diff --git a/packages/elements/src/__tests__/__snapshots__/PublicAPI-test.js.snap b/packages/elements/src/__tests__/__snapshots__/PublicAPI-test.js.snap
index de34dd015ec2..013b80199dae 100644
--- a/packages/elements/src/__tests__/__snapshots__/PublicAPI-test.js.snap
+++ b/packages/elements/src/__tests__/__snapshots__/PublicAPI-test.js.snap
@@ -16,6 +16,7 @@ Array [
   "aiGradientStart01",
   "aiGradientStart02",
   "aiInnerShadow",
+  "aiOverlay",
   "background",
   "backgroundActive",
   "backgroundBrand",
diff --git a/packages/react/src/components/Slug/Slug-examples.stories.js b/packages/react/src/components/Slug/Slug-examples.stories.js
index 9a56b41354b0..764fc82ea31b 100644
--- a/packages/react/src/components/Slug/Slug-examples.stories.js
+++ b/packages/react/src/components/Slug/Slug-examples.stories.js
@@ -276,25 +276,50 @@ export const _Combobox = {
 };
 
 export const _ComposedModal = {
+  args: {
+    showButtons: true,
+    hasScrollingContent: false,
+  },
   argTypes: {
     slug: {
       description:
         '**Experimental**: Provide a `Slug` component to be rendered inside the component',
     },
+    hasScrollingContent: {
+      description: 'Add scrolling content indicator',
+    },
+    showButtons: {
+      description: 'Show or hide the Modal buttons',
+    },
   },
-  render: () => {
+  render: (args) => {
     const [open, setOpen] = useState(true); // eslint-disable-line
     return (
       <div className="slug-modal">
         <Button onClick={() => setOpen(true)}>Launch composed modal</Button>
         <ComposedModal open={open} onClose={() => setOpen(false)} slug={slug}>
           <ModalHeader label="Account resources" title="Add a custom domain" />
-          <ModalBody>
+          <ModalBody hasScrollingContent={args.hasScrollingContent}>
             <p style={{ marginBottom: '1rem' }}>
               Custom domains direct requests for your apps in this Cloud Foundry
               organization to a URL that you own. A custom domain can be a
               shared domain, a shared subdomain, or a shared domain and host.
             </p>
+            <p style={{ marginBottom: '1rem' }}>
+              Lorem ipsum dolor sit amet, consectetur adipiscing elit. Phasellus
+              eu nibh odio. Nunc a consequat est, id porttitor sapien. Proin
+              vitae leo vitae orci tincidunt auctor eget eget libero. Ut
+              tincidunt ultricies fringilla. Aliquam erat volutpat. Aenean arcu
+              odio, elementum vel vehicula vitae, porttitor ac lorem. Sed
+              viverra elit ac risus tincidunt fermentum. Ut sollicitudin nibh id
+              risus ornare ornare. Etiam gravida orci ut lectus dictum, quis
+              ultricies felis mollis. Mauris nec commodo est, nec faucibus nibh.
+              Nunc commodo ante quis pretium consectetur. Ut ac nisl vitae mi
+              mattis vulputate a at elit. Nullam porttitor ex eget mi feugiat
+              mattis. Nunc non sodales magna. Proin ornare tellus quis hendrerit
+              egestas. Donec pharetra leo nec molestie sollicitudin.
+            </p>
+
             <TextInput
               data-modal-primary-focus
               id="text-input-1"
@@ -306,14 +331,29 @@ export const _ComposedModal = {
               <SelectItem value="us-south" text="US South" />
               <SelectItem value="us-east" text="US East" />
             </Select>
+            <p style={{ marginBlock: '1rem' }}>
+              Custom domains direct requests for your apps in this Cloud Foundry
+              organization to a URL that you own. A custom domain can be a
+              shared domain, a shared subdomain, or a shared domain and host.
+            </p>
+            <TextInput
+              data-modal-primary-focus
+              id="text-input-1"
+              labelText="Domain name"
+              placeholder="e.g. github.com"
+              style={{ marginBottom: '1rem' }}
+            />
           </ModalBody>
-          <ModalFooter
-            primaryButtonText="Add"
-            secondaryButtons={[
-              { buttonText: 'Keep both' },
-              { buttonText: 'Rename' },
-            ]}
-          />
+
+          {args.showButtons && (
+            <ModalFooter
+              primaryButtonText="Add"
+              secondaryButtons={[
+                { buttonText: 'Keep both' },
+                { buttonText: 'Rename' },
+              ]}
+            />
+          )}
         </ComposedModal>
       </div>
     );
@@ -380,13 +420,23 @@ export const _FilterableMultiselect = {
 };
 
