diff --git a/changes/39273-filter-button-hover-fix b/changes/39273-filter-button-hover-fix
new file mode 100644
index 0000000000..166d1dfb47
--- /dev/null
+++ b/changes/39273-filter-button-hover-fix
@@ -0,0 +1 @@
+* Fixed a hover style issue in the label filter close button
\ No newline at end of file
diff --git a/frontend/pages/hosts/ManageHostsPage/components/FilterPill/_styles.scss b/frontend/pages/hosts/ManageHostsPage/components/FilterPill/_styles.scss
index cffb1cfb45..75a357af29 100644
--- a/frontend/pages/hosts/ManageHostsPage/components/FilterPill/_styles.scss
+++ b/frontend/pages/hosts/ManageHostsPage/components/FilterPill/_styles.scss
@@ -5,6 +5,7 @@
     padding: 6px 12px;
     border: 1px solid $ui-fleet-black-25;
     border-radius: $border-radius;
+    overflow: hidden;
     box-shadow: none;
     color: $core-fleet-black;
     font-size: $xx-small;