diff --git a/src/cascadia/TerminalSettingsEditor/Appearances.cpp b/src/cascadia/TerminalSettingsEditor/Appearances.cpp
index 236485128e..a38c9326fc 100644
--- a/src/cascadia/TerminalSettingsEditor/Appearances.cpp
+++ b/src/cascadia/TerminalSettingsEditor/Appearances.cpp
@@ -10,6 +10,8 @@
 #include "EnumEntry.h"
 #include "ProfileViewModel.h"
 
+#include "CursorColorTemplateSelector.g.cpp"
+#include "AppearanceViewModel.g.cpp"
 #include "Appearances.g.cpp"
 
 using namespace winrt::Windows::UI::Text;
@@ -203,6 +205,26 @@ namespace winrt::Microsoft::Terminal::Settings::Editor::implementation
         return _isFontFeature;
     }
 
+    DataTemplate CursorColorTemplateSelector::SelectTemplateCore(const IInspectable& item, const DependencyObject& /*container*/)
+    {
+        return SelectTemplateCore(item);
+    }
+
+    DataTemplate CursorColorTemplateSelector::SelectTemplateCore(const IInspectable& item)
+    {
+        if (const auto maybeCursorColor = item.try_as<Windows::UI::Color>())
+        {
+            const auto cursorColor = *maybeCursorColor;
+            if (cursorColor.R == 0xFF && cursorColor.G == 0xFF && cursorColor.B == 0xFF)
+            {
+                return InvertColorTemplate();
+            }
+            return DefaultTemplate();
+        }
+        assert(false);
+        return nullptr;
+    }
+
     AppearanceViewModel::AppearanceViewModel(const Model::AppearanceConfig& appearance) :
         _appearance{ appearance }
     {
@@ -1036,11 +1058,12 @@ namespace winrt::Microsoft::Terminal::Settings::Editor::implementation
         if (modelVal)
         {
             // user defined an override value
+            const auto color = modelVal.Value();
             return Windows::UI::Color{
                 .A = 255,
-                .R = modelVal.Value().R,
-                .G = modelVal.Value().G,
-                .B = modelVal.Value().B
+                .R = color.R,
+                .G = color.G,
+                .B = color.B
             };
         }
         // set to null --> deduce value from color scheme
diff --git a/src/cascadia/TerminalSettingsEditor/Appearances.h b/src/cascadia/TerminalSettingsEditor/Appearances.h
index e8b1cac6c3..b7c05d3ca8 100644
--- a/src/cascadia/TerminalSettingsEditor/Appearances.h
+++ b/src/cascadia/TerminalSettingsEditor/Appearances.h
@@ -19,6 +19,7 @@ Author(s):
 #include "Font.g.h"
 #include "FontKeyValuePair.g.h"
 #include "Appearances.g.h"
+#include "CursorColorTemplateSelector.g.h"
 #include "AppearanceViewModel.g.h"
 #include "Utils.h"
 #include "ViewModelHelpers.h"
@@ -60,6 +61,19 @@ namespace winrt::Microsoft::Terminal::Settings::Editor::implementation
         bool _isFontFeature;
     };
 
+    struct CursorColorTemplateSelector : public CursorColorTemplateSelectorT<CursorColorTemplateSelector>
+    {
+    public:
+        CursorColorTemplateSelector() = default;
+
+        Windows::UI::Xaml::DataTemplate SelectTemplateCore(const Windows::Foundation::IInspectable& item, const Windows::UI::Xaml::DependencyObject& container);
+        Windows::UI::Xaml::DataTemplate SelectTemplateCore(const Windows::Foundation::IInspectable& item);
+
+        WINRT_PROPERTY(Windows::UI::Xaml::DataTemplate, DefaultTemplate, nullptr);
+        WINRT_PROPERTY(Windows::UI::Xaml::DataTemplate, InvertColorTemplate, nullptr);
+        WINRT_PROPERTY(Editor::ColorSchemeViewModel, ColorScheme, nullptr);
+    };
+
     struct AppearanceViewModel : AppearanceViewModelT<AppearanceViewModel>, ViewModelHelper<AppearanceViewModel>
     {
         enum FontSettingIndex
@@ -247,5 +261,6 @@ namespace winrt::Microsoft::Terminal::Settings::Editor::implementation
 
