diff --git a/frontend/public/components/modals/__tests__/impersonate-user-modal-integration.spec.tsx b/frontend/public/components/modals/__tests__/impersonate-user-modal-integration.spec.tsx
index c935378c0c2..21212e88316 100644
--- a/frontend/public/components/modals/__tests__/impersonate-user-modal-integration.spec.tsx
+++ b/frontend/public/components/modals/__tests__/impersonate-user-modal-integration.spec.tsx
@@ -250,7 +250,7 @@ describe('ImpersonateUserModal Integration Tests', () => {
       });
     });
 
-    it('should show no results when filter matches nothing', async () => {
+    it('should show "Create" option when filter matches nothing in available groups', async () => {
       const user = userEvent.setup();
       render(
         <Provider store={mockStore}>
@@ -268,31 +268,84 @@ describe('ImpersonateUserModal Integration Tests', () => {
       // Type to filter with non-matching text
       await user.type(groupsInput, 'nonexistent');
 
-      expect(await screen.findByText('No results found')).toBeVisible();
+      // Should show "Create" option instead of just "No results found"
+      expect(await screen.findByText('Create "nonexistent"')).toBeVisible();
     });
   });
 
-  describe('Error handling workflow', () => {
-    it('should show error when groups fail to load', async () => {
-      const error = new Error('Failed to fetch groups');
-      (useK8sWatchResource as jest.Mock).mockReturnValue([[], false, error]);
+  describe('Direct Authentication / model-absent workflow', () => {
+    it('should allow group impersonation when Group model does not exist', async () => {
+      const error = new Error('Model does not exist');
+      (useK8sWatchResource as jest.Mock).mockReturnValue([[], true, error]);
+
+      const user = userEvent.setup();
+      const onImpersonate = jest.fn();
 
       render(
         <Provider store={mockStore}>
-          <ImpersonateUserModal isOpen onClose={jest.fn()} onImpersonate={jest.fn()} />
+          <ImpersonateUserModal isOpen onClose={jest.fn()} onImpersonate={onImpersonate} />
         </Provider>,
       );
 
-      expect(await screen.findByText('Failed to load groups')).toBeVisible();
+      // Should NOT show error alert
+      expect(screen.queryByText('Failed to load groups')).not.toBeInTheDocument();
+
+      // Should show helper text for manual entry
+      expect(
+        screen.getByText('Type group names manually. Press Enter to add each group.'),
+      ).toBeInTheDocument();
+
+      // Enter username
+      const usernameInput = screen.getByTestId('username-input');
+      await user.clear(usernameInput);
+      await user.type(usernameInput, 'oidc-user');
+
+      // Enter groups via free-form
+      const groupInput = screen.getByPlaceholderText('Enter groups');
+      await user.click(groupInput);
+      await user.type(groupInput, 'oidc-admins{Enter}');
+      await user.type(groupInput, 'oidc-devs{Enter}');
+
+      // Both groups should appear as chips
+      await waitFor(() => {
+        expect(screen.getByText('oidc-admins')).toBeInTheDocument();
+        expect(screen.getByText('oidc-devs')).toBeInTheDocument();
+      });
+
+      // Submit
+      const submitButton = screen.getByTestId('impersonate-button');
+      await user.click(submitButton);
+
+      await waitFor(() => {
+        expect(onImpersonate).toHaveBeenCalledWith('oidc-user', ['oidc-admins', 'oidc-devs']);
+      });
+    });
+
+    it('should still allow impersonation without groups when model is absent', async () => {
+      const error = new Error('Model does not exist');
+      (useK8sWatchResource as jest.Mock).mockReturnValue([[], true, error]);
 
