diff --git a/src/app/features/room-nav/RoomNavItem.tsx b/src/app/features/room-nav/RoomNavItem.tsx
index d4368c3e5c..9a3d3b3aba 100644
--- a/src/app/features/room-nav/RoomNavItem.tsx
+++ b/src/app/features/room-nav/RoomNavItem.tsx
@@ -1,5 +1,5 @@
-import { MouseEventHandler, forwardRef, useState, MouseEvent } from 'react';
-import { EventType, Room } from '$types/matrix-sdk';
+import { MouseEventHandler, forwardRef, useState, MouseEvent, useEffect } from 'react';
+import { EventType, Room, RoomEvent as RoomEventEnum } from '$types/matrix-sdk';
 import {
   Avatar,
   Box,
@@ -25,7 +25,7 @@ import { useNavigate } from 'react-router-dom';
 import { NavButton, NavItem, NavItemContent, NavItemOptions } from '$components/nav';
 import { UnreadBadge, UnreadBadgeCenter } from '$components/unread-badge';
 import { RoomAvatar, RoomIcon } from '$components/room-avatar';
-import { getDirectRoomAvatarUrl, getRoomAvatarUrl } from '$utils/room';
+import { getDirectRoomAvatarUrl, getRoomAvatarUrl, roomHaveUnread } from '$utils/room';
 import { nameInitials } from '$utils/common';
 import { useMatrixClient } from '$hooks/useMatrixClient';
 import { useRoomUnread } from '$state/hooks/unread';
@@ -63,6 +63,28 @@ import { useAtomValue } from 'jotai';
 import { nicknamesAtom } from '$state/nicknames';
 import { RoomNavUser } from './RoomNavUser';
 
+/**
+ * Reactively checks whether a room has unread messages, even if the
+ * push-rule notification count is zero (e.g. mentions-only rooms with
+ * new regular messages).
+ */
+function useRoomHasUnread(room: Room): boolean {
+  const mx = useMatrixClient();
+  const [hasUnread, setHasUnread] = useState(() => roomHaveUnread(mx, room));
+
+  useEffect(() => {
+    const update = () => setHasUnread(roomHaveUnread(mx, room));
+    room.on(RoomEventEnum.Timeline, update);
+    room.on(RoomEventEnum.Receipt, update);
+    return () => {
+      room.removeListener(RoomEventEnum.Timeline, update);
+      room.removeListener(RoomEventEnum.Receipt, update);
+    };
+  }, [room, mx]);
+
+  return hasUnread;
+}
+
 type RoomNavItemMenuProps = {
   room: Room;
   requestClose: () => void;
@@ -243,6 +265,7 @@ export function RoomNavItem({
   const { focusWithinProps } = useFocusWithin({ onFocusWithinChange: setHover });
   const [menuAnchor, setMenuAnchor] = useState<RectCords>();
   const unread = useRoomUnread(room.roomId, roomToUnreadAtom);
+  const hasRoomUnread = useRoomHasUnread(room);
   const typingMember = useRoomTypingMember(room.roomId).filter(
     (receipt) => receipt.userId !== mx.getUserId()
   );
@@ -318,6 +341,10 @@ export function RoomNavItem({
   };
 
   const optionsVisible = hover || !!menuAnchor;
+  let unreadCount = 0;
+  if (unread) {
+    unreadCount = unread.highlight > 0 ? unread.highlight : unread.total;
+  }
   const ariaLabel = [
     roomName,
     room.isCallRoom()
@@ -338,7 +365,7 @@ export function RoomNavItem({
       <NavItem
         variant="Background"
         radii="400"
-        highlight={unread !== undefined}
+        highlight={unread !== undefined || hasRoomUnread}
         aria-selected={selected}
         data-hover={!!menuAnchor}
         onContextMenu={handleContextMenu}
@@ -368,7 +395,10 @@ export function RoomNavItem({
                 ) : (
                   <RoomIcon
                     style={{
-                      opacity: unread || isActiveCall ? config.opacity.P500 : config.opacity.P300,
+                      opacity:
+                        unread || hasRoomUnread || isActiveCall
+                          ? config.opacity.P500
+                          : config.opacity.P300,
                     }}
                     filled={selected || isActiveCall}
                     size="100"
@@ -379,7 +409,7 @@ export function RoomNavItem({
               </Avatar>
               <Box as="span" grow="Yes">
                 <Text
-                  priority={unread || isActiveCall ? '500' : '300'}
+                  priority={unread || hasRoomUnread || isActiveCall ? '500' : '300'}
                   as="span"
                   size="Inherit"
                   truncate
@@ -392,9 +422,9 @@ export function RoomNavItem({
                   <TypingIndicator size="300" disableAnimation />
                 </Badge>
