diff --git a/packages/react/src/AnchoredOverlay/AnchoredOverlay.dev.stories.tsx b/packages/react/src/AnchoredOverlay/AnchoredOverlay.dev.stories.tsx
index fc95111e9a3..dc9cb7331a6 100644
--- a/packages/react/src/AnchoredOverlay/AnchoredOverlay.dev.stories.tsx
+++ b/packages/react/src/AnchoredOverlay/AnchoredOverlay.dev.stories.tsx
@@ -5,6 +5,11 @@ import {Button} from '../Button'
 import {AnchoredOverlay} from '.'
 import {Stack} from '../Stack'
 import {Dialog, Spinner, ActionList, ActionMenu} from '..'
+import Octicon from '../Octicon'
+import Avatar from '../Avatar'
+import Link from '../Link'
+import {LocationIcon, RepoIcon} from '@primer/octicons-react'
+import classes from './AnchoredOverlay.features.stories.module.css'
 
 const meta = {
   title: 'Components/AnchoredOverlay/Dev',
@@ -13,6 +18,34 @@ const meta = {
 
 export default meta
 
+const hoverCard = (
+  <Stack gap="condensed" style={{padding: '16px'}}>
+    <Stack direction="horizontal" gap="condensed" justify="space-between">
+      <Avatar src="https://avatars.githubusercontent.com/u/7143434?v=4" size={48} />
+      <Button size="small">Follow</Button>
+    </Stack>
+    <Stack direction="horizontal" gap="none">
+      <span className={classes.UserName}>monalisa</span>
+      <span className={classes.UserMeta}>
+        <Link inline muted href="#">
+          Monalisa Octocat
+        </Link>
+      </span>
+    </Stack>
+    <span className={classes.Bio}>
+      Former beach cat and champion swimmer. Now your friendly octopus with a normal face.
+    </span>
+    <Stack direction="horizontal" gap="none">
+      <Octicon className={classes.Icon} icon={LocationIcon} />
+      <span className={classes.MetaMuted}>Interwebs</span>
+    </Stack>
+    <Stack direction="horizontal" gap="none">
+      <Octicon className={classes.Icon} icon={RepoIcon} />
+      <span className={classes.MetaMuted}>Owns this repository</span>
+    </Stack>
+  </Stack>
+)
+
 export const RepositionAfterContentGrows = () => {
   const [open, setOpen] = useState(false)
   const [loading, setLoading] = useState(true)
@@ -345,3 +378,70 @@ export const ManyOverlays = () => {
     </div>
   )
 }
+
+const gridPositions = [
+  {row: 'start', col: 'start'},
+  {row: 'start', col: 'center'},
+  {row: 'start', col: 'end'},
+  {row: 'center', col: 'start'},
+  {row: 'center', col: 'center'},
+  {row: 'center', col: 'end'},
+  {row: 'end', col: 'start'},
+  {row: 'end', col: 'center'},
+  {row: 'end', col: 'end'},
+]
+
+export const AnchorPositionGridFallbackDisabled = () => {
+  return <AnchorPositionGridFallback cssAnchorPositioningSettings={{fallbackStrategy: 'none'}} />
+}
+
+const AnchorPositionGridFallback = ({
+  cssAnchorPositioningSettings,
+}: {
+  cssAnchorPositioningSettings: {fallbackStrategy: 'none' | 'opposite-side'}
+}) => {
+  const [openCell, setOpenCell] = useState<string | null>(null)
+
+  return (
+    <div className={classes.AnchorGridContainer}>
+      <div className={classes.AnchorGrid}>
+        <div className={classes.AnchorGridInner}>
+          {gridPositions.map(({row, col}) => {
+            const key = `${row}-${col}`
+            const isCenter = row === 'center' && col === 'center'
+
+            return (
+              <div key={key} className={classes.AnchorGridCell}>
+                <span className={classes.AnchorGridLabel}>
+                  {row} / {col}
+                </span>
+                {isCenter ? (
+                  <AnchoredOverlay
+                    open={openCell === key}
+                    onOpen={() => setOpenCell(key)}
+                    onClose={() => setOpenCell(null)}
+                    renderAnchor={props => <Button {...props}>Anchor</Button>}
+                    overlayProps={{
+                      role: 'dialog',
+                      'aria-modal': true,
+                      'aria-label': 'Anchor Position Grid Demo',
+                    }}
+                    focusZoneSettings={{disabled: true}}
+                    preventOverflow={false}
+                    cssAnchorPositioningSettings={cssAnchorPositioningSettings}
+                  >
+                    <div className={classes.FlexColFill}>{hoverCard}</div>
+                  </AnchoredOverlay>
+                ) : null}
+              </div>
+            )
+          })}
+        </div>
+      </div>
+    </div>
+  )
+}
+
+export const AnchorPositionGridFallbackOppositeSide = () => {
+  return <AnchorPositionGridFallback cssAnchorPositioningSettings={{fallbackStrategy: 'opposite-side'}} />
+}
diff --git a/packages/react/src/AnchoredOverlay/AnchoredOverlay.features.stories.tsx b/packages/react/src/AnchoredOverlay/AnchoredOverlay.features.stories.tsx
index 9656519d5a8..c5c41a22090 100644
--- a/packages/react/src/AnchoredOverlay/AnchoredOverlay.features.stories.tsx
+++ b/packages/react/src/AnchoredOverlay/AnchoredOverlay.features.stories.tsx
@@ -402,6 +402,7 @@ export const CenteredOnPage = () => {
           'aria-modal': true,
           'aria-label': 'Centered Overlay Demo',
         }}
+        cssAnchorPositioningSettings={{fallbackStrategy: 'default'}}
         focusZoneSettings={{disabled: true}}
         preventOverflow={false}
       >
diff --git a/packages/react/src/AnchoredOverlay/AnchoredOverlay.test.tsx b/packages/react/src/AnchoredOverlay/AnchoredOverlay.test.tsx
index 0613dd97493..929376ee06c 100644
--- a/packages/react/src/AnchoredOverlay/AnchoredOverlay.test.tsx
+++ b/packages/react/src/AnchoredOverlay/AnchoredOverlay.test.tsx
@@ -407,6 +407,50 @@ describe('AnchoredOverlay feature flag specific behavior', () => {
       expect(overlay).not.toHaveAttribute('popover')
     })
 
