diff --git a/app/javascript/dashboard/components-next/dropdown-menu/DropdownMenu.vue b/app/javascript/dashboard/components-next/dropdown-menu/DropdownMenu.vue
index 8fa465704..fba446c0d 100644
--- a/app/javascript/dashboard/components-next/dropdown-menu/DropdownMenu.vue
+++ b/app/javascript/dashboard/components-next/dropdown-menu/DropdownMenu.vue
@@ -162,7 +162,7 @@ onMounted(() => {
         >
           <p
             v-if="section.title"
-            class="px-2 py-2 text-xs mb-0 font-medium text-n-slate-11 uppercase tracking-wide sticky top-0 z-10 bg-n-alpha-3 backdrop-blur-sm"
+            class="px-2 py-2 text-xs mb-0 font-medium text-n-slate-11 uppercase tracking-wide sticky top-0 z-10 bg-n-alpha-3 backdrop-blur-sm truncate min-w-0"
           >
             {{ section.title }}
           </p>
diff --git a/app/javascript/dashboard/components-next/sidebar/Sidebar.vue b/app/javascript/dashboard/components-next/sidebar/Sidebar.vue
index ab037618c..15a007a74 100644
--- a/app/javascript/dashboard/components-next/sidebar/Sidebar.vue
+++ b/app/javascript/dashboard/components-next/sidebar/Sidebar.vue
@@ -21,6 +21,12 @@ import ChannelIcon from 'next/icon/ChannelIcon.vue';
 import SidebarAccountSwitcher from './SidebarAccountSwitcher.vue';
 import Logo from 'next/icon/Logo.vue';
 import ComposeConversation from 'dashboard/components-next/NewConversation/ComposeConversation.vue';
+import {
+  SIDEBAR_SORT_SECTIONS,
+  getSidebarSortOptions,
+  resolveSidebarSort,
+  sortSidebarItems,
+} from 'dashboard/helper/sidebarSort';
 
 const props = defineProps({
   isMobileSidebarOpen: {
@@ -50,6 +56,7 @@ const { width: windowWidth } = useWindowSize();
 const isMobile = computed(() => windowWidth.value < 768);
 
 const accountId = useMapGetter('getCurrentAccountId');
+const currentUserId = useMapGetter('getCurrentUserID');
 const isFeatureEnabledonAccount = useMapGetter(
   'accounts/isFeatureEnabledonAccount'
 );
@@ -79,6 +86,11 @@ const fetchConversationUnreadCounts = ([currentAccountId, isEnabled]) => {
   store.dispatch('conversationUnreadCounts/get');
 };
 
+const fetchSidebarSortPreferences = ([currentAccountId, userId]) => {
+  if (!currentAccountId || !userId) return;
+  store.dispatch('sidebarSortPreferences/initialize');
+};
+
 const toggleShortcutModalFn = show => {
   if (show) {
     emit('openKeyShortcutModal');
@@ -192,6 +204,9 @@ const contactCustomViews = useMapGetter('customViews/getContactCustomViews');
 const conversationCustomViews = useMapGetter(
   'customViews/getConversationCustomViews'
 );
+const getSidebarSectionSort = useMapGetter(
+  'sidebarSortPreferences/getSectionSort'
+);
 
 onMounted(() => {
   store.dispatch('labels/get');
@@ -207,44 +222,62 @@ watch([accountId, hasConversationUnreadCounts], fetchConversationUnreadCounts, {
   immediate: true,
 });
 
-const normalizeUnreadCount = count => {
-  const unreadCount = Number(count);
-  return Number.isFinite(unreadCount) && unreadCount > 0 ? unreadCount : 0;
-};
+watch([accountId, currentUserId], fetchSidebarSortPreferences, {
+  immediate: true,
+});
 
-const sortByUnreadCount = (items, labelKey, unreadCountKey) =>
-  items.slice().sort((a, b) => {
-    const unreadCountDiff =
-      normalizeUnreadCount(unreadCountKey(b)) -
-      normalizeUnreadCount(unreadCountKey(a));
-
-    if (unreadCountDiff !== 0) return unreadCountDiff;
-
-    return labelKey(a).localeCompare(labelKey(b));
+const getSortOptionsForSection = section =>
+  getSidebarSortOptions(section, {
+    hasUnreadCounts: hasConversationUnreadCounts.value,
   });
 
+const getSortForSection = section =>
+  resolveSidebarSort(section, getSidebarSectionSort.value(section), {
+    hasUnreadCounts: hasConversationUnreadCounts.value,
+  });
+
+const updateSortPreference = (section, sortBy) => {
+  store.dispatch('sidebarSortPreferences/setSectionSort', {
+    section,
+    sortBy,
+  });
+};
+
+const buildSortConfig = section => ({
+  sortOptions: getSortOptionsForSection(section),
+  activeSort: getSortForSection(section),
+  onSortChange: sortBy => updateSortPreference(section, sortBy),
+});
+
+const sortedFolders = computed(() =>
+  sortSidebarItems(conversationCustomViews.value, {
+    sortBy: getSortForSection(SIDEBAR_SORT_SECTIONS.FOLDERS),
+    labelKey: view => view.name,
+  })
+);
+
 const sortedTeams = computed(() =>
-  sortByUnreadCount(
-    teams.value,
-    team => team.name,
-    team => getTeamUnreadCount.value(team.id)
-  )
+  sortSidebarItems(teams.value, {
+    sortBy: getSortForSection(SIDEBAR_SORT_SECTIONS.TEAMS),
+    labelKey: team => team.name,
+    unreadCountKey: team => getTeamUnreadCount.value(team.id),
+  })
 );
 
 const sortedInboxes = computed(() =>
-  sortByUnreadCount(
-    inboxes.value,
-    inbox => inbox.name,
-    inbox => getInboxUnreadCount.value(inbox.id)
-  )
+  sortSidebarItems(inboxes.value, {
+    sortBy: getSortForSection(SIDEBAR_SORT_SECTIONS.CHANNELS),
+    labelKey: inbox => inbox.name,
+    unreadCountKey: inbox => getInboxUnreadCount.value(inbox.id),
+  })
 );
 
 const sortedLabels = computed(() =>
-  sortByUnreadCount(
-    labels.value,
-    label => label.title,
-    label => getLabelUnreadCount.value(label.id)
-  )
+  sortSidebarItems(labels.value, {
+    sortBy: getSortForSection(SIDEBAR_SORT_SECTIONS.LABELS),
+    labelKey: label => label.title,
+    unreadCountKey: label => getLabelUnreadCount.value(label.id),
+  })
 );
 
