthYearDropdowns: Story = {
+  render(args) {
+    const [date, setDate] = useState<Date | undefined>(new Date());
+
+    return (
+      <div className="p-4">
+        <Calendar
+          {...args}
+          mode="single"
+          selected={date}
+          onSelect={setDate}
+          captionLayout="dropdown"
+          className="rounded-md border"
+        />
+      </div>
+    );
+  },
+};
diff --git a/packages/propel/src/calendar/root.tsx b/packages/propel/src/calendar/root.tsx
index eb962064be6..fd9516c614f 100644
--- a/packages/propel/src/calendar/root.tsx
+++ b/packages/propel/src/calendar/root.tsx
@@ -5,13 +5,149 @@
  */
 
 import * as React from "react";
-import { DayPicker } from "react-day-picker";
+import { createPortal } from "react-dom";
+import { DayPicker, UI } from "react-day-picker";
+import type { DropdownProps } from "react-day-picker";
+import { ChevronDownIcon } from "../icons/arrows/chevron-down";
 import { ChevronLeftIcon } from "../icons/arrows/chevron-left";
 
 import { cn } from "../utils";
 
 export type CalendarProps = React.ComponentProps<typeof DayPicker>;
 
+/**
+ * Replacement for react-day-picker's caption dropdowns (month/year).
+ *
+ * The default implementation renders an invisible native `<select>` over the caption label.
+ * Inside Plane's portaled dropdown popups, clicking that native select opens an OS-level
+ * popup window: the browser window blurs and the surrounding Headless UI combobox treats it
+ * as an outside interaction, tearing down the calendar before the selection lands. Rendering
+ * an in-page menu instead (portal-positioned, so it is not clipped by the popup's
+ * `overflow-hidden`) keeps the interaction inside the window and avoids the blur entirely.
+ */
+function CalendarCaptionDropdown(dropdownProps: DropdownProps) {
+  const { options, value, onChange, disabled, className, classNames, "aria-label": ariaLabel, style } = dropdownProps;
+  const [isOpen, setIsOpen] = React.useState(false);
+  const [menuPosition, setMenuPosition] = React.useState<{ top: number; left: number; openUpwards: boolean } | null>(
+    null
+  );
+  const triggerRef = React.useRef<HTMLButtonElement>(null);
+  const menuRef = React.useRef<HTMLDivElement>(null);
+
+  const selectedOption = options?.find((option) => option.value === Number(value));
+
+  const handleTriggerClick = () => {
+    if (isOpen) {
+      setIsOpen(false);
+      return;
+    }
+    const trigger = triggerRef.current;
+    if (!trigger) return;
+    const rect = trigger.getBoundingClientRect();
+    // flip the menu above the trigger when there is not enough room below
+    const openUpwards = rect.bottom + 260 > window.innerHeight && rect.top > 260;
+    setMenuPosition({ top: openUpwards ? rect.top - 4 : rect.bottom + 4, left: rect.left, openUpwards });
+    setIsOpen(true);
+  };
+
+  React.useEffect(() => {
+    if (!isOpen) return;
+    const handlePointerDown = (event: PointerEvent) => {
+      const target = event.target as Node;
+      if (triggerRef.current?.contains(target) || menuRef.current?.contains(target)) return;
+      setIsOpen(false);
+    };
+    const handleKeyDown = (event: KeyboardEvent) => {
+      if (event.key === "Escape") setIsOpen(false);
+    };
+    // the menu is anchored to viewport coordinates: any viewport change closes it,
+    // except scrolls inside the menu itself (wheel-scrolling the option list)
+    const handleViewportChange = (event: Event) => {
+      if (event.target instanceof Node && menuRef.current?.contains(event.target)) return;
+      setIsOpen(false);
+    };
+    document.addEventListener("pointerdown", handlePointerDown);
+    document.addEventListener("keydown", handleKeyDown);
+    window.addEventListener("resize", handleViewportChange);
+    window.addEventListener("scroll", handleViewportChange, true);
+    return () => {
+      document.removeEventListener("pointerdown", handlePointerDown);
+      document.removeEventListener("keydown", handleKeyDown);
+      window.removeEventListener("resize", handleViewportChange);
+      window.removeEventListener("scroll", handleViewportChange, true);