 namespace winrt::Microsoft::Terminal::Settings::Editor::factory_implementation
 {
+    BASIC_FACTORY(CursorColorTemplateSelector);
     BASIC_FACTORY(Appearances);
 }
diff --git a/src/cascadia/TerminalSettingsEditor/Appearances.idl b/src/cascadia/TerminalSettingsEditor/Appearances.idl
index 42ce83f07c..69edc74cbc 100644
--- a/src/cascadia/TerminalSettingsEditor/Appearances.idl
+++ b/src/cascadia/TerminalSettingsEditor/Appearances.idl
@@ -30,6 +30,14 @@ namespace Microsoft.Terminal.Settings.Editor
         Single Value;
     }
 
+    runtimeclass CursorColorTemplateSelector : Windows.UI.Xaml.Controls.DataTemplateSelector
+    {
+        CursorColorTemplateSelector();
+        Windows.UI.Xaml.DataTemplate DefaultTemplate;
+        Windows.UI.Xaml.DataTemplate InvertColorTemplate;
+        ColorSchemeViewModel ColorScheme;
+    }
+
     runtimeclass AppearanceViewModel : Windows.UI.Xaml.Data.INotifyPropertyChanged
     {
         Boolean IsDefault;
diff --git a/src/cascadia/TerminalSettingsEditor/Appearances.xaml b/src/cascadia/TerminalSettingsEditor/Appearances.xaml
index 23e117a8ae..6cd093f13c 100644
--- a/src/cascadia/TerminalSettingsEditor/Appearances.xaml
+++ b/src/cascadia/TerminalSettingsEditor/Appearances.xaml
@@ -61,6 +61,62 @@
                     </Button>
                 </Grid>
             </DataTemplate>
+
+            <DataTemplate x:Key="InvertCursorColorPreviewTemplate"
+                          x:DataType="Color">
+                <Grid ColumnSpacing="4">
+                    <Grid.ColumnDefinitions>
+                        <ColumnDefinition Width="auto" />
+                        <ColumnDefinition Width="*" />
+                    </Grid.ColumnDefinitions>
+                    <!-- Display the text "ABC" where the first half is white on black, and the second half is black on white -->
+                    <!--TODO CARLOS: Replace Black/White below with binding to color scheme foreground/background-->
+                    <Border Grid.Column="0"
+                            CornerRadius="2">
+                        <Grid>
+                            <Border>
+                                <Border.Background>
+                                    <LinearGradientBrush StartPoint="0,0" EndPoint="1,0">
+                                        <GradientStop Color="{Binding ColorScheme.BackgroundColor.Color, Source={StaticResource CursorColorTemplateSelector}}" Offset="0.0" />
+                                        <GradientStop Color="{Binding ColorScheme.BackgroundColor.Color, Source={StaticResource CursorColorTemplateSelector}}" Offset="0.5" />
+                                        <GradientStop Color="{Binding ColorScheme.ForegroundColor.Color, Source={StaticResource CursorColorTemplateSelector}}" Offset="0.5" />
+                                        <GradientStop Color="{Binding ColorScheme.ForegroundColor.Color, Source={StaticResource CursorColorTemplateSelector}}" Offset="1.0" />
+                                    </LinearGradientBrush>
+                                </Border.Background>
+                            </Border>
+                            <TextBlock Text="ABC"
+                                       HorizontalAlignment="Center"
+                                       VerticalAlignment="Center"
+                                       FontFamily="Cascadia Code, Consolas, 'Courier New', monospace"
+                                       FontWeight="Bold"
+                                       FontSize="12"
+                                       Padding="2,0">
+                                <TextBlock.Foreground>
+                                    <LinearGradientBrush StartPoint="0,0" EndPoint="1,0">
+                                        <GradientStop Color="White" Offset="0.0" />
+                                        <GradientStop Color="White" Offset="0.5" />
+                                        <GradientStop Color="Black" Offset="0.5" />
+                                        <GradientStop Color="Black" Offset="1.0" />
+                                    </LinearGradientBrush>
+                                </TextBlock.Foreground>
+                            </TextBlock>
+                        </Grid>
+                    </Border>
+                    <TextBlock x:Uid="Profile_CursorColor_InvertTextBlock"
+                               Grid.Column="1"
+                               Margin="0"
+                               HorizontalAlignment="Right"
+                               VerticalAlignment="Center"
+                               FontFamily="Segoe UI, Segoe Fluent Icons, Segoe MDL2 Assets"
+                               Style="{StaticResource SettingsPageItemDescriptionStyle}" />
+                </Grid>
+            </DataTemplate>
+
+            <local:CursorColorTemplateSelector
+                x:Key="CursorColorTemplateSelector"
+                DefaultTemplate="{StaticResource ColorPreviewTemplate}"
+                InvertColorTemplate="{StaticResource InvertCursorColorPreviewTemplate}"
+                ColorScheme="{x:Bind Appearance.CurrentColorScheme, Mode=OneWay}" />
         </ResourceDictionary>
     </UserControl.Resources>
 
