diff --git a/app/assets/javascripts/groups_select.js b/app/assets/javascripts/groups_select.js
index e5dfa30edab..602a3b78189 100644
--- a/app/assets/javascripts/groups_select.js
+++ b/app/assets/javascripts/groups_select.js
@@ -6,23 +6,60 @@ var slice = [].slice;
 window.GroupsSelect = (function() {
   function GroupsSelect() {
     $('.ajax-groups-select').each((function(_this) {
+      const self = _this;
+
       return function(i, select) {
         var all_available, skip_groups;
-        all_available = $(select).data('all-available');
-        skip_groups = $(select).data('skip-groups') || [];
-        return $(select).select2({
+        const $select = $(select);
+        all_available = $select.data('all-available');
+        skip_groups = $select.data('skip-groups') || [];
+
+        $select.select2({
           placeholder: "Search for a group",
-          multiple: $(select).hasClass('multiselect'),
+          multiple: $select.hasClass('multiselect'),
           minimumInputLength: 0,
-          query: function(query) {
-            var options = { all_available: all_available, skip_groups: skip_groups };
-            return Api.groups(query.term, options, function(groups) {
-              var data;
-              data = {
-                results: groups
+          ajax: {
+            url: Api.buildUrl(Api.groupsPath),
+            dataType: 'json',
+            quietMillis: 250,
+            transport: function (params) {
+              $.ajax(params).then((data, status, xhr) => {
+                const results = data || [];
+
+                const headers = gl.utils.normalizeCRLFHeaders(xhr.getAllResponseHeaders());
+                const currentPage = parseInt(headers['X-PAGE'], 10) || 0;
+                const totalPages = parseInt(headers['X-TOTAL-PAGES'], 10) || 0;
+                const more = currentPage < totalPages;
+
+                return {
+                  results,
+                  pagination: {
+                    more,
+                  },
+                };
+              }).then(params.success).fail(params.error);
+            },
+            data: function (search, page) {
+              return {
+                search,
+                page,
+                per_page: GroupsSelect.PER_PAGE,
+                all_available,
+                skip_groups,
               };
-              return query.callback(data);
-            });
+            },
+            results: function (data, page) {
+              if (data.length) return { results: [] };
+
+              const results = data.length ? data : data.results || [];
+              const more = data.pagination ? data.pagination.more : false;
+
+              return {
+                results,
+                page,
+                more,
+              };
+            },
           },
           initSelection: function(element, callback) {
             var id;
@@ -34,19 +71,23 @@ window.GroupsSelect = (function() {
           formatResult: function() {
             var args;
             args = 1 <= arguments.length ? slice.call(arguments, 0) : [];
-            return _this.formatResult.apply(_this, args);
+            return self.formatResult.apply(self, args);
           },
           formatSelection: function() {
             var args;
             args = 1 <= arguments.length ? slice.call(arguments, 0) : [];
-            return _this.formatSelection.apply(_this, args);
+            return self.formatSelection.apply(self, args);
           },
-          dropdownCssClass: "ajax-groups-dropdown",
+          dropdownCssClass: "ajax-groups-dropdown select2-infinite",
           // we do not want to escape markup since we are displaying html in results
           escapeMarkup: function(m) {
             return m;
           }
         });
+
+        self.dropdown = document.querySelector('.select2-infinite .select2-results');
+
+        $select.on('select2-loaded', self.forceOverflow.bind(self));
       };
     })(this));
   }
@@ -65,5 +106,12 @@ window.GroupsSelect = (function() {
     return group.full_name;
   };
 
+  GroupsSelect.prototype.forceOverflow = function (e) {
+    const itemHeight = this.dropdown.querySelector('.select2-result:first-child').clientHeight;
+    this.dropdown.style.height = `${Math.floor(this.dropdown.scrollHeight - (itemHeight * 0.9))}px`;
+  };
+
+  GroupsSelect.PER_PAGE = 20;
+
   return GroupsSelect;
 })();
diff --git a/app/assets/javascripts/lib/utils/common_utils.js b/app/assets/javascripts/lib/utils/common_utils.js
index a1423b6fda5..4aad0128aef 100644
--- a/app/assets/javascripts/lib/utils/common_utils.js
+++ b/app/assets/javascripts/lib/utils/common_utils.js
@@ -231,6 +231,22 @@
       return upperCaseHeaders;
     };
 
