diff --git a/packages/code-editor/src/CodeEditor/CodeEditor.stories.tsx b/packages/code-editor/src/CodeEditor/CodeEditor.stories.tsx
index 37488ded0b..5455a15ef4 100644
--- a/packages/code-editor/src/CodeEditor/CodeEditor.stories.tsx
+++ b/packages/code-editor/src/CodeEditor/CodeEditor.stories.tsx
@@ -49,7 +49,7 @@ export const XMLEditor: StoryObj<HvCodeEditorProps> = {
     docs: {
       description: {
         story:
-          "XML is one of the languages supported, and it can be enabled by setting the `language` property to `xml`. A XML schema can also be provided through the `xsdSchema` property. By providing a XML schema, the XML written will be validated against the schema showing errors. Providing a schema will also enable the code editor to show suggestions when opening a tag (`<`), writing an attribute, and when clicking on the CTRL and SPACE keys at the same time.",
+          "XML is one of the languages supported, and it can be enabled by setting the `language` property to `xml`. A XML schema can also be provided through the `xsdSchema` property. By providing a XML schema, the XML written will be validated against the schema showing errors. Providing a schema will also enable the code editor to show suggestions when opening a tag (`<`), writing an attribute, and when clicking on the CTRL and SPACE keys at the same time. By default, the XML code editor is formatted automatically. The property `disableAutoFormat` can be set to `true` to disable this behavior. You can also format manually the code using the `hvXmlFormatter` util.",
       },
       source: { code: XmlStoryRaw },
     },
diff --git a/packages/code-editor/src/CodeEditor/CodeEditor.tsx b/packages/code-editor/src/CodeEditor/CodeEditor.tsx
index 59c87f4309..9e5fd9186e 100644
--- a/packages/code-editor/src/CodeEditor/CodeEditor.tsx
+++ b/packages/code-editor/src/CodeEditor/CodeEditor.tsx
@@ -3,7 +3,7 @@ import { Editor, useMonaco, type EditorProps } from "@monaco-editor/react";
 import { useTheme, type ExtractNames } from "@hitachivantara/uikit-react-utils";
 
 import { staticClasses, useClasses } from "./CodeEditor.styles";
-import { languagePlugins } from "./plugins";
+import { Formatter, languagePlugins } from "./plugins";
 
 export { staticClasses as codeEditorClasses };
 
@@ -20,6 +20,12 @@ export interface HvCodeEditorProps extends EditorProps {
   options?: EditorProps["options"];
   /** XSD schema used to validate the code editor content when the language is set to `xml`. */
   xsdSchema?: string;
+  /**
+   * Whether to disable code auto format or not. Code format happens on mount, on blur, and on paste.
+   * Supported languages: `XML`.
+   * Defaults to `false`.
+   */
+  disableAutoFormat?: boolean;
 }
 
 const defaultCodeEditorOptions: EditorProps["options"] = {
@@ -51,6 +57,7 @@ export const HvCodeEditor = ({
   defaultLanguage,
   language: languageProp,
   xsdSchema,
+  disableAutoFormat = false,
   onMount: onMountProp,
   beforeMount: beforeMountProp,
   ...others
@@ -97,24 +104,19 @@ export const HvCodeEditor = ({
     handleActiveThemes();
   }, [handleActiveThemes]);
 
-  const handleFormatCode = () => {
-    // Get language plugin
-    const languagePlugin = language ? languagePlugins[language] : undefined;
-
-    if (!languagePlugin) return;
-
-    const { formatter } = languagePlugin;
-
-    // Format code
-    if (editorRef.current && formatter) {
-      try {
-        const unformattedCode = editorRef.current.getValue();
-        const formattedCode = formatter(unformattedCode);
-        editorRef.current.setValue(formattedCode);
-      } catch (error) {
-        // eslint-disable-next-line no-console
-        if (import.meta.env.DEV) console.error(error);
-      }
+  const handleFormatCode = async (
+    editor: any,
+    monaco: any,
+    formatter: Formatter,
+  ) => {
+    try {
+      const model = editor.getModel();
+      const content = model.getValue();
+      const formattedCode = await formatter(content, editor, monaco);
+      if (formattedCode) editorRef.current.setValue(formattedCode);
+    } catch (error) {
+      // eslint-disable-next-line no-console
+      if (import.meta.env.DEV) console.error(error);
     }
   };
 
@@ -140,6 +142,7 @@ export const HvCodeEditor = ({
       editorOptions,
       keyDownListener,
       validationMarker,
+      formatter,
     } = languagePlugin;
 
