diff --git a/apps/browser/src/auth/popup/account-switching/account.component.html b/apps/browser/src/auth/popup/account-switching/account.component.html
index 90770bb8d9b..35f4477fa1e 100644
--- a/apps/browser/src/auth/popup/account-switching/account.component.html
+++ b/apps/browser/src/auth/popup/account-switching/account.component.html
@@ -5,7 +5,6 @@
       [id]="account.id"
       [text]="account.name"
       [color]="account.avatarColor"
-      size="small"
       aria-hidden="true"
     ></bit-avatar>
 
diff --git a/apps/browser/src/auth/popup/account-switching/current-account.component.html b/apps/browser/src/auth/popup/account-switching/current-account.component.html
index 7ab55f36753..8b3c9aabdda 100644
--- a/apps/browser/src/auth/popup/account-switching/current-account.component.html
+++ b/apps/browser/src/auth/popup/account-switching/current-account.component.html
@@ -10,7 +10,6 @@
       [id]="currentAccount.id"
       [text]="currentAccount.name"
       [color]="currentAccount.avatarColor"
-      size="small"
       aria-hidden="true"
     ></bit-avatar>
   </button>
@@ -24,7 +23,6 @@
       <bit-avatar
         [text]="'&hellip;'"
         [color]="'#6795E8'"
-        size="small"
         aria-hidden="true"
         class="[&>img]:tw-block"
       ></bit-avatar>
diff --git a/apps/web/src/app/admin-console/organizations/members/components/bulk/bulk-confirm-dialog.component.html b/apps/web/src/app/admin-console/organizations/members/components/bulk/bulk-confirm-dialog.component.html
index 28c3db83030..68e434c6cda 100644
--- a/apps/web/src/app/admin-console/organizations/members/components/bulk/bulk-confirm-dialog.component.html
+++ b/apps/web/src/app/admin-console/organizations/members/components/bulk/bulk-confirm-dialog.component.html
@@ -28,7 +28,7 @@
         <ng-template body>
           <tr bitRow *ngFor="let user of filteredUsers" alignContent="middle">
             <td bitCell class="tw-w-5">
-              <bit-avatar [text]="user | userName" [id]="user.id" size="small"></bit-avatar>
+              <bit-avatar [text]="user | userName" [id]="user.id"></bit-avatar>
             </td>
             <td bitCell>
               {{ user.email }}
@@ -40,7 +40,7 @@
           </tr>
           <tr *ngFor="let user of excludedUsers" alignContent="middle">
             <td bitCell class="tw-w-5">
-              <bit-avatar [text]="user | userName" [id]="user.id" size="small"></bit-avatar>
+              <bit-avatar [text]="user | userName" [id]="user.id"></bit-avatar>
             </td>
             <td bitCell>
               {{ user.email }}
@@ -64,7 +64,7 @@
         <ng-template body>
           <tr bitRow *ngFor="let user of filteredUsers" alignContent="middle">
             <td bitCell class="tw-w-5">
-              <bit-avatar [text]="user | userName" [id]="user.id" size="small"></bit-avatar>
+              <bit-avatar [text]="user | userName" [id]="user.id"></bit-avatar>
             </td>
             <td bitCell>
               {{ user.email }}
diff --git a/apps/web/src/app/admin-console/organizations/members/components/bulk/bulk-delete-dialog.component.html b/apps/web/src/app/admin-console/organizations/members/components/bulk/bulk-delete-dialog.component.html
index f666decae81..f08e96a996c 100644
--- a/apps/web/src/app/admin-console/organizations/members/components/bulk/bulk-delete-dialog.component.html
+++ b/apps/web/src/app/admin-console/organizations/members/components/bulk/bulk-delete-dialog.component.html
@@ -19,7 +19,7 @@
         <ng-template body>
           <tr bitRow *ngFor="let user of users">
             <td bitCell class="tw-w-5">
-              <bit-avatar [text]="user | userName" [id]="user.id" size="small"></bit-avatar>
+              <bit-avatar [text]="user | userName" [id]="user.id"></bit-avatar>
             </td>
             <td bitCell>
               <div>
@@ -50,7 +50,7 @@
         <ng-template body>
           <tr bitRow *ngFor="let user of users">
             <td bitCell class="tw-w-5">
-              <bit-avatar [text]="user | userName" [id]="user.id" size="small"></bit-avatar>
+              <bit-avatar [text]="user | userName" [id]="user.id"></bit-avatar>
             </td>
             <td bitCell>
               {{ user.email }}
diff --git a/apps/web/src/app/admin-console/organizations/members/components/bulk/bulk-enable-sm-dialog.component.html b/apps/web/src/app/admin-console/organizations/members/components/bulk/bulk-enable-sm-dialog.component.html
index 4e8b88af20a..7800e275b65 100644
--- a/apps/web/src/app/admin-console/organizations/members/components/bulk/bulk-enable-sm-dialog.component.html
+++ b/apps/web/src/app/admin-console/organizations/members/components/bulk/bulk-enable-sm-dialog.component.html
@@ -14,7 +14,6 @@
           <td bitCell>
             <div class="tw-flex tw-items-center">
               <bit-avatar
-                size="small"
                 [text]="u | userName"
                 [id]="u.userId"
                 [color]="u.avatarColor"
diff --git a/apps/web/src/app/admin-console/organizations/members/components/bulk/bulk-remove-dialog.component.html b/apps/web/src/app/admin-console/organizations/members/components/bulk/bulk-remove-dialog.component.html
index 8727148f4ff..2d1d6c15753 100644
--- a/apps/web/src/app/admin-console/organizations/members/components/bulk/bulk-remove-dialog.component.html
+++ b/apps/web/src/app/admin-console/organizations/members/components/bulk/bulk-remove-dialog.component.html
@@ -23,7 +23,7 @@
         <ng-template body>
           <tr bitRow *ngFor="let user of users">
             <td bitCell class="tw-w-5">
-              <bit-avatar [text]="user | userName" [id]="user.id" size="small"></bit-avatar>
+              <bit-avatar [text]="user | userName" [id]="user.id"></bit-avatar>
             </td>
             <td bitCell>
               {{ user.email }}
@@ -53,7 +53,7 @@
         <ng-template body>
           <tr bitRow *ngFor="let user of users">
             <td bitCell class="tw-w-5">
-              <bit-avatar [text]="user | userName" [id]="user.id" size="small"></bit-avatar>
+              <bit-avatar [text]="user | userName" [id]="user.id"></bit-avatar>
             </td>
             <td bitCell>
               {{ user.email }}
diff --git a/apps/web/src/app/admin-console/organizations/members/components/bulk/bulk-restore-revoke.component.html b/apps/web/src/app/admin-console/organizations/members/components/bulk/bulk-restore-revoke.component.html
