diff --git a/packages/fiori/cypress/specs/ShellBar.cy.tsx b/packages/fiori/cypress/specs/ShellBar.cy.tsx
index 4ac34c011211..86402d5712c7 100644
--- a/packages/fiori/cypress/specs/ShellBar.cy.tsx
+++ b/packages/fiori/cypress/specs/ShellBar.cy.tsx
@@ -684,4 +684,74 @@ describe("Keyboard Navigation", () => {
 			.find(".ui5-shellbar-logo-area")
 			.should("not.exist");
 	});
+
+	it("Test arrow navigation within search input respects cursor position", () => {
+		cy.mount(
+			<ShellBar showSearchField={true}>
+				<Button id="button" slot="content">Test Button</Button>
+				<ShellBarSearch slot="searchField" value="test value"></ShellBarSearch>
+				<ShellBarItem icon={activities} text="Action 1"></ShellBarItem>
+			</ShellBar>
+		);
+		cy.wait(RESIZE_THROTTLE_RATE);
+
+		function placeAtStartOfInput() {
+			cy.get("[ui5-shellbar] [slot='searchField']")
+				.shadow()
+				.find("input")
+				.then($input => {
+					$input[0].setSelectionRange(0, 0);
+				});
+		}
+		function placeAtEndOfInput() {
+			cy.get("[ui5-shellbar] [slot='searchField']")
+				.shadow()
+				.find("input")
+				.then($input => {
+					const inputLength = $input.val().toString().length;
+					$input[0].setSelectionRange(inputLength, inputLength);
+				});
+		}
+		function placeInMiddleOfInput() {
+			cy.get("[ui5-shellbar] [slot='searchField']")
+				.shadow()
+				.find("input")
+				.then($input => {
+					const inputLength = $input.val().toString().length;
+					const middlePosition = Math.floor(inputLength / 2);
+					$input[0].setSelectionRange(middlePosition, middlePosition);
+				});
+		}
+
+		// Focus the search input
+		cy.get("[ui5-shellbar] [slot='searchField']")
+			.realClick()
+			.shadow()
+			.find("input")
+			.as("nativeInput");
+
+		placeAtStartOfInput();
+		// Press left arrow - should move focus away from input since cursor is at start
+		cy.get("@nativeInput").type("{leftArrow}");
+		// Verify focus is now on the button
+		cy.get("[ui5-shellbar] [ui5-button]").should("be.focused");
+
+
+		placeAtEndOfInput();
+		// Press right arrow - should move focus away from input since cursor is at end
+		cy.get("@nativeInput").type("{rightArrow}");
+		// Verify focus is now on the ShellBarItem
+		cy.get("[ui5-shellbar]")
+			.shadow()
+			.find(".ui5-shellbar-custom-item")
+			.should("be.focused");
+
+		placeInMiddleOfInput();
+		// Press left arrow - should stay focused on input since cursor is in the middle
+		cy.get("@nativeInput").type("{leftArrow}");
+		cy.get("@nativeInput").should("be.focused");
+		// Press right arrow - should stay focused on input since cursor is in the middle
+		cy.get("@nativeInput").type("{rightArrow}");
+		cy.get("@nativeInput").should("be.focused");
+	});
 });
diff --git a/packages/fiori/src/ShellBar.ts b/packages/fiori/src/ShellBar.ts
index e225caa12c60..e846e84160ac 100644
--- a/packages/fiori/src/ShellBar.ts
+++ b/packages/fiori/src/ShellBar.ts
@@ -14,6 +14,7 @@ import {
 	isRight,
 } from "@ui5/webcomponents-base/dist/Keys.js";
 import { getEffectiveAriaLabelText } from "@ui5/webcomponents-base/dist/util/AccessibilityTextsHelper.js";
+import { getTabbableElements } from "@ui5/webcomponents-base/dist/util/TabbableElements.js";
 import ListItemStandard from "@ui5/webcomponents/dist/ListItemStandard.js";
 import List from "@ui5/webcomponents/dist/List.js";
 import type { ListItemClickEventDetail } from "@ui5/webcomponents/dist/List.js";
@@ -647,12 +648,32 @@ class ShellBar extends UI5Element {
 	}
 