 const closeMobileSidebar = () => {
@@ -331,9 +364,10 @@ const menuItems = computed(() => {
           label: t('SIDEBAR.CUSTOM_VIEWS_FOLDER'),
           icon: 'i-lucide-folder',
           activeOn: ['conversations_through_folders'],
+          ...buildSortConfig(SIDEBAR_SORT_SECTIONS.FOLDERS),
           collapsible: true,
           showTreeLine: true,
-          children: conversationCustomViews.value.map(view => ({
+          children: sortedFolders.value.map(view => ({
             name: `${view.name}-${view.id}`,
             label: view.name,
             to: accountScopedRoute('folder_conversations', { id: view.id }),
@@ -344,6 +378,7 @@ const menuItems = computed(() => {
           label: t('SIDEBAR.TEAMS'),
           icon: 'i-lucide-users',
           activeOn: ['conversations_through_team'],
+          ...buildSortConfig(SIDEBAR_SORT_SECTIONS.TEAMS),
           collapsible: true,
           showTreeLine: true,
           children: sortedTeams.value.map(team => ({
@@ -358,6 +393,7 @@ const menuItems = computed(() => {
           label: t('SIDEBAR.CHANNELS'),
           icon: 'i-lucide-mailbox',
           activeOn: ['conversation_through_inbox'],
+          ...buildSortConfig(SIDEBAR_SORT_SECTIONS.CHANNELS),
           collapsible: true,
           showTreeLine: true,
           children: sortedInboxes.value.map(inbox => ({
@@ -380,6 +416,7 @@ const menuItems = computed(() => {
           label: t('SIDEBAR.LABELS'),
           icon: 'i-lucide-tag',
           activeOn: ['conversations_through_label'],
+          ...buildSortConfig(SIDEBAR_SORT_SECTIONS.LABELS),
           collapsible: true,
           showTreeLine: true,
           children: sortedLabels.value.map(label => ({
diff --git a/app/javascript/dashboard/components-next/sidebar/SidebarCollapsedPopover.vue b/app/javascript/dashboard/components-next/sidebar/SidebarCollapsedPopover.vue
index 18e1aea23..2e431eb7e 100644
--- a/app/javascript/dashboard/components-next/sidebar/SidebarCollapsedPopover.vue
+++ b/app/javascript/dashboard/components-next/sidebar/SidebarCollapsedPopover.vue
@@ -1,11 +1,13 @@
 <script setup>
 import { computed, ref, onMounted, nextTick } from 'vue';
+import { onClickOutside } from '@vueuse/core';
 import { useRouter } from 'vue-router';
 import { useSidebarContext } from './provider';
 import { useMapGetter } from 'dashboard/composables/store';
 import Icon from 'next/icon/Icon.vue';
 import TeleportWithDirection from 'dashboard/components-next/TeleportWithDirection.vue';
 import SidebarUnreadBadge from './SidebarUnreadBadge.vue';
+import SidebarSortMenu from './SidebarSortMenu.vue';
 
 const props = defineProps({
   label: { type: String, required: true },
@@ -14,7 +16,7 @@ const props = defineProps({
   triggerRect: { type: Object, default: () => ({ top: 0, left: 0 }) },
 });
 
-const emit = defineEmits(['close', 'mouseenter', 'mouseleave']);
+const emit = defineEmits(['close', 'mouseenter', 'mouseleave', 'sortToggle']);
 
 const router = useRouter();
 const { isAllowed, sidebarWidth } = useSidebarContext();
@@ -29,6 +31,14 @@ const toggleSubGroup = name => {
   expandedSubGroup.value = expandedSubGroup.value === name ? null : name;
 };
 
+const handleSortToggle = isSortOpen => {
+  emit('sortToggle', isSortOpen);
+};
+
+onClickOutside(popoverRef, () => emit('close'), {
+  ignore: ['[data-popover-content]'],
+});
+
 const navigateAndClose = to => {
   router.push(to);
   emit('close');
@@ -123,24 +133,44 @@ onMounted(async () => {
         >
           <template v-for="child in accessibleChildren" :key="child.name">
             <!-- SubGroup with children -->
-            <li v-if="child.children" class="py-0.5">
-              <button
-                class="flex items-center gap-2 px-2 py-1.5 w-full rounded-lg text-n-slate-11 hover:bg-n-alpha-2 transition-colors duration-150 ease-out text-left rtl:text-right"
-                @click="toggleSubGroup(child.name)"
+            <li v-if="child.children" class="group/sidebar-section py-0.5">
+              <div
+                class="flex items-center rounded-lg text-n-slate-11 hover:bg-n-alpha-2 transition-colors duration-150 ease-out"
               >
-                <Icon
-                  v-if="child.icon"
-                  :icon="child.icon"
-                  class="size-4 flex-shrink-0"
-                />
-                <span class="flex-1 truncate text-sm">{{ child.label }}</span>
-                <span
-                  class="size-3 transition-transform i-lucide-chevron-down"
-                  :class="{
-                    'rotate-180': expandedSubGroup === child.name,
-                  }"
-                />
-              </button>
+                <button
+                  class="flex flex-1 min-w-0 items-center gap-2 ps-2 py-1.5 text-left rtl:text-right"
+                  @click="toggleSubGroup(child.name)"
+                >
+                  <Icon
+                    v-if="child.icon"
+                    :icon="child.icon"
+                    class="size-4 flex-shrink-0"
+                  />
+                  <span class="flex-1 truncate text-sm">{{ child.label }}</span>
+                </button>
+                <div class="flex flex-shrink-0 items-center gap-1 pe-2">
+                  <SidebarSortMenu
+                    v-if="child.sortOptions?.length"
+                    :active-sort="child.activeSort"
+                    :options="child.sortOptions"
+                    :open-on-hover="false"
+                    @sort="child.onSortChange"
+                    @toggle="handleSortToggle"
+                  />
+                  <button
+                    type="button"
+                    class="flex size-6 flex-shrink-0 items-center justify-center rounded-md text-n-slate-11 hover:bg-n-alpha-2 focus-visible:bg-n-alpha-2 focus-visible:outline-none"
+                    @click.stop="toggleSubGroup(child.name)"
+                  >
+                    <span
+                      class="size-4 flex-shrink-0 transition-transform i-lucide-chevron-down"
+                      :class="{
+                        'rotate-180': expandedSubGroup === child.name,
+                      }"
+                    />
+                  </button>
+                </div>
+              </div>
               <Transition v-bind="transition">
                 <ul
                   v-if="expandedSubGroup === child.name"
diff --git a/app/javascript/dashboard/components-next/sidebar/SidebarGroup.vue b/app/javascript/dashboard/components-next/sidebar/SidebarGroup.vue
index f618ad9ba..de2ad8e28 100644
--- a/app/javascript/dashboard/components-next/sidebar/SidebarGroup.vue
+++ b/app/javascript/dashboard/components-next/sidebar/SidebarGroup.vue
@@ -55,6 +55,9 @@ const hasChildren = computed(
 const isPopoverOpen = computed(() => activePopover.value === props.name);
 const triggerRef = ref(null);
 const triggerRect = ref({ top: 0, left: 0, bottom: 0, right: 0 });
+// The sort dropdown teleports outside the popover; keep the popover open while
+// it is showing so moving the cursor onto it does not close everything.
+const isSortMenuOpen = ref(false);
 
 const openPopover = () => {
   if (triggerRef.value) {
@@ -82,7 +85,7 @@ const handleMouseEnter = () => {
 };
 
 const handleMouseLeave = () => {
-  if (!hasChildren.value) return;
+  if (!hasChildren.value || isSortMenuOpen.value) return;
   scheduleClose(200);
 };
 
@@ -91,9 +94,15 @@ const handlePopoverMouseEnter = () => {
 };
 
 const handlePopoverMouseLeave = () => {
+  if (isSortMenuOpen.value) return;
   scheduleClose(100);
 };
 
