diff --git a/Code/Framework/AzToolsFramework/AzToolsFramework/Input/QtEventToAzInputManager.cpp b/Code/Framework/AzToolsFramework/AzToolsFramework/Input/QtEventToAzInputManager.cpp
index 18acccf049..d146dc91da 100644
--- a/Code/Framework/AzToolsFramework/AzToolsFramework/Input/QtEventToAzInputManager.cpp
+++ b/Code/Framework/AzToolsFramework/AzToolsFramework/Input/QtEventToAzInputManager.cpp
@@ -256,6 +256,14 @@ namespace AzToolsFramework
             // If our focus changes, go ahead and reset all input devices.
             HandleFocusChange(event);
 
+            if (eventType == QEvent::FocusOut)
+            {
+                if (m_capturingCursor)
+                {
+                    qApp->restoreOverrideCursor();
+                }
+            }
+
             // If we focus in on the source widget and the mouse is contained in its
             // bounds, refresh the cached cursor position to ensure it is up to date (this
             // ensures cursor positions are refreshed correctly with context menu focus changes)
@@ -264,6 +272,11 @@ namespace AzToolsFramework
                 const auto globalCursorPosition = QCursor::pos();
                 if (m_sourceWidget->geometry().contains(globalCursorPosition))
                 {
+                    if (m_capturingCursor)
+                    {
+                        qApp->setOverrideCursor(Qt::ForbiddenCursor);
+                    }
+
                     HandleMouseMoveEvent(globalCursorPosition);
                 }
             }
@@ -452,4 +465,22 @@ namespace AzToolsFramework
             }
         }
     }
+
+    void QtEventToAzInputMapper::PushCursor(/*enum*/)
+    {
+        if (!m_overrideCursor)
+        {
+            qApp->setOverrideCursor(Qt::ForbiddenCursor);
+            m_overrideCursor = true;
+        }
+    }
+
+    void QtEventToAzInputMapper::PopCursor()
+    {
+        if (m_overrideCursor)
+        {
+            qApp->restoreOverrideCursor();
+            m_overrideCursor = false;
+        }
+    }
 } // namespace AzToolsFramework
diff --git a/Code/Framework/AzToolsFramework/AzToolsFramework/Input/QtEventToAzInputManager.h b/Code/Framework/AzToolsFramework/AzToolsFramework/Input/QtEventToAzInputManager.h
index 5add24ad84..8127738dd3 100644
--- a/Code/Framework/AzToolsFramework/AzToolsFramework/Input/QtEventToAzInputManager.h
+++ b/Code/Framework/AzToolsFramework/AzToolsFramework/Input/QtEventToAzInputManager.h
@@ -55,6 +55,9 @@ namespace AzToolsFramework
         //! like a dolly or rotation, where mouse movement is important but cursor location is not.
         void SetCursorCaptureEnabled(bool enabled);
 
+        void PushCursor(/*enum*/);
+        void PopCursor();
+
         // QObject overrides...
         bool eventFilter(QObject* object, QEvent* event) override;
 
@@ -164,6 +167,8 @@ namespace AzToolsFramework
         bool m_enabled = true;
         // Flags whether or not the cursor is being constrained to the source widget (for invisible mouse movement).
         bool m_capturingCursor = false;
+        //
+        bool m_overrideCursor = true;
 
         // Our viewport-specific AZ devices. We control their internal input channel states.
         AZStd::unique_ptr<EditorQtMouseDevice> m_mouseDevice;
diff --git a/Code/Framework/AzToolsFramework/AzToolsFramework/Viewport/ViewportMessages.h b/Code/Framework/AzToolsFramework/AzToolsFramework/Viewport/ViewportMessages.h
index 9d2f7e9b90..93ca8706eb 100644
--- a/Code/Framework/AzToolsFramework/AzToolsFramework/Viewport/ViewportMessages.h
+++ b/Code/Framework/AzToolsFramework/AzToolsFramework/Viewport/ViewportMessages.h
@@ -310,6 +310,10 @@ namespace AzToolsFramework
             virtual void EndCursorCapture() = 0;
             //! Is the mouse over the viewport.
             virtual bool IsMouseOver() const = 0;
+            //!
+            virtual void PushOverrideCursor(/*enum*/) {} // make virtual
+            //!
+            virtual void PopOverrideCursor() {} // make virtual
 