               )}
-              {!optionsVisible && unread && (
+              {!optionsVisible && (unread || hasRoomUnread) && (
                 <UnreadBadgeCenter>
-                  <UnreadBadge highlight={unread.highlight > 0} count={unread.total} />
+                  <UnreadBadge highlight={!!unread && unread.highlight > 0} count={unreadCount} />
                 </UnreadBadgeCenter>
               )}
               {!optionsVisible && notificationMode !== RoomNotificationMode.Unset && (
diff --git a/src/app/features/search/Search.tsx b/src/app/features/search/Search.tsx
index e326bf04f7..9d4ea3519c 100644
--- a/src/app/features/search/Search.tsx
+++ b/src/app/features/search/Search.tsx
@@ -342,7 +342,7 @@ export function Search({ requestClose }: SearchProps) {
                                 <UnreadBadgeCenter>
                                   <UnreadBadge
                                     highlight={unread.highlight > 0}
-                                    count={unread.total}
+                                    count={unread.highlight > 0 ? unread.highlight : unread.total}
                                   />
                                 </UnreadBadgeCenter>
                               )}
diff --git a/src/app/pages/client/sidebar/DirectTab.tsx b/src/app/pages/client/sidebar/DirectTab.tsx
index 01d7ce3f89..37473bf863 100644
--- a/src/app/pages/client/sidebar/DirectTab.tsx
+++ b/src/app/pages/client/sidebar/DirectTab.tsx
@@ -108,7 +108,10 @@ export function DirectTab() {
       </SidebarItemTooltip>
       {directUnread && (
         <SidebarItemBadge hasCount={directUnread.total > 0}>
-          <UnreadBadge highlight={directUnread.highlight > 0} count={directUnread.total} />
+          <UnreadBadge
+            highlight={directUnread.highlight > 0}
+            count={directUnread.highlight > 0 ? directUnread.highlight : directUnread.total}
+          />
         </SidebarItemBadge>
       )}
       {menuAnchor && (
diff --git a/src/app/pages/client/sidebar/HomeTab.tsx b/src/app/pages/client/sidebar/HomeTab.tsx
index 74f7adfa9d..a19aee989b 100644
--- a/src/app/pages/client/sidebar/HomeTab.tsx
+++ b/src/app/pages/client/sidebar/HomeTab.tsx
@@ -110,7 +110,10 @@ export function HomeTab() {
       </SidebarItemTooltip>
       {homeUnread && (
         <SidebarItemBadge hasCount={homeUnread.total > 0}>
-          <UnreadBadge highlight={homeUnread.highlight > 0} count={homeUnread.total} />
+          <UnreadBadge
+            highlight={homeUnread.highlight > 0}
+            count={homeUnread.highlight > 0 ? homeUnread.highlight : homeUnread.total}
+          />
         </SidebarItemBadge>
       )}
       {menuAnchor && (
diff --git a/src/app/pages/client/sidebar/SpaceTabs.tsx b/src/app/pages/client/sidebar/SpaceTabs.tsx
index 99f54040a5..bc3927da5f 100644
--- a/src/app/pages/client/sidebar/SpaceTabs.tsx
+++ b/src/app/pages/client/sidebar/SpaceTabs.tsx
@@ -466,7 +466,10 @@ function SpaceTab({
           </SidebarItemTooltip>
           {unread && (
             <SidebarItemBadge hasCount={unread.total > 0}>
-              <UnreadBadge highlight={unread.highlight > 0} count={unread.total} />
+              <UnreadBadge
+                highlight={unread.highlight > 0}
+                count={unread.highlight > 0 ? unread.highlight : unread.total}
+              />
             </SidebarItemBadge>
           )}
           {menuAnchor && (
@@ -598,7 +601,10 @@ function ClosedSpaceFolder({
           </SidebarItemTooltip>
           {unread && (
             <SidebarItemBadge hasCount={unread.total > 0}>
-              <UnreadBadge highlight={unread.highlight > 0} count={unread.total} />
+              <UnreadBadge
+                highlight={unread.highlight > 0}
+                count={unread.highlight > 0 ? unread.highlight : unread.total}
+              />
             </SidebarItemBadge>
           )}
         </SidebarItem>
diff --git a/src/app/state/room/roomToUnread.ts b/src/app/state/room/roomToUnread.ts
index 7d12691c5d..706b4bd7f7 100644
--- a/src/app/state/room/roomToUnread.ts
+++ b/src/app/state/room/roomToUnread.ts
@@ -32,6 +32,7 @@ import { useSyncState } from '$hooks/useSyncState';
 import { useRoomsNotificationPreferencesContext } from '$hooks/useRoomsNotificationPreferences';
