diff --git a/dev/Dev.vue b/dev/Dev.vue
index ab8e964..b6f4164 100644
--- a/dev/Dev.vue
+++ b/dev/Dev.vue
@@ -1,21 +1,72 @@
 <template>
   <div id="app">
-    <v-select v-model="selected" v-bind="config" />
+    <!--    <v-select v-model="selected" v-bind="config" />-->
+
+    <v-select v-model="selected" v-bind="config">
+      <template #dropdown>
+        <DropdownMenu>
+          <DropdownMenuItem
+            v-for="(option, index) in config.options"
+            :key="option.value"
+            :option="option"
+            :index="index"
+          >
+            {{ option.label }}
+          </DropdownMenuItem>
+        </DropdownMenu>
+      </template>
+    </v-select>
+
+    <v-select v-model="selected" v-bind="config">
+      <template #dropdown>
+        <DropdownMenu as="div">
+          <div v-for="group in Object.keys(optionsGroupedByLabel)" :key="group">
+            <div>{{ group }}</div>
+            <ul>
+              <DropdownMenuItem
+                as="li"
+                v-for="(option, index) in optionsGroupedByLabel[group]"
+                :key="option.value"
+                :option="option"
+                :index="index"
+              >
+                {{ option.label }}
+              </DropdownMenuItem>
+            </ul>
+          </div>
+        </DropdownMenu>
+      </template>
+    </v-select>
   </div>
 </template>
 
 <script>
 import vSelect from '@/components/Select.vue'
 import countries from '../docs/.vuepress/data/countryCodes.js'
+import DropdownMenu from '@/components/DropdownMenu.vue'
+import DropdownMenuItem from '@/components/DropdownMenuItem.vue'
 
 export default {
-  components: { vSelect },
+  components: { DropdownMenuItem, DropdownMenu, vSelect },
   data: () => ({
     selected: null,
     config: {
       options: countries,
+      getOptionKey: ({ value }) => value,
     },
   }),
+  computed: {
+    optionsGroupedByLabel() {
+      return this.config.options.reduce((acc, option) => {
+        const label = option.label[0]
+        if (!acc[label]) {
+          acc[label] = []
+        }
+        acc[label].push(option)
+        return acc
+      }, {})
+    },
+  },
 }
 </script>
 
diff --git a/src/components/DropdownMenu.vue b/src/components/DropdownMenu.vue
index c6ec331..c2dd662 100644
--- a/src/components/DropdownMenu.vue
+++ b/src/components/DropdownMenu.vue
@@ -1,15 +1,34 @@
 <script setup lang="ts">
-import { inject } from 'vue'
+import { inject, onMounted, ref, watch } from 'vue'
 import vAppendToBody from '@/directives/appendToBody.js'
 import { VueSelectInjectionKey } from '@/symbols'
-import type { VueSelectInjectedProps } from '@/components/Select.vue'
+import type { InjectedVueSelectContext } from '@/types'
 
-const context = inject<VueSelectInjectedProps>(VueSelectInjectionKey)
+const context = inject<InjectedVueSelectContext>(VueSelectInjectionKey)
+const dropdownMenu = ref<HTMLElement | null>(null)
+
+onMounted(() => {
+  if (dropdownMenu.value) {
+    context?.value.setDropdownMenuEl(dropdownMenu.value)
+  }
+})
+
+watch(
+  () => context?.value.dropdownOpen,
+  (open) => {
+    if (open) {
+      context?.value.setDropdownMenuEl(dropdownMenu.value)
+    }
+  }
+)
+
+withDefaults(defineProps<{ as?: string }>(), { as: 'ul' })
 </script>
 