@@ -514,10 +570,10 @@
                                     ClearSettingValue="{x:Bind Appearance.ClearCursorColor}"
                                     CurrentValue="{x:Bind Appearance.CursorColorPreview, Mode=OneWay}"
                                     CurrentValueAccessibleName="{x:Bind Appearance.CursorColorPreview, Converter={StaticResource ColorToStringConverter}, Mode=OneWay}"
-                                    CurrentValueTemplate="{StaticResource ColorPreviewTemplate}"
+                                    CurrentValueTemplateSelector="{StaticResource CursorColorTemplateSelector}"
                                     HasSettingValue="{x:Bind Appearance.HasCursorColor, Mode=OneWay}"
                                     SettingOverrideSource="{x:Bind Appearance.CursorColorOverrideSource, Mode=OneWay}"
-                                    Style="{StaticResource ExpanderSettingContainerStyleWithComplexPreview}">
+                                    Style="{StaticResource ExpanderSettingContainerStyleWithTemplateSelector}">
                 <local:NullableColorPicker x:Uid="Profile_CursorColor_NullableColorPicker"
                                            ColorSchemeVM="{x:Bind Appearance.CurrentColorScheme, Mode=OneWay}"
                                            CurrentColor="{x:Bind Appearance.CursorColor, Mode=TwoWay}"
diff --git a/src/cascadia/TerminalSettingsEditor/Resources/en-US/Resources.resw b/src/cascadia/TerminalSettingsEditor/Resources/en-US/Resources.resw
index 7b3ebe85a6..6f0c601e47 100644
--- a/src/cascadia/TerminalSettingsEditor/Resources/en-US/Resources.resw
+++ b/src/cascadia/TerminalSettingsEditor/Resources/en-US/Resources.resw
@@ -2463,4 +2463,8 @@
   <data name="Settings_ResetApplicationStateConfirmationButton.Content" xml:space="preserve">
     <value>Yes, clear the cache</value>
   </data>
-</root>
+  <data name="Profile_CursorColor_InvertTextBlock.Text" xml:space="preserve">
+    <value>Invert</value>
+    <comment>Label displayed when the selected cursor color value inverts the selected text's color.</comment>
+  </data>
+</root>
\ No newline at end of file
diff --git a/src/cascadia/TerminalSettingsEditor/SettingContainer.cpp b/src/cascadia/TerminalSettingsEditor/SettingContainer.cpp
index 2ab1614123..130cfcc29a 100644
--- a/src/cascadia/TerminalSettingsEditor/SettingContainer.cpp
+++ b/src/cascadia/TerminalSettingsEditor/SettingContainer.cpp
@@ -15,6 +15,7 @@ namespace winrt::Microsoft::Terminal::Settings::Editor::implementation
     DependencyProperty SettingContainer::_FontIconGlyphProperty{ nullptr };
     DependencyProperty SettingContainer::_CurrentValueProperty{ nullptr };
     DependencyProperty SettingContainer::_CurrentValueTemplateProperty{ nullptr };
+    DependencyProperty SettingContainer::_CurrentValueTemplateSelectorProperty{ nullptr };
     DependencyProperty SettingContainer::_CurrentValueAccessibleNameProperty{ nullptr };
     DependencyProperty SettingContainer::_HasSettingValueProperty{ nullptr };
     DependencyProperty SettingContainer::_SettingOverrideSourceProperty{ nullptr };
@@ -75,6 +76,15 @@ namespace winrt::Microsoft::Terminal::Settings::Editor::implementation
                     xaml_typename<Editor::SettingContainer>(),
                     PropertyMetadata{ nullptr });
         }
+        if (!_CurrentValueTemplateSelectorProperty)
+        {
+            _CurrentValueTemplateSelectorProperty =
+                DependencyProperty::Register(
+                    L"CurrentValueTemplateSelector",
+                    xaml_typename<Windows::UI::Xaml::Controls::DataTemplateSelector>(),
+                    xaml_typename<Editor::SettingContainer>(),
+                    PropertyMetadata{ nullptr });
+        }
         if (!_CurrentValueAccessibleNameProperty)
         {
             _CurrentValueAccessibleNameProperty =
@@ -116,7 +126,9 @@ namespace winrt::Microsoft::Terminal::Settings::Editor::implementation
     void SettingContainer::_OnCurrentValueChanged(const Windows::UI::Xaml::DependencyObject& d, const Windows::UI::Xaml::DependencyPropertyChangedEventArgs& /*e*/)
     {
         const auto& obj{ d.try_as<Editor::SettingContainer>() };
-        get_self<SettingContainer>(obj)->_UpdateCurrentValueAutoProp();
+        const auto& settingContainer = get_self<SettingContainer>(obj);
+        settingContainer->_UpdateCurrentValueAutoProp();
+        settingContainer->_UpdateCurrentValueTemplate();
     }
 
