diff --git a/plugins/chat/app/models/chat/message.rb b/plugins/chat/app/models/chat/message.rb
index 271c233f41c..202cf243a8f 100644
--- a/plugins/chat/app/models/chat/message.rb
+++ b/plugins/chat/app/models/chat/message.rb
@@ -381,6 +381,10 @@ module Chat
       new_mentions = parsed_mentions.direct_mentions.pluck(:id)
       delete_mentions("Chat::UserMention", old_mentions - new_mentions)
       insert_mentions("Chat::UserMention", new_mentions - old_mentions)
+
+      # add users to threads when they are mentioned to track read status
+      return if new_mentions.empty? || !in_thread?
+      User.where(id: new_mentions).each { |user| thread.add(user, notification_level: :normal) }
     end
   end
 end
diff --git a/plugins/chat/app/queries/chat/channel_unreads_query.rb b/plugins/chat/app/queries/chat/channel_unreads_query.rb
index d23a1a17c94..ec3d0e4e915 100644
--- a/plugins/chat/app/queries/chat/channel_unreads_query.rb
+++ b/plugins/chat/app/queries/chat/channel_unreads_query.rb
@@ -37,15 +37,17 @@ module Chat
         (
           SELECT COUNT(*) AS mention_count
           FROM notifications
-          INNER JOIN user_chat_channel_memberships ON user_chat_channel_memberships.user_id = :user_id
+          INNER JOIN user_chat_channel_memberships AS uccm ON uccm.user_id = :user_id
           INNER JOIN chat_messages ON (data::json->>'chat_message_id')::bigint = chat_messages.id
           LEFT JOIN chat_threads ON chat_threads.id = chat_messages.thread_id
+          LEFT JOIN user_chat_thread_memberships AS uctm ON uctm.thread_id = chat_messages.thread_id AND uctm.user_id = :user_id
           WHERE NOT read
-          AND user_chat_channel_memberships.chat_channel_id = memberships.chat_channel_id
+          AND uccm.chat_channel_id = memberships.chat_channel_id
           AND notifications.user_id = :user_id
           AND notifications.notification_type = :notification_type_mention
-          AND (data::json->>'chat_message_id')::bigint > COALESCE(user_chat_channel_memberships.last_read_message_id, 0)
           AND (data::json->>'chat_channel_id')::bigint = memberships.chat_channel_id
+          AND (((chat_messages.thread_id IS NULL OR chat_messages.id = chat_threads.original_message_id) AND chat_messages.id > COALESCE(uccm.last_read_message_id, 0))
+          OR (chat_messages.thread_id IS NOT NULL AND uctm.id IS NOT NULL AND chat_messages.id > COALESCE(uctm.last_read_message_id, 0)))
         ) AS mention_count,
         (
           SELECT COUNT(*) AS watched_threads_unread_count
diff --git a/plugins/chat/app/queries/chat/thread_unreads_query.rb b/plugins/chat/app/queries/chat/thread_unreads_query.rb
index 442aad6c9dd..f1e39adecd6 100644
--- a/plugins/chat/app/queries/chat/thread_unreads_query.rb
+++ b/plugins/chat/app/queries/chat/thread_unreads_query.rb
@@ -64,16 +64,17 @@ module Chat
           FROM notifications
           INNER JOIN chat_messages ON chat_messages.id = (data::json->>'chat_message_id')::bigint
           INNER JOIN chat_channels ON chat_channels.id = chat_messages.chat_channel_id
-          INNER JOIN user_chat_channel_memberships ON user_chat_channel_memberships.chat_channel_id = chat_messages.chat_channel_id
-          LEFT JOIN chat_threads ON chat_threads.id = chat_messages.thread_id
+          INNER JOIN user_chat_channel_memberships AS uccm ON uccm.chat_channel_id = chat_messages.chat_channel_id
+          INNER JOIN user_chat_thread_memberships AS uctm ON uctm.thread_id = chat_messages.thread_id AND uctm.user_id = :user_id
           WHERE NOT read
           AND notifications.user_id = :user_id
           AND notifications.notification_type = :notification_type_mention
-          AND user_chat_channel_memberships.user_id = :user_id
+          AND uccm.user_id = :user_id
           AND chat_channels.threading_enabled
           AND chat_messages.deleted_at IS NULL
           AND chat_messages.thread_id = memberships.thread_id
-          AND NOT user_chat_channel_memberships.muted
+          AND (uctm.id IS NOT NULL AND chat_messages.id > COALESCE(uctm.last_read_message_id, 0))
+          AND NOT uccm.muted
         ) AS mention_count,
         (
           SELECT COUNT(*) AS watched_threads_unread_count
diff --git a/plugins/chat/assets/javascripts/discourse/components/chat-channel-unread-indicator.gjs b/plugins/chat/assets/javascripts/discourse/components/chat-channel-unread-indicator.gjs
index 9aeaeaa1481..72f8d7d9062 100644
--- a/plugins/chat/assets/javascripts/discourse/components/chat-channel-unread-indicator.gjs
+++ b/plugins/chat/assets/javascripts/discourse/components/chat-channel-unread-indicator.gjs
@@ -39,7 +39,7 @@ export default class ChatChannelUnreadIndicator extends Component {
   }
 
