diff --git a/CRM/Core/BAO/CustomGroup.php b/CRM/Core/BAO/CustomGroup.php
index 568e92a6336f..d8c189a09e86 100644
--- a/CRM/Core/BAO/CustomGroup.php
+++ b/CRM/Core/BAO/CustomGroup.php
@@ -45,37 +45,29 @@ public static function create(&$params) {
       $group->title = $params['title'];
     }
 
-    $extends = CRM_Utils_Array::value('extends', $params, []);
-    $extendsEntity = $extends[0] ?? NULL;
-
-    $participantEntities = [
-      'ParticipantRole',
-      'ParticipantEventName',
-      'ParticipantEventType',
-    ];
-
-    if (in_array($extendsEntity, $participantEntities)) {
-      $group->extends = 'Participant';
-    }
-    else {
-      $group->extends = $extendsEntity;
-    }
-
-    $group->extends_entity_column_id = 'null';
-    if (in_array($extendsEntity, $participantEntities)
-    ) {
-      $group->extends_entity_column_id = CRM_Core_DAO::getFieldValue('CRM_Core_DAO_OptionValue', $extendsEntity, 'value', 'name');
-    }
-
-    // this is format when form get submit.
-    $extendsChildType = $extends[1] ?? NULL;
+    $extendsChildType = NULL;
     // lets allow user to pass direct child type value, CRM-6893
     if (!empty($params['extends_entity_column_value'])) {
       $extendsChildType = $params['extends_entity_column_value'];
     }
     if (!CRM_Utils_System::isNull($extendsChildType)) {
+      $b = self::getMungedEntity($params['extends'], $params['extends_entity_column_id'] ?? NULL);
+      $registeredSubTypes = self::getSubTypes()[$b];
+      if (is_array($extendsChildType)) {
+        foreach ($extendsChildType as $childType) {
+          if (!array_key_exists($childType, $registeredSubTypes) && !in_array($childType, $registeredSubTypes, TRUE)) {
+            throw new CRM_Core_Exception('Supplied Sub type is not valid for the specified entitiy');
+          }
+        }
+      }
+      else {
+        if (!array_key_exists($extendsChildType, $registeredSubTypes) && !in_array($extendsChildType, $registeredSubTypes, TRUE)) {
+          throw new CRM_Core_Exception('Supplied Sub type is not valid for the specified entitiy');
+        }
+        $extendsChildType = [$extendsChildType];
+      }
       $extendsChildType = implode(CRM_Core_DAO::VALUE_SEPARATOR, $extendsChildType);
-      if (CRM_Utils_Array::value(0, $extends) == 'Relationship') {
+      if ($params['extends'] == 'Relationship') {
         $extendsChildType = str_replace(['_a_b', '_b_a'], [
           '',
           '',
@@ -107,6 +99,8 @@ public static function create(&$params) {
       'is_active',
       'is_multiple',
       'icon',
+      'extends_entity_column_id',
+      'extends',
     ];
     $current_db_version = CRM_Core_BAO_Domain::version();
     $is_public_version = version_compare($current_db_version, '4.7.19', '>=');
@@ -200,7 +194,7 @@ public static function create(&$params) {
         $params['id'],
         'table_name'
       );
-      CRM_Core_BAO_SchemaHandler::changeFKConstraint($table, self::mapTableName($extendsEntity));
+      CRM_Core_BAO_SchemaHandler::changeFKConstraint($table, self::mapTableName($params['extends']));
     }
     $transaction->commit();
 
@@ -2200,4 +2194,57 @@ private static function buildGroupTree($entityType, $toReturn, $subTypes, $query
     return [$multipleFieldGroups, $groupTree];
   }
 
