diff --git a/packages/mui-material/src/Autocomplete/Autocomplete.js b/packages/mui-material/src/Autocomplete/Autocomplete.js
index 7425a7cc9386c0..15f91a2f2564b1 100644
--- a/packages/mui-material/src/Autocomplete/Autocomplete.js
+++ b/packages/mui-material/src/Autocomplete/Autocomplete.js
@@ -280,6 +280,7 @@ const AutocompleteListbox = styled('div', {
   padding: '8px 0',
   maxHeight: '40vh',
   overflow: 'auto',
+  position: 'relative',
   [`& .${autocompleteClasses.option}`]: {
     minHeight: 48,
     display: 'flex',
diff --git a/packages/mui-material/src/Autocomplete/Autocomplete.test.js b/packages/mui-material/src/Autocomplete/Autocomplete.test.js
index f4282ecdfe31b0..c94264b53580c1 100644
--- a/packages/mui-material/src/Autocomplete/Autocomplete.test.js
+++ b/packages/mui-material/src/Autocomplete/Autocomplete.test.js
@@ -19,6 +19,7 @@ import Autocomplete, {
 } from '@mui/material/Autocomplete';
 import { paperClasses } from '@mui/material/Paper';
 import { iconButtonClasses } from '@mui/material/IconButton';
+import Box from '@mui/system/Box';
 
 function checkHighlightIs(listbox, expected) {
   const focused = listbox.querySelector(`.${classes.focused}`);
@@ -208,6 +209,39 @@ describe('<Autocomplete />', () => {
       checkHighlightIs(getByRole('listbox'), 'two');
     });
 
+    // https://github.com/mui/material-ui/issues/34998
+    it('should scroll the listbox to the top when keyboard highlight wraps around after the last item is highlighted', function test() {
+      if (/jsdom/.test(window.navigator.userAgent)) {
+        this.skip();
+      }
+
+      const { getByRole } = render(
+        <Autocomplete
+          open
+          options={['one', 'two', 'three', 'four', 'five']}
+          renderInput={(params) => <TextField {...params} />}
+          ListboxProps={{ style: { padding: 0, maxHeight: '100px' } }}
+          PopperComponent={(props) => {
+            const { disablePortal, anchorEl, open, ...other } = props;
+            return <Box {...other} />;
+          }}
+        />,
+      );
+      const textbox = getByRole('combobox');
+      act(() => {
+        textbox.focus();
+      });
+      fireEvent.keyDown(textbox, { key: 'ArrowDown' });
+      fireEvent.keyDown(textbox, { key: 'ArrowDown' });
+      fireEvent.keyDown(textbox, { key: 'ArrowDown' });
+      fireEvent.keyDown(textbox, { key: 'ArrowDown' });
+      fireEvent.keyDown(textbox, { key: 'ArrowDown' });
+      fireEvent.keyDown(textbox, { key: 'ArrowDown' });
+
+      checkHighlightIs(getByRole('listbox'), 'one');
+      expect(getByRole('listbox')).to.have.property('scrollTop', 0);
+    });
+
     it('should keep the current highlight if possible', () => {
       const { getByRole } = render(
         <Autocomplete