+const handleSortToggle = isOpen => {
+  isSortMenuOpen.value = isOpen;
+  cancelClose();
+};
+
 // Close popover when mouse leaves the window
 const handleWindowBlur = () => {
   closeActivePopover();
@@ -273,6 +282,7 @@ watch(
           @close="closePopover"
           @mouseenter="handlePopoverMouseEnter"
           @mouseleave="handlePopoverMouseLeave"
+          @sort-toggle="handleSortToggle"
         />
       </div>
     </template>
@@ -307,6 +317,9 @@ watch(
             :end-tree-line="child.showTreeLine && isLastVisibleChild(child)"
             :is-expanded="isExpanded"
             :active-child="activeChild"
+            :sort-options="child.sortOptions"
+            :active-sort="child.activeSort"
+            @update-sort="child.onSortChange"
           />
           <SidebarGroupLeaf
             v-else-if="isAllowed(child.to)"
diff --git a/app/javascript/dashboard/components-next/sidebar/SidebarGroupHeader.vue b/app/javascript/dashboard/components-next/sidebar/SidebarGroupHeader.vue
index a40330f01..c59cfe85e 100644
--- a/app/javascript/dashboard/components-next/sidebar/SidebarGroupHeader.vue
+++ b/app/javascript/dashboard/components-next/sidebar/SidebarGroupHeader.vue
@@ -45,7 +45,9 @@ const count = computed(() =>
         class="size-2 -top-px ltr:-right-px rtl:-left-px bg-n-brand absolute rounded-full border border-n-solid-2"
       />
     </div>
-    <div class="flex items-center gap-1.5 flex-grow min-w-0 flex-1">
+    <div
+      class="flex items-center gap-1.5 flex-grow justify-between min-w-0 flex-1"
+    >
       <span
         class="truncate"
         :class="{
@@ -57,11 +59,7 @@ const count = computed(() =>
       </span>
       <span
         v-if="dynamicCount && !expandable"
-        class="rounded-md capitalize text-xs leading-5 font-medium text-center outline outline-1 px-1 flex-shrink-0"
-        :class="{
-          'text-n-slate-12 outline-n-slate-6': isActive,
-          'text-n-slate-11 outline-n-strong': !isActive,
-        }"
+        class="inline-grid h-5 min-w-5 place-items-center rounded-full bg-n-slate-4 px-1 text-xxs font-medium leading-3 text-n-slate-12 dark:bg-n-slate-5 flex-shrink-0"
       >
         {{ count }}
       </span>
diff --git a/app/javascript/dashboard/components-next/sidebar/SidebarGroupSeparator.vue b/app/javascript/dashboard/components-next/sidebar/SidebarGroupSeparator.vue
index 4a649a1df..393a88523 100644
--- a/app/javascript/dashboard/components-next/sidebar/SidebarGroupSeparator.vue
+++ b/app/javascript/dashboard/components-next/sidebar/SidebarGroupSeparator.vue
@@ -1,5 +1,6 @@
 <script setup>
 import Icon from 'next/icon/Icon.vue';
+import SidebarSortMenu from './SidebarSortMenu.vue';
 
 defineProps({
   collapsible: {
@@ -18,6 +19,14 @@ defineProps({
     type: [Object, String],
     default: '',
   },
+  sortOptions: {
+    type: Array,
+    default: () => [],
+  },
+  activeSort: {
+    type: String,
+    default: '',
+  },
   showTreeLine: {
     type: Boolean,
     default: false,
@@ -28,7 +37,7 @@ defineProps({
   },
 });
 
-const emit = defineEmits(['toggle']);
+const emit = defineEmits(['toggle', 'update-sort']);
 
 const TREE_VERTICAL_LINE =
   "before:content-[''] before:absolute before:-top-1 before:w-0.5 before:bg-n-slate-4 before:start-[-0.5rem]";
@@ -37,34 +46,59 @@ const TREE_ELBOW =
 </script>
 