index 1b711b366d6..49ba5bd7f49 100644
--- a/apps/web/src/app/admin-console/organizations/members/components/bulk/bulk-restore-revoke.component.html
+++ b/apps/web/src/app/admin-console/organizations/members/components/bulk/bulk-restore-revoke.component.html
@@ -23,7 +23,7 @@
     <ng-template #userDisplay let-user>
       <div class="tw-flex tw-items-center">
         <div class="tw-mr-6">
-          <bit-avatar [text]="user | userName" [id]="user.id" size="small"></bit-avatar>
+          <bit-avatar [text]="user | userName" [id]="user.id"></bit-avatar>
         </div>
         <ng-container *ngIf="user.name; else emailOnly">
           <div class="tw-truncate" [title]="user.name + ' ' + user.email">
diff --git a/apps/web/src/app/admin-console/organizations/members/components/bulk/bulk-status.component.html b/apps/web/src/app/admin-console/organizations/members/components/bulk/bulk-status.component.html
index 0b238c17d2f..3f6e56fcd0c 100644
--- a/apps/web/src/app/admin-console/organizations/members/components/bulk/bulk-status.component.html
+++ b/apps/web/src/app/admin-console/organizations/members/components/bulk/bulk-status.component.html
@@ -14,7 +14,7 @@
       <ng-template body>
         <tr bitRow *ngFor="let item of users">
           <td width="30" bitCell>
-            <bit-avatar [text]="item.user | userName" [id]="item.user.id" size="small"></bit-avatar>
+            <bit-avatar [text]="item.user | userName" [id]="item.user.id"></bit-avatar>
           </td>
           <td bitCell>
             {{ item.user.email }}
diff --git a/apps/web/src/app/admin-console/organizations/members/deprecated_members.component.html b/apps/web/src/app/admin-console/organizations/members/deprecated_members.component.html
index 921004e315d..75732ef716c 100644
--- a/apps/web/src/app/admin-console/organizations/members/deprecated_members.component.html
+++ b/apps/web/src/app/admin-console/organizations/members/deprecated_members.component.html
@@ -207,7 +207,6 @@
                 <td bitCell (click)="edit(u, organization)" class="tw-cursor-pointer">
                   <div class="tw-flex tw-items-center">
                     <bit-avatar
-                      size="small"
                       [text]="u | userName"
                       [id]="u.userId"
                       [color]="u.avatarColor"
@@ -254,7 +253,6 @@
                 <td bitCell>
                   <div class="tw-flex tw-items-center">
                     <bit-avatar
-                      size="small"
                       [text]="u | userName"
                       [id]="u.userId"
                       [color]="u.avatarColor"
diff --git a/apps/web/src/app/admin-console/organizations/members/members.component.html b/apps/web/src/app/admin-console/organizations/members/members.component.html
index 074e9c38f6e..a9b46e60f0c 100644
--- a/apps/web/src/app/admin-console/organizations/members/members.component.html
+++ b/apps/web/src/app/admin-console/organizations/members/members.component.html
@@ -228,7 +228,6 @@
                 <td bitCell (click)="edit(u, organization)" class="tw-cursor-pointer">
                   <div class="tw-flex tw-items-center">
                     <bit-avatar
-                      size="small"
                       [text]="u | userName"
                       [id]="u.userId"
                       [color]="u.avatarColor"
@@ -267,7 +266,6 @@
                 <td bitCell>
                   <div class="tw-flex tw-items-center">
                     <bit-avatar
-                      size="small"
                       [text]="u | userName"
                       [id]="u.userId"
                       [color]="u.avatarColor"
diff --git a/apps/web/src/app/admin-console/organizations/settings/account.component.html b/apps/web/src/app/admin-console/organizations/settings/account.component.html
index 943454781db..ae4bd73c737 100644
--- a/apps/web/src/app/admin-console/organizations/settings/account.component.html
+++ b/apps/web/src/app/admin-console/organizations/settings/account.component.html
@@ -21,7 +21,7 @@
         </bit-form-field>
       </div>
       <div>
-        <bit-avatar [text]="org.name" [id]="org.id" size="large"></bit-avatar>
+        <bit-avatar [text]="org.name" [id]="org.id" size="2xlarge"></bit-avatar>
         <app-account-fingerprint
           [fingerprintMaterial]="organizationId"
           [publicKeyBuffer]="publicKeyBuffer"
diff --git a/apps/web/src/app/auth/settings/account/change-avatar-dialog.component.html b/apps/web/src/app/auth/settings/account/change-avatar-dialog.component.html
index 7e8b69a0c48..08b4851899d 100644
--- a/apps/web/src/app/auth/settings/account/change-avatar-dialog.component.html
+++ b/apps/web/src/app/auth/settings/account/change-avatar-dialog.component.html
@@ -14,7 +14,6 @@
           [title]="c.name"
           text="{{ profile | userName }}"
           [color]="c.color"
-          [border]="true"
         >
         </selectable-avatar>
       </ng-container>
@@ -28,7 +27,7 @@
             '!tw-outline-[3px] tw-outline-primary-600 hover:tw-outline-[3px] hover:tw-outline-primary-600':
               customColorSelected,
           }"
-          class="tw-relative tw-flex tw-size-24 tw-cursor-pointer tw-place-content-center tw-rounded-full tw-border tw-border-solid tw-border-secondary-600 tw-outline tw-outline-0 tw-outline-offset-1 hover:tw-outline-1 hover:tw-outline-primary-300 focus:tw-outline-2 focus:tw-outline-primary-600"
+          class="tw-relative tw-flex tw-size-16 tw-cursor-pointer tw-place-content-center tw-rounded-full tw-border tw-border-solid tw-border-secondary-600 tw-outline tw-outline-0 tw-outline-offset-1 hover:tw-outline-1 hover:tw-outline-primary-300 focus:tw-outline-2 focus:tw-outline-primary-600"
           [style.background-color]="customColor$ | async"
         >
           <i
diff --git a/apps/web/src/app/auth/settings/account/change-avatar-dialog.component.ts b/apps/web/src/app/auth/settings/account/change-avatar-dialog.component.ts
index 6e6fac1404e..d41a2367e01 100644
--- a/apps/web/src/app/auth/settings/account/change-avatar-dialog.component.ts
+++ b/apps/web/src/app/auth/settings/account/change-avatar-dialog.component.ts
@@ -47,6 +47,8 @@ export class ChangeAvatarDialogComponent implements OnInit, OnDestroy {
   @ViewChild("colorPicker") colorPickerElement: ElementRef<HTMLElement>;
 
