diff --git a/desktop/src/features/sidebar/ui/SidebarSection.tsx b/desktop/src/features/sidebar/ui/SidebarSection.tsx
index 0c99eaf16d1..c4c459aeffb 100644
--- a/desktop/src/features/sidebar/ui/SidebarSection.tsx
+++ b/desktop/src/features/sidebar/ui/SidebarSection.tsx
@@ -294,6 +294,14 @@ export function ChannelMenuButton({
     (hasSidebarUnreadProjections
       ? unreadThreadChannelIds.has(channel.id)
       : hasUnread);
+  const showsUnreadCount =
+    !isActive && channel.channelType !== "dm" && unreadCount > 0;
+  const showsEphemeralBadge =
+    Boolean(ephemeralDisplay) &&
+    !activeWorking &&
+    !isMuted &&
+    !showsUnreadCount &&
+    !hasThreadUnread;
   const inactiveContentOpacity = cn(
     !isActive && !hasTopLevelUnread && !isMuted && "opacity-80",
     !isActive &&
@@ -334,7 +342,7 @@ export function ChannelMenuButton({
       >
         {resolvedLabel}
       </span>
-      {ephemeralDisplay ? (
+      {showsEphemeralBadge && ephemeralDisplay ? (
         <EphemeralChannelBadge
           display={ephemeralDisplay}
           testId={`channel-ephemeral-${channel.name}`}
@@ -358,7 +366,7 @@ export function ChannelMenuButton({
           )}
         />
       ) : null}
-      {!isActive && channel.channelType !== "dm" && unreadCount > 0 ? (
+      {showsUnreadCount ? (
         <UnreadCountBadge
           channelName={channel.name}
           className="ml-auto bg-notification text-notification-foreground"
diff --git a/desktop/tests/e2e/channels.spec.ts b/desktop/tests/e2e/channels.spec.ts
index 68d81156e44..d433829437d 100644
--- a/desktop/tests/e2e/channels.spec.ts
+++ b/desktop/tests/e2e/channels.spec.ts
@@ -34,6 +34,8 @@ type MockFeedWindow = Window & {
     content: string;
     createdAt?: number;
     id?: string;
+    kind?: number;
+    mentionPubkeys?: string[];
     parentEventId?: string;
     pubkey?: string;
   }) => {
@@ -1581,12 +1583,78 @@ test("create ephemeral stream shows sidebar and header affordances", async ({
     /Ephemeral channel\. Cleans up in 14 days\./,
   );
 
+  const channelRow = page.getByTestId(`channel-${channelName}`);
+  const channelId = await channelRow.getAttribute("data-channel-id");
+  if (!channelId) {
+    throw new Error("Created ephemeral channel is missing its channel id.");
+  }
+
+  await waitForMockLiveSubscription(page, channelName);
+  await page.getByTestId("channel-general").click();
+  await page.evaluate(
+    ({ agentPubkey, channelId: activeChannelId }) => {
+      (window as MockFeedWindow).__BUZZ_E2E_SEED_ACTIVE_TURNS__?.({
+        agentPubkey,
+        channelId: activeChannelId,
+        turnId: "ephemeral-sidebar-status",
+      });
+    },
+    { agentPubkey: OWNED_RELAY_AGENT_PUBKEY, channelId },
+  );
+
+  await expect(
+    page.getByTestId(`channel-working-${channelName}`),
+  ).toBeVisible();
+  await expect(
+    page.getByTestId(`channel-ephemeral-${channelName}`),
+  ).toHaveCount(0);
+
+  await page.evaluate(
+    ({ agentPubkey, channelId: activeChannelId }) => {
+      (window as MockFeedWindow).__BUZZ_E2E_SEED_ACTIVE_TURNS__?.({
+        agentPubkey,
+        channelId: activeChannelId,
+        turnId: "ephemeral-sidebar-status",
+        kind: "turn_completed",
+      });
+    },
+    { agentPubkey: OWNED_RELAY_AGENT_PUBKEY, channelId },
+  );
+  await expect(
+    page.getByTestId(`channel-ephemeral-${channelName}`),
+  ).toBeVisible();
+
   await page
     .getByRole("button", { name: "Toggle Sidebar", exact: true })
     .click();
   await expect(
     page.getByTestId(`channel-ephemeral-${channelName}`),
   ).toBeVisible();
+  await page
+    .getByRole("button", { name: "Toggle Sidebar", exact: true })
+    .click();
+
+  await page.evaluate(
+    ({ channelName: targetChannelName, mentionPubkey, senderPubkey }) => {
+      (window as MockFeedWindow).__BUZZ_E2E_EMIT_MOCK_MESSAGE__?.({
+        channelName: targetChannelName,
+        content: "Unread mention in an ephemeral channel",
+        kind: 40002,
+        mentionPubkeys: [mentionPubkey],
+        pubkey: senderPubkey,
+      });
+    },
+    {
+      channelName,
+      mentionPubkey: MOCK_IDENTITY_PUBKEY,
+      senderPubkey: TEST_IDENTITIES.alice.pubkey,
+    },
+  );
+
+  await expect(page.getByTestId(`channel-unread-${channelName}`)).toBeVisible();
+  await expect(
+    page.getByTestId(`channel-ephemeral-${channelName}`),
+  ).toHaveCount(0);
 });
 
 test("ephemeral countdown refreshes when switching channels after a clock jump", async ({