 <template>
-  <component
-    :is="collapsible ? 'button' : 'div'"
-    :type="collapsible ? 'button' : undefined"
-    :aria-expanded="collapsible ? isExpanded : undefined"
-    :title="label"
-    class="relative justify-between flex items-center gap-2 px-2 py-1.5 rounded-lg h-8 text-n-slate-10 select-none min-w-0"
-    :class="[
-      showTreeLine && TREE_VERTICAL_LINE,
-      showTreeLine &&
-        (endTreeLine ? `before:h-3 ${TREE_ELBOW}` : 'before:-bottom-1'),
-      {
-        'w-full': !collapsible,
-        'pointer-events-none': !collapsible,
-        'ms-5 cursor-pointer hover:bg-n-alpha-2': collapsible,
-      },
-    ]"
-    @click.stop="emit('toggle')"
-  >
-    <div class="min-w-0 inline-flex gap-2 items-center">
-      <Icon v-if="icon" :icon="icon" class="size-4 flex-shrink-0" />
-      <span class="text-sm font-medium leading-5 flex-grow truncate text-start">
-        {{ label }}
-      </span>
+  <div class="relative min-w-0" :class="{ 'ms-5': collapsible }">
+    <component
+      :is="collapsible ? 'button' : 'div'"
+      :type="collapsible ? 'button' : undefined"
+      :aria-expanded="collapsible ? isExpanded : undefined"
+      :title="label"
+      class="relative flex h-8 w-full min-w-0 items-center justify-between gap-2 rounded-lg px-2 py-1.5 text-n-slate-10 select-none"
+      :class="[
+        showTreeLine && TREE_VERTICAL_LINE,
+        showTreeLine &&
+          (endTreeLine ? `before:h-3 ${TREE_ELBOW}` : 'before:-bottom-1'),
+        {
+          'pointer-events-none': !collapsible,
+          'cursor-pointer hover:bg-n-alpha-2': collapsible,
+          'pe-14': collapsible && sortOptions.length,
+          'pe-8': collapsible && !sortOptions.length,
+          'pe-10': !collapsible && sortOptions.length,
+        },
+      ]"
+      @click.stop="collapsible ? emit('toggle') : undefined"
+    >
+      <div class="inline-flex min-w-0 items-center gap-2">
+        <Icon v-if="icon" :icon="icon" class="size-4 flex-shrink-0" />
+        <span
+          class="flex-grow truncate text-start text-sm font-medium leading-5"
+        >
+          {{ label }}
+        </span>
+      </div>
+    </component>
+    <div
+      v-if="collapsible || sortOptions.length"
+      class="absolute end-2 top-1/2 flex -translate-y-1/2 items-center gap-1"
+    >
+      <SidebarSortMenu
+        v-if="sortOptions.length"
+        :active-sort="activeSort"
+        :options="sortOptions"
+        @sort="sortBy => emit('update-sort', sortBy)"
+      />
+      <button
+        v-if="collapsible"
+        type="button"
+        class="flex size-6 flex-shrink-0 items-center justify-center rounded-md text-n-slate-10 hover:bg-n-alpha-2 focus-visible:bg-n-alpha-2 focus-visible:outline-none"
+        :aria-expanded="isExpanded"
+        :aria-label="label"
+        @click.stop="emit('toggle')"
+      >
+        <span
+          class="size-3 flex-shrink-0"
+          :class="isExpanded ? 'i-lucide-chevron-up' : 'i-lucide-chevron-down'"
+        />
+      </button>
     </div>
-    <span
-      v-if="collapsible"
-      class="size-3 flex-shrink-0 text-n-slate-10 me-0.5"
-      :class="isExpanded ? 'i-lucide-chevron-up' : 'i-lucide-chevron-down'"
-    />
-  </component>
+  </div>
 </template>
diff --git a/app/javascript/dashboard/components-next/sidebar/SidebarSortMenu.vue b/app/javascript/dashboard/components-next/sidebar/SidebarSortMenu.vue
new file mode 100644
index 000000000..c4e29d881
--- /dev/null
+++ b/app/javascript/dashboard/components-next/sidebar/SidebarSortMenu.vue
@@ -0,0 +1,209 @@
+<script setup>
+import { computed, nextTick, onBeforeUnmount, ref } from 'vue';
+import { vOnClickOutside } from '@vueuse/components';
+import { useI18n } from 'vue-i18n';
+import { useDropdownPosition } from 'dashboard/composables/useDropdownPosition';
+import Button from 'dashboard/components-next/button/Button.vue';
+import DropdownMenu from 'dashboard/components-next/dropdown-menu/DropdownMenu.vue';
+import TeleportWithDirection from 'dashboard/components-next/TeleportWithDirection.vue';
+import { SIDEBAR_SORT_KEYS } from 'dashboard/helper/sidebarSort';
+
+const props = defineProps({
+  activeSort: {
+    type: String,
+    default: '',
+  },
+  options: {
+    type: Array,
+    default: () => [],
+  },
+  openOnHover: {
+    type: Boolean,
+    default: true,
+  },
+});
+
+const emit = defineEmits(['sort', 'toggle']);
+
+const SORT_OPTION_GROUPS = [
+  {
+    key: 'created',
+    options: [SIDEBAR_SORT_KEYS.CREATED_DESC, SIDEBAR_SORT_KEYS.CREATED_ASC],
+  },
+  {
+    key: 'alphabetical',
+    options: [
+      SIDEBAR_SORT_KEYS.ALPHABETICAL_ASC,
+      SIDEBAR_SORT_KEYS.ALPHABETICAL_DESC,
+    ],
+  },
+  {
+    key: 'unread_count',
+    options: [
+      SIDEBAR_SORT_KEYS.UNREAD_COUNT_DESC,
+      SIDEBAR_SORT_KEYS.UNREAD_COUNT_ASC,
+    ],
+  },
+];
+
+const { t } = useI18n();
+const isOpen = ref(false);
+const triggerRef = ref(null);
+const popoverRef = ref(null);
+let closeTimer;
+
+const { fixedPosition, updatePosition } = useDropdownPosition(
+  triggerRef,
+  popoverRef,
+  isOpen,
+  { align: 'start' }
+);
+
+const getSortOptionLabel = option => {
+  if (option === SIDEBAR_SORT_KEYS.CREATED_DESC) {
+    return t('SIDEBAR.SORT_OPTIONS.CREATED_DESC');
+  }
+
+  if (option === SIDEBAR_SORT_KEYS.CREATED_ASC) {
+    return t('SIDEBAR.SORT_OPTIONS.CREATED_ASC');
+  }
+
+  if (option === SIDEBAR_SORT_KEYS.ALPHABETICAL_ASC) {
+    return t('SIDEBAR.SORT_OPTIONS.ALPHABETICAL_ASC');
+  }
+
+  if (option === SIDEBAR_SORT_KEYS.ALPHABETICAL_DESC) {
+    return t('SIDEBAR.SORT_OPTIONS.ALPHABETICAL_DESC');
+  }
+
+  if (option === SIDEBAR_SORT_KEYS.UNREAD_COUNT_DESC) {
+    return t('SIDEBAR.SORT_OPTIONS.UNREAD_COUNT_DESC');
+  }
+
+  if (option === SIDEBAR_SORT_KEYS.UNREAD_COUNT_ASC) {
+    return t('SIDEBAR.SORT_OPTIONS.UNREAD_COUNT_ASC');
+  }
+
+  return '';
+};
+
+const getSortGroupLabel = groupKey => {
+  if (groupKey === 'created') {
+    return t('SIDEBAR.SORT_GROUPS.CREATED');
+  }
+
+  if (groupKey === 'alphabetical') {
+    return t('SIDEBAR.SORT_GROUPS.ALPHABETICAL');
+  }
+
+  if (groupKey === 'unread_count') {
+    return t('SIDEBAR.SORT_GROUPS.UNREAD_COUNT');
+  }
+
+  return '';
+};
+
+const sortMenuSections = computed(() =>
+  SORT_OPTION_GROUPS.map(group => ({
+    title: getSortGroupLabel(group.key),
+    items: group.options
+      .filter(option => props.options.includes(option))
+      .map(option => ({
+        label: getSortOptionLabel(option),
+        value: option,
+        action: 'sort',
+        isActive: option === props.activeSort,
+      })),
+  })).filter(section => section.items.length)
+);
+
+const clearCloseTimer = () => {
+  if (closeTimer) {
+    clearTimeout(closeTimer);
+    closeTimer = null;
+  }
+};
+
+const openMenu = async () => {
+  clearCloseTimer();
+  isOpen.value = true;
+  emit('toggle', true);
+
+  await nextTick();
+  updatePosition();
+};
+
+const closeMenu = () => {
+  clearCloseTimer();
+  isOpen.value = false;
+  emit('toggle', false);
+};
+
+const scheduleClose = () => {
+  clearCloseTimer();
+  closeTimer = setTimeout(closeMenu, 150);
+};
+
+const handleTriggerEnter = () => {
+  if (props.openOnHover) openMenu();
+};
+
+const handleTriggerLeave = () => {
+  if (props.openOnHover) scheduleClose();
+};
+
+const handleClickOutside = event => {
+  if (triggerRef.value?.contains(event.target)) return;
+  closeMenu();
+};
+
+const handleSortChange = ({ value }) => {
+  emit('sort', value);
+  closeMenu();
+};
+
+onBeforeUnmount(clearCloseTimer);
+</script>
+
+<template>
+  <div
+    ref="triggerRef"
+    class="relative invisible flex-shrink-0 opacity-0 pointer-events-none transition-opacity duration-150 group-hover/sidebar-section:visible group-hover/sidebar-section:opacity-100 group-hover/sidebar-section:pointer-events-auto"
+    :class="{ '!visible !opacity-100 !pointer-events-auto': isOpen }"
+    @mouseenter="handleTriggerEnter"
+    @mouseleave="handleTriggerLeave"
+  >
+    <Button
+      :title="t('SIDEBAR.SORT_TOOLTIP')"
+      icon="i-lucide-arrow-up-down"
+      ghost
+      slate
+      xs
+      class="!size-6 !text-n-slate-11 hover:!text-n-slate-12"
+      :class="{ '!bg-n-alpha-2': isOpen }"
+      @click.stop="openMenu"
+    />
+    <TeleportWithDirection>
+      <DropdownMenu
+        v-if="isOpen"
+        ref="popoverRef"
+        v-on-click-outside="handleClickOutside"
+        data-popover-content
+        :menu-sections="sortMenuSections"
+        :class="fixedPosition.class"
+        :style="fixedPosition.style"
+        class="w-60 !fixed"
+        @action="handleSortChange"
+        @mouseenter="clearCloseTimer"
+        @mouseleave="handleTriggerLeave"
+      >
+        <template #trailing-icon="{ item }">
+          <span
+            v-if="item.isActive"
+            class="i-lucide-check ms-auto size-4 flex-shrink-0 text-n-slate-11"
+          />
+        </template>
+      </DropdownMenu>
+    </TeleportWithDirection>
+  </div>
+</template>
diff --git a/app/javascript/dashboard/components-next/sidebar/SidebarSubGroup.vue b/app/javascript/dashboard/components-next/sidebar/SidebarSubGroup.vue
index a9f9c45e1..82005b49a 100644
--- a/app/javascript/dashboard/components-next/sidebar/SidebarSubGroup.vue
+++ b/app/javascript/dashboard/components-next/sidebar/SidebarSubGroup.vue
@@ -1,5 +1,6 @@
 <script setup>
 import { computed, ref, watch } from 'vue';
+import { useEventListener } from '@vueuse/core';
 import { useMapGetter } from 'dashboard/composables/store';
 import { LOCAL_STORAGE_KEYS } from 'dashboard/constants/localStorage';
 import { LocalStorage } from 'shared/helpers/localStorage';
@@ -8,7 +9,6 @@ import SidebarGroupLeaf from './SidebarGroupLeaf.vue';
 import SidebarGroupSeparator from './SidebarGroupSeparator.vue';
 
 import { useSidebarContext } from './provider';
-import { useEventListener } from '@vueuse/core';
 
 const props = defineProps({
   name: { type: String, required: true },
@@ -17,11 +17,15 @@ const props = defineProps({
   icon: { type: [Object, String], required: true },
   children: { type: Array, default: undefined },
   activeChild: { type: Object, default: undefined },
+  sortOptions: { type: Array, default: () => [] },
+  activeSort: { type: String, default: '' },
   collapsible: { type: Boolean, default: false },
   showTreeLine: { type: Boolean, default: false },
   endTreeLine: { type: Boolean, default: false },
 });
 
