diff --git a/pyrefly/lib/state/lsp.rs b/pyrefly/lib/state/lsp.rs
index 2c57afef2f..35b85b0d09 100644
--- a/pyrefly/lib/state/lsp.rs
+++ b/pyrefly/lib/state/lsp.rs
@@ -3136,11 +3136,17 @@ impl<'a> Transaction<'a> {
                         supports_completion_item_details,
                     );
                 }
-                // If autoimport completions were skipped due to character threshold,
-                // mark the results as incomplete so clients keep asking for completions.
-                // This ensures autoimport completions will be checked once the threshold is reached,
-                // even if local completions are currently available.
-                if identifier.as_str().len() < MIN_CHARACTERS_TYPED_AUTOIMPORT {
+                // Mark results as incomplete in the following cases so clients keep asking
+                // for completions as the user types more:
+                // 1. If identifier is below MIN_CHARACTERS_TYPED_AUTOIMPORT threshold,
+                //    autoimport completions are skipped and will be checked once threshold
+                //    is reached.
+                // 2. If local completions exist and blocked autoimport completions,
+                //    the local completions might not match as the user continues typing,
+                //    and autoimport completions should then be shown.
+                if identifier.as_str().len() < MIN_CHARACTERS_TYPED_AUTOIMPORT
+                    || has_local_completions
+                {
                     is_incomplete = true;
                 }
                 self.add_builtins_autoimport_completions(handle, Some(&identifier), &mut result);
diff --git a/pyrefly/lib/test/lsp/lsp_interaction/completion.rs b/pyrefly/lib/test/lsp/lsp_interaction/completion.rs
index 51118f465a..8f711e3ef1 100644
--- a/pyrefly/lib/test/lsp/lsp_interaction/completion.rs
+++ b/pyrefly/lib/test/lsp/lsp_interaction/completion.rs
@@ -602,3 +602,78 @@ fn test_completion_complete_with_local_completions() {
 
     interaction.shutdown().unwrap();
 }
+
+#[test]
+fn test_completion_incomplete_with_local_completions_blocking_autoimport() {
+    let root = get_test_files_root();
+    let mut interaction = LspInteraction::new();
+    interaction.set_root(root.path().join("autoimport_common_prefix"));
+    interaction
+        .initialize(InitializeSettings::default())
+        .unwrap();
+
+    // Open b.py which has UsersController, and a.py which has UsersManager
+    interaction.client.did_open("b.py");
+    interaction.client.did_open("a.py");
+
+    // Type "Users" (5 characters, above MIN_CHARACTERS_TYPED_AUTOIMPORT = 3)
+    // in b.py. Local completion UsersController exists, so autoimport is skipped.
+    // But is_incomplete should still be true because the local completion might
+    // not match as the user continues typing (e.g., "UsersM" should show UsersManager).
+    interaction
+        .client
+        .did_change("b.py", "class UsersController:\n    pass\n\nUsers");
+
+    interaction
+        .client
+        .completion("b.py", 3, 5)
+        .expect_completion_response_with(|list| {
+            // Should have local completion UsersController
+            let has_users_controller = list
+                .items
+                .iter()
+                .any(|item| item.label == "UsersController");
+            // is_incomplete should be true so client asks again when typing more
+            has_users_controller && list.is_incomplete
+        })
+        .unwrap();
+
+    interaction.shutdown().unwrap();
+}
+
+#[test]
+fn test_completion_autoimport_shown_when_local_no_longer_matches() {
+    let root = get_test_files_root();
+    let mut interaction = LspInteraction::new();
+    interaction.set_root(root.path().join("autoimport_common_prefix"));
+    interaction
+        .initialize(InitializeSettings::default())
+        .unwrap();
+
+    // Open b.py which has UsersController, and a.py which has UsersManager
+    interaction.client.did_open("b.py");
+    interaction.client.did_open("a.py");
+
+    // Type "UsersM" - this should NOT match local "UsersController" (no 'M' in it)
+    // but SHOULD match autoimport "UsersManager" from a.py
+    interaction
+        .client
+        .did_change("b.py", "class UsersController:\n    pass\n\nUsersM");
+
+    interaction
+        .client
+        .completion("b.py", 3, 6)
+        .expect_completion_response_with(|list| {
+            // Should have autoimport completion UsersManager
+            let has_users_manager = list.items.iter().any(|item| item.label == "UsersManager");
+            // Should NOT have UsersController (doesn't match "UsersM")
+            let has_users_controller = list
+                .items
+                .iter()
+                .any(|item| item.label == "UsersController");
+            has_users_manager && !has_users_controller
+        })
+        .unwrap();
+
+    interaction.shutdown().unwrap();
+}
diff --git a/pyrefly/lib/test/lsp/lsp_interaction/test_files/autoimport_common_prefix/a.py b/pyrefly/lib/test/lsp/lsp_interaction/test_files/autoimport_common_prefix/a.py
new file mode 100644
index 0000000000..ad8edf9681
--- /dev/null
+++ b/pyrefly/lib/test/lsp/lsp_interaction/test_files/autoimport_common_prefix/a.py
@@ -0,0 +1,8 @@
+# Copyright (c) Meta Platforms, Inc. and affiliates.
+#
+# This source code is licensed under the MIT license found in the
+# LICENSE file in the root directory of this source tree.
+
+
+class UsersManager:
+    pass
diff --git a/pyrefly/lib/test/lsp/lsp_interaction/test_files/autoimport_common_prefix/b.py b/pyrefly/lib/test/lsp/lsp_interaction/test_files/autoimport_common_prefix/b.py
new file mode 100644
index 0000000000..48879d4c4a
--- /dev/null
+++ b/pyrefly/lib/test/lsp/lsp_interaction/test_files/autoimport_common_prefix/b.py
@@ -0,0 +1,8 @@
+# Copyright (c) Meta Platforms, Inc. and affiliates.
+#
+# This source code is licensed under the MIT license found in the
+# LICENSE file in the root directory of this source tree.
+
+
+class UsersController:
+    pass