+    /**
+      this will take in the getAllResponseHeaders result and normalize them
+      this way we don't run into production issues when nginx gives us lowercased header keys
+    */
+    w.gl.utils.normalizeCRLFHeaders = (headers) => {
+      const headersObject = {};
+      const headersArray = headers.split('\n');
+
+      headersArray.forEach((header) => {
+        const keyValue = header.split(': ');
+        headersObject[keyValue[0]] = keyValue[1];
+      });
+
+      return w.gl.utils.normalizeHeaders(headersObject);
+    };
+
     /**
      * Parses pagination object string values into numbers.
      *
diff --git a/spec/features/projects/group_links_spec.rb b/spec/features/projects/group_links_spec.rb
index 4c28205da9b..c969acc9140 100644
--- a/spec/features/projects/group_links_spec.rb
+++ b/spec/features/projects/group_links_spec.rb
@@ -1,6 +1,6 @@
 require 'spec_helper'
 
-feature 'Project group links', feature: true, js: true do
+feature 'Project group links', :feature, :js do
   include Select2Helper
 
   let(:master) { create(:user) }
@@ -51,4 +51,24 @@ feature 'Project group links', feature: true, js: true do
       end
     end
   end
+
+  describe 'the groups dropdown' do
+    before do
+      group_two = create(:group)
+      group.add_owner(master)
+      group_two.add_owner(master)
+
+      visit namespace_project_settings_members_path(project.namespace, project)
+      execute_script 'GroupsSelect.PER_PAGE = 1;'
+      open_select2 '#link_group_id'
+    end
+
+    it 'should infinitely scroll' do
+      expect(find('.select2-drop .select2-results')).to have_selector('.select2-result', count: 1)
+
+      scroll_select2_to_bottom('.select2-drop .select2-results:visible')
+
+      expect(find('.select2-drop .select2-results')).to have_selector('.select2-result', count: 2)
+    end
+  end
 end
diff --git a/spec/javascripts/lib/utils/common_utils_spec.js b/spec/javascripts/lib/utils/common_utils_spec.js
index d2e24eb7eb2..7cf39d37181 100644
--- a/spec/javascripts/lib/utils/common_utils_spec.js
+++ b/spec/javascripts/lib/utils/common_utils_spec.js
@@ -108,6 +108,37 @@ require('~/lib/utils/common_utils');
       });
     });
 
+    describe('gl.utils.normalizeCRLFHeaders', () => {
+      beforeEach(function () {
+        this.CLRFHeaders = 'a-header: a-value\nAnother-Header: ANOTHER-VALUE\nLaSt-HeAdEr: last-VALUE';
+
+        spyOn(String.prototype, 'split').and.callThrough();
+        spyOn(gl.utils, 'normalizeHeaders').and.callThrough();
+
+        this.normalizeCRLFHeaders = gl.utils.normalizeCRLFHeaders(this.CLRFHeaders);
+      });
+
+      it('should split by newline', function () {
+        expect(String.prototype.split).toHaveBeenCalledWith('\n');
+      });
+
+      it('should split by colon+space for each header', function () {
+        expect(String.prototype.split.calls.allArgs().filter(args => args[0] === ': ').length).toBe(3);
+      });
+
+      it('should call gl.utils.normalizeHeaders with a parsed headers object', function () {
+        expect(gl.utils.normalizeHeaders).toHaveBeenCalledWith(jasmine.any(Object));
+      });
+
+      it('should return a normalized headers object', function () {
+        expect(this.normalizeCRLFHeaders).toEqual({
+          'A-HEADER': 'a-value',
+          'ANOTHER-HEADER': 'ANOTHER-VALUE',
+          'LAST-HEADER': 'last-VALUE',
+        });
+      });
+    });
+
     describe('gl.utils.parseIntPagination', () => {
       it('should parse to integers all string values and return pagination object', () => {
         const pagination = {
diff --git a/spec/support/select2_helper.rb b/spec/support/select2_helper.rb
index 0d526045012..6b1853c2364 100644
--- a/spec/support/select2_helper.rb
+++ b/spec/support/select2_helper.rb
@@ -22,4 +22,12 @@ module Select2Helper
       execute_script("$('#{selector}').select2('val', '#{value}').trigger('change');")
     end
   end
+
+  def open_select2(selector)
+    execute_script("$('#{selector}').select2('open');")
+  end
+
+  def scroll_select2_to_bottom(selector)
+    evaluate_script "$('#{selector}').scrollTop($('#{selector}')[0].scrollHeight); $('#{selector}');"
+  end
 end