     // Update options
@@ -174,9 +177,19 @@ export const HvCodeEditor = ({
     if (keyDownListener)
       editor.onKeyDown((event: any) => keyDownListener(event, editor, monaco));
 
-    // Listen for events to auto format code: on paste and on blur
-    editor.onDidBlurEditorText(() => handleFormatCode());
-    editor.onDidPaste(() => handleFormatCode());
+    // Listen for events to auto format code
+    if (formatter && !disableAutoFormat) {
+      // On mount
+      handleFormatCode(editor, monaco, formatter);
+
+      // On blur
+      editor.onDidBlurEditorText(() =>
+        handleFormatCode(editor, monaco, formatter),
+      );
+
+      // On paste
+      editor.onDidPaste(() => handleFormatCode(editor, monaco, formatter));
+    }
   };
 
   return (
diff --git a/packages/code-editor/src/CodeEditor/index.ts b/packages/code-editor/src/CodeEditor/index.ts
index 6bb8194a87..81af0ec2bf 100644
--- a/packages/code-editor/src/CodeEditor/index.ts
+++ b/packages/code-editor/src/CodeEditor/index.ts
@@ -1 +1,2 @@
 export * from "./CodeEditor";
+export * from "./languages";
diff --git a/packages/code-editor/src/CodeEditor/languages/index.ts b/packages/code-editor/src/CodeEditor/languages/index.ts
new file mode 100644
index 0000000000..8b9b92f8d8
--- /dev/null
+++ b/packages/code-editor/src/CodeEditor/languages/index.ts
@@ -0,0 +1 @@
+export { hvXmlFormatter } from "./xml";
diff --git a/packages/code-editor/src/CodeEditor/languages/xml.ts b/packages/code-editor/src/CodeEditor/languages/xml.ts
index 9040b8c815..279257755e 100644
--- a/packages/code-editor/src/CodeEditor/languages/xml.ts
+++ b/packages/code-editor/src/CodeEditor/languages/xml.ts
@@ -1,5 +1,5 @@
 import { type Monaco } from "@monaco-editor/react";
-import formatter from "xml-formatter";
+import formatter, { XMLFormatterOptions } from "xml-formatter";
 import { validateXML } from "xmllint-wasm";
 
 // Helpful notes
@@ -354,9 +354,31 @@ export const xmlOptions = {
   autoClosingBrackets: false,
 };
 
-/** XML code formatter. */
-export const xmlFormatter = (unformattedCode: string) =>
-  formatter(unformattedCode, {
-    collapseContent: true,
-    forceSelfClosingEmptyTag: true,
-  });
+/**
+ * XML code formatter.
+ * When the code has errors, it is not formatted and `undefined` is returned.
+ * @param content Current code editor content
+ * @param editor Editor instance
+ * @param monaco Monaco instance
+ * @param options XML formatter options
+ * @returns `string with the formatted code or `undefined`
+ */
+export const hvXmlFormatter = async (
+  content: string,
+  editor: any,
+  monaco: Monaco,
+  options?: XMLFormatterOptions,
+) => {
+  const validation = await getXmlValidationMarkers(content, editor, monaco); // without schema for XML
+  const hasError = validation.some(
+    (marker: any) => marker?.severity === monaco.MarkerSeverity.Error,
+  );
+
+  // Format only if there are no errors
+  return hasError
+    ? undefined
+    : formatter(content, {
+        collapseContent: true,
+        ...options,
+      });
+};
diff --git a/packages/code-editor/src/CodeEditor/plugins.ts b/packages/code-editor/src/CodeEditor/plugins.ts
index d971f46658..23749b1aee 100644
--- a/packages/code-editor/src/CodeEditor/plugins.ts
+++ b/packages/code-editor/src/CodeEditor/plugins.ts
@@ -4,7 +4,7 @@ import {
   getXmlCompletionProvider,
   getXmlValidationMarkers,
   handleXmlKeyDown,
-  xmlFormatter,
+  hvXmlFormatter,
   xmlOptions,
 } from "./languages/xml";
 