-      // Should still allow impersonation without groups
       const ue = userEvent.setup();
+      const onImpersonate = jest.fn();
+
+      render(
+        <Provider store={mockStore}>
+          <ImpersonateUserModal isOpen onClose={jest.fn()} onImpersonate={onImpersonate} />
+        </Provider>,
+      );
+
       const usernameInput = screen.getByTestId('username-input');
       await ue.clear(usernameInput);
       await ue.type(usernameInput, 'erroruser');
 
       const submitButton = screen.getByTestId('impersonate-button');
       expect(submitButton).not.toBeDisabled();
+
+      await ue.click(submitButton);
+
+      await waitFor(() => {
+        expect(onImpersonate).toHaveBeenCalledWith('erroruser', []);
+      });
     });
   });
 
diff --git a/frontend/public/components/modals/__tests__/impersonate-user-modal.spec.tsx b/frontend/public/components/modals/__tests__/impersonate-user-modal.spec.tsx
index 1f2de4520e8..0b4802a986b 100644
--- a/frontend/public/components/modals/__tests__/impersonate-user-modal.spec.tsx
+++ b/frontend/public/components/modals/__tests__/impersonate-user-modal.spec.tsx
@@ -163,17 +163,164 @@ describe('ImpersonateUserModal', () => {
       expect(screen.getByPlaceholderText('Enter groups')).toBeInTheDocument();
     });
 
-    it('should show error alert when groups fail to load', () => {
-      const error = new Error('Failed to load groups');
+    it('should gracefully handle group load errors without showing error alert', () => {
+      const error = new Error('Model does not exist');
       (useK8sWatchResource as jest.Mock).mockReturnValue([[], false, error]);
 
       render(
         <ImpersonateUserModal isOpen onClose={mockOnClose} onImpersonate={mockOnImpersonate} />,
       );
 
-      // Check for alert with danger variant
-      const alerts = screen.getAllByText('Failed to load groups');
-      expect(alerts.length).toBeGreaterThan(0);
+      // Should NOT show error alert — free-form entry is available instead
+      expect(screen.queryByText('Failed to load groups')).not.toBeInTheDocument();
+      // Should show helper text for manual entry
+      expect(
+        screen.getByText('Type group names manually. Press Enter to add each group.'),
+      ).toBeInTheDocument();
+    });
+  });
+
+  describe('Free-form Group Entry', () => {
+    it('should add a group on Enter key press', async () => {
+      const user = userEvent.setup();
+      // Groups model unavailable
+      const error = new Error('Model does not exist');
+      (useK8sWatchResource as jest.Mock).mockReturnValue([[], true, error]);
+
+      render(
+        <ImpersonateUserModal isOpen onClose={mockOnClose} onImpersonate={mockOnImpersonate} />,
+      );
+
+      const groupInput = screen.getByPlaceholderText('Enter groups');
+      await user.click(groupInput);
+      await user.type(groupInput, 'my-custom-group{Enter}');
+
+      // Group chip should appear
+      await waitFor(() => {
+        expect(screen.getByText('my-custom-group')).toBeInTheDocument();
+      });
+    });
+
+    it('should add multiple free-form groups', async () => {
+      const user = userEvent.setup();
+      const error = new Error('Model does not exist');
+      (useK8sWatchResource as jest.Mock).mockReturnValue([[], true, error]);
+
+      render(
+        <ImpersonateUserModal isOpen onClose={mockOnClose} onImpersonate={mockOnImpersonate} />,
+      );
+
+      const groupInput = screen.getByPlaceholderText('Enter groups');
+      await user.click(groupInput);
+      await user.type(groupInput, 'group-a{Enter}');
+      await user.type(groupInput, 'group-b{Enter}');
+
+      await waitFor(() => {
+        expect(screen.getByText('group-a')).toBeInTheDocument();
+        expect(screen.getByText('group-b')).toBeInTheDocument();
+      });
+    });
+
+    it('should not add duplicate groups on Enter', async () => {
+      const user = userEvent.setup();
+      const error = new Error('Model does not exist');
+      (useK8sWatchResource as jest.Mock).mockReturnValue([[], true, error]);
+
+      render(
+        <ImpersonateUserModal isOpen onClose={mockOnClose} onImpersonate={mockOnImpersonate} />,
+      );
+
+      const groupInput = screen.getByPlaceholderText('Enter groups');
+      await user.click(groupInput);
+      await user.type(groupInput, 'my-group{Enter}');
+      await user.type(groupInput, 'my-group{Enter}');
+
+      await waitFor(() => {
+        // eslint-disable-next-line testing-library/no-node-access -- checking chip count
+        const chips = document.querySelectorAll('.pf-v6-c-label');
+        expect(chips.length).toBe(1);
+      });
+    });
+
+    it('should show "Create" option in dropdown for new group name', async () => {
+      const user = userEvent.setup();
+      render(
+        <ImpersonateUserModal isOpen onClose={mockOnClose} onImpersonate={mockOnImpersonate} />,
+      );
+
+      const groupInput = screen.getByPlaceholderText('Enter groups');
+      await user.click(groupInput);
+      await user.type(groupInput, 'new-custom-group');
+
+      await waitFor(() => {
+        expect(screen.getByText('Create "new-custom-group"')).toBeInTheDocument();
+      });
+    });
+
+    it('should add group via "Create" option click', async () => {
+      const user = userEvent.setup();
+      render(
+        <ImpersonateUserModal isOpen onClose={mockOnClose} onImpersonate={mockOnImpersonate} />,
+      );
+
+      const groupInput = screen.getByPlaceholderText('Enter groups');
+      await user.click(groupInput);
+      await user.type(groupInput, 'new-custom-group');
+
+      const createOption = await screen.findByTestId('create-group-option');
+      await user.click(createOption);
+
+      await waitFor(() => {
+        // eslint-disable-next-line testing-library/no-node-access -- checking chip appearance
+        const chips = document.querySelectorAll('.pf-v6-c-label');
+        expect(chips.length).toBe(1);
+      });
+    });
+
+    it('should submit free-form groups with onImpersonate', async () => {
+      const user = userEvent.setup();
+      const error = new Error('Model does not exist');
+      (useK8sWatchResource as jest.Mock).mockReturnValue([[], true, error]);
+
+      render(
+        <ImpersonateUserModal isOpen onClose={mockOnClose} onImpersonate={mockOnImpersonate} />,
+      );
+
+      const usernameInput = screen.getByTestId('username-input');
+      await user.clear(usernameInput);
+      await user.type(usernameInput, 'testuser');
+
+      const groupInput = screen.getByPlaceholderText('Enter groups');
+      await user.click(groupInput);
+      await user.type(groupInput, 'oidc-admins{Enter}');
+      await user.type(groupInput, 'oidc-developers{Enter}');
+
+      const submitButton = screen.getByTestId('impersonate-button');
+      await user.click(submitButton);
+
+      await waitFor(() => {
+        expect(mockOnImpersonate).toHaveBeenCalledWith('testuser', [
+          'oidc-admins',
+          'oidc-developers',
+        ]);
+      });
+    });
+
+    it('should show hint text when model unavailable and no text typed', async () => {
+      const user = userEvent.setup();
+      const error = new Error('Model does not exist');
+      (useK8sWatchResource as jest.Mock).mockReturnValue([[], true, error]);
+
+      render(
+        <ImpersonateUserModal isOpen onClose={mockOnClose} onImpersonate={mockOnImpersonate} />,
+      );
+
+      const groupInput = screen.getByPlaceholderText('Enter groups');
+      await user.click(groupInput);
+
+      await waitFor(() => {
+        expect(screen.getByText('Type a group name and press Enter')).toBeInTheDocument();
+      });
     });
   });
 