+    it('should disable CSS side fallbacks when cssAnchorPositioningSettings.fallbackStrategy is "none"', () => {
+      const {baseElement} = render(
+        <FeatureFlags flags={{primer_react_css_anchor_positioning: true}}>
+          <BaseStyles>
+            <AnchoredOverlay
+              open={true}
+              onOpen={() => {}}
+              onClose={() => {}}
+              renderAnchor={props => <Button {...props}>Anchor Button</Button>}
+              side="outside-bottom"
+              cssAnchorPositioningSettings={{fallbackStrategy: 'none'}}
+            >
+              <button type="button">Focusable Child</button>
+            </AnchoredOverlay>
+          </BaseStyles>
+        </FeatureFlags>,
+      )
+
+      const overlay = baseElement.querySelector('[data-component="AnchoredOverlay"]') as HTMLElement
+      expect(overlay.style.getPropertyValue('position-try-fallbacks')).toBe('none')
+    })
+
+    it('should only allow opposite-side CSS fallback when cssAnchorPositioningSettings.fallbackStrategy is "opposite-side"', () => {
+      const {baseElement} = render(
+        <FeatureFlags flags={{primer_react_css_anchor_positioning: true}}>
+          <BaseStyles>
+            <AnchoredOverlay
+              open={true}
+              onOpen={() => {}}
+              onClose={() => {}}
+              renderAnchor={props => <Button {...props}>Anchor Button</Button>}
+              side="outside-bottom"
+              cssAnchorPositioningSettings={{fallbackStrategy: 'opposite-side'}}
+            >
+              <button type="button">Focusable Child</button>
+            </AnchoredOverlay>
+          </BaseStyles>
+        </FeatureFlags>,
+      )
+
+      const overlay = baseElement.querySelector('[data-component="AnchoredOverlay"]') as HTMLElement
+      expect(overlay.style.getPropertyValue('position-try-fallbacks')).toBe('flip-block')
+    })
+
     describe('when overlayProps.portalContainerName is provided', () => {
       it('should fall back to JS positioning (data-anchor-position="false") even with the flag enabled', () => {
         const portalRoot = document.createElement('div')
@@ -504,6 +548,28 @@ describe('AnchoredOverlay feature flag specific behavior', () => {
       const overlay = baseElement.querySelector('[data-component="AnchoredOverlay"]')
       expect(overlay).not.toHaveAttribute('popover')
     })
+
+    it('should ignore cssAnchorPositioningSettings when CSS anchor positioning is disabled', () => {
+      const {baseElement} = render(
+        <FeatureFlags flags={{primer_react_css_anchor_positioning: false}}>
+          <BaseStyles>
+            <AnchoredOverlay
+              open={true}
+              onOpen={() => {}}
+              onClose={() => {}}
+              renderAnchor={props => <Button {...props}>Anchor Button</Button>}
+              side="outside-bottom"
+              cssAnchorPositioningSettings={{fallbackStrategy: 'none'}}
+            >
+              <button type="button">Focusable Child</button>
+            </AnchoredOverlay>
+          </BaseStyles>
+        </FeatureFlags>,
+      )
+
+      const overlay = baseElement.querySelector('[data-component="AnchoredOverlay"]') as HTMLElement
+      expect(overlay.style.getPropertyValue('position-try-fallbacks')).toBe('')
+    })
   })
 })
 