         protected:
             ~ViewportMouseCursorRequests() = default;
diff --git a/Code/Framework/AzToolsFramework/AzToolsFramework/ViewportSelection/EditorHelpers.cpp b/Code/Framework/AzToolsFramework/AzToolsFramework/ViewportSelection/EditorHelpers.cpp
index bb718d0dc9..912e1ccff5 100644
--- a/Code/Framework/AzToolsFramework/AzToolsFramework/ViewportSelection/EditorHelpers.cpp
+++ b/Code/Framework/AzToolsFramework/AzToolsFramework/ViewportSelection/EditorHelpers.cpp
@@ -189,9 +189,15 @@ namespace AzToolsFramework
         // Verify if the entity Id corresponds to an entity that is focused; if not, halt selection.
         if (!IsSelectableAccordingToFocusMode(entityIdUnderCursor))
         {
+            ViewportInteraction::ViewportMouseCursorRequestBus::Event(
+                viewportId, &ViewportInteraction::ViewportMouseCursorRequestBus::Events::PushOverrideCursor);
+
             return AZ::EntityId();
         }
 
+        ViewportInteraction::ViewportMouseCursorRequestBus::Event(
+            viewportId, &ViewportInteraction::ViewportMouseCursorRequestBus::Events::PopOverrideCursor);
+
         // Container Entity support - if the entity that is being selected is part of a closed container,
         // change the selection to the container instead.
         if (ContainerEntityInterface* containerEntityInterface = AZ::Interface<ContainerEntityInterface>::Get())
diff --git a/Gems/Atom/Tools/AtomToolsFramework/Code/Include/AtomToolsFramework/Viewport/RenderViewportWidget.h b/Gems/Atom/Tools/AtomToolsFramework/Code/Include/AtomToolsFramework/Viewport/RenderViewportWidget.h
index b407aa2b4c..eebe445f7b 100644
--- a/Gems/Atom/Tools/AtomToolsFramework/Code/Include/AtomToolsFramework/Viewport/RenderViewportWidget.h
+++ b/Gems/Atom/Tools/AtomToolsFramework/Code/Include/AtomToolsFramework/Viewport/RenderViewportWidget.h
@@ -102,6 +102,8 @@ namespace AtomToolsFramework
         void BeginCursorCapture() override;
         void EndCursorCapture() override;
         bool IsMouseOver() const override;
+        void PushOverrideCursor(/*enum*/) override;
+        void PopOverrideCursor() override;
 
         // AzFramework::WindowRequestBus::Handler overrides ...
         void SetWindowTitle(const AZStd::string& title) override;
diff --git a/Gems/Atom/Tools/AtomToolsFramework/Code/Source/Viewport/RenderViewportWidget.cpp b/Gems/Atom/Tools/AtomToolsFramework/Code/Source/Viewport/RenderViewportWidget.cpp
index 83926ecc79..df639c8026 100644
--- a/Gems/Atom/Tools/AtomToolsFramework/Code/Source/Viewport/RenderViewportWidget.cpp
+++ b/Gems/Atom/Tools/AtomToolsFramework/Code/Source/Viewport/RenderViewportWidget.cpp
@@ -367,6 +367,16 @@ namespace AtomToolsFramework
         m_inputChannelMapper->SetCursorCaptureEnabled(false);
     }
 
+    void RenderViewportWidget::PushOverrideCursor(/*enum*/)
+    {
+        m_inputChannelMapper->PushCursor();
+    }
+
+    void RenderViewportWidget::PopOverrideCursor()
+    {
+        m_inputChannelMapper->PopCursor();
+    }
+
     void RenderViewportWidget::SetWindowTitle(const AZStd::string& title)
     {
         setWindowTitle(QString::fromUtf8(title.c_str()));