diff --git a/frontend/public/components/modals/impersonate-user-modal.tsx b/frontend/public/components/modals/impersonate-user-modal.tsx
index 902e7210d9a..e5e3d3c9a03 100644
--- a/frontend/public/components/modals/impersonate-user-modal.tsx
+++ b/frontend/public/components/modals/impersonate-user-modal.tsx
@@ -1,13 +1,13 @@
-import type { FC, Ref, MouseEvent } from 'react';
-import { useState, useEffect, useMemo, useCallback, useRef } from 'react';
+import type { FC, KeyboardEvent, Ref, MouseEvent } from 'react';
+import { useState, useMemo, useCallback, useRef } from 'react';
 import type { MenuToggleElement } from '@patternfly/react-core';
 import {
+  Alert,
+  AlertVariant,
   Button,
   Form,
   FormGroup,
   TextInput,
-  Alert,
-  AlertVariant,
   Select,
   SelectList,
   SelectOption,
@@ -35,6 +35,7 @@ import { FieldLevelHelp } from '../utils/field-level-help';
 import { useK8sWatchResource } from '../utils/k8s-watch-hook';
 
 const SELECT_ALL_KEY = '__select_all__';
+const CREATE_KEY = '__create__';
 const MAX_VISIBLE_CHIPS = 5;
 