diff --git a/packages/react/src/AnchoredOverlay/AnchoredOverlay.tsx b/packages/react/src/AnchoredOverlay/AnchoredOverlay.tsx
index f532d590d81..4e278da02d0 100644
--- a/packages/react/src/AnchoredOverlay/AnchoredOverlay.tsx
+++ b/packages/react/src/AnchoredOverlay/AnchoredOverlay.tsx
@@ -124,6 +124,18 @@ interface AnchoredOverlayBaseProps extends Pick<OverlayProps, 'height' | 'width'
    * and the browser supports native CSS anchor positioning. Has no effect otherwise. Defaults to `"portal"`.
    */
   renderAs?: 'portal' | 'popover'
+
+  /**
+   * Settings for CSS anchor positioning behavior when CSS anchor positioning is active.
+   *
+   * `fallbackStrategy` controls CSS fallback behavior:
+   * - `"default"`: use built-in CSS fallback rules.
+   * - `"none"`: keep the requested side with no CSS fallbacks.
+   * - `"opposite-side"`: only allow fallback to the opposite side.
+   *
+   * Ignored when CSS anchor positioning is not active.
+   */
+  cssAnchorPositioningSettings?: {fallbackStrategy: 'default' | 'none' | 'opposite-side'}
 }
 
 export type AnchoredOverlayProps = AnchoredOverlayBaseProps &
@@ -167,6 +179,7 @@ export const AnchoredOverlay: React.FC<React.PropsWithChildren<AnchoredOverlayPr
   displayCloseButton = true,
   closeButtonProps = defaultCloseButtonProps,
   renderAs = 'portal',
+  cssAnchorPositioningSettings,
 }) => {
   const cssAnchorPositioningFlag = useFeatureFlag('primer_react_css_anchor_positioning')
   // Lazy initial state so feature detection runs once per mount on the client.
@@ -301,6 +314,17 @@ export const AnchoredOverlay: React.FC<React.PropsWithChildren<AnchoredOverlayPr
     if (open && currentOverlay) {
       currentOverlay.style.setProperty('position-anchor', resolvedAnchorName)
 
+      const positionTryFallbacks = getCSSAnchorPositionTryFallbacks(
+        side,
+        cssAnchorPositioningSettings?.fallbackStrategy ?? 'default',
+      )
+
+      if (positionTryFallbacks) {
+        currentOverlay.style.setProperty('position-try-fallbacks', positionTryFallbacks)
+      } else {
+        currentOverlay.style.removeProperty('position-try-fallbacks')
+      }
+
       // Defer the getBoundingClientRect read into a `requestAnimationFrame` so the style write above
       // does not force a synchronous layout.
       pendingPositionFrame = requestAnimationFrame(() => {
@@ -344,11 +368,22 @@ export const AnchoredOverlay: React.FC<React.PropsWithChildren<AnchoredOverlayPr
       // The overlay may no longer be in the DOM at this point, so we need to check for its presence before trying to update it.
       if (currentOverlay) {
         currentOverlay.style.removeProperty('position-anchor')
+        currentOverlay.style.removeProperty('position-try-fallbacks')
       }
     }
     // overlayRef is a stable ref object; including it in deps is unnecessary.
     // eslint-disable-next-line react-hooks/exhaustive-deps
-  }, [cssAnchorPositioning, shouldRenderAsPopover, open, anchorElement, overlayElement, id, width])
+  }, [
+    cssAnchorPositioning,
+    shouldRenderAsPopover,
+    open,
+    anchorElement,
+    overlayElement,
+    id,
+    width,
+    side,
+    cssAnchorPositioningSettings,
+  ])
 
   const showXIcon = onClose && variant.narrow === 'fullscreen' && displayCloseButton
   const XButtonAriaLabelledBy = closeButtonProps['aria-labelledby']
@@ -474,6 +509,32 @@ function getDefaultPosition(
   return {horizontal, leftOffset, rightOffset, suggestedSide}
 }
 
+function getCSSAnchorPositionTryFallbacks(
+  side: PositionSettings['side'],
+  strategy: 'default' | 'none' | 'opposite-side',
+): string | undefined {
+  // Disable all CSS fallbacks (including those defined in the stylesheet).
+  if (strategy === 'none') return 'none'
+
+  // Restrict fallbacks to flipping to the opposite side along the relevant axis.
+  if (strategy === 'opposite-side') {
+    switch (side) {
+      case 'outside-top':
+      case 'outside-bottom':
+        return 'flip-block'
+      case 'outside-left':
+      case 'outside-right':
+        return 'flip-inline'
+      default:
+        return undefined
+    }
+  }
+
+  // 'default': don't write an inline `position-try-fallbacks`, so the
+  // stylesheet-defined fallback list on `.AnchoredOverlay` takes effect.
+  return undefined
+}
+
 function assignRef<T>(
   ref: React.MutableRefObject<T | null> | ((instance: T | null) => void) | null | undefined,
   value: T | null,