 import { getClientSyncDiagnostics } from '$client/initMatrix';
 import { roomToParentsAtom } from './roomToParents';
+import { mDirectAtom } from '../mDirectList';
 
 export type RoomToUnreadAction =
   | {
@@ -122,14 +123,14 @@ const baseRoomToUnread = atom<RoomToUnread>(new Map());
 export const roomToUnreadAtom = atom<RoomToUnread, [RoomToUnreadAction], undefined>(
   (get) => get(baseRoomToUnread),
   (get, set, action) => {
+    const dmRoomIds = get(mDirectAtom);
+    const getEffectiveParents = (roomId: string): Set<string> =>
+      dmRoomIds.has(roomId) ? new Set() : getAllParents(get(roomToParentsAtom), roomId);
+
     if (action.type === 'RESET') {
       const draftRoomToUnread: RoomToUnread = new Map();
       action.unreadInfos.forEach((unreadInfo) => {
-        putUnreadInfo(
-          draftRoomToUnread,
-          getAllParents(get(roomToParentsAtom), unreadInfo.roomId),
-          unreadInfo
-        );
+        putUnreadInfo(draftRoomToUnread, getEffectiveParents(unreadInfo.roomId), unreadInfo);
       });
       set(baseRoomToUnread, draftRoomToUnread);
       return;
@@ -143,7 +144,7 @@ export const roomToUnreadAtom = atom<RoomToUnread, [RoomToUnreadAction], undefin
             produce(get(baseRoomToUnread), (draftRoomToUnread) =>
               deleteUnreadInfo(
                 draftRoomToUnread,
-                getAllParents(get(roomToParentsAtom), unreadInfo.roomId),
+                getEffectiveParents(unreadInfo.roomId),
                 unreadInfo.roomId
               )
             )
@@ -160,11 +161,7 @@ export const roomToUnreadAtom = atom<RoomToUnread, [RoomToUnreadAction], undefin
       set(
         baseRoomToUnread,
         produce(get(baseRoomToUnread), (draftRoomToUnread) =>
-          putUnreadInfo(
-            draftRoomToUnread,
-            getAllParents(get(roomToParentsAtom), unreadInfo.roomId),
-            unreadInfo
-          )
+          putUnreadInfo(draftRoomToUnread, getEffectiveParents(unreadInfo.roomId), unreadInfo)
         )
       );
       return;
@@ -173,11 +170,7 @@ export const roomToUnreadAtom = atom<RoomToUnread, [RoomToUnreadAction], undefin
       set(
         baseRoomToUnread,
         produce(get(baseRoomToUnread), (draftRoomToUnread) =>
-          deleteUnreadInfo(
-            draftRoomToUnread,
-            getAllParents(get(roomToParentsAtom), action.roomId),
-            action.roomId
-          )
+          deleteUnreadInfo(draftRoomToUnread, getEffectiveParents(action.roomId), action.roomId)
         )
       );
     }
diff --git a/src/app/utils/room.ts b/src/app/utils/room.ts
index cadd0e9539..aed17e84b6 100644
--- a/src/app/utils/room.ts
+++ b/src/app/utils/room.ts
@@ -243,15 +243,20 @@ export const getUnreadInfo = (room: Room, options?: UnreadInfoOptions): UnreadIn
   let highlight = room.getUnreadNotificationCount(NotificationCountType.Highlight);
   let syntheticDotUnread = false;
 
-  // If our latest notification event is confirmed read, clamp stale non-highlight totals.
+  // If our latest main-timeline notification event is confirmed read, clamp its stale count.
+  // Only apply to the room (non-thread) portion so thread reply counts are preserved.
   if (userId && total > 0 && highlight === 0) {
-    const liveEvents = room.getLiveTimeline().getEvents();
-    const latestNotification = [...liveEvents]
-      .reverse()
-      .find((event) => !event.isSending() && isNotificationEvent(event));
-    const latestNotificationId = latestNotification?.getId();
-    if (latestNotificationId && room.hasUserReadEvent(userId, latestNotificationId)) {
-      total = 0;
+    const roomTotal = room.getRoomUnreadNotificationCount(NotificationCountType.Total);
+    if (roomTotal > 0) {
+      const liveEvents = room.getLiveTimeline().getEvents();
+      const latestNotification = [...liveEvents]
+        .reverse()
+        .find((event) => !event.isSending() && isNotificationEvent(event));
+      const latestNotificationId = latestNotification?.getId();
+      if (latestNotificationId && room.hasUserReadEvent(userId, latestNotificationId)) {
+        // Subtract only the stale main-timeline count; thread totals remain intact.
+        total -= roomTotal;
+      }
     }
   }