+    };
+  }, [isOpen]);
+
+  const handleOptionSelect = (optionValue: number) => {
+    // react-day-picker's month/year change handlers read `e.target.value` from the change event
+    onChange?.({ target: { value: String(optionValue) } } as React.ChangeEvent<HTMLSelectElement>);
+    setIsOpen(false);
+  };
+
+  // bring the selected option into view when the menu opens (e.g. the current year)
+  React.useEffect(() => {
+    if (!isOpen) return;
+    menuRef.current?.querySelector('[aria-selected="true"]')?.scrollIntoView({ block: "center" });
+  }, [isOpen]);
+
+  return (
+    <span data-disabled={disabled === true} className={classNames[UI.DropdownRoot]} style={style}>
+      <button
+        ref={triggerRef}
+        type="button"
+        aria-label={ariaLabel}
+        aria-haspopup="listbox"
+        aria-expanded={isOpen}
+        disabled={disabled}
+        onClick={handleTriggerClick}
+        className={cn(classNames[UI.CaptionLabel], className, "cursor-pointer disabled:cursor-not-allowed")}
+      >
+        {selectedOption?.label}
+        <ChevronDownIcon className="ml-1 size-3.5" />
+      </button>
+      {isOpen &&
+        menuPosition &&
+        createPortal(
+          <div
+            ref={menuRef}
+            role="listbox"
+            aria-label={ariaLabel}
+            className="fixed z-[9999] min-w-28 overflow-auto rounded-md border border-subtle bg-surface-1 p-1 shadow-raised-200"
+            style={{
+              top: menuPosition.top,
+              left: menuPosition.left,
+              maxHeight: "16rem",
+              ...(menuPosition.openUpwards ? { transform: "translateY(-100%)" } : {}),
+            }}
+            // the menu is portaled to body, i.e. outside the surrounding popover's DOM:
+            // stop pointer/mouse events from reaching Headless UI's outside-click dismissal,
+            // otherwise clicking an option closes the whole date picker before the selection lands
+            onPointerDown={(e) => e.stopPropagation()}
+            onMouseDown={(e) => e.stopPropagation()}
+          >
+            {options?.map((option) => (
+              <button
+                key={option.value}
+                type="button"
+                role="option"
+                aria-selected={option.value === Number(value)}
+                disabled={option.disabled}
+                onClick={() => handleOptionSelect(option.value)}
+                className={cn(
+                  "flex w-full cursor-pointer items-center rounded-sm px-2 py-1.5 text-left text-13 outline-none hover:bg-layer-transparent-hover focus-visible:bg-layer-transparent-hover disabled:cursor-not-allowed disabled:opacity-50",
+                  { "bg-layer-transparent-active": option.value === Number(value) }
+                )}
+              >
+                {option.label}
+              </button>
+            ))}
+          </div>,
+          document.body
+        )}
+    </span>
+  );
+}
+
 export function Calendar({ className, showOutsideDays = true, ...props }: CalendarProps) {
   const currentYear = new Date().getFullYear();
   const thirtyYearsAgoFirstDay = new Date(currentYear - 30, 0, 1);
@@ -23,16 +159,17 @@ export function Calendar({ className, showOutsideDays = true, ...props }: Calend
       className={cn("p-3", className)}
       weekStartsOn={props.weekStartsOn}
       components={{
-        Chevron: ({ className, ...props }) => (
+        Chevron: ({ className: chevronClassName, ...chevronProps }) => (
           <ChevronLeftIcon
             className={cn(
               "size-4",
-              { "rotate-180": props.orientation === "right", "-rotate-90": props.orientation === "down" },
-              className
+              { "rotate-180": chevronProps.orientation === "right", "-rotate-90": chevronProps.orientation === "down" },
+              chevronClassName
             )}
-            {...props}
+            {...chevronProps}
           />
         ),
+        Dropdown: CalendarCaptionDropdown,
       }}
       startMonth={thirtyYearsAgoFirstDay}
       endMonth={thirtyYearsFromNowFirstDay}