diff --git a/src/components/MarketSwitcher.tsx b/src/components/MarketSwitcher.tsx
index ef291c6c33..0e5c7f0cca 100644
--- a/src/components/MarketSwitcher.tsx
+++ b/src/components/MarketSwitcher.tsx
@@ -19,6 +19,7 @@ import React, { useMemo, useRef, useState } from 'react';
 import { ArrowUpRightIcon } from 'src/components/icons/ArrowUpRightIcon';
 import { ChevronUpDownIcon } from 'src/components/icons/ChevronUpDownIcon';
 import { FAVOURITE_STAR_COLOR, StarIcon } from 'src/components/icons/StarIcon';
+import { hasNoMarketResults, shouldShowLegacySection } from 'src/components/marketSwitcher.utils';
 import { ShimmerText } from 'src/components/ShimmerText';
 import { useRootStore } from 'src/store/root';
 import { BaseNetworkConfig } from 'src/ui-config/networksConfig';
@@ -611,13 +612,23 @@ export const MarketSwitcher = ({ hideDescription }: MarketSwitcherProps) => {
     </Box>
   );
 
-  const noResults =
-    pinned.length === 0 &&
-    ethereum.length === 0 &&
-    l2.length === 0 &&
-    other.length === 0 &&
-    v4Ethereum.length === 0 &&
-    v4Other.length === 0;
+  // An active search reveals matching legacy markets even while the switch is off, so a searched
+  // market is never hidden from the person who just named it.
+  const showLegacySection = shouldShowLegacySection({
+    showLegacy,
+    searchQuery,
+    legacyCount: legacy.length,
+  });
+
+  const noResults = hasNoMarketResults([
+    pinned.length,
+    ethereum.length,
+    l2.length,
+    other.length,
+    legacy.length,
+    v4Ethereum.length,
+    v4Other.length,
+  ]);
 
   const renderSelectorContent = (mobile: boolean) => (
     <>
@@ -705,7 +716,7 @@ export const MarketSwitcher = ({ hideDescription }: MarketSwitcherProps) => {
           )}
 
         {/* Legacy */}
-        {showLegacy &&
+        {showLegacySection &&
           renderSection(
             <Trans>Legacy</Trans>,
             legacy.map((id) => renderGridItem(id, mobile))
diff --git a/src/components/__tests__/marketSwitcher.utils.test.ts b/src/components/__tests__/marketSwitcher.utils.test.ts
new file mode 100644
index 0000000000..8ec7d38af0
--- /dev/null
+++ b/src/components/__tests__/marketSwitcher.utils.test.ts
@@ -0,0 +1,50 @@
+import { hasNoMarketResults, shouldShowLegacySection } from '../marketSwitcher.utils';
+
+describe('shouldShowLegacySection', () => {
+  it('keeps legacy markets collapsed by default', () => {
+    expect(shouldShowLegacySection({ showLegacy: false, searchQuery: '', legacyCount: 3 })).toBe(
+      false
+    );
+  });
+
+  it('shows legacy markets when the switch is on', () => {
+    expect(shouldShowLegacySection({ showLegacy: true, searchQuery: '', legacyCount: 3 })).toBe(
+      true
+    );
+  });
+
+  // Regression guard for https://github.com/aave/interface/issues/3127: searching for a legacy
+  // market used to report "No markets found" because the match was never rendered.
+  it('shows a searched-for legacy market even while the switch is off', () => {
+    expect(
+      shouldShowLegacySection({ showLegacy: false, searchQuery: 'gnosis', legacyCount: 1 })
+    ).toBe(true);
+  });
+
+  it('stays hidden when a search matches no legacy market', () => {
+    expect(
+      shouldShowLegacySection({ showLegacy: false, searchQuery: 'base', legacyCount: 0 })
+    ).toBe(false);
+  });
+
+  it('treats a whitespace-only query as no search', () => {
+    expect(shouldShowLegacySection({ showLegacy: false, searchQuery: '   ', legacyCount: 3 })).toBe(
+      false
+    );
+  });
+});
+
+describe('hasNoMarketResults', () => {
+  it('reports no results when every group is empty', () => {
+    expect(hasNoMarketResults([0, 0, 0, 0, 0, 0, 0])).toBe(true);
+  });
+
+  // The other half of #3127: legacy has to count, or a legacy-only match renders the empty state.
+  it('does not report no results when only a legacy market matched', () => {
+    expect(hasNoMarketResults([0, 0, 0, 0, 1, 0, 0])).toBe(false);
+  });
+
+  it('does not report no results when a non-legacy group matched', () => {
+    expect(hasNoMarketResults([0, 2, 0, 0, 0, 0, 0])).toBe(false);
+  });
+});
diff --git a/src/components/marketSwitcher.utils.ts b/src/components/marketSwitcher.utils.ts
new file mode 100644
index 0000000000..b0113d076c
--- /dev/null
+++ b/src/components/marketSwitcher.utils.ts
@@ -0,0 +1,28 @@
+/**
+ * Pure helpers for the market switcher's legacy section.
+ *
+ * Legacy markets are collapsed behind a "Show legacy markets" switch. That also hid them from
+ * search, so searching for one reported "No markets found" while the match sat in the
+ * un-rendered legacy group (https://github.com/aave/interface/issues/3127).
+ */
+
+/**
+ * Legacy markets stay collapsed by default, but an explicit search must never hide a match —
+ * typing a market name has already said which market the user wants.
+ */
+export const shouldShowLegacySection = ({
+  showLegacy,
+  searchQuery,
+  legacyCount,
+}: {
+  showLegacy: boolean;
+  searchQuery: string;
+  legacyCount: number;
+}): boolean => legacyCount > 0 && (showLegacy || searchQuery.trim() !== '');
+
+/**
+ * "No markets found" has to account for every group a match can land in, legacy included,
+ * otherwise a legacy-only match is reported as no match at all.
+ */
+export const hasNoMarketResults = (groupCounts: number[]): boolean =>
+  groupCounts.every((count) => count === 0);