+const emit = defineEmits(['update-sort']);
+
 const { isAllowed } = useSidebarContext();
 const scrollableContainer = ref(null);
 const accountId = useMapGetter('getCurrentAccountId');
@@ -121,7 +125,7 @@ watch([hasActiveChild, storageKey], expandSubGroupOnActiveChild, {
 </script>
 
 <template>
-  <li class="relative flex flex-col list-none min-w-0">
+  <li class="group/sidebar-section relative flex flex-col list-none min-w-0">
     <template v-if="hasAccessibleItems">
       <SidebarGroupSeparator
         v-show="isExpanded"
@@ -131,8 +135,11 @@ watch([hasActiveChild, storageKey], expandSubGroupOnActiveChild, {
         :is-expanded="isSubGroupExpanded"
         :show-tree-line="showTreeLine"
         :end-tree-line="endTreeLine"
+        :sort-options="sortOptions"
+        :active-sort="activeSort"
         class="my-1"
         @toggle="toggleSubGroup"
+        @update-sort="sortBy => emit('update-sort', sortBy)"
       />
       <ul
         v-if="children.length"
diff --git a/app/javascript/dashboard/helper/sidebarSort.js b/app/javascript/dashboard/helper/sidebarSort.js
new file mode 100644
index 000000000..801dd94e2
--- /dev/null
+++ b/app/javascript/dashboard/helper/sidebarSort.js
@@ -0,0 +1,181 @@
+export const SIDEBAR_SORT_KEYS = Object.freeze({
+  CREATED_DESC: 'created_at_desc',
+  CREATED_ASC: 'created_at_asc',
+  ALPHABETICAL_ASC: 'alphabetical_asc',
+  ALPHABETICAL_DESC: 'alphabetical_desc',
+  UNREAD_COUNT_DESC: 'unread_count_desc',
+  UNREAD_COUNT_ASC: 'unread_count_asc',
+});
+
+export const SIDEBAR_SORT_SECTIONS = Object.freeze({
+  FOLDERS: 'folders',
+  TEAMS: 'teams',
+  CHANNELS: 'channels',
+  LABELS: 'labels',
+});
+
+export const SIDEBAR_SORT_OPTIONS_BY_SECTION = Object.freeze({
+  [SIDEBAR_SORT_SECTIONS.FOLDERS]: [
+    SIDEBAR_SORT_KEYS.CREATED_DESC,
+    SIDEBAR_SORT_KEYS.CREATED_ASC,
+    SIDEBAR_SORT_KEYS.ALPHABETICAL_ASC,
+    SIDEBAR_SORT_KEYS.ALPHABETICAL_DESC,
+  ],
+  [SIDEBAR_SORT_SECTIONS.TEAMS]: [
+    SIDEBAR_SORT_KEYS.CREATED_DESC,
+    SIDEBAR_SORT_KEYS.CREATED_ASC,
+    SIDEBAR_SORT_KEYS.ALPHABETICAL_ASC,
+    SIDEBAR_SORT_KEYS.ALPHABETICAL_DESC,
+    SIDEBAR_SORT_KEYS.UNREAD_COUNT_DESC,
+    SIDEBAR_SORT_KEYS.UNREAD_COUNT_ASC,
+  ],
+  [SIDEBAR_SORT_SECTIONS.CHANNELS]: [
+    SIDEBAR_SORT_KEYS.CREATED_DESC,
+    SIDEBAR_SORT_KEYS.CREATED_ASC,
+    SIDEBAR_SORT_KEYS.ALPHABETICAL_ASC,
+    SIDEBAR_SORT_KEYS.ALPHABETICAL_DESC,
+    SIDEBAR_SORT_KEYS.UNREAD_COUNT_DESC,
+    SIDEBAR_SORT_KEYS.UNREAD_COUNT_ASC,
+  ],
+  [SIDEBAR_SORT_SECTIONS.LABELS]: [
+    SIDEBAR_SORT_KEYS.CREATED_DESC,
+    SIDEBAR_SORT_KEYS.CREATED_ASC,
+    SIDEBAR_SORT_KEYS.ALPHABETICAL_ASC,
+    SIDEBAR_SORT_KEYS.ALPHABETICAL_DESC,
+    SIDEBAR_SORT_KEYS.UNREAD_COUNT_DESC,
+    SIDEBAR_SORT_KEYS.UNREAD_COUNT_ASC,
+  ],
+});
+
+const UNREAD_COUNT_SORT_OPTIONS = [
+  SIDEBAR_SORT_KEYS.UNREAD_COUNT_DESC,
+  SIDEBAR_SORT_KEYS.UNREAD_COUNT_ASC,
+];
+
+export const DEFAULT_SIDEBAR_SORT_PREFERENCES = Object.freeze({
+  [SIDEBAR_SORT_SECTIONS.FOLDERS]: SIDEBAR_SORT_KEYS.CREATED_DESC,
+  [SIDEBAR_SORT_SECTIONS.TEAMS]: SIDEBAR_SORT_KEYS.UNREAD_COUNT_DESC,
+  [SIDEBAR_SORT_SECTIONS.CHANNELS]: SIDEBAR_SORT_KEYS.UNREAD_COUNT_DESC,
+  [SIDEBAR_SORT_SECTIONS.LABELS]: SIDEBAR_SORT_KEYS.UNREAD_COUNT_DESC,
+});
+
+export const isValidSidebarSort = (section, sortBy) => {
+  return SIDEBAR_SORT_OPTIONS_BY_SECTION[section]?.includes(sortBy);
+};
+
+const isUnreadCountSort = sortBy => UNREAD_COUNT_SORT_OPTIONS.includes(sortBy);
+
+export const getSidebarSortOptions = (
+  section,
+  { hasUnreadCounts = true } = {}
+) => {
+  const options = SIDEBAR_SORT_OPTIONS_BY_SECTION[section] || [];
+
+  if (hasUnreadCounts) return options;
+
+  return options.filter(option => !isUnreadCountSort(option));
+};
+
+export const resolveSidebarSort = (
+  section,
+  sortBy,
+  { hasUnreadCounts = true } = {}
+) => {
+  const options = getSidebarSortOptions(section, { hasUnreadCounts });
+
+  if (options.includes(sortBy)) return sortBy;
+  if (!hasUnreadCounts && isUnreadCountSort(sortBy)) {
+    return SIDEBAR_SORT_KEYS.ALPHABETICAL_ASC;
+  }
+
+  return options[0] || SIDEBAR_SORT_KEYS.ALPHABETICAL_ASC;
+};
+
+export const normalizeSidebarSortPreferences = (preferences = {}) => {
+  const savedPreferences = preferences || {};
+
+  return Object.keys(DEFAULT_SIDEBAR_SORT_PREFERENCES).reduce(
+    (result, section) => {
+      const sortBy = savedPreferences[section];
+      result[section] = isValidSidebarSort(section, sortBy)
+        ? sortBy
+        : DEFAULT_SIDEBAR_SORT_PREFERENCES[section];
+      return result;
+    },
+    {}
+  );
+};
+
+const normalizeUnreadCount = count => {
+  const unreadCount = Number(count);
+  return Number.isFinite(unreadCount) && unreadCount > 0 ? unreadCount : 0;
+};
+
+const getCreatedValue = item => {
+  const createdAt = item.created_at || item.createdAt;
+
+  if (typeof createdAt === 'number') return createdAt;
+
+  if (createdAt) {
+    const timestamp = Date.parse(createdAt);
+    if (Number.isFinite(timestamp)) return timestamp;
+  }
+
+  const id = Number(item.id);
+  return Number.isFinite(id) ? id : 0;
+};
+
+const getLabelValue = (item, labelKey) => {
+  return String(labelKey(item) || '');
+};
+
+const compareAlphabetically = (a, b, labelKey) => {
+  return getLabelValue(a, labelKey).localeCompare(
+    getLabelValue(b, labelKey),
+    undefined,
+    {
+      sensitivity: 'base',
+    }
+  );
+};
+
+export const sortSidebarItems = (
+  items,
+  { sortBy, labelKey, unreadCountKey = () => 0 }
+) => {
+  return (items || []).slice().sort((a, b) => {
+    if (sortBy === SIDEBAR_SORT_KEYS.CREATED_DESC) {
+      const createdDiff = getCreatedValue(b) - getCreatedValue(a);
+      if (createdDiff !== 0) return createdDiff;