 <template>
-  <ul
-    v-if="context.dropdownOpen"
+  <Component
+    :is="as"
+    v-show="context.dropdownOpen"
     :id="`vs${context.uid}__listbox`"
     ref="dropdownMenu"
     :key="`vs${context.uid}__listbox`"
@@ -21,11 +40,28 @@ const context = inject<VueSelectInjectedProps>(VueSelectInjectionKey)
     @mouseup="context.onMouseUp"
   >
     <slot></slot>
-  </ul>
-  <ul
-    v-else
-    :id="`vs${context.uid}__listbox`"
-    role="listbox"
-    style="display: none; visibility: hidden"
-  ></ul>
+    <!--  TODO: not sure why, but using the previous system of swapping the dropdown el at open causes performance to drop drastically with Vue dev tools open -->
+    <!--  <Component-->
+    <!--    :is="as"-->
+    <!--    v-if="context.dropdownOpen"-->
+    <!--    :id="`vs${context.uid}__listbox`"-->
+    <!--    ref="dropdownMenu"-->
+    <!--    :key="`vs${context.uid}__listbox`"-->
+    <!--    v-append-to-body-->
+    <!--    class="vs__dropdown-menu"-->
+    <!--    role="listbox"-->
+    <!--    tabindex="-1"-->
+    <!--    @mousedown.prevent="context.onMousedown"-->
+    <!--    @mouseup="context.onMouseUp"-->
+    <!--  >-->
+    <!--    <slot></slot>-->
+    <!--  </Component>-->
+    <!--  <Component-->
+    <!--    :is="as"-->
+    <!--    v-else-->
+    <!--    :id="`vs${context.uid}__listbox`"-->
+    <!--    role="listbox"-->
+    <!--    style="display: none; visibility: hidden"-->
+    <!--  ></Component>-->
+  </Component>
 </template>
diff --git a/src/components/DropdownMenuItem.vue b/src/components/DropdownMenuItem.vue
new file mode 100644
index 0000000..2d1f7d9
--- /dev/null
+++ b/src/components/DropdownMenuItem.vue
@@ -0,0 +1,64 @@
+<script setup lang="ts">
+import { inject, onBeforeUnmount, onMounted, ref } from 'vue'
+import { VueSelectInjectionKey } from '@/symbols'
+import type { InjectedVueSelectContext, VueSelectOption } from '@/types'
+
+const context = inject<InjectedVueSelectContext>(VueSelectInjectionKey)
+
+interface Props {
+  as?: string
+  index: number
+  option: VueSelectOption
+  opinionated?: boolean
+}
+
+withDefaults(defineProps<Props>(), { as: 'li', opinionated: true })
+
+const selectableOption = ref<HTMLElement | null>(null)
+
+onMounted(() => {
+  if (selectableOption.value) {
+    context?.value.registerSelectableEl(selectableOption.value)
+  }
+})
+
+onBeforeUnmount(() => {
+  if (selectableOption.value) {
+    context?.value.unRegisterSelectableEl(selectableOption.value)
+  }
+})
+</script>
+
+<template>
+  <Component
+    ref="selectableOption"
+    :is="as"
+    :id="`vs${context.uid}__option-${index}`"
+    role="option"
+    :class="
+      opinionated
+        ? [
+            'vs__dropdown-option',
+            {
+              'vs__dropdown-option--deselect':
+                context.isOptionDeselectable(option) &&
+                index === context.typeAheadPointer,
+              'vs__dropdown-option--selected': context.isOptionSelected(option),
+              'vs__dropdown-option--highlight':
+                index === context.typeAheadPointer,
+              'vs__dropdown-option--disabled': !context.selectable(option),
+            },
+          ]
+        : ''
+    "
+    :aria-selected="index === context.typeAheadPointer ? true : null"
+    @mouseover="
+      context.selectable(option) ? context.setTypeAheadPointer(index) : null
+    "
+    @click.prevent.stop="
+      context.selectable(option) ? context.select(option) : null
+    "
+  >
+    <slot></slot>
+  </Component>
+</template>
diff --git a/src/components/Select.vue b/src/components/Select.vue
index ae5267a..3cdf167 100644
--- a/src/components/Select.vue
+++ b/src/components/Select.vue
@@ -82,36 +82,30 @@
         </slot>
       </div>
     </div>
-    <transition :name="transition">
-      <DropdownMenu>
-        <li
-          v-for="(option, index) in filteredOptions"
-          :id="`vs${uid}__option-${index}`"
-          :key="getOptionKey(option)"
-          role="option"
-          class="vs__dropdown-option"
-          :class="{
-            'vs__dropdown-option--deselect':
-              isOptionDeselectable(option) && index === typeAheadPointer,
-            'vs__dropdown-option--selected': isOptionSelected(option),
-            'vs__dropdown-option--highlight': index === typeAheadPointer,
-            'vs__dropdown-option--disabled': !selectable(option),
-          }"
-          :aria-selected="index === typeAheadPointer ? true : null"
-          @mouseover="selectable(option) ? (typeAheadPointer = index) : null"
-          @click.prevent.stop="selectable(option) ? select(option) : null"
-        >
-          <slot name="option" v-bind="normalizeOptionForSlot(option)">
-            {{ getOptionLabel(option) }}
+    <slot name="dropdown">
+      <transition :name="transition">
+        <DropdownMenu>
+          <slot name="options">
+            <DropdownMenuItem
+              v-for="(option, index) in filteredOptions"
+              :opinionated="true"
+              :index="index"
+              :option="option"
+              :key="getOptionKey(option)"
+            >
+              <slot name="option" v-bind="normalizeOptionForSlot(option)">
+                {{ getOptionLabel(option) }}
+              </slot>
+            </DropdownMenuItem>
+            <li v-if="filteredOptions.length === 0" class="vs__no-options">
+              <slot name="no-options" v-bind="scope.noOptions">
+                Sorry, no matching options.
+              </slot>
+            </li>
           </slot>
-        </li>
-        <li v-if="filteredOptions.length === 0" class="vs__no-options">
-          <slot name="no-options" v-bind="scope.noOptions">
-            Sorry, no matching options.
-          </slot>
-        </li>
-      </DropdownMenu>
-    </transition>
+        </DropdownMenu>
+      </transition>
+    </slot>
     <slot name="footer" v-bind="scope.footer" />
   </div>
 </template>
@@ -123,19 +117,14 @@ import ajax from '@/mixins/ajax.js'
 import childComponents from '@/components/childComponents.js'
 import sortAndStringify from '@/utility/sortAndStringify.js'
 import uniqueId from '@/utility/uniqueId.js'
-import { computed, ComputedRef, defineComponent } from 'vue'
+import { computed, defineComponent } from 'vue'
 import { VueSelectInjectionKey } from '@/symbols.js'
 import DropdownMenu from '@/components/DropdownMenu.vue'
-
-export interface VueSelectContext {
-  uid: ComputedRef<string>
-  dropdownOpen: ComputedRef<boolean>
-  onMousedown: (e: MouseEvent) => void
-  onMouseup: (e: MouseEvent) => void
-}
+import type { VueSelectContext, VueSelectOption } from '@/types'
+import DropdownMenuItem from '@/components/DropdownMenuItem.vue'
 
