diff --git a/dev/playground/combo-box.html b/dev/playground/combo-box.html
index dc5def7a54d..15945f1f4b4 100644
--- a/dev/playground/combo-box.html
+++ b/dev/playground/combo-box.html
@@ -59,24 +59,47 @@ <h2 class="heading">States</h2>
       </vaadin-combo-box>
     </section>
 
+    <section class="section">
+      <h2 class="heading">Item Label Generator</h2>
+      <vaadin-combo-box id="label-generator" label="Select product" clear-button-visible></vaadin-combo-box>
+    </section>
+
     <script type="module">
       document.querySelectorAll('vaadin-combo-box').forEach((comboBox) => {
-        comboBox.dataProvider = async (params, callback) => {
-          const index = params.page * params.pageSize;
-          const response = await fetch(
-            `https://demo.vaadin.com/demo-data/1.0/filtered-countries?index=${index}&count=${params.pageSize}&filter=${params.filter}`,
-          );
-          if (response.ok) {
-            const { result, size } = await response.json();
-            // Emulate network latency for demo purpose
-            setTimeout(() => {
-              callback(result, size);
-            }, 1000);
-          }
-        };
+        if (comboBox.id === 'label-generator') {
+          // Example with itemLabelGenerator
+          comboBox.items = [
+            { id: 'p1', name: 'Laptop', category: 'Electronics', price: 999.99, inStock: true },
+            { id: 'p2', name: 'Mouse', category: 'Electronics', price: 29.99, inStock: true },
+            { id: 'p3', name: 'Keyboard', category: 'Electronics', price: 79.99, inStock: false },
+            { id: 'p4', name: 'Monitor', category: 'Electronics', price: 399.99, inStock: true },
+            { id: 'p5', name: 'Desk Chair', category: 'Furniture', price: 249.99, inStock: true },
+            { id: 'p6', name: 'Standing Desk', category: 'Furniture', price: 599.99, inStock: false },
+          ];
+          comboBox.itemValuePath = 'id';
+          comboBox.itemLabelGenerator = (item) => {
+            const stockStatus = item.inStock ? '✅' : '❌';
+            return `${item.name} - $${item.price} ${stockStatus}`;
+          };
+          comboBox.value = 'p1';
+        } else {
+          comboBox.dataProvider = async (params, callback) => {
+            const index = params.page * params.pageSize;
+            const response = await fetch(
+              `https://demo.vaadin.com/demo-data/1.0/filtered-countries?index=${index}&count=${params.pageSize}&filter=${params.filter}`,
+            );
+            if (response.ok) {
+              const { result, size } = await response.json();
+              // Emulate network latency for demo purpose
+              setTimeout(() => {
+                callback(result, size);
+              }, 1000);
+            }
+          };
 
-        if (!comboBox.placeholder) {
-          comboBox.selectedItem = 'Andorra';
+          if (!comboBox.placeholder) {
+            comboBox.selectedItem = 'Andorra';
+          }
         }
       });
     </script>
diff --git a/packages/combo-box/src/vaadin-combo-box-items-mixin.d.ts b/packages/combo-box/src/vaadin-combo-box-items-mixin.d.ts
index 286e130590c..6be65eb0ef6 100644
--- a/packages/combo-box/src/vaadin-combo-box-items-mixin.d.ts
+++ b/packages/combo-box/src/vaadin-combo-box-items-mixin.d.ts
@@ -29,6 +29,13 @@ export declare class ComboBoxItemsMixinClass<TItem> {
    */
   filter: string;
 
+  /**
+   * A function that is used to generate the label for dropdown
+   * items based on the item. Receives one argument:
+   * - `item` The item to generate the label for.
+   */
+  itemLabelGenerator: ((item: TItem) => string) | undefined;
+
   /**
    * Path for label of the item. If `items` is an array of objects, the
    * `itemLabelPath` is used to fetch the displayed string label for each
diff --git a/packages/combo-box/src/vaadin-combo-box-items-mixin.js b/packages/combo-box/src/vaadin-combo-box-items-mixin.js
index 2bbc39e2f55..825b3d890d4 100644
--- a/packages/combo-box/src/vaadin-combo-box-items-mixin.js
+++ b/packages/combo-box/src/vaadin-combo-box-items-mixin.js
@@ -77,6 +77,15 @@ export const ComboBoxItemsMixin = (superClass) =>
           sync: true,
         },
 