   loading = false;
+
+  // change palette to new colors
   defaultColorPalette: NamedAvatarColor[] = [
     { name: "brightBlue", color: "#16cbfc" },
     { name: "green", color: "#94cc4b" },
@@ -102,6 +104,7 @@ export class ChangeAvatarDialogComponent implements OnInit, OnDestroy {
     this.setSelection(this.customColor$.value);
   }
 
+  // does this get used anywhere?
   async generateAvatarColor() {
     Utils.stringToColor(this.profile.name.toString());
   }
diff --git a/apps/web/src/app/auth/settings/account/profile.component.html b/apps/web/src/app/auth/settings/account/profile.component.html
index b3972925598..8ef79f59851 100644
--- a/apps/web/src/app/auth/settings/account/profile.component.html
+++ b/apps/web/src/app/auth/settings/account/profile.component.html
@@ -20,7 +20,7 @@
     </div>
     <div class="tw-col-span-12 @3xl:tw-col-span-6 tw-row-start-1 @3xl:tw-row-start-auto">
       <div class="tw-mb-3 tw-flex tw-align-middle tw-items-center">
-        <dynamic-avatar text="{{ profile | userName }}" [id]="profile.id" size="large">
+        <dynamic-avatar text="{{ profile | userName }}" [id]="profile.id" size="2xlarge">
         </dynamic-avatar>
         <button
           class="tw-ml-3"
diff --git a/apps/web/src/app/auth/settings/account/selectable-avatar.component.ts b/apps/web/src/app/auth/settings/account/selectable-avatar.component.ts
index b74cf8beb59..27fe5b3ee9e 100644
--- a/apps/web/src/app/auth/settings/account/selectable-avatar.component.ts
+++ b/apps/web/src/app/auth/settings/account/selectable-avatar.component.ts
@@ -19,12 +19,10 @@ import { AvatarModule } from "@bitwarden/components";
     <bit-avatar
       appStopClick
       [text]="text"
-      size="xlarge"
+      size="2xlarge"
       [text]="text"
       [color]="color"
-      [border]="false"
       [id]="id"
-      [border]="border"
       [title]="title"
     >
     </bit-avatar>
@@ -46,9 +44,6 @@ export class SelectableAvatarComponent {
   @Input() color: string;
   // FIXME(https://bitwarden.atlassian.net/browse/CL-903): Migrate to Signals
   // eslint-disable-next-line @angular-eslint/prefer-signals
-  @Input() border = false;
-  // FIXME(https://bitwarden.atlassian.net/browse/CL-903): Migrate to Signals
-  // eslint-disable-next-line @angular-eslint/prefer-signals
   @Input() selected = false;
   // FIXME(https://bitwarden.atlassian.net/browse/CL-903): Migrate to Signals
   // eslint-disable-next-line @angular-eslint/prefer-output-emitter-ref
diff --git a/apps/web/src/app/auth/settings/emergency-access/emergency-access.component.html b/apps/web/src/app/auth/settings/emergency-access/emergency-access.component.html
index 70165a94fc3..4f3d58608e2 100644
--- a/apps/web/src/app/auth/settings/emergency-access/emergency-access.component.html
+++ b/apps/web/src/app/auth/settings/emergency-access/emergency-access.component.html
@@ -50,7 +50,6 @@
               [text]="c | userName"
               [id]="c.granteeId"
               [color]="c.avatarColor"
-              size="small"
             ></bit-avatar>
             <span class="tw-inline-flex tw-gap-2">
               <a bitLink href="#" appStopClick (click)="edit(c)">{{ c.email }}</a>
@@ -173,7 +172,6 @@
               [text]="c | userName"
               [id]="c.grantorId"
               [color]="c.avatarColor"
-              size="small"
             ></bit-avatar>
             <span class="tw-inline-flex tw-gap-2">
               <span>{{ c.email }}</span>
diff --git a/apps/web/src/app/components/dynamic-avatar.component.ts b/apps/web/src/app/components/dynamic-avatar.component.ts
index ddaaa21758b..01bc9540daf 100644
--- a/apps/web/src/app/components/dynamic-avatar.component.ts
+++ b/apps/web/src/app/components/dynamic-avatar.component.ts
@@ -4,10 +4,10 @@ import { Component, Input, OnDestroy } from "@angular/core";
 import { Subject } from "rxjs";
 
