diff --git a/Packages/com.unity.inputsystem/CHANGELOG.md b/Packages/com.unity.inputsystem/CHANGELOG.md
index 1a8cd8269e..809d8ab632 100644
--- a/Packages/com.unity.inputsystem/CHANGELOG.md
+++ b/Packages/com.unity.inputsystem/CHANGELOG.md
@@ -15,6 +15,7 @@ however, it has to be formatted properly to pass verification tests.
 - Fixed an issue where a composite binding would not be consecutively triggered after ResetDevice() has been called from the associated action handler [ISXB-746](https://issuetracker.unity3d.com/product/unity/issues/guid/ISXB-746).
 - Fixed resource designation for "d_InputControl" icon to address CI failure.
 - Fixed an issue where a composite binding would not be consecutively triggered after disabling actions while there are action modifiers in progress [ISXB-505](https://issuetracker.unity3d.com/product/unity/issues/guid/ISXB-505).
+- Fixed prefabs and missing default control scheme used by PlayerInput component are now correctly shown in the inspector [ISXB-818](https://issuetracker.unity3d.com/product/unity/issues/guid/ISXB-818)
 
 ## [1.8.2] - 2024-04-29
 
diff --git a/Packages/com.unity.inputsystem/InputSystem/Plugins/PlayerInput/PlayerInputEditor.cs b/Packages/com.unity.inputsystem/InputSystem/Plugins/PlayerInput/PlayerInputEditor.cs
index 985dad7ad7..265f496b71 100644
--- a/Packages/com.unity.inputsystem/InputSystem/Plugins/PlayerInput/PlayerInputEditor.cs
+++ b/Packages/com.unity.inputsystem/InputSystem/Plugins/PlayerInput/PlayerInputEditor.cs
@@ -84,25 +84,42 @@ public override void OnInspectorGUI()
             if (m_ControlSchemeOptions != null && m_ControlSchemeOptions.Length > 1) // Don't show if <Any> is the only option.
             {
                 // Default control scheme picker.
-
-                var selected = EditorGUILayout.Popup(m_DefaultControlSchemeText, m_SelectedDefaultControlScheme,
-                    m_ControlSchemeOptions);
+                Color currentBg = GUI.backgroundColor;
+                // if the invalid DefaultControlSchemeName is selected set the popup draw the BG color in red
+                if (m_InvalidDefaultControlSchemeName != null && m_SelectedDefaultControlScheme == 1)
+                    GUI.backgroundColor = Color.red;
+
+                var rect = EditorGUILayout.GetControlRect();
+                var label = EditorGUI.BeginProperty(rect, m_DefaultControlSchemeText, m_DefaultControlSchemeProperty);
+                var selected = EditorGUI.Popup(rect, label, m_SelectedDefaultControlScheme, m_ControlSchemeOptions);
+                EditorGUI.EndProperty();
                 if (selected != m_SelectedDefaultControlScheme)
                 {
                     if (selected == 0)
                     {
                         m_DefaultControlSchemeProperty.stringValue = null;
                     }
+                    // if there is an invalid default scheme name it will be at rank 1.
+                    // we use m_InvalidDefaultControlSchemeName to prevent usage of the string with "name<Not Found>"
+                    else if (m_InvalidDefaultControlSchemeName != null && selected == 1)
+                    {
+                        m_DefaultControlSchemeProperty.stringValue = m_InvalidDefaultControlSchemeName;
+                    }
                     else
                     {
-                        m_DefaultControlSchemeProperty.stringValue =
-                            m_ControlSchemeOptions[selected].text;
+                        m_DefaultControlSchemeProperty.stringValue = m_ControlSchemeOptions[selected].text;
                     }
                     m_SelectedDefaultControlScheme = selected;
                 }
+                // Restore the initial color
+                GUI.backgroundColor = currentBg;
 
