diff --git a/packages/react-components/react-tags/package.json b/packages/react-components/react-tags/package.json
index 07133dd18720ea..b917884a8a08fb 100644
--- a/packages/react-components/react-tags/package.json
+++ b/packages/react-components/react-tags/package.json
@@ -39,6 +39,7 @@
     "@fluentui/react-avatar": "^9.5.5",
     "@fluentui/react-icons": "^2.0.203",
     "@fluentui/react-jsx-runtime": "9.0.0-alpha.6",
+    "@fluentui/react-shared-contexts": "^9.5.0",
     "@fluentui/react-tabster": "^9.7.5",
     "@fluentui/react-theme": "^9.1.8",
     "@fluentui/react-utilities": "^9.9.2",
diff --git a/packages/react-components/react-tags/src/components/TagGroup/useTagGroup.ts b/packages/react-components/react-tags/src/components/TagGroup/useTagGroup.ts
index 5da937f4212447..1cdf4937d92e36 100644
--- a/packages/react-components/react-tags/src/components/TagGroup/useTagGroup.ts
+++ b/packages/react-components/react-tags/src/components/TagGroup/useTagGroup.ts
@@ -1,6 +1,9 @@
 import * as React from 'react';
-import { getNativeElementProps, useEventCallback } from '@fluentui/react-utilities';
+import { getNativeElementProps, useEventCallback, useMergedRefs } from '@fluentui/react-utilities';
 import type { TagGroupProps, TagGroupState } from './TagGroup.types';
+import { useArrowNavigationGroup, useFocusFinders } from '@fluentui/react-tabster';
+import { useFluent_unstable as useFluent } from '@fluentui/react-shared-contexts';
+import { tagButtonClassNames } from '../TagButton/useTagButtonStyles.styles';
 
 /**
  * Create the state required to render TagGroup.
@@ -14,10 +17,37 @@ import type { TagGroupProps, TagGroupState } from './TagGroup.types';
 export const useTagGroup_unstable = (props: TagGroupProps, ref: React.Ref<HTMLElement>): TagGroupState => {
   const { onDismiss, size = 'medium' } = props;
 
+  const innerRef = React.useRef<HTMLElement>();
+  const { targetDocument } = useFluent();
+  const { findNextFocusable, findPrevFocusable } = useFocusFinders();
+
   const handleTagDismiss = useEventCallback((e: React.MouseEvent | React.KeyboardEvent, id: string) => {
     onDismiss?.(e, { dismissedTagValue: id });
 
-    // TODO set focus after tag dismiss
+    // set focus after tag dismiss
+    const activeElement = targetDocument?.activeElement;
+    if (innerRef.current?.contains(activeElement as HTMLElement)) {
+      // focus on next tag only if the active element is within the current tag group
+      const next = findNextFocusable(activeElement as HTMLElement, { container: innerRef.current });
+      if (next) {
+        next.focus();
+        return;
+      }
+
+      // if there is no next focusable, focus on the previous focusable
+      if (activeElement?.className.includes(tagButtonClassNames.dismissButton)) {
+        const prev = findPrevFocusable(activeElement.parentElement as HTMLElement, { container: innerRef.current });
+        prev?.focus();
+      } else {
+        const prev = findPrevFocusable(activeElement as HTMLElement, { container: innerRef.current });
+        prev?.focus();
+      }
+    }
+  });
+
+  const arrowNavigationProps = useArrowNavigationGroup({
+    circular: true,
+    axis: 'both',
   });
 
   return {
@@ -30,9 +60,10 @@ export const useTagGroup_unstable = (props: TagGroupProps, ref: React.Ref<HTMLEl
     },
 
     root: getNativeElementProps('div', {
-      ref,
+      ref: useMergedRefs(ref, innerRef),
+      role: 'toolbar',
+      ...arrowNavigationProps,
       ...props,
-      // TODO aria attributes
     }),
   };
 };
diff --git a/packages/react-components/react-tags/stories/Tag/TagDescription.md b/packages/react-components/react-tags/stories/Tag/TagDescription.md
index e69de29bb2d1d6..30785a128834f0 100644
--- a/packages/react-components/react-tags/stories/Tag/TagDescription.md
+++ b/packages/react-components/react-tags/stories/Tag/TagDescription.md
@@ -0,0 +1 @@
+A Tag provides a visual representation of an attribute, person, or asset.
diff --git a/packages/react-components/react-tags/stories/TagButton/TagButtonBestPractices.md b/packages/react-components/react-tags/stories/TagButton/TagButtonBestPractices.md
index 08ff8ddeeb5f86..625151fb10240c 100644
--- a/packages/react-components/react-tags/stories/TagButton/TagButtonBestPractices.md
+++ b/packages/react-components/react-tags/stories/TagButton/TagButtonBestPractices.md
@@ -2,4 +2,6 @@
 