 export interface ImpersonateUserModalProps {
@@ -47,6 +48,16 @@ export interface ImpersonateUserModalProps {
 
 export const ImpersonateUserModal: FC<ImpersonateUserModalProps> = ({
   isOpen,
+  onClose,
+  ...rest
+}) => (
+  <Modal variant={ModalVariant.small} isOpen={isOpen} onClose={onClose}>
+    {isOpen && <ImpersonateUserModalContent onClose={onClose} {...rest} />}
+  </Modal>
+);
+
+/** Inner content component that mounts/unmounts with the modal, resetting state naturally. */
+const ImpersonateUserModalContent: FC<Omit<ImpersonateUserModalProps, 'isOpen'>> = ({
   onClose,
   onImpersonate,
   prefilledUsername = '',
@@ -70,20 +81,20 @@ export const ImpersonateUserModal: FC<ImpersonateUserModalProps> = ({
     isList: true,
   });
 
+  // Whether groups are available from the API (model exists and loaded successfully)
+  const groupsAvailable = groupsLoaded && !groupsLoadError;
+
   // Extract group names from the API response
   const availableGroups = useMemo(() => {
-    if (!groupsLoaded || groupsLoadError) {
+    if (!groupsAvailable) {
       return [];
     }
     return groups.map((group) => group.metadata.name).sort();
-  }, [groups, groupsLoaded, groupsLoadError]);
+  }, [groups, groupsAvailable]);
 
   const handleClose = useCallback(() => {
-    setUsername(prefilledUsername);
-    setSelectedGroups([]);
-    setUsernameError('');
     onClose();
-  }, [prefilledUsername, onClose]);
+  }, [onClose]);
 
   const handleUsernameChange = (value: string) => {
     setUsername(value);
@@ -102,6 +113,31 @@ export const ImpersonateUserModal: FC<ImpersonateUserModalProps> = ({
     );
   }, [groupSearchFilter, availableGroups]);
 
+  // Check if typed text can be created as a new group entry
+  const isCreatableGroup = useMemo(() => {
+    const trimmed = groupSearchFilter.trim();
+    if (!trimmed) {
+      return false;
+    }
+    // Don't show "Create" if it exactly matches an existing available group or is already selected
+    const alreadyExists = availableGroups.some(
+      (g) => g.toLowerCase() === trimmed.toLowerCase(),
+    );
+    return !alreadyExists && !selectedGroups.includes(trimmed);
+  }, [groupSearchFilter, availableGroups, selectedGroups]);
+
+  // Add a free-form group name
+  const handleCreateGroup = useCallback(
+    (groupName: string) => {
+      const trimmed = groupName.trim();
+      if (trimmed && !selectedGroups.includes(trimmed)) {
+        setSelectedGroups([...selectedGroups, trimmed]);
+        setGroupSearchFilter('');
+      }
+    },
+    [selectedGroups],
+  );
+
   const handleSelectAll = useCallback(() => {
     if (selectedGroups.length === filteredGroups.length) {
       // If all filtered groups are selected, deselect all
@@ -117,6 +153,12 @@ export const ImpersonateUserModal: FC<ImpersonateUserModalProps> = ({
     (_event: MouseEvent | undefined, value: string | number) => {
       const group = value as string;
 
+      // Handle "Create" option
+      if (group === CREATE_KEY) {
+        handleCreateGroup(groupSearchFilter);
+        return;
+      }
+
       // Handle "Select all" option
       if (group === SELECT_ALL_KEY) {
         handleSelectAll();
@@ -132,13 +174,24 @@ export const ImpersonateUserModal: FC<ImpersonateUserModalProps> = ({
       }
       // Keep dropdown open - don't call setIsGroupSelectOpen(false)
     },
-    [selectedGroups, handleSelectAll],
+    [selectedGroups, handleSelectAll, handleCreateGroup, groupSearchFilter],
   );
 
   const handleGroupRemove = (groupToRemove: string) => {
     setSelectedGroups(selectedGroups.filter((g) => g !== groupToRemove));
   };
 