 export default defineComponent({
-  components: { DropdownMenu, ...childComponents },
+  components: { DropdownMenuItem, DropdownMenu, ...childComponents },
 
   mixins: [pointerScroll, typeAheadPointer, ajax],
 
@@ -309,7 +298,7 @@ export default defineComponent({
      */
     reduce: {
       type: Function,
-      default: (option) => option,
+      default: (option: VueSelectOption) => option,
     },
 
     /**
@@ -318,12 +307,10 @@ export default defineComponent({
      *
      * @type {Function}
      * @since 3.3.0
-     * @param {Object|String} option
-     * @return {Boolean}
      */
     selectable: {
       type: Function,
-      default: (option) => true,
+      default: (option: VueSelectOption): boolean => true,
     },
 
     /**
@@ -341,7 +328,7 @@ export default defineComponent({
      */
     getOptionLabel: {
       type: Function,
-      default(option) {
+      default(option: VueSelectOption) {
         if (typeof option === 'object') {
           if (!option.hasOwnProperty(this.label)) {
             return console.warn(
@@ -374,7 +361,7 @@ export default defineComponent({
      */
     getOptionKey: {
       type: Function,
-      default(option) {
+      default(option: VueSelectOption): unknown {
         if (typeof option !== 'object') {
           return option
         }
@@ -659,7 +646,7 @@ export default defineComponent({
      */
     dropdownShouldOpen: {
       type: Function,
-      default({ noDrop, open, mutableLoading }) {
+      default({ noDrop, open, mutableLoading }): boolean {
         return noDrop ? false : open && !mutableLoading
       },
     },
@@ -676,12 +663,28 @@ export default defineComponent({
 
   provide() {
     return {
-      [VueSelectInjectionKey]: computed(() => {
+      [VueSelectInjectionKey]: computed<VueSelectContext>(() => {
         return {
           uid: this.uid,
+          getOptionKey: this.getOptionKey,
+          isOptionDeselectable: this.isOptionDeselectable,
+          isOptionSelected: this.isOptionSelected,
+          typeAheadPointer: this.typeAheadPointer,
+          setTypeAheadPointer: this.setTypeAheadPointer,
           dropdownOpen: this.dropdownOpen,
           onMousedown: this.onMousedown,
           onMouseup: this.onMouseUp,
+          selectable: this.selectable,
+          select: this.select,
+          setDropdownMenuEl: (ref: HTMLElement) => {
+            this.dropdownMenuEl = ref
+          },
+          registerSelectableEl: (ref: HTMLElement) => {
+            this.selectableEls.push(ref)
+          },
+          unRegisterSelectableEl: (ref: HTMLElement) => {
+            this.selectableEls = this.selectableEls.filter((el) => el !== ref)
+          },
         }
       }),
     }
@@ -696,6 +699,17 @@ export default defineComponent({
       // eslint-disable-next-line vue/no-reserved-keys
       _value: [], // Internal value managed by Vue Select if no `value` prop is passed
       deselectButtons: [],
+      dropdownMenuEl: null,
+      selectableEls: [],
+    } as {
+      search: string
+      open: boolean
+      isComposing: boolean
+      pushedTags: VueSelectOption[]
+      _value: any[]
+      deselectButtons: any[]
+      dropdownMenuEl: HTMLElement | null
+      selectableEls: HTMLElement[]
     }
   },
 
