diff --git a/stylesheets/_modules.scss b/stylesheets/_modules.scss
index f6838c0e65..81e45586cc 100644
--- a/stylesheets/_modules.scss
+++ b/stylesheets/_modules.scss
@@ -5826,6 +5826,12 @@ button.module-calling-participants-list__contact {
   }
 }
 
+.module-left-pane__dialogs {
+  & + .module-left-pane__chatFolders {
+    margin-top: 8px;
+  }
+}
+
 .module-left-pane__archive-helper-text {
   @include mixins.font-body-2;
 
diff --git a/ts/components/leftPane/LeftPaneChatFolders.dom.tsx b/ts/components/leftPane/LeftPaneChatFolders.dom.tsx
index 640109fe7c..b34f47b051 100644
--- a/ts/components/leftPane/LeftPaneChatFolders.dom.tsx
+++ b/ts/components/leftPane/LeftPaneChatFolders.dom.tsx
@@ -85,6 +85,9 @@ function getChatFolderIconName(
   return chatFolder.folderType === ChatFolderType.ALL ? 'message' : 'folder';
 }
 
+// Needed to conditionally apply margin after network warning/update available
+const LEFT_PANE_CHAT_FOLDERS_CLASS_NAME = 'module-left-pane__chatFolders';
+
 export function LeftPaneChatFolders(
   props: LeftPaneChatFoldersProps
 ): JSX.Element | null {
@@ -116,7 +119,7 @@ export function LeftPaneChatFolders(
 
   if (props.navSidebarWidthBreakpoint === WidthBreakpoint.Narrow) {
     return (
-      <div className={tw('px-2')}>
+      <div className={tw(LEFT_PANE_CHAT_FOLDERS_CLASS_NAME, 'px-2')}>
         <AxoSelect.Root
           value={props.selectedChatFolder?.id ?? null}
           onValueChange={handleValueChange}
diff --git a/ts/state/ducks/chatFolders.preload.ts b/ts/state/ducks/chatFolders.preload.ts
index 3cde9aa77d..2f2bce8b9a 100644
--- a/ts/state/ducks/chatFolders.preload.ts
+++ b/ts/state/ducks/chatFolders.preload.ts
@@ -9,25 +9,28 @@ import type { BoundActionCreatorsMapObject } from '../../hooks/useBoundActions.s
 import { useBoundActions } from '../../hooks/useBoundActions.std.js';
 import {
   ChatFolderParamsSchema,
+  isConversationInChatFolder,
   type ChatFolder,
   type ChatFolderId,
   type ChatFolderParams,
 } from '../../types/ChatFolder.std.js';
-import { getCurrentChatFolders } from '../selectors/chatFolders.std.js';
+import {
+  getCurrentChatFolders,
+  getSelectedChatFolder,
+} from '../selectors/chatFolders.std.js';
 import { DataReader, DataWriter } from '../../sql/Client.preload.js';
 import { storageServiceUploadJob } from '../../services/storage.preload.js';
 import { parseStrict } from '../../util/schemas.std.js';
 import { chatFolderCleanupService } from '../../services/expiring/chatFolderCleanupService.preload.js';
 import { drop } from '../../util/drop.std.js';
-import {
-  TARGETED_CONVERSATION_CHANGED,
-  type TargetedConversationChangedActionType,
-} from './conversations.preload.js';
 import type { ShowToastActionType } from './toast.preload.js';
 import { showToast } from './toast.preload.js';
 import { ToastType } from '../../types/Toast.dom.js';
 import type { CurrentChatFolder } from '../../types/CurrentChatFolders.std.js';
 import { CurrentChatFolders } from '../../types/CurrentChatFolders.std.js';
+import { getConversationLookup } from '../selectors/conversations.dom.js';
+import { getOwn } from '../../util/getOwn.std.js';
+import { strictAssert } from '../../util/assert.std.js';
 