+        /**
+         * A function that is used to generate the label for dropdown
+         * items based on the item. Receives one argument:
+         * - `item` The item to generate the label for.
+         */
+        itemLabelGenerator: {
+          type: Object,
+        },
+
         /**
          * Path for label of the item. If `items` is an array of objects, the
          * `itemLabelPath` is used to fetch the displayed string label for each
@@ -122,6 +131,10 @@ export const ComboBoxItemsMixin = (superClass) =>
       if (props.has('filter')) {
         this._filterChanged(this.filter);
       }
+
+      if (props.has('itemLabelGenerator')) {
+        this.requestContentUpdate();
+      }
     }
 
     /**
@@ -161,6 +174,10 @@ export const ComboBoxItemsMixin = (superClass) =>
      * @override
      */
     _getItemLabel(item) {
+      if (typeof this.itemLabelGenerator === 'function' && item) {
+        return this.itemLabelGenerator(item) || '';
+      }
+
       let label = item && this.itemLabelPath ? get(this.itemLabelPath, item) : undefined;
       if (label === undefined || label === null) {
         label = item ? item.toString() : '';
diff --git a/packages/combo-box/test/items.test.js b/packages/combo-box/test/items.test.js
index dadc0fb5334..c4984f9f2aa 100644
--- a/packages/combo-box/test/items.test.js
+++ b/packages/combo-box/test/items.test.js
@@ -142,8 +142,6 @@ describe('items', () => {
   });
 
   describe('itemClassNameGenerator', () => {
-    let comboBox;
-
     beforeEach(async () => {
       comboBox = fixtureSync('<vaadin-combo-box></vaadin-combo-box>');
       await nextRender();
@@ -194,4 +192,76 @@ describe('items', () => {
       expect(items[2].className).to.equal('');
     });
   });
+
+  describe('itemLabelGenerator', () => {
+    beforeEach(async () => {
+      comboBox = fixtureSync('<vaadin-combo-box></vaadin-combo-box>');
+      comboBox.items = [
+        { id: 1, name: 'John', surname: 'Doe', age: 30 },
+        { id: 2, name: 'Jane', surname: 'Smith', age: 25 },
+        { id: 3, name: 'Bob', surname: 'Johnson', age: 35 },
+      ];
+      comboBox.itemLabelGenerator = (item) => `${item.name} ${item.surname}`;
+      await nextRender();
+    });
+
+    it('should generate items text content using itemLabelGenerator', async () => {
+      comboBox.open();
+      await nextRender();
+
+      const items = getAllItems(comboBox);
+      expect(items[0].textContent).to.equal('John Doe');
+      expect(items[1].textContent).to.equal('Jane Smith');
+      expect(items[2].textContent).to.equal('Bob Johnson');
+    });
+
+    it('should set generated label as input value when item is selected', async () => {
+      comboBox.itemValuePath = 'id';
+      comboBox.value = 2;
+      await nextRender();
+      expect(comboBox.inputElement.value).to.equal('Jane Smith');
+    });
+
+    it('should filter items using generated label', () => {
+      setInputValue(comboBox, 'john');
+
+      expect(comboBox.filteredItems.length).to.equal(2);
+      expect(comboBox.filteredItems[0]).to.deep.equal(comboBox.items[0]);
+      expect(comboBox.filteredItems[1]).to.deep.equal(comboBox.items[2]);
+    });
+
+    it('should use itemLabelGenerator over itemLabelPath', async () => {
+      comboBox.itemLabelPath = 'surname';
+      comboBox.itemLabelGenerator = (item) => item.name;
+      comboBox.open();
+      await nextRender();
+
+      const items = getAllItems(comboBox);
+      expect(items[0].textContent).to.equal('John');
+      expect(items[1].textContent).to.equal('Jane');
+    });
+
+    it('should accept empty string returned from itemLabelGenerator', async () => {
+      comboBox.itemLabelGenerator = (item) => (item.id === 2 ? '' : `${item.name} ${item.surname}`);
+      comboBox.open();
+      await nextRender();
+
+      const items = getAllItems(comboBox);
+      expect(items[0].textContent).to.equal('John Doe');
+      expect(items[1].textContent).to.equal('');
+      expect(items[2].textContent).to.equal('Bob Johnson');
+    });
+
+    it('should update dropdown when itemLabelGenerator changes', async () => {
+      comboBox.open();
+      await nextRender();
+
+      expect(getFirstItem(comboBox).textContent).to.equal('John Doe');
+
+      comboBox.itemLabelGenerator = (item) => `${item.name} (${item.age})`;
+      await nextRender();
+
+      expect(getFirstItem(comboBox).textContent).to.equal('John (30)');
+    });
+  });
 });
diff --git a/packages/combo-box/test/typings/combo-box.types.ts b/packages/combo-box/test/typings/combo-box.types.ts
index 50caf56517f..eda20a33df8 100644
--- a/packages/combo-box/test/typings/combo-box.types.ts
+++ b/packages/combo-box/test/typings/combo-box.types.ts
@@ -100,6 +100,7 @@ assertType<string>(narrowedComboBox.filter);
 assertType<TestComboBoxItem[] | undefined>(narrowedComboBox.filteredItems);
 assertType<TestComboBoxItem[] | undefined>(narrowedComboBox.items);
 assertType<(item: TestComboBoxItem) => string>(narrowedComboBox.itemClassNameGenerator);
+assertType<((item: TestComboBoxItem) => string) | undefined>(narrowedComboBox.itemLabelGenerator);
 assertType<string | null | undefined>(narrowedComboBox.itemIdPath);
 assertType<string>(narrowedComboBox.itemLabelPath);
 assertType<string>(narrowedComboBox.itemValuePath);
diff --git a/packages/multi-select-combo-box/test/chips.test.js b/packages/multi-select-combo-box/test/chips.test.js
index 513d98d8ec5..1cc0021f055 100644
--- a/packages/multi-select-combo-box/test/chips.test.js
+++ b/packages/multi-select-combo-box/test/chips.test.js
@@ -2,12 +2,11 @@ import { expect } from '@vaadin/chai-plugins';
 import { sendKeys } from '@vaadin/test-runner-commands';
 import { fixtureSync, nextRender, nextResize, nextUpdate } from '@vaadin/testing-helpers';
 import '../src/vaadin-multi-select-combo-box.js';
+import { getChips } from './helpers.js';
 