+
+                rect = EditorGUILayout.GetControlRect();
+                label = EditorGUI.BeginProperty(rect, m_AutoSwitchText, m_NeverAutoSwitchControlSchemesProperty);
                 var neverAutoSwitchValueOld = m_NeverAutoSwitchControlSchemesProperty.boolValue;
-                var neverAutoSwitchValueNew = !EditorGUILayout.Toggle(m_AutoSwitchText, !neverAutoSwitchValueOld);
+                var neverAutoSwitchValueNew = !EditorGUI.Toggle(rect, label, !neverAutoSwitchValueOld);
+                EditorGUI.EndProperty();
                 if (neverAutoSwitchValueOld != neverAutoSwitchValueNew)
                 {
                     m_NeverAutoSwitchControlSchemesProperty.boolValue = neverAutoSwitchValueNew;
@@ -112,9 +129,11 @@ public override void OnInspectorGUI()
             if (m_ActionMapOptions != null && m_ActionMapOptions.Length > 0)
             {
                 // Default action map picker.
-
-                var selected = EditorGUILayout.Popup(m_DefaultActionMapText, m_SelectedDefaultActionMap,
+                var rect = EditorGUILayout.GetControlRect();
+                var label = EditorGUI.BeginProperty(rect, m_DefaultActionMapText, m_DefaultActionMapProperty);
+                var selected = EditorGUI.Popup(rect, label, m_SelectedDefaultActionMap,
                     m_ActionMapOptions);
+                EditorGUI.EndProperty();
                 if (selected != m_SelectedDefaultActionMap)
                 {
                     if (selected == 0)
@@ -424,6 +443,7 @@ private void OnActionAssetChange()
                 m_ActionNames = null;
                 m_SelectedDefaultActionMap = -1;
                 m_SelectedDefaultControlScheme = -1;
+                m_InvalidDefaultControlSchemeName = null;
                 return;
             }
 
@@ -486,22 +506,36 @@ void AddEntry(InputAction action, PlayerInput.ActionEvent actionEvent)
 
             // Read out control schemes.
             var selectedDefaultControlScheme = playerInput.defaultControlScheme;
+            m_InvalidDefaultControlSchemeName = null;
             m_SelectedDefaultControlScheme = 0;
-            var controlSchemes = asset.controlSchemes;
-            m_ControlSchemeOptions = new GUIContent[controlSchemes.Count + 1];
-            m_ControlSchemeOptions[0] = new GUIContent(EditorGUIUtility.TrTextContent("<Any>"));
-            ////TODO: sort alphabetically
-            for (var i = 0; i < controlSchemes.Count; ++i)
-            {
-                var name = controlSchemes[i].name;
-                m_ControlSchemeOptions[i + 1] = new GUIContent(name);
+            ////TODO: sort alphabetically and ensure that the order is the same in the schemes editor
+            var controlSchemesNames = asset.controlSchemes.Select(cs => cs.name).ToList();
 
-                if (selectedDefaultControlScheme != null && string.Compare(name, selectedDefaultControlScheme,
-                    StringComparison.InvariantCultureIgnoreCase) == 0)
-                    m_SelectedDefaultControlScheme = i + 1;
+            // try to find the selected Default Control Scheme
+            if (!string.IsNullOrEmpty(selectedDefaultControlScheme))
+            {
+                // +1 since <Any> will be the first in the list
+                m_SelectedDefaultControlScheme = 1 + controlSchemesNames.FindIndex(name => string.Compare(name, selectedDefaultControlScheme,
+                    StringComparison.InvariantCultureIgnoreCase) == 0);
+                // if not found, will insert the invalid name next to <Any>
+                if (m_SelectedDefaultControlScheme == 0)
+                {
+                    m_InvalidDefaultControlSchemeName = selectedDefaultControlScheme;
+                    m_SelectedDefaultControlScheme = 1;
+                    controlSchemesNames.Insert(0, $"{selectedDefaultControlScheme}{L10n.Tr("<Not Found>")}");
+                }
             }
-            if (m_SelectedDefaultControlScheme <= 0)
+            else
+            {
                 playerInput.defaultControlScheme = null;
+            }
+
+            m_ControlSchemeOptions = new GUIContent[controlSchemesNames.Count + 1];
+            m_ControlSchemeOptions[0] = new GUIContent(EditorGUIUtility.TrTextContent("<Any>"));
+            for (var i = 0; i < controlSchemesNames.Count; ++i)
+            {
+                m_ControlSchemeOptions[i + 1] = new GUIContent(controlSchemesNames[i]);
+            }
 
             // Read out action maps.
             var selectedDefaultActionMap = !string.IsNullOrEmpty(playerInput.defaultActionMap)
@@ -562,6 +596,7 @@ void AddEntry(InputAction action, PlayerInput.ActionEvent actionEvent)
         [NonSerialized] private int[] m_ActionMapIndices;
         [NonSerialized] private int m_NumActionMaps;
         [NonSerialized] private int m_SelectedDefaultControlScheme;
+        [NonSerialized] private string m_InvalidDefaultControlSchemeName;
         [NonSerialized] private GUIContent[] m_ControlSchemeOptions;
         [NonSerialized] private int m_SelectedDefaultActionMap;
         [NonSerialized] private GUIContent[] m_ActionMapOptions;