+  public static function getSubTypes(): array {
+    $sel2 = [];
+    $activityType = CRM_Core_PseudoConstant::activityType(FALSE, TRUE, FALSE, 'label', TRUE);
+
+    $eventType = CRM_Core_OptionGroup::values('event_type');
+    $grantType = CRM_Core_OptionGroup::values('grant_type');
+    $campaignTypes = CRM_Campaign_PseudoConstant::campaignType();
+    $membershipType = CRM_Member_BAO_MembershipType::getMembershipTypes(FALSE);
+    $participantRole = CRM_Core_OptionGroup::values('participant_role');
+
+    asort($activityType);
+    asort($eventType);
+    asort($grantType);
+    asort($membershipType);
+    asort($participantRole);
+
+    $sel2['Event'] = $eventType;
+    $sel2['Grant'] = $grantType;
+    $sel2['Activity'] = $activityType;
+    $sel2['Campaign'] = $campaignTypes;
+    $sel2['Membership'] = $membershipType;
+    $sel2['ParticipantRole'] = $participantRole;
+    $sel2['ParticipantEventName'] = CRM_Event_PseudoConstant::event(NULL, FALSE, "( is_template IS NULL OR is_template != 1 )");
+    $sel2['ParticipantEventType'] = $eventType;
+    $sel2['Contribution'] = CRM_Contribute_PseudoConstant::financialType();
+    $sel2['Relationship'] = CRM_Custom_Form_Group::getRelationshipTypes();
+
+    $sel2['Individual'] = CRM_Contact_BAO_ContactType::subTypePairs('Individual', FALSE, NULL);
+    $sel2['Household'] = CRM_Contact_BAO_ContactType::subTypePairs('Household', FALSE, NULL);
+    $sel2['Organization'] = CRM_Contact_BAO_ContactType::subTypePairs('Organization', FALSE, NULL);
+
+    CRM_Core_BAO_CustomGroup::getExtendedObjectTypes($sel2);
+    return $sel2;
+  }
+
+  /**
+   * Get the munged entity.
+   *
+   * This is the entity eg. Relationship or the name of the sub entity
+   * e.g ParticipantRole.
+   *
+   * @param string $extends
+   * @param int|null $extendsEntityColumn
+   *
+   * @return string
+   */
+  protected static function getMungedEntity($extends, $extendsEntityColumn = NULL) {
+    if (!$extendsEntityColumn || $extendsEntityColumn === 'null') {
+      return $extends;
+    }
+    return CRM_Core_OptionGroup::values('custom_data_type', FALSE, FALSE, FALSE, NULL, 'name')[$extendsEntityColumn];
+  }
+
 }
diff --git a/CRM/Custom/Form/Group.php b/CRM/Custom/Form/Group.php
index ebb516f79939..ddf49e1c3a80 100644
--- a/CRM/Custom/Form/Group.php
+++ b/CRM/Custom/Form/Group.php
@@ -176,38 +176,8 @@ public function buildQuickForm() {
     $this->assign('contactTypes', json_encode($contactTypes));
 
     $sel1 = ["" => ts("- select -")] + CRM_Core_SelectValues::customGroupExtends();
-    $sel2 = [];
-    $activityType = CRM_Core_PseudoConstant::activityType(FALSE, TRUE, FALSE, 'label', TRUE);
-
-    $eventType = CRM_Core_OptionGroup::values('event_type');
-    $grantType = CRM_Core_OptionGroup::values('grant_type');
-    $campaignTypes = CRM_Campaign_PseudoConstant::campaignType();
-    $membershipType = CRM_Member_BAO_MembershipType::getMembershipTypes(FALSE);
-    $participantRole = CRM_Core_OptionGroup::values('participant_role');
-
     ksort($sel1);
-    asort($activityType);
-    asort($eventType);
-    asort($grantType);
-    asort($membershipType);
-    asort($participantRole);
-
-    $sel2['Event'] = $eventType;
-    $sel2['Grant'] = $grantType;
-    $sel2['Activity'] = $activityType;
-    $sel2['Campaign'] = $campaignTypes;
-    $sel2['Membership'] = $membershipType;
-    $sel2['ParticipantRole'] = $participantRole;
-    $sel2['ParticipantEventName'] = CRM_Event_PseudoConstant::event(NULL, FALSE, "( is_template IS NULL OR is_template != 1 )");
-    $sel2['ParticipantEventType'] = $eventType;
-    $sel2['Contribution'] = CRM_Contribute_PseudoConstant::financialType();
-    $sel2['Relationship'] = self::getRelationshipTypes();
-
-    $sel2['Individual'] = CRM_Contact_BAO_ContactType::subTypePairs('Individual', FALSE, NULL);
-    $sel2['Household'] = CRM_Contact_BAO_ContactType::subTypePairs('Household', FALSE, NULL);
-    $sel2['Organization'] = CRM_Contact_BAO_ContactType::subTypePairs('Organization', FALSE, NULL);
-
-    CRM_Core_BAO_CustomGroup::getExtendedObjectTypes($sel2);
+    $sel2 = CRM_Core_BAO_CustomGroup::getSubTypes();
 
