diff --git a/platform-api/internal/handler/llm_template_integration_test.go b/platform-api/internal/handler/llm_template_integration_test.go
index 09b9e7008..0c9c84899 100644
--- a/platform-api/internal/handler/llm_template_integration_test.go
+++ b/platform-api/internal/handler/llm_template_integration_test.go
@@ -332,7 +332,7 @@ func TestLLMTemplateHTTP_BlankGroupIDQuery(t *testing.T) {
 	}
 }
 
-// ---- PATCH enable/disable by handle (built-in only) -----------------------
+// ---- PATCH enable/disable by handle (built-in and custom) -----------------
 
 func TestLLMTemplateHTTP_ToggleByHandle(t *testing.T) {
 	r, _, cleanup := setupLLMTemplateEnv(t)
@@ -350,10 +350,16 @@ func TestLLMTemplateHTTP_ToggleByHandle(t *testing.T) {
 		t.Errorf("re-enable built-in: expected 200, got %d", w.Code)
 	}
 
-	// Custom template cannot be toggled -> 403.
+	// Custom templates are toggleable too.
 	handle, _ := createFamily(t, r, "Custom Toggle")
-	if w := doJSON(t, r, http.MethodPatch, tmplBase+"/"+handle, `{"enabled":false}`, true); w.Code != http.StatusForbidden {
-		t.Errorf("toggle custom: expected 403, got %d: %s", w.Code, w.Body.String())
+	w = doJSON(t, r, http.MethodPatch, tmplBase+"/"+handle, `{"enabled":false}`, true)
+	if w.Code != http.StatusOK {
+		t.Errorf("disable custom: expected 200, got %d: %s", w.Code, w.Body.String())
+	} else if bodyMap(t, w)["enabled"] != false {
+		t.Errorf("expected enabled=false after disabling custom template")
+	}
+	if w := doJSON(t, r, http.MethodPatch, tmplBase+"/"+handle, `{"enabled":true}`, true); w.Code != http.StatusOK {
+		t.Errorf("re-enable custom: expected 200, got %d: %s", w.Code, w.Body.String())
 	}
 
 	// Unknown handle -> 404.
diff --git a/platform-api/internal/service/llm.go b/platform-api/internal/service/llm.go
index fdcb5ebc5..89028e3ae 100644
--- a/platform-api/internal/service/llm.go
+++ b/platform-api/internal/service/llm.go
@@ -696,14 +696,6 @@ func (s *LLMProviderTemplateService) SetVersionEnabled(orgUUID, groupID, version
 	if target == nil {
 		return nil, apperror.LLMProviderTemplateNotFound.New()
 	}
-	// Enable/disable is reserved for built-in ('wso2') templates only. Custom
-	// templates are managed via update/delete and cannot be toggled.
-	if target.ManagedBy != constants.PolicyManagedByWSO2 {
-		return nil, apperror.LLMProviderTemplateNotToggleable.New()
-	}
-	if err := ensureOriginMutable(target.Origin); err != nil {
-		return nil, err
-	}
 	if !enabled {
 		inUse, err := s.repo.CountProvidersUsingTemplate(groupID, orgUUID, v)
 		if err != nil {
diff --git a/platform-api/internal/service/llm_provider_template_test.go b/platform-api/internal/service/llm_provider_template_test.go
index b127b5ee0..e6890010c 100644
--- a/platform-api/internal/service/llm_provider_template_test.go
+++ b/platform-api/internal/service/llm_provider_template_test.go
@@ -679,22 +679,41 @@ func TestLLMProviderTemplateServiceSetVersionEnabled_EnableIgnoresUsage(t *testi
 	}
 }
 
-func TestLLMProviderTemplateServiceSetVersionEnabled_RejectsCustomTemplate(t *testing.T) {
+func TestLLMProviderTemplateServiceSetVersionEnabled_AllowsCustomTemplate(t *testing.T) {
 	repo := &mockLLMProviderTemplateCRUDRepo{
+		getByVersionFunc: func(templateID, orgUUID, version string) (*model.LLMProviderTemplate, error) {
+			return &model.LLMProviderTemplate{ID: templateID, Version: version, ManagedBy: "organization", Enabled: false}, nil
+		},
+	}
+	svc := NewLLMProviderTemplateService(repo, &noopAuditRepo{}, newTestIdentityService())
+
+	resp, err := svc.SetVersionEnabled("org-1", "openai", "v2.0", false)
+	if err != nil {
+		t.Fatalf("expected custom template to be toggleable, got: %v", err)
+	}
+	if !repo.setEnabledCalled || repo.setEnabledEnabled {
+		t.Fatalf("expected SetEnabled to be called with enabled=false, got called=%v enabled=%v", repo.setEnabledCalled, repo.setEnabledEnabled)
+	}
+	if resp == nil || resp.Enabled == nil || *resp.Enabled {
+		t.Fatalf("expected response to reflect disabled state, got: %#v", resp)
+	}
+}
+
+func TestLLMProviderTemplateServiceSetVersionEnabled_CustomTemplateDisableBlocksWhenInUse(t *testing.T) {
+	repo := &mockLLMProviderTemplateCRUDRepo{
+		countProvidersUsingTemplateResult: 1,
 		getByVersionFunc: func(templateID, orgUUID, version string) (*model.LLMProviderTemplate, error) {
 			return &model.LLMProviderTemplate{ID: templateID, Version: version, ManagedBy: "organization"}, nil
 		},
 	}
 	svc := NewLLMProviderTemplateService(repo, &noopAuditRepo{}, newTestIdentityService())
 