 import { AvatarService } from "@bitwarden/common/auth/abstractions/avatar.service";
+import { AvatarSizes } from "@bitwarden/components";
 
 import { SharedModule } from "../shared";
 
-type SizeTypes = "xlarge" | "large" | "default" | "small" | "xsmall";
 // FIXME(https://bitwarden.atlassian.net/browse/CL-764): Migrate to OnPush
 // eslint-disable-next-line @angular-eslint/prefer-on-push-component-change-detection
 @Component({
@@ -19,7 +19,6 @@ type SizeTypes = "xlarge" | "large" | "default" | "small" | "xsmall";
       [text]="text"
       [size]="size"
       [color]="color$ | async"
-      [border]="border"
       [id]="id"
       [title]="title"
     >
@@ -27,9 +26,6 @@ type SizeTypes = "xlarge" | "large" | "default" | "small" | "xsmall";
   </span>`,
 })
 export class DynamicAvatarComponent implements OnDestroy {
-  // FIXME(https://bitwarden.atlassian.net/browse/CL-903): Migrate to Signals
-  // eslint-disable-next-line @angular-eslint/prefer-signals
-  @Input() border = false;
   // FIXME(https://bitwarden.atlassian.net/browse/CL-903): Migrate to Signals
   // eslint-disable-next-line @angular-eslint/prefer-signals
   @Input() id: string;
@@ -41,7 +37,7 @@ export class DynamicAvatarComponent implements OnDestroy {
   @Input() title: string;
   // FIXME(https://bitwarden.atlassian.net/browse/CL-903): Migrate to Signals
   // eslint-disable-next-line @angular-eslint/prefer-signals
-  @Input() size: SizeTypes = "default";
+  @Input() size: AvatarSizes = "base";
   private destroy$ = new Subject<void>();
 
