diff --git a/app/assets/javascripts/filtered_search/dropdown_utils.js.es6 b/app/assets/javascripts/filtered_search/dropdown_utils.js.es6
index eeab10fba17d4b25056fe4bf610bfa57f6a6e49b..de3fa1167171baca9a0fc3ab4b5090f103a44826 100644
--- a/app/assets/javascripts/filtered_search/dropdown_utils.js.es6
+++ b/app/assets/javascripts/filtered_search/dropdown_utils.js.es6
@@ -28,7 +28,12 @@
       if (lastToken !== searchToken) {
         const title = updatedItem.title.toLowerCase();
         let value = lastToken.value.toLowerCase();
-        value = value.replace(/"(.*?)"/g, str => str.slice(1).slice(0, -1));
+
+        // Removes the first character if it is a quotation so that we can search
+        // with multiple words
+        if ((value[0] === '"' || value[0] === '\'') && title.indexOf(' ') !== -1) {
+          value = value.slice(1);
+        }
 
         // Eg. filterSymbol = ~ for labels
         const matchWithoutSymbol = lastToken.symbol === filterSymbol && title.indexOf(value) !== -1;
@@ -83,8 +88,9 @@
       const selectionStart = input.selectionStart;
       let inputValue = input.value;
       // Replace all spaces inside quote marks with underscores
+      // (will continue to match entire string until an end quote is found if any)
       // This helps with matching the beginning & end of a token:key
-      inputValue = inputValue.replace(/("(.*?)"|:\s+)/g, str => str.replace(/\s/g, '_'));
+      inputValue = inputValue.replace(/(('[^']*'{0,1})|("[^"]*"{0,1})|:\s+)/g, str => str.replace(/\s/g, '_'));
 
       // Get the right position for the word selected
       // Regex matches first space
diff --git a/changelogs/unreleased/27248-filtered-search-does-not-allow-filtering-labels-with-multiple-words.yml b/changelogs/unreleased/27248-filtered-search-does-not-allow-filtering-labels-with-multiple-words.yml
new file mode 100644
index 0000000000000000000000000000000000000000..6e036923158383588c8f2bec094dc3677881e533
--- /dev/null
+++ b/changelogs/unreleased/27248-filtered-search-does-not-allow-filtering-labels-with-multiple-words.yml
@@ -0,0 +1,4 @@
+---
+title: Fix filtering with multiple words
+merge_request: 8830
+author:
diff --git a/spec/javascripts/filtered_search/dropdown_utils_spec.js.es6 b/spec/javascripts/filtered_search/dropdown_utils_spec.js.es6
index 19bd8d53219e54578f8fde4623ca96f3db8e99dd..89e49b7c51190f9ce39ddb1f64e10e6cf9136bad 100644
--- a/spec/javascripts/filtered_search/dropdown_utils_spec.js.es6
+++ b/spec/javascripts/filtered_search/dropdown_utils_spec.js.es6
@@ -64,6 +64,68 @@
         const updatedItem = gl.DropdownUtils.filterWithSymbol('@', input, item);
         expect(updatedItem.droplab_hidden).toBe(false);
       });
+
+      describe('filters multiple word title', () => {
+        const multipleWordItem = {
+          title: 'Community Contributions',
+        };
+
+        it('should filter with double quote', () => {
+          input.value = 'label:"';
+
+          const updatedItem = gl.DropdownUtils.filterWithSymbol('~', input, multipleWordItem);
+          expect(updatedItem.droplab_hidden).toBe(false);
+        });
+
+        it('should filter with double quote and symbol', () => {
+          input.value = 'label:~"';
+
+          const updatedItem = gl.DropdownUtils.filterWithSymbol('~', input, multipleWordItem);
+          expect(updatedItem.droplab_hidden).toBe(false);
+        });
+
+        it('should filter with double quote and multiple words', () => {
+          input.value = 'label:"community con';
+
+          const updatedItem = gl.DropdownUtils.filterWithSymbol('~', input, multipleWordItem);
+          expect(updatedItem.droplab_hidden).toBe(false);
+        });
+
+        it('should filter with double quote, symbol and multiple words', () => {
+          input.value = 'label:~"community con';
+
+          const updatedItem = gl.DropdownUtils.filterWithSymbol('~', input, multipleWordItem);
+          expect(updatedItem.droplab_hidden).toBe(false);
+        });
+
+        it('should filter with single quote', () => {
+          input.value = 'label:\'';
+
+          const updatedItem = gl.DropdownUtils.filterWithSymbol('~', input, multipleWordItem);
+          expect(updatedItem.droplab_hidden).toBe(false);
+        });
+
+        it('should filter with single quote and symbol', () => {
+          input.value = 'label:~\'';
+
+          const updatedItem = gl.DropdownUtils.filterWithSymbol('~', input, multipleWordItem);
+          expect(updatedItem.droplab_hidden).toBe(false);
+        });
+
+        it('should filter with single quote and multiple words', () => {
+          input.value = 'label:\'community con';
+
+          const updatedItem = gl.DropdownUtils.filterWithSymbol('~', input, multipleWordItem);
+          expect(updatedItem.droplab_hidden).toBe(false);
+        });
+
+        it('should filter with single quote, symbol and multiple words', () => {
+          input.value = 'label:~\'community con';
+
+          const updatedItem = gl.DropdownUtils.filterWithSymbol('~', input, multipleWordItem);
+          expect(updatedItem.droplab_hidden).toBe(false);
+        });
+      });
     });
 
