diff --git a/packages/components/listbox/src/virtualized-listbox.tsx b/packages/components/listbox/src/virtualized-listbox.tsx
index 0a36766204..48c9499356 100644
--- a/packages/components/listbox/src/virtualized-listbox.tsx
+++ b/packages/components/listbox/src/virtualized-listbox.tsx
@@ -1,7 +1,8 @@
-import {useRef} from "react";
+import {useMemo, useRef} from "react";
 import {mergeProps} from "@react-aria/utils";
 import {useVirtualizer} from "@tanstack/react-virtual";
 import {isEmpty} from "@nextui-org/shared-utils";
+import {Node} from "@react-types/shared";
 
 import ListboxItem from "./listbox-item";
 import ListboxSection from "./listbox-section";
@@ -13,6 +14,21 @@ interface Props extends UseListboxReturn {
   virtualization?: VirtualizationProps;
 }
 
+const getItemSizesForCollection = (collection: Node<object>[], itemHeight: number) => {
+  const sizes: number[] = [];
+
+  for (const item of collection) {
+    if (item.type === "section") {
+      /* +1 for the section header */
+      sizes.push(([...item.childNodes].length + 1) * itemHeight);
+    } else {
+      sizes.push(itemHeight);
+    }
+  }
+
+  return sizes;
+};
+
 const VirtualizedListbox = (props: Props) => {
   const {
     Component,
@@ -46,16 +62,20 @@ const VirtualizedListbox = (props: Props) => {
   const listHeight = Math.min(maxListboxHeight, itemHeight * state.collection.size);
 
   const parentRef = useRef(null);
+  const itemSizes = useMemo(
+    () => getItemSizesForCollection([...state.collection], itemHeight),
+    [state.collection, itemHeight],
+  );
 
   const rowVirtualizer = useVirtualizer({
-    count: state.collection.size,
+    count: [...state.collection].length,
     getScrollElement: () => parentRef.current,
-    estimateSize: () => itemHeight,
+    estimateSize: (i) => itemSizes[i],
   });
 
   const virtualItems = rowVirtualizer.getVirtualItems();
 
-  const renderRow = ({
+  const ListBoxRow = ({
     index,
     style: virtualizerStyle,
   }: {
@@ -64,6 +84,10 @@ const VirtualizedListbox = (props: Props) => {
   }) => {
     const item = [...state.collection][index];
 
+    if (!item) {
+      return null;
+    }
+
     const itemProps = {
       color,
       item,
@@ -111,6 +135,7 @@ const VirtualizedListbox = (props: Props) => {
       )}
       <div
         ref={parentRef}
+        className="scrollbar-hide"
         style={{
           height: maxListboxHeight,
           overflow: "auto",
@@ -124,19 +149,22 @@ const VirtualizedListbox = (props: Props) => {
               position: "relative",
             }}
           >
-            {virtualItems.map((virtualItem) =>
-              renderRow({
-                index: virtualItem.index,
-                style: {
-                  position: "absolute",
-                  top: 0,
-                  left: 0,
-                  width: "100%",
-                  height: `${virtualItem.size}px`,
-                  transform: `translateY(${virtualItem.start}px)`,
-                },
-              }),
-            )}
+            {virtualItems.map((virtualItem) => {
+              return (
+                <ListBoxRow
+                  key={virtualItem.index}
+                  index={virtualItem.index}
+                  style={{
+                    position: "absolute",
+                    top: 0,
+                    left: 0,
+                    width: "100%",
+                    height: `${virtualItem.size}px`,
+                    transform: `translateY(${virtualItem.start}px)`,
+                  }}
+                />
+              );
+            })}
           </div>
         )}
       </div>
diff --git a/packages/components/select/src/use-select.ts b/packages/components/select/src/use-select.ts
index e563cd1f7d..09aa8fd993 100644
--- a/packages/components/select/src/use-select.ts
+++ b/packages/components/select/src/use-select.ts
@@ -161,7 +161,9 @@ export type UseSelectProps<T> = Omit<
   SelectVariantProps & {
     /**
      * The height of each item in the listbox.
+     * For dataset with sections, the itemHeight must be the height of each item (including padding, border, margin).
      * This is required for virtualized listboxes to calculate the height of each item.
+     * @default 36
      */
     itemHeight?: number;
     /**
@@ -208,7 +210,7 @@ export function useSelect<T extends object>(originalProps: UseSelectProps<T>) {
     onSelectionChange,
     placeholder,
     isVirtualized,
-    itemHeight = 32,
+    itemHeight = 36,
     maxListboxHeight = 256,
     children,
     disallowEmptySelection = false,
diff --git a/packages/components/select/stories/select.stories.tsx b/packages/components/select/stories/select.stories.tsx
index 34136d2bb3..6fac92d091 100644
--- a/packages/components/select/stories/select.stories.tsx
+++ b/packages/components/select/stories/select.stories.tsx
@@ -1391,6 +1391,85 @@ export const CustomItemHeight = {
   },
 };
 
