diff --git a/src/components/SelectionList/BaseSelectionList.tsx b/src/components/SelectionList/BaseSelectionList.tsx
index 5453590b9330..0c44f2709774 100644
--- a/src/components/SelectionList/BaseSelectionList.tsx
+++ b/src/components/SelectionList/BaseSelectionList.tsx
@@ -103,9 +103,10 @@ function BaseSelectionList<TItem extends ListItem>(
     const incrementPage = () => setCurrentPage((prev) => prev + 1);
 
     /**
-     * Iterates through the sections and items inside each section, and builds 3 arrays along the way:
+     * Iterates through the sections and items inside each section, and builds 4 arrays along the way:
      * - `allOptions`: Contains all the items in the list, flattened, regardless of section
-     * - `disabledOptionsIndexes`: Contains the indexes of all the disabled items in the list, to be used by the ArrowKeyFocusManager
+     * - `disabledOptionsIndexes`: Contains the indexes of all the unselectable and disabled items in the list
+     * - `disabledArrowKeyOptionsIndexes`: Contains the indexes of item that is not navigatable by the arrow key. The list is separated from disabledOptionsIndexes because unselectable item is still navigatable by the arrow key.
      * - `itemLayouts`: Contains the layout information for each item, header and footer in the list,
      * so we can calculate the position of any given item when scrolling programmatically
      */
@@ -113,6 +114,7 @@ function BaseSelectionList<TItem extends ListItem>(
         const allOptions: TItem[] = [];
 
         const disabledOptionsIndexes: number[] = [];
+        const disabledArrowKeyOptionsIndexes: number[] = [];
         let disabledIndex = 0;
 
         let offset = 0;
@@ -134,9 +136,13 @@ function BaseSelectionList<TItem extends ListItem>(
                 });
 
                 // If disabled, add to the disabled indexes array
+                const isItemDisabled = !!section.isDisabled || (item.isDisabled && !item.isSelected);
                 // eslint-disable-next-line @typescript-eslint/prefer-nullish-coalescing
-                if (!!section.isDisabled || (item.isDisabled && !item.isSelected) || item.isDisabledCheckbox) {
+                if (isItemDisabled || item.isDisabledCheckbox) {
                     disabledOptionsIndexes.push(disabledIndex);
+                    if (isItemDisabled) {
+                        disabledArrowKeyOptionsIndexes.push(disabledIndex);
+                    }
                 }
                 disabledIndex += 1;
 
@@ -169,6 +175,7 @@ function BaseSelectionList<TItem extends ListItem>(
             allOptions,
             selectedOptions,
             disabledOptionsIndexes,
+            disabledArrowKeyOptionsIndexes,
             itemLayouts,
             allSelected: selectedOptions.length > 0 && selectedOptions.length === allOptions.length - disabledOptionsIndexes.length,
         };
@@ -230,21 +237,21 @@ function BaseSelectionList<TItem extends ListItem>(
         [flattenedSections.allOptions],
     );
 
-    const [disabledIndexes, setDisabledIndexes] = useState(flattenedSections.disabledOptionsIndexes);
+    const [disabledArrowKeyIndexes, setDisabledArrowKeyIndexes] = useState(flattenedSections.disabledArrowKeyOptionsIndexes);
     useEffect(() => {
-        if (arraysEqual(disabledIndexes, flattenedSections.disabledOptionsIndexes)) {
+        if (arraysEqual(disabledArrowKeyIndexes, flattenedSections.disabledArrowKeyOptionsIndexes)) {
             return;
         }
 
-        setDisabledIndexes(flattenedSections.disabledOptionsIndexes);
+        setDisabledArrowKeyIndexes(flattenedSections.disabledArrowKeyOptionsIndexes);
         // eslint-disable-next-line react-hooks/exhaustive-deps
-    }, [flattenedSections.disabledOptionsIndexes]);
+    }, [flattenedSections.disabledArrowKeyOptionsIndexes]);
 
     // If `initiallyFocusedOptionKey` is not passed, we fall back to `-1`, to avoid showing the highlight on the first member
     const [focusedIndex, setFocusedIndex] = useArrowKeyFocusManager({
         initialFocusedIndex: flattenedSections.allOptions.findIndex((option) => option.keyForList === initiallyFocusedOptionKey),
         maxIndex: Math.min(flattenedSections.allOptions.length - 1, CONST.MAX_SELECTION_LIST_PAGE_LENGTH * currentPage - 1),
-        disabledIndexes,
+        disabledIndexes: disabledArrowKeyIndexes,
         isActive: true,
         onFocusedIndexChange: (index: number) => {
             scrollToIndex(index, true);
diff --git a/src/components/SelectionList/types.ts b/src/components/SelectionList/types.ts
index 4c9b72634c46..cf7cd5cde8d5 100644
--- a/src/components/SelectionList/types.ts
+++ b/src/components/SelectionList/types.ts
@@ -394,6 +394,7 @@ type FlattenedSectionsReturn<TItem extends ListItem> = {
     allOptions: TItem[];
     selectedOptions: TItem[];
     disabledOptionsIndexes: number[];
+    disabledArrowKeyOptionsIndexes: number[];
     itemLayouts: ItemLayout[];
     allSelected: boolean;
 };