   color$ = this.avatarService.avatarColor$;
diff --git a/bitwarden_license/bit-web/src/app/admin-console/providers/clients/add-existing-organization-dialog.component.html b/bitwarden_license/bit-web/src/app/admin-console/providers/clients/add-existing-organization-dialog.component.html
index a22484ed92d..344e0661095 100644
--- a/bitwarden_license/bit-web/src/app/admin-console/providers/clients/add-existing-organization-dialog.component.html
+++ b/bitwarden_license/bit-web/src/app/admin-console/providers/clients/add-existing-organization-dialog.component.html
@@ -19,7 +19,7 @@
             [ngClass]="{ 'tw-text-muted': addable.disabled }"
           >
             <td bitCell class="tw-w-8">
-              <bit-avatar [text]="addable.name" [id]="addable.id" size="small"></bit-avatar>
+              <bit-avatar [text]="addable.name" [id]="addable.id"></bit-avatar>
             </td>
             <td bitCell>
               {{ addable.name }}
diff --git a/bitwarden_license/bit-web/src/app/admin-console/providers/clients/manage-clients.component.html b/bitwarden_license/bit-web/src/app/admin-console/providers/clients/manage-clients.component.html
index ce89b3c068d..c51b1bbdb57 100644
--- a/bitwarden_license/bit-web/src/app/admin-console/providers/clients/manage-clients.component.html
+++ b/bitwarden_license/bit-web/src/app/admin-console/providers/clients/manage-clients.component.html
@@ -61,7 +61,7 @@
     </ng-container>
     <ng-template bitRowDef let-row>
       <td bitCell width="30">
-        <bit-avatar [text]="row.organizationName" [id]="row.id" size="small"></bit-avatar>
+        <bit-avatar [text]="row.organizationName" [id]="row.id"></bit-avatar>
       </td>
       <td bitCell width="325">
         <div class="tw-flex tw-items-center tw-gap-4 tw-break-all">
diff --git a/bitwarden_license/bit-web/src/app/admin-console/providers/manage/deprecated_members.component.html b/bitwarden_license/bit-web/src/app/admin-console/providers/manage/deprecated_members.component.html
index e0b29dffeb8..ca98bfc7ca6 100644
--- a/bitwarden_license/bit-web/src/app/admin-console/providers/manage/deprecated_members.component.html
+++ b/bitwarden_license/bit-web/src/app/admin-console/providers/manage/deprecated_members.component.html
@@ -125,7 +125,6 @@
             <td bitCell (click)="edit(user)" class="tw-cursor-pointer">
               <div class="tw-flex tw-items-center">
                 <bit-avatar
-                  size="small"
                   [text]="user | userName"
                   [id]="user.userId"
                   [color]="user.avatarColor"
diff --git a/bitwarden_license/bit-web/src/app/admin-console/providers/manage/members.component.html b/bitwarden_license/bit-web/src/app/admin-console/providers/manage/members.component.html
index 143693ed1d7..428929866ed 100644
--- a/bitwarden_license/bit-web/src/app/admin-console/providers/manage/members.component.html
+++ b/bitwarden_license/bit-web/src/app/admin-console/providers/manage/members.component.html
@@ -134,7 +134,6 @@
             <td bitCell (click)="edit(providerId, user)" class="tw-cursor-pointer">
               <div class="tw-flex tw-items-center">
                 <bit-avatar
-                  size="small"
                   [text]="user | userName"
                   [id]="user.userId"
                   [color]="user.avatarColor"
diff --git a/bitwarden_license/bit-web/src/app/admin-console/providers/providers.component.html b/bitwarden_license/bit-web/src/app/admin-console/providers/providers.component.html
index eec6f713903..8f299162439 100644
--- a/bitwarden_license/bit-web/src/app/admin-console/providers/providers.component.html
+++ b/bitwarden_license/bit-web/src/app/admin-console/providers/providers.component.html
@@ -11,7 +11,7 @@
       <ng-template body>
         <tr bitRow *ngFor="let p of providers">
           <td bitCell class="tw-w-1">
-            <bit-avatar [text]="p.name" [id]="p.id" size="small"></bit-avatar>
+            <bit-avatar [text]="p.name" [id]="p.id"></bit-avatar>
           </td>
           <td bitCell>
             <a href="#" [routerLink]="['/providers', p.id]">{{ p.name }}</a>
diff --git a/bitwarden_license/bit-web/src/app/admin-console/providers/settings/account.component.html b/bitwarden_license/bit-web/src/app/admin-console/providers/settings/account.component.html
index b6794b2987f..d5cab5c57e4 100644
--- a/bitwarden_license/bit-web/src/app/admin-console/providers/settings/account.component.html
+++ b/bitwarden_license/bit-web/src/app/admin-console/providers/settings/account.component.html
@@ -26,7 +26,7 @@
         </bit-form-field>
       </div>
       <div class="tw-col-span-6">
-        <bit-avatar [text]="provider.name" [id]="provider.id" size="large"></bit-avatar>
+        <bit-avatar [text]="provider.name" [id]="provider.id" size="2xlarge"></bit-avatar> // aaa
       </div>
     </div>
     <button type="submit" bitFormButton bitButton buttonType="primary">
diff --git a/bitwarden_license/bit-web/src/app/dirt/reports/member-access-report/member-access-report.component.html b/bitwarden_license/bit-web/src/app/dirt/reports/member-access-report/member-access-report.component.html
index 0200e206327..9a4f012fea5 100644
--- a/bitwarden_license/bit-web/src/app/dirt/reports/member-access-report/member-access-report.component.html
+++ b/bitwarden_license/bit-web/src/app/dirt/reports/member-access-report/member-access-report.component.html
@@ -44,7 +44,7 @@
   <ng-template bitRowDef let-row>
     <td bitCell>
       <div class="tw-flex tw-items-center">
-        <bit-avatar size="small" [text]="row.name" class="tw-mr-3"></bit-avatar>
+        <bit-avatar [text]="row.name" class="tw-mr-3"></bit-avatar>
         <div class="tw-flex tw-flex-col">
           <button type="button" bitLink (click)="edit(row)">
             {{ row.name }}
diff --git a/libs/components/src/avatar/avatar.component.html b/libs/components/src/avatar/avatar.component.html
new file mode 100644
index 00000000000..2bcb4c3956c
--- /dev/null
+++ b/libs/components/src/avatar/avatar.component.html
@@ -0,0 +1,24 @@
+<span [title]="title() || text()">
+  <svg
+    xmlns="http://www.w3.org/2000/svg"
+    pointer-events="none"
+    [style.backgroundColor]="customBackgroundColor()"
+    [class]="svgClass()"
+    attr.viewBox="0 0 {{ svgSize }} {{ svgSize }}"
+  >
+    <text
+      text-anchor="middle"
+      y="50%"
+      x="50%"
+      dy="0.35em"
+      pointer-events="auto"
+      [attr.fill]="textColor()"
+      [style.fontWeight]="svgFontWeight"
+      [style.fontSize.px]="svgFontSize"
+      [style.lineHeight.px]="16"
+      font-family='Inter,"Helvetica Neue",Helvetica,Arial,sans-serif,"Apple Color Emoji","Segoe UI Emoji","Segoe UI Symbol"'
+    >
+      {{ displayChars() }}
+    </text>
+  </svg>
+</span>
diff --git a/libs/components/src/avatar/avatar.component.ts b/libs/components/src/avatar/avatar.component.ts
index f50807dd506..090f7165014 100644
--- a/libs/components/src/avatar/avatar.component.ts
+++ b/libs/components/src/avatar/avatar.component.ts
@@ -1,73 +1,92 @@
 import { NgClass } from "@angular/common";
-import { ChangeDetectionStrategy, Component, computed, input } from "@angular/core";
+import {
+  ChangeDetectionStrategy,
+  Component,
+  computed,
+  ElementRef,
+  inject,
+  input,
+} from "@angular/core";
 
 import { Utils } from "@bitwarden/common/platform/misc/utils";
 
-type SizeTypes = "xlarge" | "large" | "default" | "small" | "xsmall";
+export type AvatarSizes = "2xlarge" | "xlarge" | "large" | "base" | "small";
 