 	_onKeyDown(e: KeyboardEvent) {
-		const items = this._getVisibleAndInteractiveItems();
+		if (!isLeft(e) && !isRight(e)) {
+			return;
+		}
+
+		const domRef = this.getDomRef();
+		if (!domRef) {
+			// If the component is not rendered yet, we should not handle the keydown event
+			return;
+		}
+
 		const activeElement = getActiveElement();
+		if (!activeElement) {
+			return;
+		}
+
+		// Check if the active elements should "steal" the navigation
+		if (this._allowChildNavigation(activeElement as HTMLElement, e)) {
+			return;
+		}
+
+		const items = getTabbableElements(domRef).filter(el => this._isVisible(el));
 		const currentIndex = items.findIndex(el => el === activeElement);
 
-		if (isLeft(e) || isRight(e)) {
-			e.preventDefault();// Prevent the default behavior to avoid any further automatic focus movemen
+		// Only handle arrow navigation if the focus is on a ShellBar item
+		if (currentIndex !== -1) {
+			e.preventDefault();
 
 			// Focus navigation based on the key pressed
 			if (isLeft(e)) {
@@ -663,6 +684,28 @@ class ShellBar extends UI5Element {
 		}
 	}
 
+	private _allowChildNavigation(activeElement: HTMLElement, e: KeyboardEvent): boolean {
+		if (activeElement.tagName === "INPUT" || activeElement.tagName === "TEXTAREA") {
+			return this._allowInputNavigation(activeElement as HTMLInputElement | HTMLTextAreaElement, e);
+		}
+
+		return false; // Default to false for other elements
+	}
+
+	private _allowInputNavigation(inputElement: HTMLInputElement | HTMLTextAreaElement, e: KeyboardEvent): boolean {
+		const cursorPosition = inputElement.selectionStart || 0;
+		const textLength = inputElement.value.length;
+
+		// Allow internal navigation if cursor is not at the boundaries
+		if ((isLeft(e) && cursorPosition > 0)
+		|| (isRight(e) && cursorPosition < textLength)) {
+			return true;
+		}
+
+		// Let ShellBar handle navigation if at boundaries
+		return false;
+	}
+
 	_focusNextItem(items: HTMLElement[], currentIndex: number) {
 		if (currentIndex < items.length - 1) {
 			(items[currentIndex + 1]).focus(); // Focus the next element
@@ -681,26 +724,6 @@ class ShellBar extends UI5Element {
 		return style.display !== "none" && style.visibility !== "hidden" && element.offsetWidth > 0 && element.offsetHeight > 0;
 	}
 
-	_getNavigableContent() {
-		const elements = [
-			...this.startButton,
-			...this.logo,
-			...this.shadowRoot!.querySelectorAll(".ui5-shellbar-logo"),
-			...this.shadowRoot!.querySelectorAll(".ui5-shellbar-logo-area"),
-			...this.shadowRoot!.querySelectorAll(".ui5-shellbar-menu-button"),
-			...this.contentItems,
-			...this._getRightChildItems(),
-		] as HTMLElement[];
-
-		return elements.map((element: HTMLElement) => {
-			const component = element as UI5Element;
-			if (component.isUI5Element) {
-				return component.getFocusDomRef();
-			}
-			return element;
-		}).filter(el => !!el);
-	}
-
 	_getRightChildItems() {
 		return [
 			...this.searchField,
@@ -710,15 +733,6 @@ class ShellBar extends UI5Element {
 		] as HTMLElement[];
 	}
 
-	_getVisibleAndInteractiveItems() {
-		const items = this._getNavigableContent();
-		const visibleAndInteractiveItems = items.filter(item => {
-			return this._isVisible(item) && item.tabIndex === 0;
-		});
-
-		return visibleAndInteractiveItems;
-	}
-
 	_menuItemPress(e: CustomEvent<ListItemClickEventDetail>) {
 		const shouldContinue = this.fireDecoratorEvent("menu-item-click", {
 			item: e.detail.item,