diff --git a/doc/whats-new.rst b/doc/whats-new.rst
index 5077b17ba1e..abba8167b65 100644
--- a/doc/whats-new.rst
+++ b/doc/whats-new.rst
@@ -182,6 +182,10 @@ Deprecations
 
 Bug Fixes
 ~~~~~~~~~
+- ``DataArray.str.extract`` with a named output dimension now supports NumPy
+  variable-width strings, including unmatched values and optional capture groups
+  (:issue:`11785`).
+  By `jdotc1 <https://github.com/jdotc1>`_.
 - :py:meth:`Dataset.query` now resolves coordinates in datasets with no data
   variables (:issue:`6449`).
   By `Liang, Jingyi <https://github.com/LJimmy007>`_.
diff --git a/xarray/core/accessor_str.py b/xarray/core/accessor_str.py
index a51c3822bc2..5be9bff2dcb 100644
--- a/xarray/core/accessor_str.py
+++ b/xarray/core/accessor_str.py
@@ -2154,10 +2154,10 @@ def _get_res_single(val, pat):
         def _get_res_multi(val, pat):
             match = pat.search(val)
             if match is None:
-                return np.array([""], val.dtype)
+                return np.array([""], dtype=np.object_)
             match = match.groups()
             match = [grp if grp is not None else "" for grp in match]
-            return np.array(match, val.dtype)
+            return np.array(match, dtype=np.object_)
 
         if dim is None:
             return self._apply(func=_get_res_single, func_args=(pat,))
diff --git a/xarray/tests/test_accessor_str.py b/xarray/tests/test_accessor_str.py
index d49f8bca2c9..e89db57794c 100644
--- a/xarray/tests/test_accessor_str.py
+++ b/xarray/tests/test_accessor_str.py
@@ -852,6 +852,29 @@ def test_extract_single_nocase(dtype) -> None:
     assert_equal(res_re_dim, targ_dim)
 
 
+@pytest.mark.parametrize("string_dtype", ["T", "U", "S"])
+@pytest.mark.parametrize("compiled", [False, True])
+def test_extract_multi_string_dtypes(string_dtype, compiled) -> None:
+    value = xr.DataArray(
+        np.array(["alpha_1234", "beta", "!"], dtype=string_dtype), dims="X"
+    )
+    pattern_str = r"([a-z]+)(?:_(\d+))?"
+    pattern = (
+        re.compile(pattern_str.encode() if string_dtype == "S" else pattern_str)
+        if compiled
+        else pattern_str
+    )
+    expected = xr.DataArray(
+        np.array([["alpha", "1234"], ["beta", ""], ["", ""]], dtype=string_dtype),
+        dims=["X", "group"],
+    )
+
+    result = value.str.extract(pattern, dim="group")
+
+    assert result.dtype == expected.dtype
+    assert_equal(result, expected)
+
+
 def test_extract_multi_case(dtype) -> None:
     pat_str = r"(\w+)_Xy_(\d*)"
     pat_re: str | bytes = (