 describe('chips', () => {
   let comboBox, inputElement;
 
-  const getChips = (combo) => combo.querySelectorAll('vaadin-multi-select-combo-box-chip');
-
   const getChipContent = (chip) => chip.shadowRoot.querySelector('[part="label"]').textContent;
 
   beforeEach(async () => {
diff --git a/packages/multi-select-combo-box/test/helpers.js b/packages/multi-select-combo-box/test/helpers.js
index fb820862d8c..f8339a123a9 100644
--- a/packages/multi-select-combo-box/test/helpers.js
+++ b/packages/multi-select-combo-box/test/helpers.js
@@ -1,3 +1,5 @@
+import { fire } from '@vaadin/testing-helpers';
+
 export const getDataProvider = (allItems) => (params, callback) => {
   const offset = params.page * params.pageSize;
   const filteredItems = allItems.filter((item) => item.indexOf(params.filter) > -1);
@@ -31,3 +33,19 @@ export const getAllItems = (comboBox) => {
 export const getFirstItem = (comboBox) => {
   return comboBox._scroller.querySelector('vaadin-multi-select-combo-box-item');
 };
+
+/**
+ * Emulates the user filling in something in the combo-box input.
+ *
+ * @param {Element} comboBox
+ * @param {string} value
+ */
+export function setInputValue(comboBox, value) {
+  comboBox.inputElement.value = value;
+  fire(comboBox.inputElement, 'input');
+}
+
+/**
+ * Returns all the chips of the combo-box.
+ */
+export const getChips = (comboBox) => comboBox.querySelectorAll('vaadin-multi-select-combo-box-chip');
diff --git a/packages/multi-select-combo-box/test/items.test.js b/packages/multi-select-combo-box/test/items.test.js
index 9e2cfc327f7..7f69e1dae8b 100644
--- a/packages/multi-select-combo-box/test/items.test.js
+++ b/packages/multi-select-combo-box/test/items.test.js
@@ -2,7 +2,7 @@ import { expect } from '@vaadin/chai-plugins';
 import { fixtureSync, nextRender } from '@vaadin/testing-helpers';
 import sinon from 'sinon';
 import '../src/vaadin-multi-select-combo-box.js';
-import { getAllItems, getFirstItem } from './helpers.js';
+import { getAllItems, getChips, getFirstItem, setInputValue } from './helpers.js';
 
 describe('items', () => {
   let comboBox;
@@ -81,10 +81,6 @@ describe('items', () => {
   });
 