 export const _Modal = {
+  args: {
+    showButtons: true,
+    hasScrollingContent: false,
+  },
   argTypes: {
     slug: {
       description:
         '**Experimental**: Provide a `Slug` component to be rendered inside the component',
     },
+    hasScrollingContent: {
+      description: 'Add scrolling content indicator',
+    },
+    showButtons: {
+      description: 'Show or hide the Modal buttons',
+    },
   },
-  render: () => {
+  render: (args) => {
     const [open, setOpen] = useState(true); // eslint-disable-line
     return (
       <div className="slug-modal">
@@ -398,12 +448,28 @@ export const _Modal = {
           modalLabel="Account resources"
           primaryButtonText="Add"
           secondaryButtonText="Cancel"
+          passiveModal={!args.showButtons}
+          hasScrollingContent={args.hasScrollingContent}
           slug={slug}>
-          <p>
+          <p style={{ marginBottom: '1rem' }}>
             Custom domains direct requests for your apps in this Cloud Foundry
             organization to a URL that you own. A custom domain can be a shared
             domain, a shared subdomain, or a shared domain and host.
           </p>
+          <p style={{ marginBottom: '1rem' }}>
+            Lorem ipsum dolor sit amet, consectetur adipiscing elit. Phasellus
+            eu nibh odio. Nunc a consequat est, id porttitor sapien. Proin vitae
+            leo vitae orci tincidunt auctor eget eget libero. Ut tincidunt
+            ultricies fringilla. Aliquam erat volutpat. Aenean arcu odio,
+            elementum vel vehicula vitae, porttitor ac lorem. Sed viverra elit
+            ac risus tincidunt fermentum. Ut sollicitudin nibh id risus ornare
+            ornare. Etiam gravida orci ut lectus dictum, quis ultricies felis
+            mollis. Mauris nec commodo est, nec faucibus nibh. Nunc commodo ante
+            quis pretium consectetur. Ut ac nisl vitae mi mattis vulputate a at
+            elit. Nullam porttitor ex eget mi feugiat mattis. Nunc non sodales
+            magna. Proin ornare tellus quis hendrerit egestas. Donec pharetra
+            leo nec molestie sollicitudin.
+          </p>
           <TextInput
             data-modal-primary-focus
             id="text-input-1"
diff --git a/packages/styles/scss/__tests__/theme-test.js b/packages/styles/scss/__tests__/theme-test.js
index 579ab1f076ba..0e166aed8762 100644
--- a/packages/styles/scss/__tests__/theme-test.js
+++ b/packages/styles/scss/__tests__/theme-test.js
@@ -162,6 +162,7 @@ describe('@carbon/styles/scss/theme', () => {
         "ai-border-start",
         "ai-border-end",
         "ai-drop-shadow",
+        "ai-overlay",
         "slug-callout-caret-center",
         "slug-callout-caret-bottom",
         "slug-callout-caret-bottom-background",
diff --git a/packages/styles/scss/components/modal/_modal.scss b/packages/styles/scss/components/modal/_modal.scss
index f9194d6a7575..f5f32d349cce 100644
--- a/packages/styles/scss/components/modal/_modal.scss
+++ b/packages/styles/scss/components/modal/_modal.scss
@@ -450,21 +450,25 @@
   }
 
   // Slug styles
+  .#{$prefix}--modal--slug.#{$prefix}--modal {
+    background-color: $ai-overlay;
+  }
+
   .#{$prefix}--modal--slug .#{$prefix}--modal-container {
-    @include callout-gradient();
+    @include callout-gradient('default', 0, 'layer');
 
+    border: 1px solid transparent;
     background-color: $layer;
+    box-shadow: inset 0 -80px 70px -65px $ai-inner-shadow,
+      0 4px 10px 2px $ai-drop-shadow;
   }
 