   get urgentBadgeCount() {
-    let totalCount = this.urgentCount;
+    const totalCount = this.urgentCount;
     return totalCount > MAX_UNREAD_COUNT ? `${MAX_UNREAD_COUNT}+` : totalCount;
   }
 
diff --git a/plugins/chat/assets/javascripts/discourse/components/chat/header/icon/unread-indicator.gjs b/plugins/chat/assets/javascripts/discourse/components/chat/header/icon/unread-indicator.gjs
index 2a6a55cb0b2..6ae2440b923 100644
--- a/plugins/chat/assets/javascripts/discourse/components/chat/header/icon/unread-indicator.gjs
+++ b/plugins/chat/assets/javascripts/discourse/components/chat/header/icon/unread-indicator.gjs
@@ -69,7 +69,7 @@ export default class ChatHeaderIconUnreadIndicator extends Component {
   }
 
   get urgentCountLabel() {
-    let totalCount = this.onlyMentions ? this.mentionCount : this.urgentCount;
+    const totalCount = this.onlyMentions ? this.mentionCount : this.urgentCount;
     return totalCount > MAX_UNREAD_COUNT ? `${MAX_UNREAD_COUNT}+` : totalCount;
   }
 
diff --git a/plugins/chat/spec/models/chat/message_spec.rb b/plugins/chat/spec/models/chat/message_spec.rb
index a650fdaebd4..bb2bd529c88 100644
--- a/plugins/chat/spec/models/chat/message_spec.rb
+++ b/plugins/chat/spec/models/chat/message_spec.rb
@@ -787,6 +787,22 @@ describe Chat::Message do
         expect(message.user_mentions.pluck(:target_id)).to match_array(already_mentioned)
         expect(message.user_mentions.pluck(:id)).to include(*existing_mention_ids) # the mentions weren't recreated
       end
+
+      it "creates thread memberships for mentioned users when replying to a thread" do
+        thread = Fabricate(:chat_thread)
+        thread_message =
+          Fabricate(
+            :chat_message,
+            chat_channel: thread.channel,
+            thread: thread,
+            message: "cc @#{user3.username} and @#{user4.username}",
+          )
+
+        thread_message.cook
+        thread_message.upsert_mentions
+
+        expect(thread.user_chat_thread_memberships.pluck(:user_id)).to include(user3.id, user4.id)
+      end
     end
 
     context "with group mentions" do
diff --git a/plugins/chat/spec/queries/chat/channel_unreads_query_spec.rb b/plugins/chat/spec/queries/chat/channel_unreads_query_spec.rb
index a9802931eeb..f8581dfac1e 100644
--- a/plugins/chat/spec/queries/chat/channel_unreads_query_spec.rb
+++ b/plugins/chat/spec/queries/chat/channel_unreads_query_spec.rb
@@ -210,7 +210,7 @@ describe Chat::ChannelUnreadsQuery do
     end
 
     context "for unread mentions in a thread" do
-      fab!(:thread_om) { Fabricate(:chat_message, chat_channel: channel_1) }
+      fab!(:thread_om) { Fabricate(:chat_message, chat_channel: channel_1, user: current_user) }
       fab!(:thread) { Fabricate(:chat_thread, channel: channel_1, original_message: thread_om) }
 
       it "does include the original message in the mention count" do
@@ -230,6 +230,7 @@ describe Chat::ChannelUnreadsQuery do
         thread_message_2 = Fabricate(:chat_message, chat_channel: channel_1, thread: thread)
         create_mention(thread_message_1, channel_1)
         create_mention(thread_message_2, channel_1)
+
         expect(query.first).to eq(
           {
             mention_count: 2,