     foreach ($sel2 as $main => $sub) {
       if (!empty($sel2[$main])) {
@@ -443,7 +413,8 @@ public function postProcess() {
       $params['created_date'] = date('YmdHis');
     }
 
-    $group = CRM_Core_BAO_CustomGroup::create($params);
+    $result = civicrm_api3('CustomGroup', 'create', $params);
+    $group = $result['values'][$result['id']];
 
     // reset the cache
     Civi::cache('fields')->flush();
@@ -451,14 +422,14 @@ public function postProcess() {
     CRM_Core_BAO_Cache::resetCaches();
 
     if ($this->_action & CRM_Core_Action::UPDATE) {
-      CRM_Core_Session::setStatus(ts('Your custom field set \'%1 \' has been saved.', [1 => $group->title]), ts('Saved'), 'success');
+      CRM_Core_Session::setStatus(ts('Your custom field set \'%1 \' has been saved.', [1 => $group['title']]), ts('Saved'), 'success');
     }
     else {
       // Jump directly to adding a field if popups are disabled
       $action = CRM_Core_Resources::singleton()->ajaxPopupsEnabled ? '' : '/add';
-      $url = CRM_Utils_System::url("civicrm/admin/custom/group/field$action", 'reset=1&new=1&gid=' . $group->id . '&action=' . ($action ? 'add' : 'browse'));
+      $url = CRM_Utils_System::url("civicrm/admin/custom/group/field$action", 'reset=1&new=1&gid=' . $group['id'] . '&action=' . ($action ? 'add' : 'browse'));
       CRM_Core_Session::setStatus(ts("Your custom field set '%1' has been added. You can add custom fields now.",
-        [1 => $group->title]
+        [1 => $group['title']]
       ), ts('Saved'), 'success');
       $session = CRM_Core_Session::singleton();
       $session->replaceUserContext($url);
diff --git a/Civi/Api4/Event/Subscriber/CustomGroupPreCreationSubscriber.php b/Civi/Api4/Event/Subscriber/CustomGroupPreCreationSubscriber.php
index e0615aae143b..625a09575ce9 100644
--- a/Civi/Api4/Event/Subscriber/CustomGroupPreCreationSubscriber.php
+++ b/Civi/Api4/Event/Subscriber/CustomGroupPreCreationSubscriber.php
@@ -27,14 +27,9 @@ class CustomGroupPreCreationSubscriber extends Generic\PreCreationSubscriber {
    * @param \Civi\Api4\Generic\DAOCreateAction $request
    */
   protected function modify(DAOCreateAction $request) {
-    $extends = $request->getValue('extends');
     $title = $request->getValue('title');
     $name = $request->getValue('name');
 
-    if (is_string($extends)) {
-      $request->addValue('extends', [$extends]);
-    }
-
     if (NULL === $title && $name) {
       $request->addValue('title', $name);
     }
diff --git a/api/v3/CustomGroup.php b/api/v3/CustomGroup.php
index 3c5519fc706f..f45c9ca3028b 100644
--- a/api/v3/CustomGroup.php
+++ b/api/v3/CustomGroup.php
@@ -40,6 +40,29 @@ function civicrm_api3_custom_group_create($params) {
 
