diff --git a/packages/block-editor/src/components/color-palette/test/__snapshots__/control.js.snap b/packages/block-editor/src/components/color-palette/test/__snapshots__/control.js.snap
index 3d082a14a92bf..8f02a338d1de2 100644
--- a/packages/block-editor/src/components/color-palette/test/__snapshots__/control.js.snap
+++ b/packages/block-editor/src/components/color-palette/test/__snapshots__/control.js.snap
@@ -190,9 +190,12 @@ exports[`ColorPaletteControl matches the snapshot 1`] = `
                       red
                     </span>
                     <span
-                      class="components-truncate components-color-palette__custom-color-value components-color-palette__custom-color-value--is-hex emotion-14 emotion-5"
+                      aria-label="Click to edit hex value"
+                      class="components-truncate components-color-palette__custom-color-value components-color-palette__custom-color-value--is-hex components-color-palette__custom-color-value--is-editable emotion-14 emotion-5"
                       data-wp-c16t="true"
                       data-wp-component="Truncate"
+                      role="button"
+                      tabindex="0"
                     >
                       #f00
                     </span>
diff --git a/packages/block-editor/src/components/color-palette/test/control.js b/packages/block-editor/src/components/color-palette/test/control.js
index e1a5529544f79..62dd023266512 100644
--- a/packages/block-editor/src/components/color-palette/test/control.js
+++ b/packages/block-editor/src/components/color-palette/test/control.js
@@ -1,7 +1,14 @@
 /**
  * External dependencies
  */
-import { render, waitFor, queryByAttribute } from '@testing-library/react';
+import {
+	render,
+	waitFor,
+	queryByAttribute,
+	fireEvent,
+	screen,
+} from '@testing-library/react';
+import userEvent from '@testing-library/user-event';
 
 /**
  * Internal dependencies
@@ -37,4 +44,116 @@ describe( 'ColorPaletteControl', () => {
 
 		expect( container ).toMatchSnapshot();
 	} );
+
+	it( 'allows editing hex value on click', async () => {
+		await renderAndValidate(
+			<ColorPaletteControl
+				label="Test Color"
+				value="#f00"
+				colors={ [ { color: '#f00', name: 'red' } ] }
+				disableCustomColors={ false }
+				onChange={ noop }
+			/>
+		);
+
+		const hexValue = screen.getByRole( 'button', {
+			name: /click to edit hex value/i,
+		} );
+		await userEvent.click( hexValue );
+
+		const input = screen.getByRole( 'textbox', {
+			name: /edit color hex value/i,
+		} );
+		expect( input ).toBeInTheDocument();
+		expect( input ).toHaveValue( '#f00' );
+	} );
+
+	it( 'validates hex input on blur', async () => {
+		const onChange = jest.fn();
+		await renderAndValidate(
+			<ColorPaletteControl
+				label="Test Color"
+				value="#f00"
+				colors={ [ { color: '#f00', name: 'red' } ] }
+				disableCustomColors={ false }
+				onChange={ onChange }
+			/>
+		);
+
+		const hexValue = screen.getByRole( 'button', {
+			name: /click to edit hex value/i,
+		} );
+		await userEvent.click( hexValue );
+
+		const input = screen.getByRole( 'textbox', {
+			name: /edit color hex value/i,
+		} );
+		await userEvent.clear( input );
+		await userEvent.type( input, '#ff0000' );
+		fireEvent.blur( input );
+
+		expect( onChange ).toHaveBeenCalledWith( '#ff0000' );
+	} );
+
+	it( 'reverts to previous value on invalid hex', async () => {
+		const onChange = jest.fn();
+		await renderAndValidate(
+			<ColorPaletteControl
+				label="Test Color"
+				value="#f00"
+				colors={ [ { color: '#f00', name: 'red' } ] }
+				disableCustomColors={ false }
+				onChange={ onChange }
+			/>
+		);
+
+		const hexValue = screen.getByRole( 'button', {
+			name: /click to edit hex value/i,
+		} );
+		await userEvent.click( hexValue );
+
+		const input = screen.getByRole( 'textbox', {
+			name: /edit color hex value/i,
+		} );
+		await userEvent.clear( input );
+		await userEvent.type( input, 'invalid' );
+		fireEvent.blur( input );
+
+		expect( onChange ).not.toHaveBeenCalled();
+		expect(
+			screen.getByRole( 'button', { name: /click to edit hex value/i } )
+		).toHaveTextContent( '#f00' );
+	} );
+
+	it( 'handles keyboard interaction', async () => {
+		const onChange = jest.fn();
+		await renderAndValidate(
+			<ColorPaletteControl
+				label="Test Color"
+				value="#f00"
+				colors={ [ { color: '#f00', name: 'red' } ] }
+				disableCustomColors={ false }
+				onChange={ onChange }
+			/>
+		);
+
+		const hexValue = screen.getByRole( 'button', {
+			name: /click to edit hex value/i,
+		} );
+
+		fireEvent.keyDown( hexValue, { key: 'Enter' } );
+		const input = screen.getByRole( 'textbox', {
+			name: /edit color hex value/i,
+		} );
+		expect( input ).toBeInTheDocument();
+
+		await userEvent.clear( input );
+		await userEvent.type( input, '#00f' );
+		fireEvent.keyDown( input, { key: 'Escape' } );
+
+		expect( onChange ).not.toHaveBeenCalled();
+		expect(
+			screen.getByRole( 'button', { name: /click to edit hex value/i } )
+		).toHaveTextContent( '#f00' );
+	} );
 } );
diff --git a/packages/components/src/color-palette/README.md b/packages/components/src/color-palette/README.md
index 0fbfbd4d71001..2ffe183ca8548 100644
--- a/packages/components/src/color-palette/README.md
+++ b/packages/components/src/color-palette/README.md
@@ -32,6 +32,15 @@ for the `ColorPalette`'s color swatches, by rendering your `ColorPalette` with a
 `Popover.Slot` further up the element tree and within a
 `SlotFillProvider` overall.
 