     describe('filterHint', () => {
@@ -130,5 +192,99 @@
         expect(result).toBe(false);
       });
     });
+
+    describe('getInputSelectionPosition', () => {
+      describe('word with trailing spaces', () => {
+        const value = 'label:none ';
+
+        it('should return selectionStart when cursor is at the trailing space', () => {
+          const { left, right } = gl.DropdownUtils.getInputSelectionPosition({
+            selectionStart: 11,
+            value,
+          });
+
+          expect(left).toBe(11);
+          expect(right).toBe(11);
+        });
+
+        it('should return input when cursor is at the start of input', () => {
+          const { left, right } = gl.DropdownUtils.getInputSelectionPosition({
+            selectionStart: 0,
+            value,
+          });
+
+          expect(left).toBe(0);
+          expect(right).toBe(10);
+        });
+
+        it('should return input when cursor is at the middle of input', () => {
+          const { left, right } = gl.DropdownUtils.getInputSelectionPosition({
+            selectionStart: 7,
+            value,
+          });
+
+          expect(left).toBe(0);
+          expect(right).toBe(10);
+        });
+
+        it('should return input when cursor is at the end of input', () => {
+          const { left, right } = gl.DropdownUtils.getInputSelectionPosition({
+            selectionStart: 10,
+            value,
+          });
+
+          expect(left).toBe(0);
+          expect(right).toBe(10);
+        });
+      });
+
+      describe('multiple words', () => {
+        const value = 'label:~"Community Contribution"';
+
+        it('should return input when cursor is after the first word', () => {
+          const { left, right } = gl.DropdownUtils.getInputSelectionPosition({
+            selectionStart: 17,
+            value,
+          });
+
+          expect(left).toBe(0);
+          expect(right).toBe(31);
+        });
+
+        it('should return input when cursor is before the second word', () => {
+          const { left, right } = gl.DropdownUtils.getInputSelectionPosition({
+            selectionStart: 18,
+            value,
+          });
+
+          expect(left).toBe(0);
+          expect(right).toBe(31);
+        });
+      });
+
+      describe('incomplete multiple words', () => {
+        const value = 'label:~"Community Contribution';
+
+        it('should return entire input when cursor is at the start of input', () => {
+          const { left, right } = gl.DropdownUtils.getInputSelectionPosition({
+            selectionStart: 0,
+            value,
+          });
+
+          expect(left).toBe(0);
+          expect(right).toBe(30);
+        });
+
+        it('should return entire input when cursor is at the end of input', () => {
+          const { left, right } = gl.DropdownUtils.getInputSelectionPosition({
+            selectionStart: 30,
+            value,
+          });
+
+          expect(left).toBe(0);
+          expect(right).toBe(30);
+        });
+      });
+    });
   });
 })();