diff --git a/.changeset/fn-8212-model-dropdown-sticky-gap.md b/.changeset/fn-8212-model-dropdown-sticky-gap.md
new file mode 100644
index 0000000000..31c0f36d30
--- /dev/null
+++ b/.changeset/fn-8212-model-dropdown-sticky-gap.md
@@ -0,0 +1,7 @@
+---
+"@runfusion/fusion": patch
+---
+
+summary: Remove the gap above the pinned provider header in model dropdowns so list rows no longer show through while scrolling.
+category: fix
+dev: CustomModelDropdown.css — zero the .model-combobox-list top padding so the sticky .model-combobox-optgroup provider header sits flush against the header stack (FN-8212 refinement of FN-8193).
diff --git a/packages/dashboard/app/components/CustomModelDropdown.css b/packages/dashboard/app/components/CustomModelDropdown.css
index de26991908..a6bfcf5525 100644
--- a/packages/dashboard/app/components/CustomModelDropdown.css
+++ b/packages/dashboard/app/components/CustomModelDropdown.css
@@ -228,6 +228,9 @@ The Thinking Level <select> renders inside the createPortal dropdown (.model-com
 /*
 FNXC:ModelDropdown 2026-07-09-00:00:
 FN-7760 requires the portaled model list to remain the touch-scroll owner on mobile. The global mobile lockdown keeps body/root overflow hidden and defaults touch gestures to vertical panning, so this fixed-position scroller needs its own iOS momentum scrolling, contained overscroll, and explicit vertical pan contract.
+
+FNXC:ModelDropdown 2026-07-15-00:00:
+FN-8212 refines FN-8193 by removing the scroller's top padding. A sticky provider header anchors at the list top, so top padding exposed scrolling model rows in a seam between the fixed header stack and that header. Bottom token spacing preserves the list's trailing rhythm.
 */
 .model-combobox-list {
   flex: 1;
@@ -236,7 +239,7 @@ FN-7760 requires the portaled model list to remain the touch-scroll owner on mob
   -webkit-overflow-scrolling: touch;
   overscroll-behavior: contain;
   touch-action: pan-y;
-  padding: 4px 0;
+  padding: 0 0 var(--space-xs);
 }
 
 .model-combobox-option {
diff --git a/packages/dashboard/app/components/__tests__/CustomModelDropdown.test.tsx b/packages/dashboard/app/components/__tests__/CustomModelDropdown.test.tsx
index 9a84e34b04..824a3531d2 100644
--- a/packages/dashboard/app/components/__tests__/CustomModelDropdown.test.tsx
+++ b/packages/dashboard/app/components/__tests__/CustomModelDropdown.test.tsx
@@ -65,6 +65,52 @@ describe("CustomModelDropdown", () => {
     expect(within(list!).getByText("openai").closest(".model-combobox-optgroup")).not.toBeNull();
   });
 
+  it.each([
+    { width: 1024, query: "desktop", showThinking: false },
+    { width: 1024, query: "desktop", showThinking: true },
+    { width: 768, query: "(max-width: 768px)", showThinking: false },
+    { width: 768, query: "(max-width: 768px)", showThinking: true },
+    { width: 640, query: "(max-width: 640px)", showThinking: false },
+    { width: 640, query: "(max-width: 640px)", showThinking: true },
+  ])("keeps the provider header flush with the fixed header stack at $query with thinking $showThinking", async ({ width, showThinking }) => {
+    const user = userEvent.setup();
+    const css = readFileSync(resolve(__dirname, "../CustomModelDropdown.css"), "utf-8");
+    const listRules = css.match(/\.model-combobox-list\s*\{[^}]*\}/g) ?? [];
+
+    vi.spyOn(window, "innerWidth", "get").mockReturnValue(width);
+    render(
+      <CustomModelDropdown
+        label="Executor Model"
+        value=""
+        onChange={vi.fn()}
+        models={COLLAPSIBLE_MODELS}
+        favoriteModels={["anthropic/claude-haiku"]}
+        thinkingLevel={showThinking ? "high" : undefined}
+        onThinkingLevelChange={showThinking ? vi.fn() : undefined}
+      />,
+    );
+
+    await user.click(screen.getByRole("button", { name: "Executor Model" }));
+
+    const portal = await screen.findByTestId("model-combobox-portal");
+    const list = portal.querySelector(".model-combobox-list");
+    const firstProviderGroup = Array.from(list?.children ?? []).find((child) =>
+      child.classList.contains("model-combobox-group"),
+    );
+
+    // JSDOM cannot scroll sticky elements; the zero top inset is the structural no-seam invariant.
+    expect(listRules).toHaveLength(1);
+    expect(listRules[0]).toContain("padding: 0 0 var(--space-xs);");
+    expect(listRules[0]).not.toMatch(/padding-top\s*:\s*(?!0[;}])/);
+    expect(firstProviderGroup?.querySelector(".model-combobox-optgroup")).not.toBeNull();
+    expect(firstProviderGroup?.parentElement).toBe(list);
+    if (showThinking) {
+      expect(portal.querySelector(".model-combobox-thinking")).not.toBeNull();
+    } else {
+      expect(portal.querySelector(".model-combobox-thinking")).toBeNull();
+    }
+  });
+
   it("collapses provider rows, preserves special rows, and persists the preference", async () => {
     const user = userEvent.setup();