 export type ChatFoldersState = ReadonlyDeep<{
   currentChatFolders: CurrentChatFolders;
@@ -37,21 +40,30 @@ export type ChatFoldersState = ReadonlyDeep<{
 
 const CHAT_FOLDER_RECORD_REPLACE_ALL =
   'chatFolders/CHAT_FOLDER_RECORD_REPLACE_ALL';
-const CHAT_FOLDER_CHANGE_SELECTED_CHAT_FOLDER_ID =
-  'chatFolders/CHANGE_SELECTED_CHAT_FOLDER_ID';
+const CHAT_FOLDER_UPDATE_SELECTED_CHAT_FOLDER_ID =
+  'chatFolders/UPDATE_SELECTED_CHAT_FOLDER_ID';
+const CHAT_FOLDER_UPDATE_STABLE_SELECTED_CONVERSATION_ID_IN_CHAT_FOLDER =
+  'chatFolders/CHAT_FOLDER_UPDATE_STABLE_SELECTED_CONVERSATION_ID_IN_CHAT_FOLDER';
 
 export type ChatFolderRecordReplaceAll = ReadonlyDeep<{
   type: typeof CHAT_FOLDER_RECORD_REPLACE_ALL;
   payload: CurrentChatFolders;
 }>;
 
-export type ChatFolderChangeSelectedChatFolderId = ReadonlyDeep<{
-  type: typeof CHAT_FOLDER_CHANGE_SELECTED_CHAT_FOLDER_ID;
+export type ChatFolderUpdateSelectedChatFolderId = ReadonlyDeep<{
+  type: typeof CHAT_FOLDER_UPDATE_SELECTED_CHAT_FOLDER_ID;
   payload: ChatFolderId | null;
 }>;
 
+export type ChatFolderUpdateStableConversationIdInChatFolder = ReadonlyDeep<{
+  type: typeof CHAT_FOLDER_UPDATE_STABLE_SELECTED_CONVERSATION_ID_IN_CHAT_FOLDER;
+  payload: string | null;
+}>;
+
 export type ChatFolderAction = ReadonlyDeep<
-  ChatFolderRecordReplaceAll | ChatFolderChangeSelectedChatFolderId
+  | ChatFolderRecordReplaceAll
+  | ChatFolderUpdateSelectedChatFolderId
+  | ChatFolderUpdateStableConversationIdInChatFolder
 >;
 
 export function getEmptyState(): ChatFoldersState {
@@ -198,15 +210,24 @@ function updateChatFoldersPositions(
   };
 }
 
-function updateSelectedChangeFolderId(
+function updateSelectedChatFolderId(
   chatFolderId: ChatFolderId | null
-): ChatFolderChangeSelectedChatFolderId {
+): ChatFolderUpdateSelectedChatFolderId {
   return {
-    type: CHAT_FOLDER_CHANGE_SELECTED_CHAT_FOLDER_ID,
+    type: CHAT_FOLDER_UPDATE_SELECTED_CHAT_FOLDER_ID,
     payload: chatFolderId,
   };
 }
 
+function updateStableSelectedConversationIdInChatFolder(
+  conversationId: string | null
+): ChatFolderUpdateStableConversationIdInChatFolder {
+  return {
+    type: CHAT_FOLDER_UPDATE_STABLE_SELECTED_CONVERSATION_ID_IN_CHAT_FOLDER,
+    payload: conversationId,
+  };
+}
+
 function updateChatFolderToggleChat(
   chatFolderId: ChatFolderId,
   conversationId: string,
@@ -242,6 +263,47 @@ function updateChatFolderToggleChat(
   };
 }
 