+      return compareAlphabetically(a, b, labelKey);
+    }
+
+    if (sortBy === SIDEBAR_SORT_KEYS.CREATED_ASC) {
+      const createdDiff = getCreatedValue(a) - getCreatedValue(b);
+      if (createdDiff !== 0) return createdDiff;
+      return compareAlphabetically(a, b, labelKey);
+    }
+
+    if (sortBy === SIDEBAR_SORT_KEYS.ALPHABETICAL_DESC) {
+      return compareAlphabetically(b, a, labelKey);
+    }
+
+    if (sortBy === SIDEBAR_SORT_KEYS.UNREAD_COUNT_DESC) {
+      const unreadCountDiff =
+        normalizeUnreadCount(unreadCountKey(b)) -
+        normalizeUnreadCount(unreadCountKey(a));
+
+      if (unreadCountDiff !== 0) return unreadCountDiff;
+    }
+
+    if (sortBy === SIDEBAR_SORT_KEYS.UNREAD_COUNT_ASC) {
+      const unreadCountDiff =
+        normalizeUnreadCount(unreadCountKey(a)) -
+        normalizeUnreadCount(unreadCountKey(b));
+
+      if (unreadCountDiff !== 0) return unreadCountDiff;
+    }
+
+    return compareAlphabetically(a, b, labelKey);
+  });
+};
diff --git a/app/javascript/dashboard/helper/specs/sidebarSort.spec.js b/app/javascript/dashboard/helper/specs/sidebarSort.spec.js
new file mode 100644
index 000000000..3919252c2
--- /dev/null
+++ b/app/javascript/dashboard/helper/specs/sidebarSort.spec.js
@@ -0,0 +1,205 @@
+import {
+  DEFAULT_SIDEBAR_SORT_PREFERENCES,
+  SIDEBAR_SORT_KEYS,
+  SIDEBAR_SORT_SECTIONS,
+  getSidebarSortOptions,
+  normalizeSidebarSortPreferences,
+  resolveSidebarSort,
+  sortSidebarItems,
+} from '../sidebarSort';
+
+const items = [
+  {
+    id: 1,
+    name: 'Billing',
+    created_at: '2024-01-01T00:00:00.000Z',
+  },
+  {
+    id: 3,
+    name: 'Accounts',
+    created_at: '2024-03-01T00:00:00.000Z',
+  },
+  {
+    id: 2,
+    name: 'Support',
+    created_at: '2024-02-01T00:00:00.000Z',
+  },
+];
+
+describe('#sortSidebarItems', () => {
+  it('sorts by created date descending', () => {
+    const sortedItems = sortSidebarItems(items, {
+      sortBy: SIDEBAR_SORT_KEYS.CREATED_DESC,
+      labelKey: item => item.name,
+    });
+
+    expect(sortedItems.map(item => item.name)).toEqual([
+      'Accounts',
+      'Support',
+      'Billing',
+    ]);
+  });
+
+  it('sorts by created date ascending', () => {
+    const sortedItems = sortSidebarItems(items, {
+      sortBy: SIDEBAR_SORT_KEYS.CREATED_ASC,
+      labelKey: item => item.name,
+    });
+
+    expect(sortedItems.map(item => item.name)).toEqual([
+      'Billing',
+      'Support',
+      'Accounts',
+    ]);
+  });
+
+  it('falls back to id when created date is not present', () => {
+    const sortedItems = sortSidebarItems(
+      items.map(({ created_at: _createdAt, ...item }) => item),
+      {
+        sortBy: SIDEBAR_SORT_KEYS.CREATED_DESC,
+        labelKey: item => item.name,
+      }
+    );
+
+    expect(sortedItems.map(item => item.id)).toEqual([3, 2, 1]);
+  });
+
+  it('sorts alphabetically from A to Z', () => {
+    const sortedItems = sortSidebarItems(items, {
+      sortBy: SIDEBAR_SORT_KEYS.ALPHABETICAL_ASC,
+      labelKey: item => item.name,
+    });
+
+    expect(sortedItems.map(item => item.name)).toEqual([
+      'Accounts',
+      'Billing',
+      'Support',
+    ]);
+  });
+
+  it('sorts alphabetically from Z to A', () => {
+    const sortedItems = sortSidebarItems(items, {
+      sortBy: SIDEBAR_SORT_KEYS.ALPHABETICAL_DESC,
+      labelKey: item => item.name,
+    });
+
+    expect(sortedItems.map(item => item.name)).toEqual([
+      'Support',
+      'Billing',
+      'Accounts',
+    ]);
+  });
+
+  it('sorts by unread count descending and falls back to alphabetical order', () => {
+    const unreadCounts = {
+      1: 3,
+      2: 3,
+      3: 7,
+    };
+
+    const sortedItems = sortSidebarItems(items, {
+      sortBy: SIDEBAR_SORT_KEYS.UNREAD_COUNT_DESC,
+      labelKey: item => item.name,
+      unreadCountKey: item => unreadCounts[item.id],
+    });
+
+    expect(sortedItems.map(item => item.name)).toEqual([
+      'Accounts',
+      'Billing',
+      'Support',
+    ]);
+  });
+
+  it('sorts by unread count ascending and falls back to alphabetical order', () => {
+    const unreadCounts = {
+      1: 3,
+      2: 3,
+      3: 7,
+    };
+
+    const sortedItems = sortSidebarItems(items, {
+      sortBy: SIDEBAR_SORT_KEYS.UNREAD_COUNT_ASC,
+      labelKey: item => item.name,
+      unreadCountKey: item => unreadCounts[item.id],
+    });
+
+    expect(sortedItems.map(item => item.name)).toEqual([
+      'Billing',
+      'Support',
+      'Accounts',
+    ]);
+  });
+});
+
+describe('#normalizeSidebarSortPreferences', () => {
+  it('keeps valid preferences', () => {
+    const preferences = normalizeSidebarSortPreferences({
+      [SIDEBAR_SORT_SECTIONS.FOLDERS]: SIDEBAR_SORT_KEYS.ALPHABETICAL_DESC,
+      [SIDEBAR_SORT_SECTIONS.TEAMS]: SIDEBAR_SORT_KEYS.CREATED_ASC,
+    });
+
+    expect(preferences).toEqual({
+      ...DEFAULT_SIDEBAR_SORT_PREFERENCES,
+      [SIDEBAR_SORT_SECTIONS.FOLDERS]: SIDEBAR_SORT_KEYS.ALPHABETICAL_DESC,
+      [SIDEBAR_SORT_SECTIONS.TEAMS]: SIDEBAR_SORT_KEYS.CREATED_ASC,
+    });
+  });
+
+  it('falls back to defaults for unsupported preferences', () => {
+    const preferences = normalizeSidebarSortPreferences({
+      [SIDEBAR_SORT_SECTIONS.FOLDERS]: SIDEBAR_SORT_KEYS.UNREAD_COUNT_DESC,
+    });
+
+    expect(preferences).toEqual(DEFAULT_SIDEBAR_SORT_PREFERENCES);
+  });
+
+  it('falls back to defaults when stored preferences are null', () => {
+    expect(normalizeSidebarSortPreferences(null)).toEqual(
+      DEFAULT_SIDEBAR_SORT_PREFERENCES
+    );
+  });
+});
+
+describe('#getSidebarSortOptions', () => {
+  it('keeps unread count options when unread counts are enabled', () => {
+    const options = getSidebarSortOptions(SIDEBAR_SORT_SECTIONS.TEAMS, {
