diff --git a/src/libs/ComposerUtils/index.ts b/src/libs/ComposerUtils/index.ts
index 5a7da7ca08cf..58e1efa7aa65 100644
--- a/src/libs/ComposerUtils/index.ts
+++ b/src/libs/ComposerUtils/index.ts
@@ -32,7 +32,11 @@ function canSkipTriggerHotkeys(isSmallScreenWidth: boolean, isKeyboardShown: boo
  */
 function getCommonSuffixLength(str1: string, str2: string): number {
     let i = 0;
-    while (str1[str1.length - 1 - i] === str2[str2.length - 1 - i]) {
+    if (str1.length === 0 || str2.length === 0) {
+        return 0;
+    }
+    const minLen = Math.min(str1.length, str2.length);
+    while (i < minLen && str1[str1.length - 1 - i] === str2[str2.length - 1 - i]) {
         i++;
     }
     return i;
diff --git a/src/pages/home/report/ReportActionCompose/ComposerWithSuggestions.js b/src/pages/home/report/ReportActionCompose/ComposerWithSuggestions.js
index 3bbc2b03ff6f..aebd70a4175f 100644
--- a/src/pages/home/report/ReportActionCompose/ComposerWithSuggestions.js
+++ b/src/pages/home/report/ReportActionCompose/ComposerWithSuggestions.js
@@ -117,6 +117,7 @@ function ComposerWithSuggestions({
         return draft;
     });
     const commentRef = useRef(value);
+    const lastTextRef = useRef(value);
 
     const {isSmallScreenWidth} = useWindowDimensions();
     const maxComposerLines = isSmallScreenWidth ? CONST.COMPOSER.MAX_LINES_SMALL_SCREEN : CONST.COMPOSER.MAX_LINES;
@@ -196,6 +197,50 @@ function ComposerWithSuggestions({
         RNTextInputReset.resetKeyboardInput(findNodeHandle(textInputRef.current));
     }, [textInputRef]);
 
+    /**
+     * Find the newly added characters between the previous text and the new text based on the selection.
+     *
+     * @param {string} prevText - The previous text.
+     * @param {string} newText - The new text.
+     * @returns {object} An object containing information about the newly added characters.
+     * @property {number} startIndex - The start index of the newly added characters in the new text.
+     * @property {number} endIndex - The end index of the newly added characters in the new text.
+     * @property {string} diff - The newly added characters.
+     */
+    const findNewlyAddedChars = useCallback(
+        (prevText, newText) => {
+            let startIndex = -1;
+            let endIndex = -1;
+            let currentIndex = 0;
+
+            // Find the first character mismatch with newText
+            while (currentIndex < newText.length && prevText.charAt(currentIndex) === newText.charAt(currentIndex) && selection.start > currentIndex) {
+                currentIndex++;
+            }
+
+            if (currentIndex < newText.length) {
+                startIndex = currentIndex;
+
+                // if text is getting pasted over find length of common suffix and subtract it from new text length
+                if (selection.end - selection.start > 0) {
+                    const commonSuffixLength = ComposerUtils.getCommonSuffixLength(prevText, newText);
+                    endIndex = newText.length - commonSuffixLength;
+                } else {
+                    endIndex = currentIndex + (newText.length - prevText.length);
+                }
+            }
+
+            return {
+                startIndex,
+                endIndex,
+                diff: newText.substring(startIndex, endIndex),
+            };
+        },
+        [selection.end, selection.start],
+    );
+
+    const insertWhiteSpace = (text, index) => `${text.slice(0, index)} ${text.slice(index)}`;
+
     const debouncedSaveReportComment = useMemo(
         () =>
             _.debounce((selectedReportID, newComment) => {
@@ -213,7 +258,14 @@ function ComposerWithSuggestions({
     const updateComment = useCallback(
         (commentValue, shouldDebounceSaveComment) => {
             raiseIsScrollLikelyLayoutTriggered();
-            const {text: newComment, emojis} = EmojiUtils.replaceAndExtractEmojis(commentValue, preferredSkinTone, preferredLocale);
+            const {startIndex, endIndex, diff} = findNewlyAddedChars(lastTextRef.current, commentValue);
+            const isEmojiInserted = diff.length && endIndex > startIndex && EmojiUtils.containsOnlyEmojis(diff);
+            const {text: newComment, emojis} = EmojiUtils.replaceAndExtractEmojis(
+                isEmojiInserted ? insertWhiteSpace(commentValue, endIndex) : commentValue,
+                preferredSkinTone,
+                preferredLocale,
+            );
+
             if (!_.isEmpty(emojis)) {
                 const newEmojis = EmojiUtils.getAddedEmojis(emojis, emojisPresentBefore.current);
                 if (!_.isEmpty(newEmojis)) {
@@ -264,13 +316,14 @@ function ComposerWithSuggestions({
             }
         },
         [
-            debouncedUpdateFrequentlyUsedEmojis,
-            preferredLocale,
+            raiseIsScrollLikelyLayoutTriggered,
+            findNewlyAddedChars,
             preferredSkinTone,
-            reportID,
+            preferredLocale,
             setIsCommentEmpty,
+            debouncedUpdateFrequentlyUsedEmojis,
             suggestionsRef,
-            raiseIsScrollLikelyLayoutTriggered,
+            reportID,
             debouncedSaveReportComment,
         ],
     );
@@ -321,14 +374,8 @@ function ComposerWithSuggestions({
      * @param {Boolean} shouldAddTrailSpace
      */
     const replaceSelectionWithText = useCallback(
-        (text, shouldAddTrailSpace = true) => {
-            const updatedText = shouldAddTrailSpace ? `${text} ` : text;
-            const selectionSpaceLength = shouldAddTrailSpace ? CONST.SPACE_LENGTH : 0;
-            updateComment(ComposerUtils.insertText(commentRef.current, selection, updatedText));
-            setSelection((prevSelection) => ({
-                start: prevSelection.start + text.length + selectionSpaceLength,
-                end: prevSelection.start + text.length + selectionSpaceLength,
-            }));
+        (text) => {
+            updateComment(ComposerUtils.insertText(commentRef.current, selection, text));
         },
         [selection, updateComment],
     );
@@ -452,7 +499,12 @@ function ComposerWithSuggestions({
             }
 
             focus();
-            replaceSelectionWithText(e.key, false);
+            // Reset cursor to last known location
+            setSelection((prevSelection) => ({
+                start: prevSelection.start + 1,
+                end: prevSelection.end + 1,
+            }));
+            replaceSelectionWithText(e.key);
         },
         [checkComposerVisibility, focus, replaceSelectionWithText],
     );
@@ -514,6 +566,10 @@ function ComposerWithSuggestions({
         // eslint-disable-next-line react-hooks/exhaustive-deps
     }, []);
 
+    useEffect(() => {
+        lastTextRef.current = value;
+    }, [value]);
+
     useImperativeHandle(
         forwardedRef,
         () => ({