diff --git a/app/assets/javascripts/discourse/app/components/d-navigation.js b/app/assets/javascripts/discourse/app/components/d-navigation.js
index 5c51380dcf7..1bbb7f4d0fb 100644
--- a/app/assets/javascripts/discourse/app/components/d-navigation.js
+++ b/app/assets/javascripts/discourse/app/components/d-navigation.js
@@ -15,7 +15,14 @@ export default Component.extend(FilterModeMixin, {
   // the `categories` property into this component
   @discourseComputed("site.categoriesList")
   categories(categoriesList) {
-    return categoriesList;
+    if (this.currentUser?.indirectly_muted_category_ids) {
+      return categoriesList.filter(
+        (category) =>
+          !this.currentUser.indirectly_muted_category_ids.includes(category.id)
+      );
+    } else {
+      return categoriesList;
+    }
   },
 
   @discourseComputed("category")
diff --git a/app/assets/javascripts/discourse/tests/integration/components/d-navigation-test.js b/app/assets/javascripts/discourse/tests/integration/components/d-navigation-test.js
new file mode 100644
index 00000000000..43664281968
--- /dev/null
+++ b/app/assets/javascripts/discourse/tests/integration/components/d-navigation-test.js
@@ -0,0 +1,44 @@
+import { click } from "@ember/test-helpers";
+import componentTest, {
+  setupRenderingTest,
+} from "discourse/tests/helpers/component-test";
+import { discourseModule, query } from "discourse/tests/helpers/qunit-helpers";
+import hbs from "htmlbars-inline-precompile";
+
+discourseModule("Integration | Component | d-navigation", function (hooks) {
+  setupRenderingTest(hooks);
+
+  componentTest("filters indirectly muted categories", {
+    template: hbs`
+      {{d-navigation
+        filterType="categories"
+      }}
+    `,
+
+    beforeEach() {
+      const categories = this.site.categoriesList
+        .filter((category) => !category.parent_category_id)
+        .slice(0, 4);
+      this.site.setProperties({
+        categoriesList: categories,
+      });
+      this.currentUser.set(
+        "indirectly_muted_category_ids",
+        categories.slice(0, 3).map((category) => category.id)
+      );
+    },
+
+    async test(assert) {
+      await click(".category-drop .select-kit-header-wrapper");
+      assert.strictEqual(
+        document.querySelectorAll(".category-row").length,
+        1,
+        "displays only categories that are not muted"
+      );
+      assert.strictEqual(
+        query(".category-row .badge-category span").textContent.trim(),
+        "dev"
+      );
+    },
+  });
+});
diff --git a/app/models/category_user.rb b/app/models/category_user.rb
index be8ac02b40b..21e27db0cbe 100644
--- a/app/models/category_user.rb
+++ b/app/models/category_user.rb
@@ -235,26 +235,37 @@ class CategoryUser < ActiveRecord::Base
     end
   end
 
-  def self.indirectly_muted_category_ids(user)
-    query = Category.where.not(parent_category_id: nil)
+  def self.muted_category_ids_query(user, include_direct: false)
+    query = Category
+    query = query.where.not(parent_category_id: nil) if !include_direct
+    query = query
       .joins("LEFT JOIN categories categories2 ON categories2.id = categories.parent_category_id")
       .joins("LEFT JOIN category_users ON category_users.category_id = categories.id AND category_users.user_id = #{user.id}")
       .joins("LEFT JOIN category_users category_users2 ON category_users2.category_id = categories2.id AND category_users2.user_id = #{user.id}")
-      .where("category_users.id IS NULL")
 
