diff --git a/apps/web/modules/organization/settings/api-keys/components/add-api-key-modal.test.tsx b/apps/web/modules/organization/settings/api-keys/components/add-api-key-modal.test.tsx
index 0078f5eabb..e5e142508f 100644
--- a/apps/web/modules/organization/settings/api-keys/components/add-api-key-modal.test.tsx
+++ b/apps/web/modules/organization/settings/api-keys/components/add-api-key-modal.test.tsx
@@ -1,4 +1,3 @@
-import { ApiKeyPermission } from "@prisma/client";
 import "@testing-library/jest-dom/vitest";
 import { cleanup, render, screen } from "@testing-library/react";
 import userEvent from "@testing-library/user-event";
@@ -123,6 +122,9 @@ describe("AddApiKeyModal", () => {
   it("handles permission changes", async () => {
     render(<AddApiKeyModal {...defaultProps} />);
 
+    const addButton = screen.getByRole("button", { name: /add_permission/i });
+    await userEvent.click(addButton);
+
     // Open project dropdown for the first permission row
     const projectDropdowns = screen.getAllByRole("button", { name: /Project 1/i });
     await userEvent.click(projectDropdowns[0]);
@@ -143,6 +145,8 @@ describe("AddApiKeyModal", () => {
     const addButton = screen.getByRole("button", { name: /add_permission/i });
     await userEvent.click(addButton);
 
+    await userEvent.click(addButton);
+
     // Verify new permission row is added
     const deleteButtons = screen.getAllByRole("button", { name: "" }); // Trash icons
     expect(deleteButtons).toHaveLength(2);
@@ -161,6 +165,9 @@ describe("AddApiKeyModal", () => {
     const labelInput = screen.getByPlaceholderText("e.g. GitHub, PostHog, Slack") as HTMLInputElement;
     await userEvent.type(labelInput, "Test API Key");
 
+    const addButton = screen.getByRole("button", { name: /add_permission/i });
+    await userEvent.click(addButton);
+
     // Click submit
     const submitButton = screen.getByRole("button", {
       name: "environments.project.api_keys.add_api_key",
@@ -172,7 +179,7 @@ describe("AddApiKeyModal", () => {
       environmentPermissions: [
         {
           environmentId: "env1",
-          permission: ApiKeyPermission.read,
+          permission: "read",
         },
       ],
       organizationAccess: {
@@ -203,12 +210,7 @@ describe("AddApiKeyModal", () => {
 
     expect(mockOnSubmit).toHaveBeenCalledWith({
       label: "Test API Key",
-      environmentPermissions: [
-        {
-          environmentId: "env1",
-          permission: ApiKeyPermission.read,
-        },
-      ],
+      environmentPermissions: [],
       organizationAccess: {
         accessControl: {
           read: true,
@@ -218,7 +220,7 @@ describe("AddApiKeyModal", () => {
     });
   });
 
-  it("disables submit button when label is empty", async () => {
+  it("disables submit button when label is empty and there are not environment permissions", async () => {
     render(<AddApiKeyModal {...defaultProps} />);
     const submitButton = screen.getByRole("button", {
       name: "environments.project.api_keys.add_api_key",
@@ -228,6 +230,9 @@ describe("AddApiKeyModal", () => {
     // Initially disabled
     expect(submitButton).toBeDisabled();
 
+    const addButton = screen.getByRole("button", { name: /add_permission/i });
+    await userEvent.click(addButton);
+
     // After typing, it should be enabled
     await userEvent.type(labelInput, "Test");
     expect(submitButton).not.toBeDisabled();
diff --git a/apps/web/modules/organization/settings/api-keys/components/add-api-key-modal.tsx b/apps/web/modules/organization/settings/api-keys/components/add-api-key-modal.tsx
index f6f0c5515a..16b679c68b 100644
--- a/apps/web/modules/organization/settings/api-keys/components/add-api-key-modal.tsx
+++ b/apps/web/modules/organization/settings/api-keys/components/add-api-key-modal.tsx
@@ -89,9 +89,7 @@ export const AddApiKeyModal = ({
   };
 
   // Initialize with one permission by default
-  const [selectedPermissions, setSelectedPermissions] = useState<Record<string, PermissionRecord>>(() =>
-    getInitialPermissions()
-  );
+  const [selectedPermissions, setSelectedPermissions] = useState<Record<string, PermissionRecord>>({});
 
   const projectOptions: ProjectOption[] = projects.map((project) => ({
     id: project.id,
@@ -106,14 +104,12 @@ export const AddApiKeyModal = ({
 
   const addPermission = () => {
     const newIndex = Object.keys(selectedPermissions).length;
-    if (projects.length > 0 && projects[0].environments.length > 0) {
-      const initialPermission = getInitialPermissions()["permission-0"];
-      if (initialPermission) {
-        setSelectedPermissions({
-          ...selectedPermissions,
-          [`permission-${newIndex}`]: initialPermission,
-        });
-      }
+    const initialPermission = getInitialPermissions()["permission-0"];
+    if (initialPermission) {
+      setSelectedPermissions({
+        ...selectedPermissions,
+        [`permission-${newIndex}`]: initialPermission,
+      });
     }
   };
 
