diff --git a/packages/webawesome/docs/docs/resources/changelog.md b/packages/webawesome/docs/docs/resources/changelog.md
index 41ab9ec31..6a9b80dfb 100644
--- a/packages/webawesome/docs/docs/resources/changelog.md
+++ b/packages/webawesome/docs/docs/resources/changelog.md
@@ -31,6 +31,7 @@ Components with the <wa-badge variant="warning">Experimental</wa-badge> badge sh
 - Fixed a bug in `<wa-details>` that caused it to expand/collapse when clicking on interactive elements in the summary [issue:1252]
 - Fixed `<wa-button>` to have `static` positioning by default and `relative` positioning only when used with `<wa-badge>` [pr:1346]
 - Fixed spacing in `<wa-input>` when both clear and password toggle icons are present [issue:1325]
+- Fixed a bug in `<wa-radio-group>` and `<wa-radio>` where changing appearances dynamically would render incorrectly [issue:1178]
 - Fixed a bug in `<wa-input>` that prevented the value from changing when assigning non-string values to `value` [issue:1323]
 
 ## 3.0.0-beta.4
diff --git a/packages/webawesome/src/components/radio-group/radio-group.css b/packages/webawesome/src/components/radio-group/radio-group.css
index a1922647c..8b60d8ab2 100644
--- a/packages/webawesome/src/components/radio-group/radio-group.css
+++ b/packages/webawesome/src/components/radio-group/radio-group.css
@@ -18,31 +18,19 @@
   margin-inline-start: var(--wa-form-control-required-content-offset);
 }
 
-.button-group {
-  display: flex;
-}
-
 [part~='form-control-input'] {
   display: flex;
   flex-direction: column;
   flex-wrap: wrap;
-  gap: 0.75em;
+  gap: 0; /* Radios handle their own spacing */
 }
 
 /* Horizontal */
 :host([orientation='horizontal']) [part~='form-control-input'] {
   flex-direction: row;
-  gap: 1em;
 }
 
 /* Help text */
 [part~='hint'] {
   margin-block-start: 0.5em;
 }
-
-/* Radios have the "button" appearance */
-:host fieldset.has-radio-buttons {
-  [part~='form-control-input'] {
-    gap: 0;
-  }
-}
diff --git a/packages/webawesome/src/components/radio-group/radio-group.ts b/packages/webawesome/src/components/radio-group/radio-group.ts
index cbcba6684..7e39a0872 100644
--- a/packages/webawesome/src/components/radio-group/radio-group.ts
+++ b/packages/webawesome/src/components/radio-group/radio-group.ts
@@ -57,8 +57,6 @@ export default class WaRadioGroup extends WebAwesomeFormAssociatedElement {
 
   private readonly hasSlotController = new HasSlotController(this, 'hint', 'label');
 
-  @state() hasRadioButtons = false;
-
   @query('slot:not([name])') defaultSlot: HTMLSlotElement;
 
   /**
@@ -197,11 +195,9 @@ export default class WaRadioGroup extends WebAwesomeFormAssociatedElement {
 
   private async syncRadioElements() {
     const radios = this.getAllRadios();
-    let hasRadioButtons = false;
 
-    // Add data attributes to support styling
+    // Set positioning data attributes and properties
     radios.forEach((radio, index) => {
-      if (radio.appearance === 'button') hasRadioButtons = true;
       radio.setAttribute('size', this.size);
       radio.toggleAttribute('data-wa-radio-horizontal', this.orientation !== 'vertical');
       radio.toggleAttribute('data-wa-radio-vertical', this.orientation === 'vertical');
@@ -213,9 +209,6 @@ export default class WaRadioGroup extends WebAwesomeFormAssociatedElement {
       (radio as WaRadio).forceDisabled = this.disabled;
     });
 
