diff --git a/app/assets/javascripts/invite_members/components/group_select.vue b/app/assets/javascripts/invite_members/components/group_select.vue
index 4a72e97db8ce322bb5b35cff2914868d1f062a5c..bac8914c3744077235f46cec16422446d9bbaddd 100644
--- a/app/assets/javascripts/invite_members/components/group_select.vue
+++ b/app/assets/javascripts/invite_members/components/group_select.vue
@@ -1,5 +1,11 @@
 <script>
-import { GlDropdown, GlDropdownItem, GlDropdownText, GlSearchBoxByType } from '@gitlab/ui';
+import {
+  GlAvatarLabeled,
+  GlDropdown,
+  GlDropdownItem,
+  GlDropdownText,
+  GlSearchBoxByType,
+} from '@gitlab/ui';
 import { debounce } from 'lodash';
 import Api from '~/api';
 import { s__ } from '~/locale';
@@ -8,6 +14,7 @@ import { SEARCH_DELAY } from '../constants';
 export default {
   name: 'GroupSelect',
   components: {
+    GlAvatarLabeled,
     GlDropdown,
     GlDropdownItem,
     GlDropdownText,
@@ -49,6 +56,7 @@ export default {
             id: group.id,
             name: group.full_name,
             path: group.path,
+            avatarUrl: group.avatar_url,
           }));
           this.isFetching = false;
         })
@@ -82,7 +90,7 @@ export default {
       menu-class="gl-w-full!"
     >
       <gl-search-box-by-type
-        v-model.trim="searchTerm"
+        v-model="searchTerm"
         :is-loading="isFetching"
         :placeholder="$options.i18n.searchPlaceholder"
         data-qa-selector="group_select_dropdown_search_field"
@@ -93,7 +101,13 @@ export default {
         :name="group.name"
         @click="selectGroup(group)"
       >
-        {{ group.name }}
+        <gl-avatar-labeled
+          :label="group.name"
+          :src="group.avatarUrl"
+          :entity-id="group.id"
+          :entity-name="group.name"
+          :size="32"
+        />
       </gl-dropdown-item>
       <gl-dropdown-text v-if="isFetchResultEmpty && !isFetching" data-testid="empty-result-message">
         <span class="gl-text-gray-500">{{ $options.i18n.emptySearchResult }}</span>
diff --git a/spec/frontend/invite_members/components/group_select_spec.js b/spec/frontend/invite_members/components/group_select_spec.js
index 2a6985de136f81b8dd810ff5c9d599477b746df9..60527845089ef812c1af27aa7214d36ca9c7327b 100644
--- a/spec/frontend/invite_members/components/group_select_spec.js
+++ b/spec/frontend/invite_members/components/group_select_spec.js
@@ -1,4 +1,4 @@
-import { GlDropdown, GlDropdownItem, GlSearchBoxByType } from '@gitlab/ui';
+import { GlAvatarLabeled, GlDropdown, GlSearchBoxByType } from '@gitlab/ui';
 import { mount } from '@vue/test-utils';
 import waitForPromises from 'helpers/wait_for_promises';
 import Api from '~/api';
@@ -8,8 +8,8 @@ const createComponent = () => {
   return mount(GroupSelect, {});
 };
 
-const group1 = { id: 1, full_name: 'Group One' };
-const group2 = { id: 2, full_name: 'Group Two' };
+const group1 = { id: 1, full_name: 'Group One', avatar_url: 'test' };
+const group2 = { id: 2, full_name: 'Group Two', avatar_url: 'test' };
 const allGroups = [group1, group2];
 
 describe('GroupSelect', () => {
@@ -29,10 +29,10 @@ describe('GroupSelect', () => {
   const findSearchBoxByType = () => wrapper.findComponent(GlSearchBoxByType);
   const findDropdown = () => wrapper.findComponent(GlDropdown);
   const findDropdownToggle = () => findDropdown().find('button[aria-haspopup="true"]');
-  const findDropdownItemByText = (text) =>
+  const findAvatarByLabel = (text) =>
     wrapper
-      .findAllComponents(GlDropdownItem)
-      .wrappers.find((dropdownItemWrapper) => dropdownItemWrapper.text() === text);
+      .findAllComponents(GlAvatarLabeled)
+      .wrappers.find((dropdownItemWrapper) => dropdownItemWrapper.props('label') === text);
 
   it('renders GlSearchBoxByType with default attributes', () => {
     expect(findSearchBoxByType().exists()).toBe(true);
@@ -74,9 +74,20 @@ describe('GroupSelect', () => {
     });
   });
 
+  describe('avatar label', () => {
+    it('includes the correct attributes with name and avatar_url', () => {
+      expect(findAvatarByLabel(group1.full_name).attributes()).toMatchObject({
+        src: group1.avatar_url,
+        'entity-id': `${group1.id}`,
+        'entity-name': group1.full_name,
+        size: '32',
+      });
+    });
+  });
+
   describe('when group is selected from the dropdown', () => {
     beforeEach(() => {
-      findDropdownItemByText(group1.full_name).vm.$emit('click');
+      findAvatarByLabel(group1.full_name).trigger('click');
     });
 
     it('emits `input` event used by `v-model`', () => {