@@ -176,7 +172,7 @@ export const AddApiKeyModal = ({
     });
 
     reset();
-    setSelectedPermissions(getInitialPermissions());
+    setSelectedPermissions({});
     setSelectedOrganizationAccess(defaultOrganizationAccess);
   };
 
@@ -191,11 +187,16 @@ export const AddApiKeyModal = ({
     if (!apiKeyLabel?.trim()) {
       return true;
     }
-    // Check if there are any valid permissions
-    if (Object.keys(selectedPermissions).length === 0) {
-      return true;
-    }
-    return false;
+
+    // Check if at least one project permission is set or one organization access toggle is ON
+    const hasProjectAccess = Object.keys(selectedPermissions).length > 0;
+
+    const hasOrganizationAccess = Object.values(selectedOrganizationAccess).some((accessGroup) =>
+      Object.values(accessGroup).some((value) => value === true)
+    );
+
+    // Disable submit if no access rights are granted
+    return !(hasProjectAccess || hasOrganizationAccess);
   };
 
   const setSelectedOrganizationAccessValue = (key: string, accessType: string, value: boolean) => {
@@ -335,15 +336,8 @@ export const AddApiKeyModal = ({
                         <button
                           type="button"
                           className="p-2"
-                          onClick={() => removePermission(permissionIndex)}
-                          disabled={Object.keys(selectedPermissions).length <= 1}>
-                          <Trash2Icon
-                            className={`h-5 w-5 ${
-                              Object.keys(selectedPermissions).length <= 1
-                                ? "text-slate-300"
-                                : "text-slate-500 hover:text-red-500"
-                            }`}
-                          />
+                          onClick={() => removePermission(permissionIndex)}>
+                          <Trash2Icon className={"h-5 w-5 text-slate-500 hover:text-red-500"} />
                         </button>
                       </div>
                     );
@@ -403,7 +397,7 @@ export const AddApiKeyModal = ({
                 onClick={() => {
                   setOpen(false);
                   reset();
-                  setSelectedPermissions(getInitialPermissions());
+                  setSelectedPermissions({});
                 }}>
                 {t("common.cancel")}
               </Button>
diff --git a/apps/web/modules/organization/settings/api-keys/components/edit-api-keys.test.tsx b/apps/web/modules/organization/settings/api-keys/components/edit-api-keys.test.tsx
index 94d558f3fc..7e9b0e3029 100644
--- a/apps/web/modules/organization/settings/api-keys/components/edit-api-keys.test.tsx
+++ b/apps/web/modules/organization/settings/api-keys/components/edit-api-keys.test.tsx
@@ -265,7 +265,7 @@ describe("EditAPIKeys", () => {
       organizationId: "org1",
       apiKeyData: {
         label: "New Key",
-        environmentPermissions: [{ environmentId: "env1", permission: ApiKeyPermission.read }],
+        environmentPermissions: [],
         organizationAccess: {
           accessControl: { read: true, write: false },
         },
diff --git a/apps/web/modules/organization/settings/api-keys/components/view-permission-modal.tsx b/apps/web/modules/organization/settings/api-keys/components/view-permission-modal.tsx
index 7c69d6869d..9790bab9e2 100644
--- a/apps/web/modules/organization/settings/api-keys/components/view-permission-modal.tsx
+++ b/apps/web/modules/organization/settings/api-keys/components/view-permission-modal.tsx
@@ -98,9 +98,15 @@ export const ViewPermissionModal = ({
                     data-testid="api-key-label"
                     {...register("label", { required: true, validate: (value) => value.trim() !== "" })}
                   />
+                  {/* Permission rows */}
                 </div>
                 <div className="space-y-2">
                   <Label>{t("environments.project.api_keys.permissions")}</Label>
+                  {apiKey.apiKeyEnvironments?.length === 0 && (
+                    <div className="text-center text-sm">
+                      {t("environments.project.api_keys.no_env_permissions_found")}
+                    </div>
+                  )}
                   <div className="space-y-2">
                     {/* Permission rows */}
                     {apiKey.apiKeyEnvironments?.map((permission) => {