+export function updateChatFolderStateOnTargetConversationChanged(
+  conversationId: string | undefined
+): ThunkAction<
+  void,
+  RootStateType,
+  unknown,
+  | ChatFolderUpdateSelectedChatFolderId
+  | ChatFolderUpdateStableConversationIdInChatFolder
+> {
+  return async (dispatch, getState) => {
+    if (conversationId == null) {
+      // Clear out the stable conversation id since it has been closed.
+      dispatch(updateStableSelectedConversationIdInChatFolder(null));
+      return;
+    }
+
+    const state = getState();
+    const selectedChatFolder = getSelectedChatFolder(state);
+    if (selectedChatFolder == null) {
+      return;
+    }
+
+    const conversationLookup = getConversationLookup(state);
+    const conversation = getOwn(conversationLookup, conversationId);
+    strictAssert(conversation != null, 'Target conversation not found');
+
+    if (isConversationInChatFolder(selectedChatFolder, conversation)) {
+      // Make sure the targetted conversation doesn't appear from the chat folder
+      // while its open (in case it gets marked read for example).
+      dispatch(updateStableSelectedConversationIdInChatFolder(conversationId));
+      return;
+    }
+
+    const currentChatFolders = getCurrentChatFolders(state);
+    const { currentAllChatFolder } = currentChatFolders;
+
+    dispatch(updateSelectedChatFolderId(currentAllChatFolder?.id ?? null));
+    dispatch(updateStableSelectedConversationIdInChatFolder(conversationId));
+  };
+}
+
 export const actions = {
   refetchChatFolders,
   createChatFolder,
@@ -249,7 +311,7 @@ export const actions = {
   updateChatFolder,
   deleteChatFolder,
   updateChatFoldersPositions,
-  updateSelectedChangeFolderId,
+  updateSelectedChatFolderId,
   updateChatFolderToggleChat,
 };
 
@@ -291,8 +353,11 @@ function toNextChatFoldersState(
   );
 
   // Ensure `stableSelectedConversationIdInChatFolder`
-  // is reset if `selectedChatFolderId` changes
-  if (nextState.selectedChatFolderId !== prevState.selectedChatFolderId) {
+  // is reset if `selectedChatFolderId` is null or has been changed
+  if (
+    nextState.selectedChatFolderId == null ||
+    nextState.selectedChatFolderId !== prevState.selectedChatFolderId
+  ) {
     nextState.stableSelectedConversationIdInChatFolder = null;
   }
 
@@ -301,21 +366,20 @@ function toNextChatFoldersState(
 
 export function reducer(
   state: ChatFoldersState = getEmptyState(),
-  action: ChatFolderAction | TargetedConversationChangedActionType
+  action: ChatFolderAction
 ): ChatFoldersState {
   switch (action.type) {
     case CHAT_FOLDER_RECORD_REPLACE_ALL:
       return toNextChatFoldersState(state, {
         currentChatFolders: action.payload,
       });
-    case CHAT_FOLDER_CHANGE_SELECTED_CHAT_FOLDER_ID:
+    case CHAT_FOLDER_UPDATE_SELECTED_CHAT_FOLDER_ID:
       return toNextChatFoldersState(state, {
         selectedChatFolderId: action.payload,
       });
-    case TARGETED_CONVERSATION_CHANGED:
+    case CHAT_FOLDER_UPDATE_STABLE_SELECTED_CONVERSATION_ID_IN_CHAT_FOLDER:
       return toNextChatFoldersState(state, {
-        stableSelectedConversationIdInChatFolder:
-          action.payload.conversationId ?? null,
+        stableSelectedConversationIdInChatFolder: action.payload,
       });
     default:
       return state;
diff --git a/ts/state/ducks/conversations.preload.ts b/ts/state/ducks/conversations.preload.ts
index cca6c9dc58..7d7311cd5c 100644
--- a/ts/state/ducks/conversations.preload.ts
+++ b/ts/state/ducks/conversations.preload.ts
@@ -241,6 +241,7 @@ import { isConversationUnread } from '../../util/isConversationUnread.std.js';
 import { CurrentChatFolders } from '../../types/CurrentChatFolders.std.js';
 import { itemStorage } from '../../textsecure/Storage.preload.js';
 import { enqueuePollVoteForSend as enqueuePollVoteForSendHelper } from '../../polls/enqueuePollVoteForSend.preload.js';
+import { updateChatFolderStateOnTargetConversationChanged } from './chatFolders.preload.js';
 
 const {
   chunk,
@@ -4808,6 +4809,8 @@ function showConversation({
       conversation?.setMarkedUnread(false);
     }
 