+      hasUnreadCounts: true,
+    });
+
+    expect(options).toContain(SIDEBAR_SORT_KEYS.UNREAD_COUNT_DESC);
+    expect(options).toContain(SIDEBAR_SORT_KEYS.UNREAD_COUNT_ASC);
+  });
+
+  it('removes unread count options when unread counts are disabled', () => {
+    const options = getSidebarSortOptions(SIDEBAR_SORT_SECTIONS.TEAMS, {
+      hasUnreadCounts: false,
+    });
+
+    expect(options).not.toContain(SIDEBAR_SORT_KEYS.UNREAD_COUNT_DESC);
+    expect(options).not.toContain(SIDEBAR_SORT_KEYS.UNREAD_COUNT_ASC);
+    expect(options).toContain(SIDEBAR_SORT_KEYS.ALPHABETICAL_ASC);
+  });
+});
+
+describe('#resolveSidebarSort', () => {
+  it('keeps unread count sort when unread counts are enabled', () => {
+    const sortBy = resolveSidebarSort(
+      SIDEBAR_SORT_SECTIONS.TEAMS,
+      SIDEBAR_SORT_KEYS.UNREAD_COUNT_DESC,
+      { hasUnreadCounts: true }
+    );
+
+    expect(sortBy).toBe(SIDEBAR_SORT_KEYS.UNREAD_COUNT_DESC);
+  });
+
+  it('falls back to alphabetical sort when unread counts are disabled', () => {
+    const sortBy = resolveSidebarSort(
+      SIDEBAR_SORT_SECTIONS.TEAMS,
+      SIDEBAR_SORT_KEYS.UNREAD_COUNT_DESC,
+      { hasUnreadCounts: false }
+    );
+
+    expect(sortBy).toBe(SIDEBAR_SORT_KEYS.ALPHABETICAL_ASC);
+  });
+});
diff --git a/app/javascript/dashboard/i18n/locale/en/settings.json b/app/javascript/dashboard/i18n/locale/en/settings.json
index d14175cb5..5e2543698 100644
--- a/app/javascript/dashboard/i18n/locale/en/settings.json
+++ b/app/javascript/dashboard/i18n/locale/en/settings.json
@@ -390,6 +390,21 @@
       "INFO_TEXT": "Let the system automatically mark you offline when you aren't using the app or dashboard.",
       "INFO_SHORT": "Automatically mark offline when you aren't using the app."
     },
+    "SORT_TOOLTIP": "Sort",
+    "SORT_BY": "Sort by",
+    "SORT_GROUPS": {
+      "CREATED": "Sort by date of creation",
+      "ALPHABETICAL": "Sort in alphabetical order",
+      "UNREAD_COUNT": "Sort by unread count"
+    },
+    "SORT_OPTIONS": {
+      "CREATED_DESC": "Newest first",
+      "CREATED_ASC": "Oldest first",
+      "ALPHABETICAL_ASC": "Ascending (A - Z)",
+      "ALPHABETICAL_DESC": "Descending (Z - A)",
+      "UNREAD_COUNT_DESC": "Highest first",
+      "UNREAD_COUNT_ASC": "Lowest first"
+    },
     "DOCS": "Read docs",
     "SECURITY": "Security",
     "CAPTAIN_AI": "Captain",
diff --git a/app/javascript/dashboard/store/index.js b/app/javascript/dashboard/store/index.js
index 054a823c6..23685bfad 100755
--- a/app/javascript/dashboard/store/index.js
+++ b/app/javascript/dashboard/store/index.js
@@ -44,6 +44,7 @@ import portals from './modules/helpCenterPortals';
 import reports from './modules/reports';
 import sla from './modules/sla';
 import slaReports from './modules/SLAReports';
+import sidebarSortPreferences from './modules/sidebarSortPreferences';
 import summaryReports from './modules/summaryReports';
 import teamMembers from './modules/teamMembers';
 import teams from './modules/teams';
@@ -108,6 +109,7 @@ export default createStore({
     reports,
     sla,
     slaReports,
+    sidebarSortPreferences,
     summaryReports,
     teamMembers,
     teams,
diff --git a/app/javascript/dashboard/store/modules/sidebarSortPreferences.js b/app/javascript/dashboard/store/modules/sidebarSortPreferences.js
new file mode 100644
index 000000000..2973c80be
--- /dev/null
+++ b/app/javascript/dashboard/store/modules/sidebarSortPreferences.js
@@ -0,0 +1,82 @@
+import { LocalStorage } from 'shared/helpers/localStorage';
+import {
+  DEFAULT_SIDEBAR_SORT_PREFERENCES,
+  isValidSidebarSort,
+  normalizeSidebarSortPreferences,
+} from 'dashboard/helper/sidebarSort';
+
+const STORAGE_NAME = 'chatwoot_sidebar_sort_preferences';
+export const SET_SIDEBAR_SORT_PREFERENCES = 'SET_SIDEBAR_SORT_PREFERENCES';
+
+const getPreferenceScope = rootGetters => {
+  const currentUserId = rootGetters.getCurrentUserID;
+  const currentAccountId = rootGetters.getCurrentAccountId;
+
+  if (!currentUserId || !currentAccountId) return null;
+
+  return `${currentUserId}:${currentAccountId}`;
+};
+
+export const state = {
+  preferences: { ...DEFAULT_SIDEBAR_SORT_PREFERENCES },
+  storageKey: null,
+};
+
+export const getters = {
+  getSectionSort: $state => section => {
+    return (
+      $state.preferences[section] || DEFAULT_SIDEBAR_SORT_PREFERENCES[section]
+    );
+  },
+};
+
+export const actions = {
+  initialize({ commit, rootGetters }) {
+    const storageKey = getPreferenceScope(rootGetters);
+    const storedPreferences = storageKey
+      ? LocalStorage.getFromJsonStore(STORAGE_NAME, storageKey)
+      : {};
+
+    commit(SET_SIDEBAR_SORT_PREFERENCES, {
+      preferences: normalizeSidebarSortPreferences(storedPreferences),
+      storageKey,
+    });
+  },
+  setSectionSort({ commit, rootGetters, state: currentState }, payload = {}) {
+    const { section, sortBy } = payload;
+
+    if (!isValidSidebarSort(section, sortBy)) return;
+
+    const storageKey =
+      currentState.storageKey || getPreferenceScope(rootGetters);
+    const preferences = {
+      ...currentState.preferences,
+      [section]: sortBy,
+    };
+
+    commit(SET_SIDEBAR_SORT_PREFERENCES, {
+      preferences,
+      storageKey,
+    });
+
+    if (storageKey) {
+      LocalStorage.updateJsonStore(STORAGE_NAME, storageKey, preferences);
+    }
+  },
+};
+
+export const mutations = {
+  [SET_SIDEBAR_SORT_PREFERENCES]($state, payload = {}) {
+    const { preferences = {}, storageKey = null } = payload;
+    $state.preferences = normalizeSidebarSortPreferences(preferences);
+    $state.storageKey = storageKey;
+  },
+};
+
+export default {
+  namespaced: true,
+  state,