+  // Handle Enter key to add free-form group
+  const handleGroupInputKeyDown = (event: KeyboardEvent<HTMLInputElement>) => {
+    if (event.key === 'Enter') {
+      event.preventDefault();
+      const trimmed = groupSearchFilter.trim();
+      if (trimmed && !selectedGroups.includes(trimmed)) {
+        handleCreateGroup(trimmed);
+      }
+    }
+  };
+
   const validateForm = (): boolean => {
     if (!username.trim()) {
       setUsernameError(t('Username is required'));
@@ -154,25 +207,12 @@ export const ImpersonateUserModal: FC<ImpersonateUserModalProps> = ({
     }
   };
 
-  // Reset form when modal opens with new prefilled username
-  useEffect(() => {
-    if (isOpen) {
-      setUsername(prefilledUsername);
-      setSelectedGroups([]);
-      setUsernameError('');
-      setGroupSearchFilter('');
-      setShowAllGroups(false);
-    }
-  }, [isOpen, prefilledUsername]);
-
-  // Reset showAllGroups when selected groups drop to or below MAX_VISIBLE_CHIPS
-  useEffect(() => {
-    if (selectedGroups.length <= MAX_VISIBLE_CHIPS) {
-      setShowAllGroups(false);
-    }
-  }, [selectedGroups.length]);
+  // Derive effective showAllGroups — auto-collapse when groups drop to/below threshold
+  const effectiveShowAllGroups = showAllGroups && selectedGroups.length > MAX_VISIBLE_CHIPS;
 
-  const visibleGroups = showAllGroups ? selectedGroups : selectedGroups.slice(0, MAX_VISIBLE_CHIPS);
+  const visibleGroups = effectiveShowAllGroups
+    ? selectedGroups
+    : selectedGroups.slice(0, MAX_VISIBLE_CHIPS);
   const remainingCount = selectedGroups.length - MAX_VISIBLE_CHIPS;
 
   // Check if all filtered groups are selected
@@ -203,6 +243,7 @@ export const ImpersonateUserModal: FC<ImpersonateUserModalProps> = ({
               setIsGroupSelectOpen(true);
             }
           }}
+          onKeyDown={handleGroupInputKeyDown}
           autoComplete="off"
           innerRef={textInputGroupRef}
           placeholder={t('Enter groups')}
@@ -228,8 +269,63 @@ export const ImpersonateUserModal: FC<ImpersonateUserModalProps> = ({
     </MenuToggle>
   );
 
+  // Build the dropdown options list
+  const renderSelectOptions = () => {
+    const options: JSX.Element[] = [];
+
+    // Show "Select all" only when API groups are available and there are filtered results
+    if (filteredGroups.length > 0) {
+      options.push(
+        <SelectOption
+          key={SELECT_ALL_KEY}
+          value={SELECT_ALL_KEY}
+          isSelected={areAllFilteredGroupsSelected}
+        >
+          {t('Select all')}
+        </SelectOption>,
+      );
+
+      filteredGroups.forEach((group) => {
+        options.push(
+          <SelectOption key={group} value={group} isSelected={selectedGroups.includes(group)}>
+            {group}
+          </SelectOption>,
+        );
+      });
+    }
+
+    // Show "Create" option for free-form entry when typed text is new
+    if (isCreatableGroup) {
+      options.push(
+        <SelectOption key={CREATE_KEY} value={CREATE_KEY} data-test="create-group-option">
+          {t('Create "{{groupName}}"', { groupName: groupSearchFilter.trim() })}
+        </SelectOption>,
+      );
+    }
+
+    // Show hint when no options and no creatable text
+    if (options.length === 0) {
+      if (groupSearchFilter.trim()) {
+        // Text is typed but it's already selected
+        options.push(
+          <SelectOption key="already-added" isDisabled>
+            {t('Group already added')}
+          </SelectOption>,
+        );
+      } else {
+        options.push(
+          <SelectOption key="hint" isDisabled>
+            {groupsAvailable ? t('No results found') : t('Type a group name and press Enter')}
+          </SelectOption>,
+        );
+      }
+    }
+
+    return options;
+  };
+
   return (
-    <Modal variant={ModalVariant.small} isOpen={isOpen} onClose={handleClose}>
+    <>
       <ModalHeader title={t('Impersonate')} />
       <ModalBody>
         <Form>
@@ -241,12 +337,6 @@ export const ImpersonateUserModal: FC<ImpersonateUserModalProps> = ({
             )}
           />
 