diff --git a/apps/web/playwright/lib/utils.ts b/apps/web/playwright/lib/utils.ts
index 8420ec2aef..6b2001b7b6 100644
--- a/apps/web/playwright/lib/utils.ts
+++ b/apps/web/playwright/lib/utils.ts
@@ -18,6 +18,7 @@ export async function loginAndGetApiKey(page: Page, users: UsersFixture) {
   await page.getByRole("button", { name: "Add API Key" }).isVisible();
   await page.getByRole("button", { name: "Add API Key" }).click();
   await page.getByPlaceholder("e.g. GitHub, PostHog, Slack").fill("E2E Test API Key");
+  await page.getByRole("button", { name: "+ Add permission" }).click();
   await page.getByRole("button", { name: "development" }).click();
   await page.getByRole("menuitem", { name: "production" }).click();
   await page.getByRole("button", { name: "read" }).click();
diff --git a/packages/lib/messages/de-DE.json b/packages/lib/messages/de-DE.json
index 933896b57d..5c4b7ed3ba 100644
--- a/packages/lib/messages/de-DE.json
+++ b/packages/lib/messages/de-DE.json
@@ -788,6 +788,7 @@
         "api_key_updated": "API-Schlüssel aktualisiert",
         "duplicate_access": "Doppelter Projektzugriff nicht erlaubt",
         "no_api_keys_yet": "Du hast noch keine API-Schlüssel",
+        "no_env_permissions_found": "Keine Umgebungsberechtigungen gefunden",
         "organization_access": "Organisationszugang",
         "permissions": "Berechtigungen",
         "project_access": "Projektzugriff",
diff --git a/packages/lib/messages/en-US.json b/packages/lib/messages/en-US.json
index e4bc7cf882..c479005af6 100644
--- a/packages/lib/messages/en-US.json
+++ b/packages/lib/messages/en-US.json
@@ -788,6 +788,7 @@
         "api_key_updated": "API Key updated",
         "duplicate_access": "Duplicate project access not allowed",
         "no_api_keys_yet": "You don't have any API keys yet",
+        "no_env_permissions_found": "No environment permissions found",
         "organization_access": "Organization Access",
         "permissions": "Permissions",
         "project_access": "Project Access",
diff --git a/packages/lib/messages/fr-FR.json b/packages/lib/messages/fr-FR.json
index f0b9f79754..6ab6b72742 100644
--- a/packages/lib/messages/fr-FR.json
+++ b/packages/lib/messages/fr-FR.json
@@ -788,6 +788,7 @@
         "api_key_updated": "Clé API mise à jour",
         "duplicate_access": "L'accès en double au projet n'est pas autorisé",
         "no_api_keys_yet": "Vous n'avez pas encore de clés API.",
+        "no_env_permissions_found": "Aucune autorisation d'environnement trouvée",
         "organization_access": "Accès à l'organisation",
         "permissions": "Permissions",
         "project_access": "Accès au projet",
diff --git a/packages/lib/messages/pt-BR.json b/packages/lib/messages/pt-BR.json
index 290155cfcd..c507ce5ed9 100644
--- a/packages/lib/messages/pt-BR.json
+++ b/packages/lib/messages/pt-BR.json
@@ -788,6 +788,7 @@
         "api_key_updated": "Chave de API atualizada",
         "duplicate_access": "Acesso duplicado ao projeto não permitido",
         "no_api_keys_yet": "Você ainda não tem nenhuma chave de API",
+        "no_env_permissions_found": "Nenhuma permissão de ambiente encontrada",
         "organization_access": "Acesso à Organização",
         "permissions": "Permissões",
         "project_access": "Acesso ao Projeto",
diff --git a/packages/lib/messages/pt-PT.json b/packages/lib/messages/pt-PT.json
index a6e634c601..52baa2c69f 100644
--- a/packages/lib/messages/pt-PT.json
+++ b/packages/lib/messages/pt-PT.json
@@ -788,6 +788,7 @@
         "api_key_updated": "Chave API atualizada",
         "duplicate_access": "Acesso duplicado ao projeto não permitido",
         "no_api_keys_yet": "Ainda não tem nenhuma chave API",
+        "no_env_permissions_found": "Nenhuma permissão de ambiente encontrada",
         "organization_access": "Acesso à Organização",
         "permissions": "Permissões",
         "project_access": "Acesso ao Projeto",
diff --git a/packages/lib/messages/zh-Hant-TW.json b/packages/lib/messages/zh-Hant-TW.json
index 6cb65cddac..18e4a32fd8 100644
--- a/packages/lib/messages/zh-Hant-TW.json
+++ b/packages/lib/messages/zh-Hant-TW.json
@@ -788,6 +788,7 @@
         "api_key_updated": "API 金鑰已更新",
         "duplicate_access": "不允許重複的 project 存取",
         "no_api_keys_yet": "您還沒有任何 API 金鑰",
+        "no_env_permissions_found": "找不到環境權限",
         "organization_access": "組織 Access",
         "permissions": "權限",
         "project_access": "專案存取",