diff --git a/rpcs3/Emu/Cell/Modules/cellOskDialog.cpp b/rpcs3/Emu/Cell/Modules/cellOskDialog.cpp
index c9afb6995a..6c547f1230 100644
--- a/rpcs3/Emu/Cell/Modules/cellOskDialog.cpp
+++ b/rpcs3/Emu/Cell/Modules/cellOskDialog.cpp
@@ -513,6 +513,7 @@ error_code cellOskDialogLoadAsync(u32 container, vm::ptr<CellOskDialogParam> dia
 
 	// Set device mask and event lock
 	osk->ignore_input_events = info.lock_ext_input.load();
+	osk->input_device = info.initial_input_device.load();
 
 	if (info.use_separate_windows)
 	{
@@ -812,7 +813,7 @@ error_code cellOskDialogSetSeparateWindowOption(vm::ptr<CellOskDialogSeparateWin
 
 error_code cellOskDialogSetInitialInputDevice(u32 inputDevice)
 {
-	cellOskDialog.todo("cellOskDialogSetInitialInputDevice(inputDevice=%d)", inputDevice);
+	cellOskDialog.warning("cellOskDialogSetInitialInputDevice(inputDevice=%d)", inputDevice);
 
 	if (inputDevice > CELL_OSKDIALOG_INPUT_DEVICE_KEYBOARD)
 	{
@@ -821,9 +822,6 @@ error_code cellOskDialogSetInitialInputDevice(u32 inputDevice)
 
 	g_fxo->get<osk_info>().initial_input_device = static_cast<CellOskDialogInputDevice>(inputDevice);
 
-	// TODO: use initial_input_device
-	// TODO: Signal CELL_SYSUTIL_OSKDIALOG_INPUT_DEVICE_CHANGED if the input device changed (probably only when the dialog is already open)
-
 	return CELL_OK;
 }
 
diff --git a/rpcs3/Emu/Cell/Modules/cellOskDialog.h b/rpcs3/Emu/Cell/Modules/cellOskDialog.h
index 6a925f7807..90814358ca 100644
--- a/rpcs3/Emu/Cell/Modules/cellOskDialog.h
+++ b/rpcs3/Emu/Cell/Modules/cellOskDialog.h
@@ -311,6 +311,7 @@ public:
 	std::function<void(CellOskDialogKeyMessage key_message)> on_osk_key_input_entered;
 
 	atomic_t<OskDialogState> state{ OskDialogState::Unloaded };
+	atomic_t<CellOskDialogInputDevice> input_device{ CELL_OSKDIALOG_INPUT_DEVICE_PAD }; // The current input device.
 	atomic_t<bool> pad_input_enabled{ true };      // Determines if the OSK consumes the device's events.
 	atomic_t<bool> mouse_input_enabled{ true };    // Determines if the OSK consumes the device's events.
 	atomic_t<bool> keyboard_input_enabled{ true }; // Determines if the OSK consumes the device's events.
diff --git a/rpcs3/Emu/RSX/Overlays/overlay_osk.cpp b/rpcs3/Emu/RSX/Overlays/overlay_osk.cpp
index 6a0beda88f..b766472fb5 100644
--- a/rpcs3/Emu/RSX/Overlays/overlay_osk.cpp
+++ b/rpcs3/Emu/RSX/Overlays/overlay_osk.cpp
@@ -507,6 +507,18 @@ namespace rsx
 			if (!pad_input_enabled || ignore_input_events)
 				return;
 
+			if (input_device.exchange(CELL_OSKDIALOG_INPUT_DEVICE_PAD) != CELL_OSKDIALOG_INPUT_DEVICE_PAD)
+			{
+				sysutil_send_system_cmd(CELL_SYSUTIL_OSKDIALOG_INPUT_DEVICE_CHANGED, CELL_OSKDIALOG_INPUT_DEVICE_PAD);
+			}
+
+			// Always show the pad input panel if the pad is enabled and in use.
+			if (!m_show_panel)
+			{
+				m_show_panel = true;
+				update_panel();
+			}
+
 			const u32 grid_size = num_columns * num_rows;
 
 			const auto on_accept = [this]()
@@ -739,9 +751,21 @@ namespace rsx
 			if (!pressed || !keyboard_input_enabled || ignore_input_events)
 				return;
 
+			if (input_device.exchange(CELL_OSKDIALOG_INPUT_DEVICE_KEYBOARD) != CELL_OSKDIALOG_INPUT_DEVICE_KEYBOARD)
+			{
+				sysutil_send_system_cmd(CELL_SYSUTIL_OSKDIALOG_INPUT_DEVICE_CHANGED, CELL_OSKDIALOG_INPUT_DEVICE_KEYBOARD);
+			}
+
+			if (m_use_separate_windows && m_show_panel)
+			{
+				// Hide the pad input panel if the keyboard is in use during separate windows.
+				m_show_panel = false;
+				update_panel();
+			}
+
 			const bool use_key_string_fallback = !key.empty();
 
-			osk.error("osk_dialog::on_key_pressed(led=%d, mkey=%d, key_code=%d, out_key_code=%d, pressed=%d, use_key_string_fallback=%d)", led, mkey, key_code, out_key_code, pressed, use_key_string_fallback);
+			osk.notice("osk_dialog::on_key_pressed(led=%d, mkey=%d, key_code=%d, out_key_code=%d, pressed=%d, use_key_string_fallback=%d)", led, mkey, key_code, out_key_code, pressed, use_key_string_fallback);
 
 			if (!use_key_string_fallback)
 			{
@@ -1153,10 +1177,8 @@ namespace rsx
 
 			if (m_use_separate_windows)
 			{
-				// When using separate windows, we show the text field, but hide the pad input panel if the device mask contains CELL_OSKDIALOG_DEVICE_MASK_PAD.
-				// TODO: If controller input is allowed and the user presses a button, show the pad input panel.
-				// TODO: If keyboard input is allowed and the user presses a key, hide the pad input panel.
-				m_show_panel = pad_input_enabled;
+				// When using separate windows, we show the text field, but hide the pad input panel if the input device is a pad.
+				m_show_panel = pad_input_enabled && input_device == CELL_OSKDIALOG_INPUT_DEVICE_PAD;
 				m_title.back_color.a = std::clamp(params.input_field_background_transparency, 0.0f, 1.0f);
 				m_preview.back_color.a = std::clamp(params.input_field_background_transparency, 0.0f, 1.0f);
 			}