@@ -19,7 +19,11 @@ type ValidationMarker = (
   schema?: string, // needed for XML language
 ) => Promise<object[]>;
 type KeyDownListener = (event: any, editor: any, monaco: Monaco) => void;
-type Formatter = (unformattedCode: string) => Promise<string> | string;
+export type Formatter = (
+  content: string,
+  editor: any,
+  monaco: Monaco,
+) => Promise<string | undefined>;
 
 interface LanguagePlugin {
   completionProvider?: CompletionProvider;
@@ -35,7 +39,7 @@ const xmlLanguagePlugin = (): LanguagePlugin => {
     validationMarker: getXmlValidationMarkers,
     keyDownListener: handleXmlKeyDown,
     editorOptions: xmlOptions,
-    formatter: xmlFormatter,
+    formatter: hvXmlFormatter,
   };
 };
 
diff --git a/packages/code-editor/src/CodeEditor/stories/Xml/Xml.tsx b/packages/code-editor/src/CodeEditor/stories/Xml/Xml.tsx
index 2e521450a1..a187671b72 100644
--- a/packages/code-editor/src/CodeEditor/stories/Xml/Xml.tsx
+++ b/packages/code-editor/src/CodeEditor/stories/Xml/Xml.tsx
@@ -2,6 +2,7 @@ import { useRef, useState } from "react";
 import {
   HvCodeEditor,
   HvCodeEditorProps,
+  hvXmlFormatter,
 } from "@hitachivantara/uikit-react-code-editor";
 import {
   HvButtonProps,
@@ -9,6 +10,7 @@ import {
   HvDialogContent,
   HvDialogTitle,
   HvTreeView,
+  HvTypography,
 } from "@hitachivantara/uikit-react-core";
 
 // The code for these utils can be found at: https://github.com/lumada-design/hv-uikit-react/tree/master/packages/code-editor/src/CodeEditor/stories/Xml/utils.tsx
@@ -60,11 +62,24 @@ export const XmlStory = () => {
     attributes: Attributes;
   }>();
   const [defaultExpandedKeys, setDefaultExpandedKeys] = useState<string[]>([]);
+  const [hasErrors, setHasErrors] = useState(false);
 
   const editorRef = useRef<any>(null);
+  const monacoRef = useRef<any>(null);
 
-  const handleMount: HvCodeEditorProps["onMount"] = (editor) => {
+  const handleMount: HvCodeEditorProps["onMount"] = (editor, monaco) => {
     editorRef.current = editor;
+    monacoRef.current = monaco;
+
+    // Listen for errors for validation state
+    monaco.editor.onDidChangeMarkers(() => {
+      const model = editor.getModel();
+      const markers = monaco.editor.getModelMarkers({ resource: model.uri });
+      const errors = markers.some(
+        (marker: any) => marker.severity === monaco.MarkerSeverity.Error,
+      );
+      setHasErrors(errors);
+    });
   };
 
   const handleOpenSearch: HvButtonProps["onClick"] = () => {
@@ -81,10 +96,33 @@ export const XmlStory = () => {
     setOpened(true);
   };
 
+  const handleFormat = async () => {
+    try {
+      const content = editorRef.current.getValue();
+      const formattedCode = await hvXmlFormatter(
+        content,
+        editorRef.current,
+        monacoRef.current,
+      );
+      if (formattedCode) editorRef.current.setValue(formattedCode);
+    } catch (error) {
+      // eslint-disable-next-line no-console
+      if (import.meta.env.DEV) console.error(error);
+    }
+  };
+
   return (
     <div>
-      <Header onClickTree={handleClickTree} onClickSearch={handleOpenSearch} />
+      <HvTypography variant="label">
+        Has errors: {String(hasErrors)}
+      </HvTypography>
+      <Header
+        onClickTree={handleClickTree}
+        onClickSearch={handleOpenSearch}
+        onFormat={handleFormat}
+      />
       <HvCodeEditor
+        disableAutoFormat // formatting manually
         height={270}
         language="xml"
         value={editorValue}
diff --git a/packages/code-editor/src/CodeEditor/stories/Xml/utils.tsx b/packages/code-editor/src/CodeEditor/stories/Xml/utils.tsx
index e3afbfa532..1037e336bd 100644
--- a/packages/code-editor/src/CodeEditor/stories/Xml/utils.tsx
+++ b/packages/code-editor/src/CodeEditor/stories/Xml/utils.tsx
@@ -89,9 +89,11 @@ const classes = {
 export const Header = ({
   onClickSearch,
   onClickTree,
+  onFormat,
 }: {
   onClickSearch: HvButtonProps["onClick"];
   onClickTree: HvButtonProps["onClick"];
+  onFormat: HvButtonProps["onClick"];
 }) => (
   <div className={classes.headerRoot}>
     <HvTypography variant="label">XML</HvTypography>
@@ -103,6 +105,9 @@ export const Header = ({
     <HvButton variant="primaryGhost" onClick={onClickTree}>
       XML Tree
     </HvButton>
+    <HvButton variant="primaryGhost" onClick={onFormat}>
+      Format
+    </HvButton>
   </div>
 );