diff --git a/src/libs/OptionsListUtils.ts b/src/libs/OptionsListUtils.ts
index 2a25178f26a6..b72a1e8ee54d 100644
--- a/src/libs/OptionsListUtils.ts
+++ b/src/libs/OptionsListUtils.ts
@@ -222,6 +222,7 @@ type PreviewConfig = {showChatPreviewLine?: boolean; forcePolicyNamePreview?: bo
 type FilterOptionsConfig = Pick<GetOptionsConfig, 'sortByReportTypeInSearch' | 'canInviteUser' | 'selectedOptions' | 'excludeUnknownUsers' | 'excludeLogins' | 'maxRecentReportsToShow'> & {
     preferChatroomsOverThreads?: boolean;
     preferPolicyExpenseChat?: boolean;
+    preferRecentExpenseReports?: boolean;
 };
 
 /**
@@ -1573,7 +1574,11 @@ function createOptionFromReport(report: Report, personalDetails: OnyxEntry<Perso
  * @param searchValue - search string
  * @returns a sorted list of options
  */
-function orderOptions(options: ReportUtils.OptionData[], searchValue: string | undefined, {preferChatroomsOverThreads = false, preferPolicyExpenseChat = false} = {}) {
+function orderOptions(
+    options: ReportUtils.OptionData[],
+    searchValue: string | undefined,
+    {preferChatroomsOverThreads = false, preferPolicyExpenseChat = false, preferRecentExpenseReports = false} = {},
+) {
     return lodashOrderBy(
         options,
         [
@@ -1585,6 +1590,12 @@ function orderOptions(options: ReportUtils.OptionData[], searchValue: string | u
                 if (option.isSelfDM) {
                     return 0;
                 }
+                if (preferRecentExpenseReports && !!option?.lastIOUCreationDate) {
+                    return 1;
+                }
+                if (preferRecentExpenseReports && option.isPolicyExpenseChat) {
+                    return 1;
+                }
                 if (preferChatroomsOverThreads && option.isThread) {
                     return 4;
                 }
@@ -1601,8 +1612,11 @@ function orderOptions(options: ReportUtils.OptionData[], searchValue: string | u
                 // When option.login is an exact match with the search value, returning 0 puts it at the top of the option list
                 return 0;
             },
+            // For Submit Expense flow, prioritize the most recent expense reports and then policy expense chats (without expense requests)
+            preferRecentExpenseReports ? (option) => option?.lastIOUCreationDate ?? '' : '',
+            preferRecentExpenseReports ? (option) => option?.isPolicyExpenseChat : 0,
         ],
-        ['asc'],
+        ['asc', 'desc', 'desc'],
     );
 }
 
@@ -1923,6 +1937,8 @@ function getOptions(
     let recentReportOptions = [];
     let personalDetailsOptions: ReportUtils.OptionData[] = [];
 
+    const preferRecentExpenseReports = action === CONST.IOU.ACTION.CREATE;
+
     if (includeRecentReports) {
         for (const reportOption of allReportOptions) {
             /**
@@ -1983,6 +1999,22 @@ function getOptions(
                 recentReportOptions.push(reportOption);
             }
 
+            // Add a field to sort the recent reports by the time of last IOU request for create actions
+            if (preferRecentExpenseReports) {
+                const reportPreviewAction = allSortedReportActions[reportOption.reportID]?.find((reportAction) =>
+                    ReportActionUtils.isActionOfType(reportAction, CONST.REPORT.ACTIONS.TYPE.REPORT_PREVIEW),
+                );
+
+                if (reportPreviewAction) {
+                    const iouReportID = ReportActionUtils.getIOUReportIDFromReportActionPreview(reportPreviewAction);
+                    const iouReportActions = allSortedReportActions[iouReportID] ?? [];
+                    const lastIOUAction = iouReportActions.find((iouAction) => iouAction.actionName === CONST.REPORT.ACTIONS.TYPE.IOU);
+                    if (lastIOUAction) {
+                        reportOption.lastIOUCreationDate = lastIOUAction.lastModified;
+                    }
+                }
+            }
+
             // Add this login to the exclude list so it won't appear when we process the personal details
             if (reportOption.login) {
                 optionsToExclude.push({login: reportOption.login});
@@ -2031,7 +2063,11 @@ function getOptions(
             recentReportOptions.push(...personalDetailsOptions);
             personalDetailsOptions = [];
         }
-        recentReportOptions = orderOptions(recentReportOptions, searchValue, {preferChatroomsOverThreads: true, preferPolicyExpenseChat: !!action});
+        recentReportOptions = orderOptions(recentReportOptions, searchValue, {
+            preferChatroomsOverThreads: true,
+            preferPolicyExpenseChat: !!action,
+            preferRecentExpenseReports,
+        });
     }
 