-	// Enable/disable is reserved for built-in ('wso2') templates; a custom
-	// ('organization') template must be rejected and never touch SetEnabled.
 	_, err := svc.SetVersionEnabled("org-1", "openai", "v2.0", false)
-	if !apperror.LLMProviderTemplateNotToggleable.Is(err) {
-		t.Fatalf("expected ErrLLMProviderTemplateNotToggleable, got: %v", err)
+	if !apperror.LLMProviderTemplateInUse.Is(err) {
+		t.Fatalf("expected ErrLLMProviderTemplateInUse for in-use custom template, got: %v", err)
 	}
-	if repo.setEnabledCalled || repo.countProvidersUsingTemplateCalled {
-		t.Fatalf("did not expect SetEnabled or usage check for a non-toggleable custom template")
+	if repo.setEnabledCalled {
+		t.Fatalf("did not expect SetEnabled to be called while version is in use")
 	}
 }
 
diff --git a/portals/ai-workspace/src/apis/providerTemplateApis.ts b/portals/ai-workspace/src/apis/providerTemplateApis.ts
index 6a74d41d2..125cf4dbb 100644
--- a/portals/ai-workspace/src/apis/providerTemplateApis.ts
+++ b/portals/ai-workspace/src/apis/providerTemplateApis.ts
@@ -88,10 +88,18 @@ export async function createProviderTemplate(
  * console.log(response); // { count: 1, list: [...], pagination: {...} }
  * ```
  */
-export async function getProviderTemplates(baseUrl: string): Promise<ProviderTemplatesResponse> {
+export async function getProviderTemplates(
+  baseUrl: string,
+  latestOnly: boolean = true
+): Promise<ProviderTemplatesResponse> {
   try {
+    // latestOnly=true restricts the response to the is_latest version per
+    // family; false returns every version so callers can group/compare.
+    const query = latestOnly
+      ? `?query=${encodeURIComponent('latest:true')}`
+      : '';
     const response = await get<ProviderTemplatesResponse>(
-      `/llm-provider-templates?query=${encodeURIComponent('latest:true')}`,
+      `/llm-provider-templates${query}`,
       undefined,
       baseUrl
     );
diff --git a/portals/ai-workspace/src/pages/appShell/appShellPages/providerTemplate/ProviderTemplateOverview.tsx b/portals/ai-workspace/src/pages/appShell/appShellPages/providerTemplate/ProviderTemplateOverview.tsx
index 76be6aa08..ffb87dd22 100644
--- a/portals/ai-workspace/src/pages/appShell/appShellPages/providerTemplate/ProviderTemplateOverview.tsx
+++ b/portals/ai-workspace/src/pages/appShell/appShellPages/providerTemplate/ProviderTemplateOverview.tsx
@@ -841,19 +841,19 @@ export default function ProviderTemplateOverview() {
                   />
                 </Button>
               )}
-              {isReadOnly && (
-                <Stack direction="row" spacing={1} alignItems="center">
-                  <Typography variant="body2" color="text.primary">
-                    {isEnabled ? 'Enabled' : 'Disabled'}
-                  </Typography>
-                  <Switch
-                    checked={isEnabled}
-                    disabled={isTogglingEnabled}
-                    onChange={(e) => void handleToggleEnabled(e.target.checked)}
-                    inputProps={{ 'aria-label': 'Enable or disable this version' }}
-                  />
-                </Stack>
-              )}
+              {/* Enable/disable applies to every template — built-in, custom, and
+                  gateway-originated — since it only affects control-plane listing. */}
+              <Stack direction="row" spacing={1} alignItems="center">
+                <Typography variant="body2" color="text.primary">
+                  {isEnabled ? 'Enabled' : 'Disabled'}
+                </Typography>
+                <Switch
+                  checked={isEnabled}
+                  disabled={isTogglingEnabled}
+                  onChange={(e) => void handleToggleEnabled(e.target.checked)}
+                  inputProps={{ 'aria-label': 'Enable or disable this version' }}
+                />
+              </Stack>
               {/* Custom templates can be deleted entirely (all versions). */}
               {canDelete && (
                 <Button
diff --git a/portals/ai-workspace/src/pages/appShell/appShellPages/providerTemplate/ProviderTemplatesList.tsx b/portals/ai-workspace/src/pages/appShell/appShellPages/providerTemplate/ProviderTemplatesList.tsx
index 59a77d76d..7ce3f6690 100644
--- a/portals/ai-workspace/src/pages/appShell/appShellPages/providerTemplate/ProviderTemplatesList.tsx
+++ b/portals/ai-workspace/src/pages/appShell/appShellPages/providerTemplate/ProviderTemplatesList.tsx
@@ -16,7 +16,7 @@
  * under the License.
  */
 
-import React, { useMemo, useState } from 'react';
+import React, { useEffect, useMemo, useState } from 'react';
 import { useNavigate } from 'react-router-dom';
 import {
   Avatar,