   describe('itemClassNameGenerator', () => {
-    let comboBox;
-
-    const getChips = (combo) => combo.querySelectorAll('vaadin-multi-select-combo-box-chip');
-
     beforeEach(async () => {
       comboBox = fixtureSync('<vaadin-multi-select-combo-box></vaadin-multi-select-combo-box>');
       await nextRender();
@@ -184,4 +180,95 @@ describe('items', () => {
       expect(chips[2].className).to.equal('');
     });
   });
+
+  describe('itemLabelGenerator', () => {
+    beforeEach(async () => {
+      comboBox = fixtureSync(`
+        <vaadin-multi-select-combo-box
+          auto-expand-horizontally
+          item-id-path="id"
+        ></vaadin-multi-select-combo-box>
+      `);
+      comboBox.items = [
+        { id: 1, name: 'John', surname: 'Doe', age: 30 },
+        { id: 2, name: 'Jane', surname: 'Smith', age: 25 },
+        { id: 3, name: 'Bob', surname: 'Johnson', age: 35 },
+      ];
+      comboBox.itemLabelGenerator = (item) => `${item.name} ${item.surname}`;
+      await nextRender();
+    });
+
+    it('should generate items text content using itemLabelGenerator', async () => {
+      comboBox.open();
+      await nextRender();
+
+      const items = getAllItems(comboBox);
+      expect(items[0].textContent).to.equal('John Doe');
+      expect(items[1].textContent).to.equal('Jane Smith');
+      expect(items[2].textContent).to.equal('Bob Johnson');
+    });
+
+    it('should generate chips text content using itemLabelGenerator', async () => {
+      comboBox.selectedItems = [comboBox.items[0], comboBox.items[1]];
+      await nextRender();
+
+      const chips = getChips(comboBox);
+      expect(chips[1].label).to.equal('John Doe');
+      expect(chips[2].label).to.equal('Jane Smith');
+    });
+
+    it('should filter items using generated label', () => {
+      setInputValue(comboBox, 'john');
+
+      expect(comboBox.filteredItems.length).to.equal(2);
+      expect(comboBox.filteredItems[0]).to.deep.equal(comboBox.items[0]);
+      expect(comboBox.filteredItems[1]).to.deep.equal(comboBox.items[2]);
+    });
+
+    it('should use itemLabelGenerator over itemLabelPath', async () => {
+      comboBox.itemLabelPath = 'surname';
+      comboBox.itemLabelGenerator = (item) => item.name;
+      comboBox.open();
+      await nextRender();
+
+      const items = getAllItems(comboBox);
+      expect(items[0].textContent).to.equal('John');
+      expect(items[1].textContent).to.equal('Jane');
+    });
+
+    it('should accept empty string returned from itemLabelGenerator', async () => {
+      comboBox.itemLabelGenerator = (item) => (item.id === 2 ? '' : `${item.name} ${item.surname}`);
+      comboBox.open();
+      await nextRender();
+
+      const items = getAllItems(comboBox);
+      expect(items[0].textContent).to.equal('John Doe');
+      expect(items[1].textContent).to.equal('');
+      expect(items[2].textContent).to.equal('Bob Johnson');
+    });
+
+    it('should update dropdown items when itemLabelGenerator changes', async () => {
+      comboBox.open();
+      await nextRender();
+
+      expect(getFirstItem(comboBox).textContent).to.equal('John Doe');
+
+      comboBox.itemLabelGenerator = (item) => `${item.name} (${item.age})`;
+      await nextRender();
+
+      expect(getFirstItem(comboBox).textContent).to.equal('John (30)');
+    });
+
+    it('should update chips when itemLabelGenerator changes', async () => {
+      comboBox.selectedItems = [comboBox.items[0]];
+      await nextRender();
+
+      expect(getChips(comboBox)[1].label).to.equal('John Doe');
+
+      comboBox.itemLabelGenerator = (item) => `${item.name} (${item.age})`;
+      await nextRender();
+
+      expect(getChips(comboBox)[1].label).to.equal('John (30)');
+    });
+  });
 });
diff --git a/packages/multi-select-combo-box/test/typings/multi-select-combo-box.types.ts b/packages/multi-select-combo-box/test/typings/multi-select-combo-box.types.ts
index 05c540aecde..97e0e15ff77 100644
--- a/packages/multi-select-combo-box/test/typings/multi-select-combo-box.types.ts
+++ b/packages/multi-select-combo-box/test/typings/multi-select-combo-box.types.ts
@@ -93,6 +93,7 @@ assertType<string>(narrowedComboBox.filter);
 assertType<TestComboBoxItem[] | undefined>(narrowedComboBox.filteredItems);
 assertType<TestComboBoxItem[] | undefined>(narrowedComboBox.items);
 assertType<(item: TestComboBoxItem) => string>(narrowedComboBox.itemClassNameGenerator);
+assertType<((item: TestComboBoxItem) => string) | undefined>(narrowedComboBox.itemLabelGenerator);
 assertType<string | null | undefined>(narrowedComboBox.itemIdPath);
 assertType<string>(narrowedComboBox.itemLabelPath);
 assertType<string>(narrowedComboBox.itemValuePath);