diff --git a/.changeset/tidy-tags-update.md b/.changeset/tidy-tags-update.md
new file mode 100644
index 000000000..e6c587a31
--- /dev/null
+++ b/.changeset/tidy-tags-update.md
@@ -0,0 +1,5 @@
+---
+'@keystar/ui': patch
+---
+
+Fix `TagGroup` not showing items added after the initial render when `maxRows` is set
diff --git a/design-system/pkg/src/tag/TagGroup.tsx b/design-system/pkg/src/tag/TagGroup.tsx
index 1e6c9836e..0ca0c4e80 100644
--- a/design-system/pkg/src/tag/TagGroup.tsx
+++ b/design-system/pkg/src/tag/TagGroup.tsx
@@ -1,7 +1,6 @@
 import React, {
   type ForwardedRef,
   type ReactElement,
-  useCallback,
   useEffect,
   useMemo,
   useRef,
@@ -14,8 +13,9 @@ import { useLocalizedStringFormatter } from 'react-aria/useLocalizedStringFormat
 import { ListKeyboardDelegate } from 'react-aria/ListKeyboardDelegate';
 import { AriaTagGroupProps, useTagGroup } from 'react-aria/useTagGroup';
 import { useId } from 'react-aria/useId';
-import { useLayoutEffect } from 'react';
 import { useObjectRef } from 'react-aria/useObjectRef';
+import { useEffectEvent } from 'react-aria/private/utils/useEffectEvent';
+import { useLayoutEffect } from 'react-aria/private/utils/useLayoutEffect';
 import { useResizeObserver } from 'react-aria/private/utils/useResizeObserver';
 import { useValueEffect } from 'react-aria/private/utils/useValueEffect';
 import { ListCollection } from 'react-stately/private/list/ListCollection';
@@ -69,7 +69,6 @@ function TagGroup<T extends object>(
   // props = useFormProps(props);
   let {
     maxRows,
-    children,
     actionLabel,
     onAction,
     renderEmptyState: renderEmptyStateProp,
@@ -124,7 +123,7 @@ function TagGroup<T extends object>(
   const actionsId = useId();
   const actionsRef = useRef<HTMLDivElement>(null);
 
-  let updateVisibleTagCount = useCallback(() => {
+  let updateVisibleTagCount = () => {
     if (maxRows && maxRows > 0) {
       let computeVisibleTagCount = () => {
         const containerEl = containerRef.current;
@@ -205,18 +204,21 @@ function TagGroup<T extends object>(
         yield computeVisibleTagCount();
       });
     }
-  }, [maxRows, setTagState, direction, state.collection.size]);
+  };
+
+  let updateVisibleTagCountEffect = useEffectEvent(updateVisibleTagCount);
 
   useResizeObserver({ ref: containerRef, onResize: updateVisibleTagCount });
 
-  // we only want this effect to run when children change
-  // eslint-disable-next-line react-compiler/react-compiler
-  // eslint-disable-next-line react-hooks/exhaustive-deps
-  useLayoutEffect(updateVisibleTagCount, [children]);
+  useLayoutEffect(() => {
+    if (state.collection.size > 0 && maxRows != null && maxRows > 0) {
+      queueMicrotask(updateVisibleTagCountEffect);
+    }
+  }, [state.collection.size, maxRows, updateVisibleTagCountEffect]);
 
   useEffect(() => {
     // Recalculate visible tags when fonts are loaded.
-    document.fonts?.ready.then(() => updateVisibleTagCount());
+    document.fonts?.ready.then(() => updateVisibleTagCountEffect());
 
     // we strictly want this effect to only run once
     // eslint-disable-next-line react-compiler/react-compiler
diff --git a/design-system/pkg/src/tag/test/TagGroup.test.tsx b/design-system/pkg/src/tag/test/TagGroup.test.tsx
index e0c2499ca..099d86fe0 100644
--- a/design-system/pkg/src/tag/test/TagGroup.test.tsx
+++ b/design-system/pkg/src/tag/test/TagGroup.test.tsx
@@ -68,4 +68,37 @@ describe('tag/TagGroup', function () {
     let tags = getAllByRole('row');
     expect(tags[0]).toHaveAttribute('tabIndex', '0');
   });
+
+  it('shows items added with a stable render function', () => {
+    let renderItem = (item: { id: number; label: string }) => (
+      <Item key={item.id}>{item.label}</Item>
+    );
+    let { getAllByRole, rerender } = renderWithProvider(
+      <TagGroup
+        aria-label="tag group"
+        items={[{ id: 1, label: 'Tag 1' }]}
+        maxRows={2}
+      >
+        {renderItem}
+      </TagGroup>
+    );
+
+    rerender(
+      <TagGroup
+        aria-label="tag group"
+        items={[
+          { id: 1, label: 'Tag 1' },
+          { id: 2, label: 'Tag 2' },
+        ]}
+        maxRows={2}
+      >
+        {renderItem}
+      </TagGroup>
+    );
+    act(() => {
+      jest.runAllTicks();
+    });
+
+    expect(getAllByRole('row')).toHaveLength(2);
+  });
 });