     return civicrm_api3_create_error("First item in params['extends'] must be a class name (e.g. 'Contact').");
   }
+  if (!isset($params['extends_entity_column_value']) && isset($params['extends'][1])) {
+    $extendsEntity = $params['extends'][0] ?? NULL;
+    $participantEntities = [
+      'ParticipantRole',
+      'ParticipantEventName',
+      'ParticipantEventType',
+    ];
+    $params['extends_entity_column_id'] = 'null';
+    if (in_array($extendsEntity, $participantEntities)
+    ) {
+      $params['extends_entity_column_id'] = CRM_Core_DAO::getFieldValue('CRM_Core_DAO_OptionValue', $extendsEntity, 'value', 'name');
+    }
+    $params['extends_entity_column_value'] = $params['extends'][1];
+    if (in_array($extendsEntity, $participantEntities)) {
+      $params['extends'] = 'Participant';
+    }
+    else {
+      $params['extends'] = $extendsEntity;
+    }
+  }
+  elseif (isset($params['extends']) && (!isset($params['extends'][1]) || empty($params['extends'][1]))) {
+    $params['extends'] = $params['extends'][0];
+  }
   if (isset($params['extends_entity_column_value']) && !is_array($params['extends_entity_column_value'])) {
     // BAO fails if this is a string, but API getFields says this must be a string, so we'll do a double backflip
     $params['extends_entity_column_value'] = CRM_Utils_Array::explodePadded($params['extends_entity_column_value']);
diff --git a/tests/phpunit/CRMTraits/Custom/CustomDataTrait.php b/tests/phpunit/CRMTraits/Custom/CustomDataTrait.php
index 95cbb922f561..ef904881c664 100644
--- a/tests/phpunit/CRMTraits/Custom/CustomDataTrait.php
+++ b/tests/phpunit/CRMTraits/Custom/CustomDataTrait.php
@@ -46,7 +46,7 @@ public function createCustomGroupWithFieldsOfAllTypes($groupParams = []) {
   public function createCustomGroup($params = []) {
     $params = array_merge([
       'title' => 'Custom Group',
-      'extends' => [$this->entity ?? 'Contact'],
+      'extends' => $this->entity ?? 'Contact',
       'weight' => 5,
       'style' => 'Inline',
       'max_multiple' => 0,
diff --git a/tests/phpunit/api/v3/CustomGroupTest.php b/tests/phpunit/api/v3/CustomGroupTest.php
index e689a66bf401..1c38a6c09f58 100644
--- a/tests/phpunit/api/v3/CustomGroupTest.php
+++ b/tests/phpunit/api/v3/CustomGroupTest.php
@@ -175,8 +175,7 @@ public function testCustomGroupExtendsMultipleCreate() {
       'is_active' => 1,
     ];
 
-    $result = $this->callAPIFailure('custom_group', 'create', $params,
-      'implode(): Invalid arguments passed');
+    $result = $this->callAPIFailure('custom_group', 'create', $params, 'Supplied Sub type is not valid for the specified entitiy');
   }
 
   /**
@@ -369,4 +368,32 @@ public function testUpdateCustomGroup() {
     $this->customGroupDelete($customGroupId);
   }
 
+  /**
+   * Test that as per the form that if the extends column is passed as
+   * - ['ParticipantEventType', [4]] Where 4 = Meeting Event Type that we can create a custom group correctly
+   */
+  public function testParticipantEntityCustomGroup() {
+    $customGroup = $this->callAPISuccess($this->_entity, 'create', array_merge($this->_params, ['extends' => ['ParticipantEventType', [4]]]));
+    $result = array_shift($customGroup['values']);
+    $this->assertEquals(3, $result['extends_entity_column_id']);
+    $this->assertEquals('Participant', $result['extends']);
+    $this->customGroupDelete($result['id']);
+  }
+
+  /**
+   * Test that without any fields we can change the entity type of the custom group and fields are correctly updated
+   */
+  public function testChangeEntityCustomGroup() {
+    $customGroup = $this->callAPISuccess($this->_entity, 'create', array_merge($this->_params, ['extends' => ['ParticipantEventType', [4]]]));
+    $result = array_shift($customGroup['values']);
+    $this->assertEquals(3, $result['extends_entity_column_id']);
+    $this->assertEquals('Participant', $result['extends']);
+    $customGroup = $this->callAPISuccess($this->_entity, 'create', ['id' => $customGroup['id'], 'extends' => ['Individual', []]]);
+    $result = array_shift($customGroup['values']);
+    $this->assertTrue(empty($result['extends_entity_column_id']));
+    $this->assertTrue(empty($result['extends_entity_column_value']));
+    $this->assertEquals('Individual', $result['extends']);
+    $this->customGroupDelete($result['id']);
+  }
+
 }