-  // Start the gradient 64px from bottom only when two buttons are present
   .#{$prefix}--modal--slug
-    .#{$prefix}--modal-container:has(
-      .#{$prefix}--btn-set:not(.#{$prefix}--modal-footer--three-button)
-        > button:not(:only-child)
-    ) {
-    @include callout-gradient('default', 64px);
+    .#{$prefix}--modal-container:has(.#{$prefix}--modal-footer) {
+    @include callout-gradient('default', 64px, 'layer');
 
-    background-color: $layer;
+    box-shadow: inset 0 -80px 0 -16px $layer,
+      inset 0 -160px 70px -65px $ai-inner-shadow, 0 4px 10px 2px $ai-drop-shadow;
   }
 
   .#{$prefix}--modal--slug .#{$prefix}--slug {
@@ -473,6 +477,19 @@
     inset-inline-end: 0;
   }
 
+  .#{$prefix}--modal--slug
+    .#{$prefix}--modal-content.#{$prefix}--modal-scroll-content {
+    mask-image: linear-gradient(
+        to bottom,
+        $layer calc(100% - 80px),
+        transparent calc(100% - 48px),
+        transparent 100%
+      ),
+      linear-gradient(to left, $layer 0, 16px, transparent 16px),
+      linear-gradient(to right, $layer 0, 2px, transparent 2px),
+      linear-gradient(to top, $layer 0, 2px, transparent 2px);
+  }
+
   .#{$prefix}--modal-header
     > .#{$prefix}--slug:has(+ .#{$prefix}--modal-close-button),
   .#{$prefix}--modal-header
@@ -484,8 +501,14 @@
     inset-inline-end: convert.to-rem(48px);
   }
 
+  .#{$prefix}--modal--slug
+    .#{$prefix}--modal-content--overflow-indicator::before,
+  .#{$prefix}--modal--slug .#{$prefix}--modal-content--overflow-indicator {
+    display: none;
+  }
+
   // Windows HCM fix
-  /* stylelint-disable */
+  /* stylelint-disable no-duplicate-selectors */
   .#{$prefix}--modal-close__icon {
     @include high-contrast-mode('icon-fill');
   }
@@ -493,5 +516,5 @@
   .#{$prefix}--modal-close:focus {
     @include high-contrast-mode('focus');
   }
-  /* stylelint-enable */
+  /* stylelint-enable no-duplicate-selectors */
 }
diff --git a/packages/styles/scss/utilities/_ai-gradient.scss b/packages/styles/scss/utilities/_ai-gradient.scss
index 2d05b8b0d16d..87ec673a9efe 100644
--- a/packages/styles/scss/utilities/_ai-gradient.scss
+++ b/packages/styles/scss/utilities/_ai-gradient.scss
@@ -124,6 +124,7 @@
   } @else {
     background: linear-gradient(
           to top,
+          $background $start,
           theme.$ai-aura-start $start,
           theme.$ai-aura-end 50%
         )
diff --git a/packages/themes/src/g10.js b/packages/themes/src/g10.js
index 0830cbf09691..57010fe81d56 100644
--- a/packages/themes/src/g10.js
+++ b/packages/themes/src/g10.js
@@ -13,6 +13,7 @@ import {
   blue40,
   blue60,
   blue70,
+  blue100,
 
   // CoolGray
   coolGray10,
@@ -232,6 +233,9 @@ export const aiAuraHoverEnd = rgba(white, 0);
 export const slugCalloutShadowOuter01 = rgba(blue70, 0.25);
 export const slugCalloutShadowOuter02 = rgba(black, 0.1);
 
+// AI Modal tokens
+export const aiOverlay = rgba(blue100, 0.5);
+
 //// Not used in phase 2 / possibly remove?
 export const slugCalloutGradientTop = rgba(gray10, 0.85);
 export const slugCalloutGradientBottom = rgba(gray20, 0.85);
diff --git a/packages/themes/src/g100.js b/packages/themes/src/g100.js
index abf390e880f3..a4cd52fdbdf7 100644
--- a/packages/themes/src/g100.js
+++ b/packages/themes/src/g100.js
@@ -13,6 +13,7 @@ import {
   blue60,
   blue70,
   blue80,
+  blue100,
 
   // Gray
   gray10,
@@ -237,6 +238,9 @@ export const aiAuraHoverEnd = rgba(black, 0);
 export const slugCalloutShadowOuter01 = rgba(blue80, 0.25);
 export const slugCalloutShadowOuter02 = rgba(black, 0.65);
 