+const AVATAR_DECORATIONS: {[key: string]: string[]} = {
+  arcane: ["jinx", "atlas-gauntlets", "flame-chompers", "fishbones", "hexcore", "shimmer"],
+  anime: ["cat-ears", "heart-bloom", "in-love", "in-tears", "soul-leaving-body", "starry-eyed"],
+  "lofi-vibes": ["chromawave", "cozy-cat", "cozy-headphones", "doodling", "rainy-mood"],
+  valorant: [
+    "a-hint-of-clove",
+    "blade-storm",
+    "cypher",
+    "frag-out",
+    "omen-cowl",
+    "reyna-leer",
+    "vct-supernova",
+    "viper",
+    "yoru",
+    "carnalito",
+    "a-hint-of-clove",
+    "blade-storm",
+    "cypher",
+    "frag-out",
+    "omen-cowl",
+    "reyna-leer",
+    "vct-supernova",
+    "viper",
+    "yoru",
+    "carnalito",
+  ],
+  spongebob: [
+    "flower-clouds",
+    "gary-the-snail",
+    "imagination",
+    "musclebob",
+    "sandy-cheeks",
+    "spongebob",
+  ],
+  arcade: ["clyde-invaders", "hot-shot", "joystick", "mallow-jump", "pipedream", "snake"],
+  "street-fighter": ["akuma", "cammy", "chun-li", "guile", "juri", "ken", "m.bison", "ryu"],
+};
+
+export const NonVirtualizedVsVirtualizedWithSections = {
+  render: () => {
+    const SelectComponent = ({isVirtualized}: {isVirtualized: boolean}) => (
+      <Select
+        disallowEmptySelection
+        className="max-w-xs"
+        color="secondary"
+        defaultSelectedKeys={["jinx"]}
+        isVirtualized={isVirtualized}
+        label={`Avatar Decoration ${isVirtualized ? "(Virtualized)" : "(Non-virtualized)"}`}
+        selectedKeys={["jinx"]}
+        selectionMode="single"
+        variant="bordered"
+      >
+        {Object.keys(AVATAR_DECORATIONS).map((key) => (
+          <SelectSection
+            key={key}
+            classNames={{
+              heading: "uppercase text-secondary",
+            }}
+            title={key}
+          >
+            {AVATAR_DECORATIONS[key].map((item) => (
+              <SelectItem key={item} className="capitalize" color="secondary" variant="bordered">
+                {item.replace(/-/g, " ")}
+              </SelectItem>
+            ))}
+          </SelectSection>
+        ))}
+      </Select>
+    );
+
+    return (
+      <div className="flex gap-4 w-full">
+        <SelectComponent isVirtualized={false} />
+        <SelectComponent isVirtualized={true} />
+      </div>
+    );
+  },
+};
+
 export const ValidationBehaviorAria = {
   render: ValidationBehaviorAriaTemplate,
   args: {