 ### Do
 
+- Use `Tag` instead of `TagButton` for tags without a primary action.
+
 ### Don't
diff --git a/packages/react-components/react-tags/stories/TagButton/TagButtonDescription.md b/packages/react-components/react-tags/stories/TagButton/TagButtonDescription.md
index e69de29bb2d1d6..691c625a2b65cd 100644
--- a/packages/react-components/react-tags/stories/TagButton/TagButtonDescription.md
+++ b/packages/react-components/react-tags/stories/TagButton/TagButtonDescription.md
@@ -0,0 +1 @@
+A TagButton follows the same characteristics as a Tag, but with the added functionality of having a primary and secondary action.
diff --git a/packages/react-components/react-tags/stories/TagGroup/TagGroupBestPractices.md b/packages/react-components/react-tags/stories/TagGroup/TagGroupBestPractices.md
index 08ff8ddeeb5f86..0be386c6dd82ba 100644
--- a/packages/react-components/react-tags/stories/TagGroup/TagGroupBestPractices.md
+++ b/packages/react-components/react-tags/stories/TagGroup/TagGroupBestPractices.md
@@ -2,4 +2,8 @@
 
 ### Do
 
+- A Picker component is planned for displaying multiple selected values using `TagGroup` with `Combobox`, and will be the recommended approach once it's available. But for now, when using `TagGroup` with `Combobox`:
+  - Set the `listbox` role for `TagGroup` and the `option` role for each `Tag`.
+  - If using `TagButton`, set the `option` role for the content and make the dismiss button not focusable. When content is focused, Enter/Space should invoke the primary action, and Backspace/Delete remove the tag.
+
 ### Don't
diff --git a/packages/react-components/react-tags/stories/TagGroup/TagGroupDescription.md b/packages/react-components/react-tags/stories/TagGroup/TagGroupDescription.md
index e69de29bb2d1d6..61fa85c13bde20 100644
--- a/packages/react-components/react-tags/stories/TagGroup/TagGroupDescription.md
+++ b/packages/react-components/react-tags/stories/TagGroup/TagGroupDescription.md
@@ -0,0 +1 @@
+A TagGroup is a container for multiple controls that are Tag or TagButton.
diff --git a/packages/react-components/react-tags/stories/TagGroup/TagGroupDismiss.stories.tsx b/packages/react-components/react-tags/stories/TagGroup/TagGroupDismiss.stories.tsx
index 224d13ae135868..f7ef262dff4fea 100644
--- a/packages/react-components/react-tags/stories/TagGroup/TagGroupDismiss.stories.tsx
+++ b/packages/react-components/react-tags/stories/TagGroup/TagGroupDismiss.stories.tsx
@@ -3,10 +3,10 @@ import { TagGroup, Tag, TagButton, TagButtonProps, TagProps, TagGroupProps } fro
 
 export const Dismiss = () => {
   const defaultItems = [
-    { value: '1', children: 'Tag 1' },
-    { value: '2', children: 'Tag 2' },
-    { value: 'tagButton-foo', children: 'Foo' },
-    { value: 'tagButton-bar', children: 'Bar' },
+    { value: '1', children: 'Tag 1', 'aria-label': 'Tag1, remove' },
+    { value: '2', children: 'Tag 2', 'aria-label': 'Tag2, remove' },
+    { value: 'tagButton-foo', children: 'Foo', dismissButton: { 'aria-label': 'Foo, remove' } },
+    { value: 'tagButton-bar', children: 'Bar', dismissButton: { 'aria-label': 'Bar, remove' } },
   ];
 
   const [items, setItems] = React.useState<Array<TagProps | TagButtonProps>>(defaultItems);