+// AI Modal tokens
+export const aiOverlay = rgba(blue100, 0.5);
+
 //// Not used in phase 2 / possibly remove?
 export const slugCalloutGradientTop = rgba(gray100, 0.85);
 export const slugCalloutGradientBottom = rgba(gray90, 0.85);
diff --git a/packages/themes/src/g90.js b/packages/themes/src/g90.js
index 1b4203d03387..d394fac245a7 100644
--- a/packages/themes/src/g90.js
+++ b/packages/themes/src/g90.js
@@ -13,6 +13,7 @@ import {
   blue60,
   blue70,
   blue80,
+  blue100,
 
   // Gray
   gray10,
@@ -238,6 +239,9 @@ export const aiAuraHoverEnd = rgba(black, 0);
 export const slugCalloutShadowOuter01 = rgba(blue80, 0.25);
 export const slugCalloutShadowOuter02 = rgba(black, 0.65);
 
+// AI Modal tokens
+export const aiOverlay = rgba(blue100, 0.5);
+
 //// Not used in phase 2 / possibly remove?
 export const slugCalloutGradientTop = rgba(gray100, 0.85);
 export const slugCalloutGradientBottom = rgba(gray90, 0.85);
diff --git a/packages/themes/src/tokens/__tests__/__snapshots__/v11-test.js.snap b/packages/themes/src/tokens/__tests__/__snapshots__/v11-test.js.snap
index 81c969f3e0e8..991d6d77023c 100644
--- a/packages/themes/src/tokens/__tests__/__snapshots__/v11-test.js.snap
+++ b/packages/themes/src/tokens/__tests__/__snapshots__/v11-test.js.snap
@@ -273,6 +273,7 @@ Array [
   "ai-border-start",
   "ai-border-end",
   "ai-drop-shadow",
+  "ai-overlay",
   "slug-callout-caret-center",
   "slug-callout-caret-bottom",
   "slug-callout-caret-bottom-background",
diff --git a/packages/themes/src/tokens/__tests__/metadata-test.js b/packages/themes/src/tokens/__tests__/metadata-test.js
index ea1e0b007b14..e27f2ccaab98 100644
--- a/packages/themes/src/tokens/__tests__/metadata-test.js
+++ b/packages/themes/src/tokens/__tests__/metadata-test.js
@@ -1065,6 +1065,10 @@ test('metadata', () => {
           "name": "ai-drop-shadow",
           "type": "color",
         },
+        Object {
+          "name": "ai-overlay",
+          "type": "color",
+        },
         Object {
           "name": "slug-callout-caret-center",
           "type": "color",
diff --git a/packages/themes/src/tokens/v11TokenGroup.js b/packages/themes/src/tokens/v11TokenGroup.js
index facd291d30e7..08c1bfefcfe2 100644
--- a/packages/themes/src/tokens/v11TokenGroup.js
+++ b/packages/themes/src/tokens/v11TokenGroup.js
@@ -382,6 +382,7 @@ export const ai = TokenGroup.create({
     'ai-border-start',
     'ai-border-end',
     'ai-drop-shadow',
+    'ai-overlay',
     // Caret tokens
     'slug-callout-caret-center',
     'slug-callout-caret-bottom',
diff --git a/packages/themes/src/white.js b/packages/themes/src/white.js
index e50c676ec9b4..bb2a67c55432 100644
--- a/packages/themes/src/white.js
+++ b/packages/themes/src/white.js
@@ -13,6 +13,7 @@ import {
   blue40,
   blue60,
   blue70,
+  blue100,
 
   // CoolGray
   coolGray10,
@@ -232,6 +233,9 @@ export const aiAuraHoverEnd = rgba(white, 0);
 export const slugCalloutShadowOuter01 = rgba(blue70, 0.25);
 export const slugCalloutShadowOuter02 = rgba(black, 0.1);
 
+// AI Modal tokens
+export const aiOverlay = rgba(blue100, 0.5);
+
 //// Not used in phase 2 / possibly remove?
 export const slugCalloutGradientTop = rgba(gray10, 0.85);
 export const slugCalloutGradientBottom = rgba(gray20, 0.85);