diff --git a/ui/desktop/src/components/Modal.tsx b/ui/desktop/src/components/Modal.tsx
index b8cd5665..20a8363b 100644
--- a/ui/desktop/src/components/Modal.tsx
+++ b/ui/desktop/src/components/Modal.tsx
@@ -55,7 +55,7 @@ export default function Modal({
         ref={modalRef}
         className="relative w-[500px] max-w-full bg-bgApp rounded-xl my-10  max-h-[90vh] flex flex-col"
       >
-        <div className="p-8 max-h-[calc(90vh-180px)]">{children}</div>
+        <div className="p-8 max-h-[calc(90vh-180px)] overflow-y-auto">{children}</div>
         {footer && (
           <div className="border-t border-borderSubtle bg-bgApp w-full rounded-b-xl overflow-hidden">
             {footer}
diff --git a/ui/desktop/src/components/settings_v2/extensions/modal/EnvVarsSection.tsx b/ui/desktop/src/components/settings_v2/extensions/modal/EnvVarsSection.tsx
index 39d95e28..ecb565ed 100644
--- a/ui/desktop/src/components/settings_v2/extensions/modal/EnvVarsSection.tsx
+++ b/ui/desktop/src/components/settings_v2/extensions/modal/EnvVarsSection.tsx
@@ -2,14 +2,14 @@ import React from 'react';
 import { Button } from '../../../ui/button';
 import { Plus, X } from 'lucide-react';
 import { Input } from '../../../ui/input';
+import { cn } from '../../../../utils';
 
 interface EnvVarsSectionProps {
   envVars: { key: string; value: string }[];
-  onAdd: () => void;
+  onAdd: (key: string, value: string) => void;
   onRemove: (index: number) => void;
   onChange: (index: number, field: 'key' | 'value', value: string) => void;
   submitAttempted: boolean;
-  isValid: boolean;
 }
 
 export default function EnvVarsSection({
@@ -17,24 +17,46 @@ export default function EnvVarsSection({
   onAdd,
   onRemove,
   onChange,
-  submitAttempted,
-  isValid,
 }: EnvVarsSectionProps) {
+  const [newKey, setNewKey] = React.useState('');
+  const [newValue, setNewValue] = React.useState('');
+  const [validationError, setValidationError] = React.useState<string | null>(null);
+  const [invalidFields, setInvalidFields] = React.useState<{ key: boolean; value: boolean }>({
+    key: false,
+    value: false,
+  });
+
+  const handleAdd = () => {
+    const keyEmpty = !newKey.trim();
+    const valueEmpty = !newValue.trim();
+
+    if (keyEmpty || valueEmpty) {
+      setInvalidFields({
+        key: keyEmpty,
+        value: valueEmpty,
+      });
+      setValidationError('Both variable name and value must be entered');
+      return;
+    }
+
+    setValidationError(null);
+    setInvalidFields({ key: false, value: false });
+    onAdd(newKey, newValue);
+    setNewKey('');
+    setNewValue('');
+  };
+
+  const clearValidation = () => {
+    setValidationError(null);
+    setInvalidFields({ key: false, value: false });
+  };
+
   return (
     <div>
       <div className="relative mb-2">
-        {' '}
-        {/* Added relative positioning with minimal margin */}
         <label className="text-sm font-medium text-textStandard mb-2 block">
           Environment Variables
         </label>
-        {submitAttempted && !isValid && (
-          <div className="text-xs text-red-500 mt-1">
-            {' '}
-            {/* Removed absolute positioning */}
-            Environment variables must consist of sets of variable names and values
-          </div>
-        )}
       </div>
       <div className="grid grid-cols-[1fr_1fr_auto] gap-2 items-center">
         {/* Existing environment variables */}
@@ -46,6 +68,7 @@ export default function EnvVarsSection({
                 onChange={(e) => onChange(index, 'key', e.target.value)}
                 placeholder="Variable name"
                 className={`w-full border-borderSubtle text-textStandard`}
+                disabled
               />
             </div>
             <div className="relative">
@@ -54,6 +77,7 @@ export default function EnvVarsSection({
                 onChange={(e) => onChange(index, 'value', e.target.value)}
                 placeholder="Value"
                 className={`w-full border-borderSubtle text-textStandard`}
+                disabled
               />
             </div>
             <Button
@@ -68,23 +92,38 @@ export default function EnvVarsSection({
 
         {/* Empty row with Add button */}
         <Input
+          value={newKey}
+          onChange={(e) => {
+            setNewKey(e.target.value);
+            clearValidation();
+          }}
           placeholder="Variable name"
-          className="w-full border-borderStandard text-textStandard"
-          disabled
+          className={cn(
+            'w-full border-borderStandard text-textStandard',
+            invalidFields.key && 'border-red-500 focus:border-red-500'
+          )}
         />
         <Input
+          value={newValue}
+          onChange={(e) => {
+            setNewValue(e.target.value);
+            clearValidation();
+          }}
           placeholder="Value"
-          className="w-full border-borderStandard text-textStandard"
-          disabled
+          className={cn(
+            'w-full border-borderStandard text-textStandard',
+            invalidFields.value && 'border-red-500 focus:border-red-500'
+          )}
         />
         <Button
-          onClick={onAdd}
+          onClick={handleAdd}
           variant="ghost"
           className="flex items-center justify-start gap-1 px-2 pr-4 text-s font-medium rounded-full dark:bg-slate-400 dark:text-gray-300 bg-gray-300 dark:bg-slate text-slate-400 dark:hover:bg-slate-300 hover:bg-gray-500 hover:text-white dark:hover:text-gray-900 transition-colors min-w-[60px] h-9"
         >
-          <Plus className="h-3 w-3" /> Add
+          <Plus className="h-3 w-3" /> Submit
         </Button>
       </div>
+      {validationError && <div className="mt-2 text-red-500 text-sm">{validationError}</div>}
     </div>
   );
 }
diff --git a/ui/desktop/src/components/settings_v2/extensions/modal/ExtensionModal.tsx b/ui/desktop/src/components/settings_v2/extensions/modal/ExtensionModal.tsx
index 5434177a..dd782b27 100644
--- a/ui/desktop/src/components/settings_v2/extensions/modal/ExtensionModal.tsx
+++ b/ui/desktop/src/components/settings_v2/extensions/modal/ExtensionModal.tsx
@@ -1,9 +1,6 @@
 import React, { useState } from 'react';
 import { Button } from '../../../ui/button';
 import Modal from '../../../Modal';
-import { Input } from '../../../ui/input';
-import Select from 'react-select';
-import { createDarkSelectStyles, darkSelectTheme } from '../../../ui/select-styles';
 import { ExtensionFormData } from '../utils';
 import EnvVarsSection from './EnvVarsSection';
 import ExtensionConfigFields from './ExtensionConfigFields';
@@ -33,10 +30,10 @@ export default function ExtensionModal({
   const [showDeleteConfirmation, setShowDeleteConfirmation] = useState(false);
   const [submitAttempted, setSubmitAttempted] = useState(false);
 
-  const handleAddEnvVar = () => {
+  const handleAddEnvVar = (key: string, value: string) => {
     setFormData({
       ...formData,
-      envVars: [...formData.envVars, { key: '', value: '' }],
+      envVars: [...formData.envVars, { key, value }],
     });
   };
 
@@ -208,7 +205,6 @@ export default function ExtensionModal({
               onRemove={handleRemoveEnvVar}
               onChange={Object.assign(handleEnvVarChange, { setSubmitAttempted })}
               submitAttempted={submitAttempted}
-              isValid={isEnvVarsValid()}
             />
           </div>
         </>