-const SizeClasses: Record<SizeTypes, string[]> = {
-  xlarge: ["tw-h-24", "tw-w-24", "tw-min-w-24"],
-  large: ["tw-h-16", "tw-w-16", "tw-min-w-16"],
-  default: ["tw-h-10", "tw-w-10", "tw-min-w-10"],
-  small: ["tw-h-7", "tw-w-7", "tw-min-w-7"],
-  xsmall: ["tw-h-6", "tw-w-6", "tw-min-w-6"],
+export type AvatarColors = "teal" | "coral" | "brand" | "green" | "purple";
+
+const SizeClasses: Record<AvatarSizes, string[]> = {
+  "2xlarge": ["tw-h-16", "tw-w-16", "tw-min-w-16"],
+  xlarge: ["tw-h-14", "tw-w-14", "tw-min-w-14"],
+  large: ["tw-h-11", "tw-w-11", "tw-min-w-11"],
+  base: ["tw-h-8", "tw-w-8", "tw-min-w-8"],
+  small: ["tw-h-6", "tw-w-6", "tw-min-w-6"],
 };
 
 /**
- * Avatars display a unique color that helps a user visually recognize their logged in account.
+ * Palette avatar color options. Prefer using these over custom colors. These are chosen for
+ * cohesion with the rest of our Bitwarden color palette and for accessibility color contrast.
+ * We reference color variables defined in tw-theme.css to ensure the avatar color handles light and
+ * dark mode.
+ */
+export const DefaultAvatarColors: Record<AvatarColors, string> = {
+  teal: "tw-bg-bg-avatar-teal",
+  coral: "tw-bg-bg-avatar-coral",
+  brand: "tw-bg-bg-avatar-brand",
+  green: "tw-bg-bg-avatar-green",
+  purple: "tw-bg-bg-avatar-purple",
+};
+
+/**
+ * Hover colors for each default avatar color, for use when the avatar is interactive. We reference
+ * color variables defined in tw-theme.css to ensure the avatar color handles light and
+ * dark mode.
+ */
+const DefaultAvatarHoverColors: Record<AvatarColors, string> = {
+  teal: "group-hover/avatar:tw-bg-bg-avatar-teal-hover",
+  coral: "group-hover/avatar:tw-bg-bg-avatar-coral-hover",
+  brand: "group-hover/avatar:tw-bg-bg-avatar-brand-hover",
+  green: "group-hover/avatar:tw-bg-bg-avatar-green-hover",
+  purple: "group-hover/avatar:tw-bg-bg-avatar-purple-hover",
+};
+
+/**
+ * Avatars display a background color that helps a user visually recognize their logged in account.
  *
- * A variance in color across the avatar component is important as it is used in Account Switching as a
- * visual indicator to recognize which of a personal or work account a user is logged into.
+ * Color options include a pre-defined set of palette-approved colors, or users can select a
+ * custom color. A variance in color across the avatar component is important as it is used in
+ * Account Switching as a visual indicator to recognize which of a personal or work account a user
+ * is logged into.
+ *
+ * Avatars can be static or interactive.
  */
 @Component({
-  selector: "bit-avatar",
-  template: `
-    <span [title]="title() || text()">
-      <svg
-        xmlns="http://www.w3.org/2000/svg"
-        pointer-events="none"
-        [style.backgroundColor]="backgroundColor()"
-        [ngClass]="classList()"
-        attr.viewBox="0 0 {{ svgSize }} {{ svgSize }}"
-      >
-        <text
-          text-anchor="middle"
-          y="50%"
-          x="50%"
-          dy="0.35em"
-          pointer-events="auto"
-          [attr.fill]="textColor()"
-          [style.fontWeight]="svgFontWeight"
-          [style.fontSize.px]="svgFontSize"
-          font-family='Inter,"Helvetica Neue",Helvetica,Arial,sans-serif,"Apple Color Emoji","Segoe UI Emoji","Segoe UI Symbol"'
-        >
-          {{ displayChars() }}
-        </text>
-      </svg>
-    </span>
-  `,
+  selector: "bit-avatar, button[bit-avatar], a[bit-avatar]",
+  templateUrl: "avatar.component.html",
   imports: [NgClass],
   changeDetection: ChangeDetectionStrategy.OnPush,
+  host: {
+    class: "tw-group/avatar",
+  },
+  // host directive for aria disabled states? check figma for disabled styles
 })
 export class AvatarComponent {
+  private el = inject(ElementRef);
   /**
-   * Whether to display a border around the avatar.
+   * Background color for the avatar. Provide one of the AvatarColors, or a custom hex code.
+   *
+   * If no color is provided, a color will be generated based on the id or text.
    */
-  readonly border = input(false);
+  readonly color = input<AvatarColors | string>();
 
   /**
-   * Custom background color for the avatar. If not provided, a color will be generated based on the id or text.
-   */
-  readonly color = input<string>();
-
-  /**
-   * Unique identifier used to generate a consistent background color. Takes precedence over text for color generation.
+   * Unique identifier used to generate a consistent background color. Takes precedence over text
+   * for color generation when a color is not provided.
    */
   readonly id = input<string>();
 
   /**
    * Text to display in the avatar. The first letters of words (up to 2 characters) will be shown.
-   * Also used to generate background color if id is not provided.
+   * Also used to generate background color if color and id are not provided.
    */
   readonly text = input<string>();
 
@@ -79,36 +98,67 @@ export class AvatarComponent {
   /**
    * Size of the avatar.
    */
-  readonly size = input<SizeTypes>("default");
+  readonly size = input<AvatarSizes>("base");
 
   protected readonly svgCharCount = 2;
-  protected readonly svgFontSize = 20;
-  protected readonly svgFontWeight = 300;
-  protected readonly svgSize = 48;
+  protected readonly svgFontSize = 12;
+  protected readonly svgFontWeight = 400;
+  protected readonly svgSize = 32;
 