-    // If at least one radio button exists, we assume it's a radio button group
-    this.hasRadioButtons = hasRadioButtons;
-
     await Promise.all(
       radios.map(async radio => {
         await radio.updateComplete;
@@ -349,7 +342,6 @@ export default class WaRadioGroup extends WebAwesomeFormAssociatedElement {
           'form-control': true,
           'form-control-radio-group': true,
           'form-control-has-label': hasLabel,
-          'has-radio-buttons': this.hasRadioButtons,
         })}
         role="radiogroup"
         aria-labelledby="label"
diff --git a/packages/webawesome/src/components/radio/radio.css b/packages/webawesome/src/components/radio/radio.css
index 4a7d7493a..617b297ad 100644
--- a/packages/webawesome/src/components/radio/radio.css
+++ b/packages/webawesome/src/components/radio/radio.css
@@ -31,6 +31,41 @@
   margin-block-start: 0.5em;
 }
 
+/* Default spacing for default appearance radios */
+:host([appearance='default']) {
+  margin-block: 0.375em; /* Half of the original 0.75em gap on each side */
+}
+
+:host([appearance='default'][data-wa-radio-horizontal]) {
+  margin-block: 0;
+  margin-inline: 0.5em; /* Half of the original 1em gap on each side */
+}
+
+/* Remove margin from first/last items to prevent extra space */
+:host([appearance='default'][data-wa-radio-first]) {
+  margin-block-start: 0;
+  margin-inline-start: 0;
+}
+
+:host([appearance='default'][data-wa-radio-last]) {
+  margin-block-end: 0;
+  margin-inline-end: 0;
+}
+
+/* Button appearance have no spacing, they get handled by the overlap margins below */
+:host([appearance='button']) {
+  margin: 0;
+  align-items: center;
+  min-height: var(--wa-form-control-height);
+  background-color: var(--wa-color-surface-default);
+  border: var(--wa-form-control-border-width) var(--wa-form-control-border-style) var(--wa-form-control-border-color);
+  border-radius: var(--wa-border-radius-m);
+  padding: 0 var(--wa-form-control-padding-inline);
+  transition:
+    background-color var(--wa-transition-fast),
+    border-color var(--wa-transition-fast);
+}
+
 /* Default appearance */
 :host([appearance='default']) {
   .control {
@@ -66,6 +101,13 @@
   }
 }
 
+/* Button appearance */
+:host([appearance='button']) {
+  .control {
+    display: none;
+  }
+}
+
 /* Checked */
 :host(:state(checked)) .control {
   color: var(--checked-icon-color);
@@ -85,23 +127,6 @@
   cursor: not-allowed;
 }
 
-/* Button appearance */
-:host([appearance='button']) {
-  align-items: center;
-  min-height: var(--wa-form-control-height);
-  background-color: var(--wa-color-surface-default);
-  border: var(--wa-form-control-border-width) var(--wa-form-control-border-style) var(--wa-form-control-border-color);
-  border-radius: var(--wa-border-radius-m);
-  padding: 0 var(--wa-form-control-padding-inline);
-  transition:
-    background-color var(--wa-transition-fast),
-    border-color var(--wa-transition-fast);
-
-  .control {
-    display: none;
-  }
-}
-
 /* Horizontal grouping - remove inner border radius */
 :host([appearance='button'][data-wa-radio-horizontal][data-wa-radio-inner]) {
   border-radius: 0;
@@ -153,7 +178,7 @@
   outline-offset: var(--wa-focus-ring-offset);
 }
 
-/* Remove inner borders and handle overlap */
+/* Button overlap margins */
 :host([appearance='button'][data-wa-radio-horizontal]:not([data-wa-radio-first])) {
   margin-inline-start: calc(-1 * var(--wa-form-control-border-width));
 }
diff --git a/packages/webawesome/src/components/radio/radio.ts b/packages/webawesome/src/components/radio/radio.ts
index e1c05753e..6b79faa21 100644
--- a/packages/webawesome/src/components/radio/radio.ts
+++ b/packages/webawesome/src/components/radio/radio.ts
@@ -111,7 +111,6 @@ export default class WaRadio extends WebAwesomeFormAssociatedElement {
     // We override `setValue` because we don't want to set form values from here. We want to do that in "RadioGroup" itself.
   }
 
-  // Update the handleClick method (around line 75)
   private handleClick = () => {
     if (!this.disabled && !this.forceDisabled) {
       this.checked = true;