diff --git a/apps/web/src/components/settings/LabsSettingsPanel.tsx b/apps/web/src/components/settings/LabsSettingsPanel.tsx
index 38be7d611518e..98ef0ddf7eebd 100644
--- a/apps/web/src/components/settings/LabsSettingsPanel.tsx
+++ b/apps/web/src/components/settings/LabsSettingsPanel.tsx
@@ -48,12 +48,34 @@ function BoringSidebarRow() {
       {settings.boringSidebarEnabled ? (
         <div className="mt-2 mb-2 border-l-2 border-border/60 ps-3">
           <BoringSidebarMultilineRow />
+          <BoringSidebarFlushRowsRow />
         </div>
       ) : null}
     </SettingsRow>
   );
 }
 
+function BoringSidebarFlushRowsRow() {
+  const settings = useScopedSettings();
+  const updateSettings = useUpdateScopedSettings();
+  return (
+    <SettingsRow
+      {...searchableSetting("boring-sidebar-flush-rows")}
+      className="px-0 py-2 sm:px-0"
+      description="Remove indentation from folder threads. Align their titles and details with the project's icon."
+      control={
+        <Switch
+          checked={settings.boringSidebarFlushRows}
+          onCheckedChange={(checked) =>
+            updateSettings({ boringSidebarFlushRows: Boolean(checked) })
+          }
+          aria-label="Align threads with project icon"
+        />
+      }
+    />
+  );
+}
+
 function BoringSidebarMultilineRow() {
   const settings = useScopedSettings();
   const updateSettings = useUpdateScopedSettings();
diff --git a/apps/web/src/components/settings/settingsSearch.ts b/apps/web/src/components/settings/settingsSearch.ts
index 7d7939e7f21f9..fe390c2155152 100644
--- a/apps/web/src/components/settings/settingsSearch.ts
+++ b/apps/web/src/components/settings/settingsSearch.ts
@@ -479,6 +479,13 @@ export const SETTINGS_SEARCH_ITEMS = [
     targetId: "boring-sidebar",
     searchTerms: ["beta boring sidebar folder rows multiline branch pull request details"],
   },
+  {
+    id: "boring-sidebar-flush-rows",
+    title: "Align threads with project icon",
+    to: "/settings/labs",
+    targetId: "boring-sidebar",
+    searchTerms: ["sidebar folder indent indentation flush left align spacing margin compact"],
+  },
   {
     id: "tool-call-visibility",
     title: "Tool calls in chat",
diff --git a/apps/web/src/components/sidebar/SidebarThreadRow.tsx b/apps/web/src/components/sidebar/SidebarThreadRow.tsx
index 2a3893737c0b0..f0d6206390cf1 100644
--- a/apps/web/src/components/sidebar/SidebarThreadRow.tsx
+++ b/apps/web/src/components/sidebar/SidebarThreadRow.tsx
@@ -79,6 +79,7 @@ import { formatRelativeTimeLabel, parseTimestampDate } from "../../timestampForm
 import type { SidebarThreadSummary } from "../../types";
 import type { EnvironmentProject } from "@t3tools/client-runtime/state/shell";
 import { cn } from "~/lib/utils";
+import { useClientSettings } from "~/hooks/useSettings";
 import { textDirection } from "~/textDirection";
 import { EnvironmentMachineIcon } from "../EnvironmentMachineIcon";
 import {
@@ -668,6 +669,7 @@ const SidebarThreadRow = memo(function SidebarThreadRow(props: SidebarThreadRowP
     variantAction,
   } = props;
   const threadRef = scopeThreadRef(thread.environmentId, thread.id);
+  const flushFolderRows = useClientSettings((settings) => settings.boringSidebarFlushRows);
   const threadKey = scopedThreadKey(threadRef);
   const canOperateThread = useEnvironmentScope(thread.environmentId, AuthOrchestrationOperateScope);
   const { leaseLiveStatus, rowRef: leaseRowRef } = useSidebarRowSubscriptionLease(props.isActive);
@@ -1249,8 +1251,7 @@ const SidebarThreadRow = memo(function SidebarThreadRow(props: SidebarThreadRowP
                   multiline
                     ? "flex flex-col justify-center px-2.5 py-1.5"
                     : "flex h-9 items-center gap-2.5 px-2.5",
-                  // Lines titles up with the folder name, past its chevron and icon.
-                  inFolder && "ps-9",
+                  inFolder && (flushFolderRows ? "ps-(--sidebar-row-content-inset)" : "ps-9"),
                 )}
                 onClick={handleClick}
                 onDoubleClick={handleDoubleClick}
diff --git a/packages/contracts/src/settings.ts b/packages/contracts/src/settings.ts
index 7bbb03595d4bb..7c41e3d8bb474 100644
--- a/packages/contracts/src/settings.ts
+++ b/packages/contracts/src/settings.ts
@@ -530,6 +530,7 @@ export const ClientSettingsSchema = Schema.Struct({
   boringSidebarMultilineRows: Schema.Boolean.pipe(
     Schema.withDecodingDefault(Effect.succeed(false)),
   ),
+  boringSidebarFlushRows: Schema.Boolean.pipe(Schema.withDecodingDefault(Effect.succeed(false))),
   toolCallVisibility: ToolCallVisibility.pipe(
     Schema.withDecodingDefault(Effect.succeed("showAll" as const)),
   ),
@@ -2086,6 +2087,7 @@ export const ClientSettingsPatch = Schema.Struct({
   showSkillsInSlashMenu: Schema.optionalKey(Schema.Boolean),
   boringSidebarEnabled: Schema.optionalKey(Schema.Boolean),
   boringSidebarMultilineRows: Schema.optionalKey(Schema.Boolean),
+  boringSidebarFlushRows: Schema.optionalKey(Schema.Boolean),
   toolCallVisibility: Schema.optionalKey(ToolCallVisibility),
   screenReaderAnnouncements: Schema.optionalKey(ScreenReaderAnnouncements),
   screenReaderWindowTitle: Schema.optionalKey(Schema.Boolean),