-  protected readonly classList = computed(() => {
-    return ["tw-rounded-full"]
+  protected readonly svgClass = computed(() => {
+    return ["tw-rounded-full", "tw-border-solid", this.backgroundColorClass()]
       .concat(SizeClasses[this.size()] ?? [])
-      .concat(this.border() ? ["tw-border", "tw-border-solid", "tw-border-secondary-600"] : []);
+      .concat(this.hasHoverEffects() ? this.interactiveSvgClasses() : []);
   });
 
-  protected readonly backgroundColor = computed(() => {
-    const id = this.id();
-    const upperCaseText = this.text()?.toUpperCase() ?? "";
+  protected readonly hasHoverEffects = computed(() => {
+    return this.el.nativeElement.nodeName === "BUTTON" || this.el.nativeElement.nodeName === "A";
+  });
 
-    if (!Utils.isNullOrWhitespace(this.color())) {
+  protected readonly usingCustomColor = computed(() => {
+    if (Utils.isNullOrWhitespace(this.color())) {
+      return false;
+    }
+
+    const defaultColorKeys = Object.keys(DefaultAvatarColors) as AvatarColors[];
+    return !defaultColorKeys.includes(this.color() as AvatarColors);
+  });
+
+  protected readonly customBackgroundColor = computed(() => {
+    if (this.usingCustomColor()) {
       return this.color()!;
     }
 
-    if (!Utils.isNullOrWhitespace(id)) {
-      return Utils.stringToColor(id!.toString());
+    return undefined;
+  });
+
+  protected readonly backgroundColorClass = computed(() => {
+    if (!this.usingCustomColor()) {
+      return DefaultAvatarColors[(this.color() as AvatarColors) ?? this.avatarDefaultColorKey()];
     }
 
-    return Utils.stringToColor(upperCaseText);
+    return "";
+  });
+
+  protected readonly interactiveSvgClasses = computed(() => {
+    if (!this.usingCustomColor()) {
+      return [
+        DefaultAvatarHoverColors[(this.color() as AvatarColors) ?? this.avatarDefaultColorKey()],
+      ];
+    }
+
+    // awaiting design choice for custom color hover state
+    return "";
   });
 
   protected readonly textColor = computed(() => {
-    return Utils.pickTextColorBasedOnBgColor(this.backgroundColor(), 135, true);
+    const customBg = this.customBackgroundColor();
+
+    if (customBg) {
+      return Utils.pickTextColorBasedOnBgColor(customBg, 135, true);
+    } else {
+      return "white";
+    }
   });
 
   protected readonly displayChars = computed(() => {
@@ -144,4 +194,25 @@ export class AvatarComponent {
     const characters = str.match(/./gu);
     return characters != null ? characters.slice(0, count).join("") : "";
   }
+
+  readonly avatarDefaultColorKey = computed(() => {
+    let magicString = "";
+    const id = this.id();
+
+    if (!Utils.isNullOrWhitespace(id)) {
+      magicString = id!.toString();
+    } else {
+      magicString = this.text()?.toUpperCase() ?? "";
+    }
+
+    const colorKeys = Object.keys(DefaultAvatarColors) as AvatarColors[];
+
+    let hash = 0;
+    for (let i = 0; i < magicString.length; i++) {
+      hash = magicString.charCodeAt(i) + ((hash << 5) - hash);
+    }
+
+    const index = Math.abs(hash) % colorKeys.length;
+    return colorKeys[index];
+  });
 }
diff --git a/libs/components/src/avatar/avatar.mdx b/libs/components/src/avatar/avatar.mdx
index 96db771889f..3807cce0cfe 100644
--- a/libs/components/src/avatar/avatar.mdx
+++ b/libs/components/src/avatar/avatar.mdx
@@ -16,15 +16,23 @@ import { AvatarModule } from "@bitwarden/components";
 
 ## Size
 
-### Large: 64px
+### 2XLarge
+
+<Canvas of={stories.XXLarge} />
+
+### XLarge
+
+<Canvas of={stories.XLarge} />
+
+### Large
 
 <Canvas of={stories.Large} />
 
-### Default: 48px
+### Base
 
 <Canvas of={stories.Default} />
 
-### Small 28px
+### Small
 
 <Canvas of={stories.Small} />
 
@@ -41,14 +49,6 @@ priority:
 Use the user 'ID' field if `Name` is not defined.
 <Canvas of={stories.ColorByID} />
 
-## Outline
-
-If the avatar is displayed on one of the theme's `background` color variables or is interactive,
-display the avatar with a 1 pixel `secondary-600` border to meet WCAG AA graphic contrast guidelines
-for interactive elements.
-
-<Canvas of={stories.Border} />
-
 ## Avatar as a button
 
 The Avatar can be used as a button.
@@ -63,5 +63,4 @@ When the avatar is used as a button, the following states should be used:
 
 ## Accessibility
 
-Avatar background color should have 3.1:1 contrast with it’s background; or include the
-`secondary-600` border Avatar text should have 4.5:1 contrast with the avatar background color
+Avatar background color should have 3.1:1 contrast with its background.
diff --git a/libs/components/src/avatar/avatar.stories.ts b/libs/components/src/avatar/avatar.stories.ts
index 9b0d4e4aa8c..f23a28e17f7 100644
--- a/libs/components/src/avatar/avatar.stories.ts
+++ b/libs/components/src/avatar/avatar.stories.ts
@@ -10,7 +10,7 @@ export default {
   args: {
     id: undefined,
     text: "Walt Walterson",
-    size: "default",
+    size: "base",
   },
   parameters: {
     design: {
@@ -32,7 +32,21 @@ export const Default: Story = {
     };
   },
   args: {
-    color: "#175ddc",
+    color: "brand",
+  },
+};
+
+export const XXLarge: Story = {
+  ...Default,
+  args: {
+    size: "2xlarge",
+  },
+};
+
+export const XLarge: Story = {
+  ...Default,
+  args: {
+    size: "xlarge",
   },
 };
 