+  getters,
+  actions,
+  mutations,
+};
diff --git a/app/javascript/dashboard/store/modules/specs/sidebarSortPreferences/actions.spec.js b/app/javascript/dashboard/store/modules/specs/sidebarSortPreferences/actions.spec.js
new file mode 100644
index 000000000..7fee1d018
--- /dev/null
+++ b/app/javascript/dashboard/store/modules/specs/sidebarSortPreferences/actions.spec.js
@@ -0,0 +1,106 @@
+import { LocalStorage } from 'shared/helpers/localStorage';
+import {
+  DEFAULT_SIDEBAR_SORT_PREFERENCES,
+  SIDEBAR_SORT_KEYS,
+  SIDEBAR_SORT_SECTIONS,
+} from 'dashboard/helper/sidebarSort';
+import {
+  SET_SIDEBAR_SORT_PREFERENCES,
+  actions,
+} from '../../sidebarSortPreferences';
+
+vi.mock('shared/helpers/localStorage', () => ({
+  LocalStorage: {
+    getFromJsonStore: vi.fn(),
+    updateJsonStore: vi.fn(),
+  },
+}));
+
+const rootGetters = {
+  getCurrentUserID: 1,
+  getCurrentAccountId: 2,
+};
+
+describe('#actions', () => {
+  const commit = vi.fn();
+
+  beforeEach(() => {
+    commit.mockClear();
+    LocalStorage.getFromJsonStore.mockReset();
+    LocalStorage.updateJsonStore.mockReset();
+  });
+
+  describe('#initialize', () => {
+    it('loads scoped preferences from local storage', () => {
+      LocalStorage.getFromJsonStore.mockReturnValue({
+        [SIDEBAR_SORT_SECTIONS.FOLDERS]: SIDEBAR_SORT_KEYS.ALPHABETICAL_ASC,
+      });
+
+      actions.initialize({ commit, rootGetters });
+
+      expect(LocalStorage.getFromJsonStore).toHaveBeenCalledWith(
+        'chatwoot_sidebar_sort_preferences',
+        '1:2'
+      );
+      expect(commit).toHaveBeenCalledWith(SET_SIDEBAR_SORT_PREFERENCES, {
+        preferences: {
+          ...DEFAULT_SIDEBAR_SORT_PREFERENCES,
+          [SIDEBAR_SORT_SECTIONS.FOLDERS]: SIDEBAR_SORT_KEYS.ALPHABETICAL_ASC,
+        },
+        storageKey: '1:2',
+      });
+    });
+  });
+
+  describe('#setSectionSort', () => {
+    it('persists valid preferences to local storage', () => {
+      const state = {
+        preferences: DEFAULT_SIDEBAR_SORT_PREFERENCES,
+        storageKey: '1:2',
+      };
+
+      actions.setSectionSort(
+        { commit, rootGetters, state },
+        {
+          section: SIDEBAR_SORT_SECTIONS.LABELS,
+          sortBy: SIDEBAR_SORT_KEYS.ALPHABETICAL_DESC,
+        }
+      );
+
+      const preferences = {
+        ...DEFAULT_SIDEBAR_SORT_PREFERENCES,
+        [SIDEBAR_SORT_SECTIONS.LABELS]: SIDEBAR_SORT_KEYS.ALPHABETICAL_DESC,
+      };
+
+      expect(commit).toHaveBeenCalledWith(SET_SIDEBAR_SORT_PREFERENCES, {
+        preferences,
+        storageKey: '1:2',
+      });
+      expect(LocalStorage.updateJsonStore).toHaveBeenCalledWith(
+        'chatwoot_sidebar_sort_preferences',
+        '1:2',
+        preferences
+      );
+    });
+
+    it('ignores invalid preferences', () => {
+      actions.setSectionSort(
+        {
+          commit,
+          rootGetters,
+          state: {
+            preferences: DEFAULT_SIDEBAR_SORT_PREFERENCES,
+            storageKey: '1:2',
+          },
+        },
+        {
+          section: SIDEBAR_SORT_SECTIONS.FOLDERS,
+          sortBy: SIDEBAR_SORT_KEYS.UNREAD_COUNT_DESC,
+        }
+      );
+
+      expect(commit).not.toHaveBeenCalled();
+      expect(LocalStorage.updateJsonStore).not.toHaveBeenCalled();
+    });
+  });
+});
diff --git a/app/javascript/dashboard/store/modules/specs/sidebarSortPreferences/getters.spec.js b/app/javascript/dashboard/store/modules/specs/sidebarSortPreferences/getters.spec.js
new file mode 100644
index 000000000..6c43e23bc
--- /dev/null
+++ b/app/javascript/dashboard/store/modules/specs/sidebarSortPreferences/getters.spec.js
@@ -0,0 +1,31 @@
+import {
+  DEFAULT_SIDEBAR_SORT_PREFERENCES,
+  SIDEBAR_SORT_KEYS,
+  SIDEBAR_SORT_SECTIONS,
+} from 'dashboard/helper/sidebarSort';
+import { getters } from '../../sidebarSortPreferences';
+
+describe('#getters', () => {
+  it('returns section sort preference', () => {
+    const state = {
+      preferences: {
+        ...DEFAULT_SIDEBAR_SORT_PREFERENCES,
+        [SIDEBAR_SORT_SECTIONS.TEAMS]: SIDEBAR_SORT_KEYS.CREATED_ASC,
+      },
+    };
+
+    expect(getters.getSectionSort(state)(SIDEBAR_SORT_SECTIONS.TEAMS)).toBe(
+      SIDEBAR_SORT_KEYS.CREATED_ASC
+    );
+  });
+
+  it('falls back to default section sort preference', () => {
+    const state = {
+      preferences: {},
+    };
+
+    expect(getters.getSectionSort(state)(SIDEBAR_SORT_SECTIONS.LABELS)).toBe(
+      SIDEBAR_SORT_KEYS.UNREAD_COUNT_DESC
+    );
+  });
+});
diff --git a/app/javascript/dashboard/store/modules/specs/sidebarSortPreferences/mutations.spec.js b/app/javascript/dashboard/store/modules/specs/sidebarSortPreferences/mutations.spec.js
new file mode 100644
index 000000000..2f19c84bd
--- /dev/null
+++ b/app/javascript/dashboard/store/modules/specs/sidebarSortPreferences/mutations.spec.js
@@ -0,0 +1,34 @@
+import {
+  DEFAULT_SIDEBAR_SORT_PREFERENCES,
+  SIDEBAR_SORT_KEYS,
+  SIDEBAR_SORT_SECTIONS,
+} from 'dashboard/helper/sidebarSort';
+import {
+  SET_SIDEBAR_SORT_PREFERENCES,
+  mutations,
+} from '../../sidebarSortPreferences';
+
+describe('#mutations', () => {
+  it('sets normalized preferences', () => {
+    const state = {
+      preferences: {},
+      storageKey: null,
+    };
+
+    mutations[SET_SIDEBAR_SORT_PREFERENCES](state, {
+      preferences: {
+        [SIDEBAR_SORT_SECTIONS.FOLDERS]: SIDEBAR_SORT_KEYS.ALPHABETICAL_DESC,
+        [SIDEBAR_SORT_SECTIONS.LABELS]: 'invalid',
+      },
+      storageKey: '1:2',
+    });
+
+    expect(state).toEqual({
+      preferences: {
+        ...DEFAULT_SIDEBAR_SORT_PREFERENCES,
+        [SIDEBAR_SORT_SECTIONS.FOLDERS]: SIDEBAR_SORT_KEYS.ALPHABETICAL_DESC,
+      },
+      storageKey: '1:2',
+    });
+  });
+});