diff --git a/assets/css/app.css b/assets/css/app.css
index 4221b944..30425cfb 100644
--- a/assets/css/app.css
+++ b/assets/css/app.css
@@ -96,7 +96,7 @@
 @custom-variant phx-submit-loading (.phx-submit-loading&, .phx-submit-loading &);
 @custom-variant phx-change-loading (.phx-change-loading&, .phx-change-loading &);
 
-/* Use the data attribute for dark mode  */
+/* Use the data attribute for dark mode */
 @custom-variant dark (&:where([data-theme=dark], [data-theme=dark] *));
 
 /* Make LiveView wrapper divs transparent for layout */
diff --git a/lib/towerops_web/components/layouts.ex b/lib/towerops_web/components/layouts.ex
index f70f212c..0e957993 100644
--- a/lib/towerops_web/components/layouts.ex
+++ b/lib/towerops_web/components/layouts.ex
@@ -175,7 +175,8 @@ defmodule ToweropsWeb.Layouts do
                 </.nav_link>
               </div>
             </div>
-            <div class="relative flex items-center">
+            <div class="relative flex items-center gap-2">
+              <.theme_toggle />
               <button
                 type="button"
                 id="org-menu-button"
@@ -335,32 +336,50 @@ defmodule ToweropsWeb.Layouts do
   """
   def theme_toggle(assigns) do
     ~H"""
-    <div class="card relative flex flex-row items-center border-2 border-base-300 bg-base-300 rounded-full">
-      <div class="absolute w-1/3 h-full rounded-full border-1 border-base-200 bg-base-100 brightness-200 left-0 [[data-theme=light]_&]:left-1/3 [[data-theme=dark]_&]:left-2/3 transition-[left]" />
-
+    <div class="relative" id="theme-toggle" phx-update="ignore">
       <button
-        class="flex p-2 cursor-pointer w-1/3"
-        phx-click={JS.dispatch("phx:set-theme")}
-        data-phx-theme="system"
+        type="button"
+        id="theme-menu-button"
+        phx-click={JS.toggle(to: "#theme-menu")}
+        class="flex items-center justify-center p-2 rounded-md text-zinc-500 hover:text-zinc-700 hover:bg-zinc-100 dark:text-zinc-400 dark:hover:text-zinc-200 dark:hover:bg-zinc-800"
+        aria-label="Toggle theme"
       >
-        <.icon name="hero-computer-desktop-micro" class="size-4 opacity-75 hover:opacity-100" />
+        <.icon name="hero-sun" class="size-5 block dark:hidden" />
+        <.icon name="hero-moon" class="size-5 hidden dark:block" />
       </button>
 
-      <button
-        class="flex p-2 cursor-pointer w-1/3"
-        phx-click={JS.dispatch("phx:set-theme")}
-        data-phx-theme="light"
+      <div
+        id="theme-menu"
+        class="hidden absolute top-full right-0 mt-2 w-36 origin-top-right rounded-md bg-white shadow-lg ring-1 ring-black/5 z-50 dark:bg-zinc-800 dark:ring-white/10"
+        phx-click-away={JS.hide(to: "#theme-menu")}
       >
-        <.icon name="hero-sun-micro" class="size-4 opacity-75 hover:opacity-100" />
-      </button>
-
-      <button
-        class="flex p-2 cursor-pointer w-1/3"
-        phx-click={JS.dispatch("phx:set-theme")}
-        data-phx-theme="dark"
-      >
-        <.icon name="hero-moon-micro" class="size-4 opacity-75 hover:opacity-100" />
-      </button>
+        <div class="py-1">
+          <button
+            type="button"
+            class="flex w-full items-center gap-2 px-4 py-2 text-sm text-zinc-700 hover:bg-zinc-100 dark:text-zinc-300 dark:hover:bg-zinc-700"
+            phx-click={JS.dispatch("phx:set-theme") |> JS.hide(to: "#theme-menu")}
+            data-phx-theme="system"
+          >
+            <.icon name="hero-computer-desktop" class="size-4" /> Auto
+          </button>
+          <button
+            type="button"
+            class="flex w-full items-center gap-2 px-4 py-2 text-sm text-zinc-700 hover:bg-zinc-100 dark:text-zinc-300 dark:hover:bg-zinc-700"
+            phx-click={JS.dispatch("phx:set-theme") |> JS.hide(to: "#theme-menu")}
+            data-phx-theme="light"
+          >
+            <.icon name="hero-sun" class="size-4" /> Light
+          </button>
+          <button
+            type="button"
+            class="flex w-full items-center gap-2 px-4 py-2 text-sm text-zinc-700 hover:bg-zinc-100 dark:text-zinc-300 dark:hover:bg-zinc-700"
+            phx-click={JS.dispatch("phx:set-theme") |> JS.hide(to: "#theme-menu")}
+            data-phx-theme="dark"
+          >
+            <.icon name="hero-moon" class="size-4" /> Dark
+          </button>
+        </div>
+      </div>
     </div>
     """
   end
@@ -411,7 +430,8 @@ defmodule ToweropsWeb.Layouts do
                 </.link>
               </div>
             </div>
-            <div class="flex items-center">
+            <div class="flex items-center gap-2">
+              <.theme_toggle />
               <.link
                 navigate={~p"/orgs"}
                 class="text-sm text-zinc-600 hover:text-zinc-900 dark:text-zinc-400 dark:hover:text-zinc-100"
diff --git a/lib/towerops_web/components/layouts/root.html.heex b/lib/towerops_web/components/layouts/root.html.heex
index 677969e5..dea4e23e 100644
--- a/lib/towerops_web/components/layouts/root.html.heex
+++ b/lib/towerops_web/components/layouts/root.html.heex
@@ -12,20 +12,37 @@
     </script>
     <script>
       (() => {
-        const setTheme = (theme) => {
-          if (theme === "system") {
-            localStorage.removeItem("phx:theme");
-            document.documentElement.removeAttribute("data-theme");
-          } else {
-            localStorage.setItem("phx:theme", theme);
-            document.documentElement.setAttribute("data-theme", theme);
-          }
+        const mql = window.matchMedia("(prefers-color-scheme: dark)");
+
+        const getSystemTheme = () => mql.matches ? "dark" : "light";
+
+        const applyTheme = () => {
+          const preference = localStorage.getItem("phx:theme") || "system";
+          const theme = preference === "system" ? getSystemTheme() : preference;
+          document.documentElement.setAttribute("data-theme", theme);
         };
-        if (!document.documentElement.hasAttribute("data-theme")) {
-          setTheme(localStorage.getItem("phx:theme") || "system");
-        }
-        window.addEventListener("storage", (e) => e.key === "phx:theme" && setTheme(e.newValue || "system"));
-        
+
+        const setTheme = (preference) => {
+          if (preference === "system") {
+            localStorage.removeItem("phx:theme");
+          } else {
+            localStorage.setItem("phx:theme", preference);
+          }
+          applyTheme();
+        };
+
+        // Apply theme on page load
+        applyTheme();
+
+        // Listen for system preference changes (for auto mode)
+        mql.addEventListener("change", applyTheme);
+
+        // Listen for storage changes from other tabs
+        window.addEventListener("storage", (e) => {
+          if (e.key === "phx:theme") applyTheme();
+        });
+
+        // Listen for theme change events from LiveView
         window.addEventListener("phx:set-theme", (e) => setTheme(e.target.dataset.phxTheme));
       })();
     </script>