@@ -50,20 +64,6 @@ export const Small: Story = {
   },
 };
 
-export const LightBackground: Story = {
-  ...Default,
-  args: {
-    color: "#d2ffcf",
-  },
-};
-
-export const Border: Story = {
-  ...Default,
-  args: {
-    border: true,
-  },
-};
-
 export const ColorByID: Story = {
   ...Default,
   args: {
@@ -77,3 +77,40 @@ export const ColorByText: Story = {
     text: "Jason Doe",
   },
 };
+
+export const CustomColor: Story = {
+  ...Default,
+  args: {
+    color: "#fbd9ff",
+  },
+};
+
+export const Button: Story = {
+  render: (args) => {
+    return {
+      props: args,
+      template: `
+        <button bit-avatar ${formatArgsForCodeSnippet<AvatarComponent>(args)}></button>
+      `,
+    };
+  },
+  args: {
+    color: "brand",
+  },
+};
+
+// color by text or id button story?
+
+export const CustomColorButton: Story = {
+  render: (args) => {
+    return {
+      props: args,
+      template: `
+        <button bit-avatar ${formatArgsForCodeSnippet<AvatarComponent>(args)}></button>
+      `,
+    };
+  },
+  args: {
+    color: "#fbd9ff",
+  },
+};
diff --git a/libs/components/src/tw-theme.css b/libs/components/src/tw-theme.css
index 757859985d6..671f1f17e9a 100644
--- a/libs/components/src/tw-theme.css
+++ b/libs/components/src/tw-theme.css
@@ -312,6 +312,18 @@
   --color-bg-accent-tertiary-medium: var(--color-purple-100);
   --color-bg-accent-tertiary: var(--color-purple-600);
 
+  /* Avatar Background */
+  --color-bg-avatar-teal: var(--color-teal-700);
+  --color-bg-avatar-teal-hover: var(--color-teal-800);
+  --color-bg-avatar-coral: var(--color-coral-700);
+  --color-bg-avatar-coral-hover: var(--color-coral-800);
+  --color-bg-avatar-brand: var(--color-brand-700);
+  --color-bg-avatar-brand-hover: var(--color-brand-800);
+  --color-bg-avatar-green: var(--color-green-700);
+  --color-bg-avatar-green-hover: var(--color-green-800);
+  --color-bg-avatar-purple: var(--color-purple-700);
+  --color-bg-avatar-purple-hover: var(--color-purple-800);
+
   /* Hover & Overlay */
   --color-bg-hover: rgba(var(--color-gray-950-rgb), 0.05);
   --color-bg-overlay: rgba(var(--color-gray-950-rgb), 0.3);
@@ -502,6 +514,18 @@
   --color-bg-accent-tertiary-medium: var(--color-purple-900);
   --color-bg-accent-tertiary: var(--color-purple-600);
 
+  /* Avatar Background */
+  --color-bg-avatar-teal: var(--color-teal-700);
+  --color-bg-avatar-teal-hover: var(--color-teal-600);
+  --color-bg-avatar-coral: var(--color-coral-700);
+  --color-bg-avatar-coral-hover: var(--color-coral-600);
+  --color-bg-avatar-brand: var(--color-brand-700);
+  --color-bg-avatar-brand-hover: var(--color-brand-600);
+  --color-bg-avatar-green: var(--color-green-700);
+  --color-bg-avatar-green-hover: var(--color-green-600);
+  --color-bg-avatar-purple: var(--color-purple-700);
+  --color-bg-avatar-purple-hover: var(--color-purple-600);
+
   /* Hover & Overlay */
   --color-bg-hover: rgba(var(--color-white-rgb), 0.05);
   --color-bg-overlay: rgba(var(--color-gray-950-rgb), 0.85);
diff --git a/libs/components/tailwind.config.base.js b/libs/components/tailwind.config.base.js
index bd88f5471ff..bbbf2f5defc 100644
--- a/libs/components/tailwind.config.base.js
+++ b/libs/components/tailwind.config.base.js
@@ -115,6 +115,16 @@ module.exports = {
         "accent-tertiary-soft": "var(--color-bg-accent-tertiary-soft)",
         "accent-tertiary-medium": "var(--color-bg-accent-tertiary-medium)",
         "accent-tertiary": "var(--color-bg-accent-tertiary)",
+        "avatar-teal": "var(--color-bg-avatar-teal)",
+        "avatar-teal-hover": "var(--color-bg-avatar-teal-hover)",
+        "avatar-coral": "var(--color-bg-avatar-coral)",
+        "avatar-coral-hover": "var(--color-bg-avatar-coral-hover)",
+        "avatar-brand": "var(--color-bg-avatar-brand)",
+        "avatar-brand-hover": "var(--color-bg-avatar-brand-hover)",
+        "avatar-green": "var(--color-bg-avatar-green)",
+        "avatar-green-hover": "var(--color-bg-avatar-green-hover)",
+        "avatar-purple": "var(--color-bg-avatar-purple)",
+        "avatar-purple-hover": "var(--color-bg-avatar-purple-hover)",
         hover: "var(--color-bg-hover)",
         overlay: "var(--color-bg-overlay)",
       },