diff --git a/src/components/GroupByDropdown/__tests__/GroupByDropdown.unit.test.tsx b/src/components/GroupByDropdown/__tests__/GroupByDropdown.unit.test.tsx
new file mode 100644
index 0000000000..3329e42228
--- /dev/null
+++ b/src/components/GroupByDropdown/__tests__/GroupByDropdown.unit.test.tsx
@@ -0,0 +1,99 @@
+import { QueryClient, QueryClientProvider } from "@tanstack/react-query";
+import { render, screen, waitFor } from "@testing-library/react";
+import userEvent from "@testing-library/user-event";
+import { rest } from "msw";
+import { setupServer } from "msw/node";
+import { MemoryRouter } from "react-router-dom";
+import GroupByDropdown from "./../index";
+
+const server = setupServer(
+  rest.get("/api/db/configs", (req, res, ctx) => {
+    return res(
+      ctx.json([
+        {
+          id: "1",
+          name: "Config 1",
+          tags: {
+            tag1: "value1",
+            tag2: "value2"
+          }
+        },
+        {
+          id: "2",
+          name: "Config 2",
+          tags: {
+            tag3: "value3",
+            tag4: "value4"
+          }
+        }
+      ])
+    );
+  })
+);
+
+beforeAll(() => server.listen());
+afterEach(() => server.resetHandlers());
+afterAll(() => server.close());
+
+const queryClient = new QueryClient();
+
+describe("GroupByDropdown", () => {
+  it("renders the dropdown with the provided value", async () => {
+    render(
+      <MemoryRouter>
+        <QueryClientProvider client={queryClient}>
+          <GroupByDropdown value="name" />
+        </QueryClientProvider>
+      </MemoryRouter>
+    );
+    await waitFor(() => {
+      expect(screen.getByText("Group By:")).toBeInTheDocument();
+    });
+    expect(screen.getByText("Name")).toBeInTheDocument();
+  });
+
+  it("renders the dropdown with the tag options", async () => {
+    render(
+      <MemoryRouter>
+        <QueryClientProvider client={queryClient}>
+          <GroupByDropdown />
+        </QueryClientProvider>
+      </MemoryRouter>
+    );
+    await waitFor(() => {
+      expect(screen.getByText("Group By:")).toBeInTheDocument();
+    });
+
+    userEvent.click(screen.getByText("Group By:"));
+
+    await expect(screen.findByText(/Tag1/i)).resolves.toBeInTheDocument();
+    await expect(screen.findByText(/Tag2/i)).resolves.toBeInTheDocument();
+    await expect(screen.findByText(/Tag3/i)).resolves.toBeInTheDocument();
+    await expect(screen.findByText(/Tag4/i)).resolves.toBeInTheDocument();
+  });
+
+  it("calls the onChange function when a new option is selected", async () => {
+    const onChange = jest.fn();
+    render(
+      <MemoryRouter>
+        <QueryClientProvider client={queryClient}>
+          <GroupByDropdown onChange={onChange} />
+        </QueryClientProvider>
+      </MemoryRouter>
+    );
+
+    await waitFor(() => {
+      expect(screen.getByText("Group By:")).toBeInTheDocument();
+    });
+
+    userEvent.click(screen.getByText("Group By:"));
+
+    await expect(screen.findByText(/Tag1/i)).resolves.toBeInTheDocument();
+
+    userEvent.click(screen.getByText(/Tag1/i));
+
+    await waitFor(() => {
+      expect(onChange).toHaveBeenCalledWith("tag1");
+    });
+  });
+});