@@ -862,7 +876,7 @@ export default defineComponent({
      * dropdown menu.
      * @return {Boolean} True if open
      */
-    dropdownOpen() {
+    dropdownOpen(): boolean {
       return this.dropdownShouldOpen(this)
     },
 
@@ -1131,7 +1145,7 @@ export default defineComponent({
      * @param  {Object|String}  option
      * @return {Boolean}        True when selected | False otherwise
      */
-    isOptionSelected(option) {
+    isOptionSelected(option: VueSelectOption): boolean {
       return this.selectedValue.some((value) =>
         this.optionComparator(value, option)
       )
@@ -1140,7 +1154,7 @@ export default defineComponent({
     /**
      *  Can the current option be removed via the dropdown?
      */
-    isOptionDeselectable(option) {
+    isOptionDeselectable(option: VueSelectOption) {
       return this.isOptionSelected(option) && this.deselectFromDropdown
     },
 
diff --git a/src/mixins/pointerScroll.js b/src/mixins/pointerScroll.js
index c60619a..aa9019a 100644
--- a/src/mixins/pointerScroll.js
+++ b/src/mixins/pointerScroll.js
@@ -20,6 +20,10 @@ export default {
   },
 
   methods: {
+    setTypeAheadPointer(index) {
+      this.typeAheadPointer = index
+    },
+
     /**
      * Adjust the scroll position of the dropdown list
      * if the current pointer is outside of the
@@ -28,16 +32,16 @@ export default {
      */
     maybeAdjustScroll() {
       const optionEl =
-        this.$refs.dropdownMenu?.children[this.typeAheadPointer] || false
+        this.dropdownMenuEl?.children[this.typeAheadPointer] || false
 
       if (optionEl) {
         const bounds = this.getDropdownViewport()
         const { top, bottom, height } = optionEl.getBoundingClientRect()
 
         if (top < bounds.top) {
-          return (this.$refs.dropdownMenu.scrollTop = optionEl.offsetTop)
+          return (this.dropdownMenuEl.scrollTop = optionEl.offsetTop)
         } else if (bottom > bounds.bottom) {
-          return (this.$refs.dropdownMenu.scrollTop =
+          return (this.dropdownMenuEl.scrollTop =
             optionEl.offsetTop - (bounds.height - height))
         }
       }
@@ -48,8 +52,8 @@ export default {
      * @returns {{top: (string|*|number), bottom: *}}
      */
     getDropdownViewport() {
-      return this.$refs.dropdownMenu
-        ? this.$refs.dropdownMenu.getBoundingClientRect()
+      return this.dropdownMenuEl
+        ? this.dropdownMenuEl.getBoundingClientRect()
         : {
             height: 0,
             top: 0,
diff --git a/src/types.ts b/src/types.ts
new file mode 100644
index 0000000..03bcda5
--- /dev/null
+++ b/src/types.ts
@@ -0,0 +1,20 @@
+import type { ComputedRef } from 'vue'
+
+export interface VueSelectContext {
+  uid: string | number | undefined
+  dropdownOpen: boolean
+  typeAheadPointer: number
+  setTypeAheadPointer: (index: number) => void
+  isOptionDeselectable: (option: VueSelectOption) => boolean
+  isOptionSelected: (option: VueSelectOption) => boolean
+  onMousedown: (e: MouseEvent) => void
+  onMouseup: (e: MouseEvent) => void
+  select: (option: VueSelectOption) => void
+  setDropdownMenuEl: (el: HTMLElement | null) => void
+  registerSelectableEl: (el: HTMLElement | null) => void
+  unRegisterSelectableEl: (el: HTMLElement | null) => void
+}
+
+export type InjectedVueSelectContext = ComputedRef<VueSelectContext>
+
+export type VueSelectOption = unknown
diff --git a/src/utility/uniqueId.js b/src/utility/uniqueId.ts
similarity index 83%
rename from src/utility/uniqueId.js
rename to src/utility/uniqueId.ts
index 53de592..83f9f45 100644
--- a/src/utility/uniqueId.js
+++ b/src/utility/uniqueId.ts
@@ -5,7 +5,7 @@ let idCount = 0
  * Thanks lodash!
  * @return {number}
  */
-function uniqueId() {
+function uniqueId(): number {
   return ++idCount
 }