     void SettingContainer::_OnHasSettingValueChanged(const DependencyObject& d, const DependencyPropertyChangedEventArgs& /*args*/)
@@ -279,6 +291,18 @@ namespace winrt::Microsoft::Terminal::Settings::Editor::implementation
         }
     }
 
+    void SettingContainer::_UpdateCurrentValueTemplate()
+    {
+        if (const auto& child{ GetTemplateChild(L"CurrentValuePresenter") })
+        {
+            if (const auto& contentPresenter{ child.try_as<Controls::ContentPresenter>() })
+            {
+                const auto newTemplate = contentPresenter.ContentTemplateSelector().SelectTemplate(CurrentValue());
+                contentPresenter.ContentTemplate(newTemplate);
+            }
+        }
+    }
+
     // Method Description:
     // - Helper function for generating the override message
     // Arguments:
diff --git a/src/cascadia/TerminalSettingsEditor/SettingContainer.h b/src/cascadia/TerminalSettingsEditor/SettingContainer.h
index 9c77a838e0..70dec4be17 100644
--- a/src/cascadia/TerminalSettingsEditor/SettingContainer.h
+++ b/src/cascadia/TerminalSettingsEditor/SettingContainer.h
@@ -38,6 +38,7 @@ namespace winrt::Microsoft::Terminal::Settings::Editor::implementation
         DEPENDENCY_PROPERTY(hstring, FontIconGlyph);
         DEPENDENCY_PROPERTY(Windows::Foundation::IInspectable, CurrentValue);
         DEPENDENCY_PROPERTY(Windows::UI::Xaml::DataTemplate, CurrentValueTemplate);
+        DEPENDENCY_PROPERTY(Windows::UI::Xaml::Controls::DataTemplateSelector, CurrentValueTemplateSelector);
         DEPENDENCY_PROPERTY(hstring, CurrentValueAccessibleName);
         DEPENDENCY_PROPERTY(bool, HasSettingValue);
         DEPENDENCY_PROPERTY(bool, StartExpanded);
@@ -53,6 +54,7 @@ namespace winrt::Microsoft::Terminal::Settings::Editor::implementation
         void _UpdateOverrideSystem();
         void _UpdateHelpText();
         void _UpdateCurrentValueAutoProp();
+        void _UpdateCurrentValueTemplate();
     };
 }
 
diff --git a/src/cascadia/TerminalSettingsEditor/SettingContainer.idl b/src/cascadia/TerminalSettingsEditor/SettingContainer.idl
index 143d49b919..4c241313e9 100644
--- a/src/cascadia/TerminalSettingsEditor/SettingContainer.idl
+++ b/src/cascadia/TerminalSettingsEditor/SettingContainer.idl
@@ -24,6 +24,9 @@ namespace Microsoft.Terminal.Settings.Editor
         Windows.UI.Xaml.DataTemplate CurrentValueTemplate;
         static Windows.UI.Xaml.DependencyProperty CurrentValueTemplateProperty { get; };
 