+## Features
+
+- Select from predefined color swatches
+- Custom color picker with optional alpha channel
+- Direct hex value editing for hex colors (click the hex value to edit)
+- Clearing color selection
+- Multiple palette support
+- Keyboard navigation
+
 ## Props
 
 The component accepts the following props.
diff --git a/packages/components/src/color-palette/index.tsx b/packages/components/src/color-palette/index.tsx
index de4e4f4206fe3..9c82ffc970701 100644
--- a/packages/components/src/color-palette/index.tsx
+++ b/packages/components/src/color-palette/index.tsx
@@ -1,7 +1,12 @@
 /**
  * External dependencies
  */
-import type { ForwardedRef } from 'react';
+import type {
+	ForwardedRef,
+	MouseEvent,
+	ChangeEvent,
+	KeyboardEvent,
+} from 'react';
 import { colord, extend } from 'colord';
 import namesPlugin from 'colord/plugins/names';
 import a11yPlugin from 'colord/plugins/a11y';
@@ -12,7 +17,14 @@ import clsx from 'clsx';
  */
 import { useInstanceId } from '@wordpress/compose';
 import { __, sprintf } from '@wordpress/i18n';
-import { useCallback, useMemo, useState, forwardRef } from '@wordpress/element';
+import {
+	useCallback,
+	useMemo,
+	useState,
+	forwardRef,
+	useEffect,
+	useRef,
+} from '@wordpress/element';
 
 /**
  * Internal dependencies
@@ -31,6 +43,7 @@ import type {
 	MultiplePalettesProps,
 	PaletteObject,
 	SinglePaletteProps,
+	CustomColorValueInputProps,
 } from './types';
 import type { WordPressComponentProps } from '../context';
 import type { DropdownProps } from '../dropdown/types';
@@ -42,6 +55,97 @@ import {
 
 extend( [ namesPlugin, a11yPlugin ] );
 