-          {groupsLoadError && (
-            <Alert variant={AlertVariant.danger} isInline title={t('Failed to load groups')}>
-              {groupsLoadError.message}
-            </Alert>
-          )}
-
           <FormGroup
             label={
               <>
@@ -304,32 +394,19 @@ export const ImpersonateUserModal: FC<ImpersonateUserModalProps> = ({
               aria-label={t('Select groups to impersonate')}
               aria-describedby="groups-help-text"
             >
-              <SelectList id="impersonate-groups-listbox">
-                {filteredGroups.length === 0 ? (
-                  <SelectOption isDisabled>{t('No results found')}</SelectOption>
-                ) : (
-                  <>
-                    <SelectOption
-                      key={SELECT_ALL_KEY}
-                      value={SELECT_ALL_KEY}
-                      isSelected={areAllFilteredGroupsSelected}
-                    >
-                      {t('Select all')}
-                    </SelectOption>
-                    {filteredGroups.map((group) => (
-                      <SelectOption
-                        key={group}
-                        value={group}
-                        isSelected={selectedGroups.includes(group)}
-                      >
-                        {group}
-                      </SelectOption>
-                    ))}
-                  </>
-                )}
-              </SelectList>
+              <SelectList id="impersonate-groups-listbox">{renderSelectOptions()}</SelectList>
             </Select>
 
+            {!groupsAvailable && (
+              <FormHelperText id="groups-help-text">
+                <HelperText>
+                  <HelperTextItem>
+                    {t('Type group names manually. Press Enter to add each group.')}
+                  </HelperTextItem>
+                </HelperText>
+              </FormHelperText>
+            )}
+
             {selectedGroups.length > 0 && (
               <Flex spaceItems={{ default: 'spaceItemsSm' }} className="pf-v6-u-mt-sm">
                 {visibleGroups.map((group) => (
@@ -365,6 +442,6 @@ export const ImpersonateUserModal: FC<ImpersonateUserModalProps> = ({
           {t('Cancel')}
         </Button>
       </ModalFooter>
-    </Modal>
+    </>
   );
 };
diff --git a/frontend/public/locales/en/public.json b/frontend/public/locales/en/public.json
index 7078a415270..599eda8411c 100644
--- a/frontend/public/locales/en/public.json
+++ b/frontend/public/locales/en/public.json
@@ -443,6 +443,7 @@
   "CrashLoopBackOff indicates that the application in the container is repeatedly failing to start.": "CrashLoopBackOff indicates that the application in the container is repeatedly failing to start.",
   "CRD versions": "CRD versions",
   "Create": "Create",
+  "Create \"{{groupName}}\"": "Create \"{{groupName}}\"",
   "Create {{formType}} secret": "Create {{formType}} secret",
   "Create {{label}}": "Create {{label}}",
   "Create {{objLabel}}": "Create {{objLabel}}",
@@ -666,7 +667,6 @@
   "Extra scopes": "Extra scopes",
   "Failed": "Failed",
   "Failed pods": "Failed pods",
-  "Failed to load groups": "Failed to load groups",
   "Failed to parse YAML sample": "Failed to parse YAML sample",
   "Failing": "Failing",
   "false": "false",
@@ -727,6 +727,7 @@
   "greater than pod_one": "greater than pod",
   "greater than pod_other": "greater than pods",
   "Group": "Group",
+  "Group already added": "Group already added",
   "Group by": "Group by",
   "Group details": "Group details",
   "Group interval": "Group interval",
@@ -1632,6 +1633,8 @@
   "Try the OpenShift Pipelines tutorial": "Try the OpenShift Pipelines tutorial",
   "Try the sample AI Chatbot Helm chart": "Try the sample AI Chatbot Helm chart",
   "Type": "Type",
+  "Type a group name and press Enter": "Type a group name and press Enter",
+  "Type group names manually. Press Enter to add each group.": "Type group names manually. Press Enter to add each group.",
   "Unable to load VolumeAttributesClass resources": "Unable to load VolumeAttributesClass resources",
   "Unable to resolve": "Unable to resolve",
   "Unable to Rollback": "Unable to Rollback",