+        Windows.UI.Xaml.Controls.DataTemplateSelector CurrentValueTemplateSelector;
+        static Windows.UI.Xaml.DependencyProperty CurrentValueTemplateSelectorProperty { get; };
+
         String CurrentValueAccessibleName;
         static Windows.UI.Xaml.DependencyProperty CurrentValueAccessibleNameProperty { get; };
 
diff --git a/src/cascadia/TerminalSettingsEditor/SettingContainerStyle.xaml b/src/cascadia/TerminalSettingsEditor/SettingContainerStyle.xaml
index 280dba68ad..4af3978f9b 100644
--- a/src/cascadia/TerminalSettingsEditor/SettingContainerStyle.xaml
+++ b/src/cascadia/TerminalSettingsEditor/SettingContainerStyle.xaml
@@ -470,6 +470,58 @@
         </Setter>
     </Style>
 
+    <!--  A setting container which can expand. Supports data template override for preview  -->
+    <Style x:Key="ExpanderSettingContainerStyleWithTemplateSelector"
+           TargetType="local:SettingContainer">
+        <Setter Property="MaxWidth" Value="1000" />
+        <Setter Property="IsTabStop" Value="False" />
+        <Setter Property="AutomationProperties.AccessibilityView" Value="Raw" />
+        <Setter Property="Template">
+            <Setter.Value>
+                <ControlTemplate TargetType="local:SettingContainer">
+                    <muxc:Expander x:Name="Expander"
+                                   Margin="0,4,0,0"
+                                   HorizontalAlignment="Stretch"
+                                   HorizontalContentAlignment="Stretch"
+                                   Content="{TemplateBinding Content}"
+                                   IsExpanded="{TemplateBinding StartExpanded}">
+                        <muxc:Expander.Header>
+                            <Grid MinHeight="64">
+                                <Grid.ColumnDefinitions>
+                                    <ColumnDefinition Width="*" />
+                                    <ColumnDefinition Width="Auto" />
+                                </Grid.ColumnDefinitions>
+                                <StackPanel Grid.Column="0"
+                                            Style="{StaticResource StackPanelInExpanderStyle}">
+                                    <StackPanel Orientation="Horizontal">
+                                        <TextBlock Style="{StaticResource SettingsPageItemHeaderStyle}"
+                                                   Text="{TemplateBinding Header}" />
+                                        <Button x:Name="ResetButton"
+                                                Style="{StaticResource SettingContainerResetButtonStyle}">
+                                            <FontIcon Glyph="&#xE845;"
+                                                      Style="{StaticResource SettingContainerFontIconStyle}" />
+                                        </Button>
+                                    </StackPanel>
+                                    <TextBlock x:Name="HelpTextBlock"
+                                               Style="{StaticResource SettingsPageItemDescriptionStyle}"
+                                               Text="{TemplateBinding HelpText}" />
+                                </StackPanel>
+                                <ContentPresenter x:Name="CurrentValuePresenter"
+                                                  Grid.Column="1"
+                                                  MaxWidth="248"
+                                                  Margin="0,0,-16,0"
+                                                  HorizontalAlignment="Right"
+                                                  VerticalAlignment="Center"
+                                                  Content="{TemplateBinding CurrentValue}"
+                                                  ContentTemplateSelector="{TemplateBinding CurrentValueTemplateSelector}" />
+                            </Grid>
+                        </muxc:Expander.Header>
+                    </muxc:Expander>
+                </ControlTemplate>
+            </Setter.Value>
+        </Setter>
+    </Style>
+
     <!--  A setting container that displays a warning with an icon  -->
     <Style x:Key="SettingContainerWarningStyle"
            TargetType="local:SettingContainer">