+    dispatch(updateChatFolderStateOnTargetConversationChanged(conversationId));
+
     if (conversationId === conversations.selectedConversationId) {
       if (!conversationId) {
         return;
diff --git a/ts/state/smart/LeftPaneChatFolders.preload.tsx b/ts/state/smart/LeftPaneChatFolders.preload.tsx
index a56d8f0787..1e1c0af32f 100644
--- a/ts/state/smart/LeftPaneChatFolders.preload.tsx
+++ b/ts/state/smart/LeftPaneChatFolders.preload.tsx
@@ -33,7 +33,7 @@ export const SmartLeftPaneChatFolders = memo(
     );
     const location = useSelector(getSelectedLocation);
 
-    const { updateSelectedChangeFolderId } = useChatFolderActions();
+    const { updateSelectedChatFolderId } = useChatFolderActions();
     const { changeLocation } = useNavActions();
     const { markChatFolderRead, setChatFolderMuteExpiration } =
       useConversationsActions();
@@ -66,7 +66,7 @@ export const SmartLeftPaneChatFolders = memo(
         allChatFoldersUnreadStats={allChatFoldersUnreadStats}
         allChatFoldersMutedStats={allChatFoldersMutedStats}
         selectedChatFolder={selectedChatFolder}
-        onSelectedChatFolderIdChange={updateSelectedChangeFolderId}
+        onSelectedChatFolderIdChange={updateSelectedChatFolderId}
         onChatFolderMarkRead={markChatFolderRead}
         onChatFolderUpdateMute={setChatFolderMuteExpiration}
         onChatFolderOpenSettings={handleChatFolderOpenSettings}
diff --git a/ts/test-electron/state/ducks/conversations_test.preload.ts b/ts/test-electron/state/ducks/conversations_test.preload.ts
index 90a4a4522a..2405078b5b 100644
--- a/ts/test-electron/state/ducks/conversations_test.preload.ts
+++ b/ts/test-electron/state/ducks/conversations_test.preload.ts
@@ -508,7 +508,12 @@ describe('both/state/ducks/conversations', () => {
           getEmptyRootState,
           null
         );
-        const action = dispatch.getCall(0).args[0];
+        const action = dispatch
+          .getCalls()
+          .map(call => call.args[0])
+          .find(a => {
+            return a.type === TARGETED_CONVERSATION_CHANGED;
+          });
         const nextState = reducer(state, action);
 
         assert.equal(nextState.selectedConversationId, 'abc123');
@@ -531,7 +536,10 @@ describe('both/state/ducks/conversations', () => {
           conversationId: 'abc123',
           messageId: 'xyz987',
         })(dispatch, getEmptyRootState, null);
-        const action = dispatch.getCall(0).args[0];
+        const action = dispatch
+          .getCalls()
+          .map(call => call.args[0])
+          .find(a => a.type === TARGETED_CONVERSATION_CHANGED);
         const nextState = reducer(state, action);
 
         assert.equal(nextState.selectedConversationId, 'abc123');
@@ -547,7 +555,12 @@ describe('both/state/ducks/conversations', () => {
             conversationId: 'fake-conversation-id',
             switchToAssociatedView: true,
           })(dispatch, getEmptyRootState, null);
-          [action] = dispatch.getCall(0).args;
+          action = dispatch
+            .getCalls()
+            .map(call => call.args[0])
+            .find(a => {
+              return a.type === TARGETED_CONVERSATION_CHANGED;
+            });
         });
 
         it('shows the inbox if the conversation is not archived', () => {