@@ -41,8 +41,14 @@ import { useProviderTemplates } from '../../../../contexts/llmProvider/providerT
 import { useAppShell } from '../../../../contexts/AppShellContext';
 import { buildOrgPath } from '../../../../utils/projectRouting';
 import ErrorAlert from '../../../../Components/common/ErrorAlert';
-import { truncateProviderDisplayName } from '../../../../utils/providerTemplateDisplay';
+import {
+  familyHandle,
+  truncateProviderDisplayName,
+} from '../../../../utils/providerTemplateDisplay';
 import type { ProviderTemplate } from '../../../../utils/types';
+import * as providerTemplateApis from '../../../../apis/providerTemplateApis';
+import { PLATFORM_API_BASE_URL } from '../../../../config.env';
+import { logger } from '../../../../utils/logger';
 import AnthropicLogo from '../../../../assets/brands/Anthropic.jpg';
 import AWSBedrockLogo from '../../../../assets/brands/AWSBedrock.webp';
 import AzureLogo from '../../../../assets/brands/Azure.png';
@@ -94,13 +100,82 @@ export default function ProviderTemplatesList({
     useProviderTemplates();
 
   const [searchQuery, setSearchQuery] = useState('');
+  const [allVersions, setAllVersions] = useState<ProviderTemplate[] | null>(
+    null
+  );
+
+  // The shared context fetches latest-only (one is_latest row per family).
+  // This listing must consider every version's enabled flag, so fetch all
+  // versions here. Re-fetched whenever the context refreshes (create/delete/
+  // toggle) so the cards stay in sync.
+  useEffect(() => {
+    let cancelled = false;
+    (async () => {
+      try {
+        const response = await providerTemplateApis.getProviderTemplates(
+          PLATFORM_API_BASE_URL,
+          false
+        );
+        if (!cancelled) setAllVersions(response.list ?? []);
+      } catch (fetchError) {
+        logger.error('Failed to fetch all template versions:', fetchError);
+        if (!cancelled) setAllVersions(null); // fall back to latest-only list
+      }
+    })();
+    return () => {
+      cancelled = true;
+    };
+  }, [templatesResponse]);
+
+  // One card per family: the highest ENABLED version; when every version in
+  // the family is disabled, the highest version overall (rendered with the
+  // existing dimmed "Disabled" styling). Grouping is per (ownership, family)
+  // because creating a version from a built-in clones into the same groupId
+  // with managedBy 'organization' — a family-only key would make the built-in
+  // card vanish from the Built-in section.
+  const familyCards = useMemo(() => {
+    const source = allVersions ?? templatesResponse.list;
+    const parseVersion = (value?: string): [number, number] => {
+      const match = /^v(\d+)\.(\d+)$/.exec((value ?? '').trim());
+      return match ? [Number(match[1]), Number(match[2])] : [-1, -1];
+    };
+    const isHigher = (a: ProviderTemplate, b: ProviderTemplate): boolean => {
+      const [aMajor, aMinor] = parseVersion(a.version);
+      const [bMajor, bMinor] = parseVersion(b.version);
+      return aMajor > bMajor || (aMajor === bMajor && aMinor > bMinor);
+    };
+    const enabledPick = new Map<string, ProviderTemplate>();
+    const anyPick = new Map<string, ProviderTemplate>();
+    for (const template of source) {
+      const ownership =
+        (template.managedBy ?? template.provider) === 'wso2'
+          ? 'wso2'
+          : 'custom';
+      const key = `${ownership}:${
+        template.groupId ?? familyHandle((template.id ?? '').toLowerCase())
+      }`;
+      const currentAny = anyPick.get(key);
+      if (!currentAny || isHigher(template, currentAny)) {
+        anyPick.set(key, template);
+      }
+      if (template.enabled !== false) {
+        const currentEnabled = enabledPick.get(key);
+        if (!currentEnabled || isHigher(template, currentEnabled)) {
+          enabledPick.set(key, template);
+        }
+      }
+    }
+    return Array.from(anyPick.entries()).map(
+      ([key, fallback]) => enabledPick.get(key) ?? fallback
+    );
+  }, [allVersions, templatesResponse.list]);
 
   const templates = useMemo(
     () =>
-      templatesResponse.list.filter(
+      familyCards.filter(
         (template) => (template.managedBy ?? template.provider) !== 'wso2'
       ),
-    [templatesResponse.list]
+    [familyCards]
   );
 
   const templatesBase = buildOrgPath(
@@ -132,10 +207,10 @@ export default function ProviderTemplatesList({
 
   const builtInTemplates = useMemo(
     () =>
-      templatesResponse.list.filter(
+      familyCards.filter(
         (template) => (template.managedBy ?? template.provider) === 'wso2'
       ),
-    [templatesResponse.list]
+    [familyCards]
   );
   const filteredBuiltIn = useMemo(() => {
     const query = searchQuery.trim().toLowerCase();