     return {
@@ -2395,6 +2431,7 @@ function filterOptions(options: Options, searchInputValue: string, config?: Filt
         excludeLogins = [],
         preferChatroomsOverThreads = false,
         preferPolicyExpenseChat = false,
+        preferRecentExpenseReports = false,
     } = config ?? {};
     if (searchInputValue.trim() === '' && maxRecentReportsToShow > 0) {
         return {...options, recentReports: options.recentReports.slice(0, maxRecentReportsToShow)};
@@ -2476,7 +2513,7 @@ function filterOptions(options: Options, searchInputValue: string, config?: Filt
 
     return {
         personalDetails,
-        recentReports: orderOptions(recentReports, searchValue, {preferChatroomsOverThreads, preferPolicyExpenseChat}),
+        recentReports: orderOptions(recentReports, searchValue, {preferChatroomsOverThreads, preferPolicyExpenseChat, preferRecentExpenseReports}),
         userToInvite,
         currentUserOption: matchResults.currentUserOption,
         categoryOptions: [],
diff --git a/src/libs/ReportUtils.ts b/src/libs/ReportUtils.ts
index 719f9971f907..584d5d09b682 100644
--- a/src/libs/ReportUtils.ts
+++ b/src/libs/ReportUtils.ts
@@ -459,6 +459,7 @@ type OptionData = {
     tabIndex?: 0 | -1;
     isConciergeChat?: boolean;
     isBold?: boolean;
+    lastIOUCreationDate?: string;
 } & Report;
 
 type OnyxDataTaskAssigneeChat = {
diff --git a/src/pages/home/ReportScreen.tsx b/src/pages/home/ReportScreen.tsx
index e44a59baf7eb..69c4402e959b 100644
--- a/src/pages/home/ReportScreen.tsx
+++ b/src/pages/home/ReportScreen.tsx
@@ -694,6 +694,7 @@ function ReportScreen({route, currentReportID = '', navigation}: ReportScreenPro
 
     const lastRoute = usePrevious(route);
     const lastReportActionIDFromRoute = usePrevious(reportActionIDFromRoute);
+
     // Define here because reportActions are recalculated before mount, allowing data to display faster than useEffect can trigger.
     // If we have cached reportActions, they will be shown immediately.
     // We aim to display a loader first, then fetch relevant reportActions, and finally show them.
diff --git a/src/pages/iou/request/MoneyRequestParticipantsSelector.tsx b/src/pages/iou/request/MoneyRequestParticipantsSelector.tsx
index a83819afdfb4..0168133154ee 100644
--- a/src/pages/iou/request/MoneyRequestParticipantsSelector.tsx
+++ b/src/pages/iou/request/MoneyRequestParticipantsSelector.tsx
@@ -169,9 +169,10 @@ function MoneyRequestParticipantsSelector({participants = CONST.EMPTY_ARRAY, onF
             excludeLogins: CONST.EXPENSIFY_EMAILS,
             maxRecentReportsToShow: CONST.IOU.MAX_RECENT_REPORTS_TO_SHOW,
             preferPolicyExpenseChat: isPaidGroupPolicy,
+            preferRecentExpenseReports: action === CONST.IOU.ACTION.CREATE,
         });
         return newOptions;
-    }, [areOptionsInitialized, defaultOptions, debouncedSearchTerm, participants, isPaidGroupPolicy, canUseP2PDistanceRequests, iouRequestType, isCategorizeOrShareAction]);
+    }, [areOptionsInitialized, defaultOptions, debouncedSearchTerm, participants, isPaidGroupPolicy, canUseP2PDistanceRequests, iouRequestType, isCategorizeOrShareAction, action]);
 
     /**
      * Returns the sections needed for the OptionsSelector