+function CustomColorValueInput( {
+	value,
+	onChange,
+	isHex,
+}: CustomColorValueInputProps ) {
+	const [ isEditing, setIsEditing ] = useState( false );
+	const [ inputValue, setInputValue ] = useState( value );
+	const inputRef = useRef< HTMLInputElement >( null );
+	const truncateRef = useRef< HTMLDivElement >( null );
+
+	useEffect( () => {
+		setInputValue( value );
+	}, [ value ] );
+
+	useEffect( () => {
+		if ( isEditing && inputRef.current ) {
+			inputRef.current.focus();
+		}
+	}, [ isEditing ] );
+
+	const handleClick = ( e: MouseEvent< HTMLDivElement > ) => {
+		e.preventDefault();
+		if ( isHex ) {
+			setIsEditing( true );
+		}
+	};
+
+	const handleChange = ( e: ChangeEvent< HTMLInputElement > ) => {
+		setInputValue( e.target.value );
+	};
+
+	const handleTruncateKeyDown = ( e: KeyboardEvent< HTMLDivElement > ) => {
+		if ( isHex && ( e.key === 'Enter' || e.key === ' ' ) ) {
+			e.preventDefault();
+			setIsEditing( true );
+		}
+	};
+
+	const handleBlur = () => {
+		setIsEditing( false );
+		if ( isHex && /^#[0-9A-Fa-f]{6}$/.test( inputValue || '' ) ) {
+			onChange( inputValue );
+		} else {
+			setInputValue( value );
+		}
+	};
+
+	const handleKeyDown = ( e: KeyboardEvent< HTMLInputElement > ) => {
+		if ( e.key === 'Enter' ) {
+			( e.target as HTMLInputElement ).blur();
+		} else if ( e.key === 'Escape' ) {
+			setInputValue( value );
+			setIsEditing( false );
+			truncateRef.current?.focus();
+		}
+	};
+
+	if ( isEditing && isHex ) {
+		return (
+			<input
+				ref={ inputRef }
+				type="text"
+				value={ inputValue || '' }
+				onChange={ handleChange }
+				onBlur={ handleBlur }
+				onKeyDown={ handleKeyDown }
+				className="components-color-palette__custom-color-value-input"
+				aria-label={ __( 'Edit color hex value' ) }
+			/>
+		);
+	}
+
+	return (
+		<Truncate
+			ref={ truncateRef }
+			className={ clsx( 'components-color-palette__custom-color-value', {
+				'components-color-palette__custom-color-value--is-hex': isHex,
+				'components-color-palette__custom-color-value--is-editable':
+					isHex,
+			} ) }
+			onClick={ handleClick }
+			onKeyDown={ handleTruncateKeyDown }
+			role={ isHex ? 'button' : undefined }
+			tabIndex={ isHex ? 0 : undefined }
+			aria-label={ isHex ? __( 'Click to edit hex value' ) : undefined }
+		>
+			{ value }
+		</Truncate>
+	);
+}
+
 function SinglePalette( {
 	className,
 	clearColor,
@@ -220,7 +324,7 @@ function UnforwardedColorPalette(
 			/>
 		</DropdownContentWrapper>
 	);
-	const isHex = value?.startsWith( '#' );
+	const isHex = value?.startsWith( '#' ) ?? false;
 
 	// Leave hex values as-is. Remove the `var()` wrapper from CSS vars.
 	const displayValue = value?.replace( /^var\((.+)\)$/, '$1' );
@@ -311,22 +415,11 @@ function UnforwardedColorPalette(
 										? buttonLabelName
 										: __( 'No color selected' ) }
 								</Truncate>
-								{ /*
-								This `Truncate` is always rendered, even if
-								there is no `displayValue`, to ensure the layout
-								does not shift
-								*/ }
-								<Truncate
-									className={ clsx(
-										'components-color-palette__custom-color-value',
-										{
-											'components-color-palette__custom-color-value--is-hex':
-												isHex,
-										}
-									) }
-								>
-									{ displayValue }
-								</Truncate>
+								<CustomColorValueInput
+									value={ displayValue }
+									onChange={ onChange }
+									isHex={ isHex }
+								/>
 							</VStack>
 						</VStack>
 					) }
diff --git a/packages/components/src/color-palette/types.ts b/packages/components/src/color-palette/types.ts
index b2a7a884fec57..c6f4446542e13 100644
--- a/packages/components/src/color-palette/types.ts
+++ b/packages/components/src/color-palette/types.ts
@@ -122,3 +122,9 @@ export type ColorPaletteProps = Pick< PaletteProps, 'onChange' > & {
 				'aria-label'?: never;
 		  }
 	);
+
+export type CustomColorValueInputProps = {
+	value?: string;
+	onChange: ( newColor?: string ) => void;
+	isHex: boolean;
+};