+    direct_category_muted_sql = "COALESCE(category_users.notification_level, #{CategoryUser.default_notification_level}) = #{CategoryUser.notification_levels[:muted]}"
+    parent_category_muted_sql =
+      "(category_users.id IS NULL AND COALESCE(category_users2.notification_level, #{CategoryUser.default_notification_level}) = #{notification_levels[:muted]})"
+
+    conditions = [parent_category_muted_sql]
+    conditions.push(direct_category_muted_sql) if include_direct
     if SiteSetting.max_category_nesting === 3
       query = query
         .joins("LEFT JOIN categories categories3 ON categories3.id = categories2.parent_category_id")
         .joins("LEFT JOIN category_users category_users3 ON category_users3.category_id = categories3.id AND category_users3.user_id = #{user.id}")
-        .where("
-          (category_users2.notification_level = #{notification_levels[:muted]})
-          OR
-          (category_users2.id IS NULL AND category_users3.notification_level = #{notification_levels[:muted]})
-      ")
-    else
-      query = query.where("category_users2.notification_level = #{notification_levels[:muted]}")
+      grandparent_category_muted_sql = "(category_users.id IS NULL AND category_users2.id IS NULL AND COALESCE(category_users3.notification_level, #{CategoryUser.default_notification_level}) = #{notification_levels[:muted]})"
+      conditions.push(grandparent_category_muted_sql)
     end
-    query.pluck("categories.id")
+
+    query.where(conditions.join(" OR "))
+  end
+
+  def self.muted_category_ids(user)
+    muted_category_ids_query(user, include_direct: true).pluck("categories.id")
+  end
+
+  def self.indirectly_muted_category_ids(user)
+    muted_category_ids_query(user).pluck("categories.id")
   end
 end
 
diff --git a/app/models/topic_tracking_state.rb b/app/models/topic_tracking_state.rb
index aa19bb740e8..d43b054b5b3 100644
--- a/app/models/topic_tracking_state.rb
+++ b/app/models/topic_tracking_state.rb
@@ -464,7 +464,6 @@ class TopicTrackingState
       JOIN user_options AS uo ON uo.user_id = u.id
       JOIN categories c ON c.id = topics.category_id
       LEFT JOIN topic_users tu ON tu.topic_id = topics.id AND tu.user_id = u.id
-      LEFT JOIN category_users ON category_users.category_id = topics.category_id AND category_users.user_id = :user_id
       #{skip_new ? "" : "LEFT JOIN dismissed_topic_users ON dismissed_topic_users.topic_id = topics.id AND dismissed_topic_users.user_id = :user_id"}
       #{additional_join_sql}
       WHERE u.id = :user_id AND
@@ -478,7 +477,7 @@ class TopicTrackingState
             NOT (
               #{(skip_new && skip_unread) ? "" : "last_read_post_number IS NULL AND"}
               (
-                COALESCE(category_users.notification_level, #{CategoryUser.default_notification_level}) = #{CategoryUser.notification_levels[:muted]}
+                topics.category_id IN (#{CategoryUser.muted_category_ids_query(user, include_direct: true).select("categories.id").to_sql})
                 AND tu.notification_level <= #{TopicUser.notification_levels[:regular]}
               )
             )
diff --git a/spec/models/category_user_spec.rb b/spec/models/category_user_spec.rb
index fe5166c37ed..2b8d4f33e19 100644
--- a/spec/models/category_user_spec.rb
+++ b/spec/models/category_user_spec.rb
@@ -267,7 +267,7 @@ describe CategoryUser do
     end
   end
 
-  describe "#indirectly_muted_category_ids" do
+  describe ".muted_category_ids" do
     context "max category nesting 2" do
       fab!(:category1) { Fabricate(:category) }
       fab!(:category2) { Fabricate(:category, parent_category: category1) }
@@ -275,15 +275,19 @@ describe CategoryUser do
 
       it "calculates muted categories based on parent category state" do
         expect(CategoryUser.indirectly_muted_category_ids(user)).to eq([])
+        expect(CategoryUser.muted_category_ids(user)).to eq([])
 
         category_user = CategoryUser.create!(user: user, category: category1, notification_level: CategoryUser.notification_levels[:muted])
         expect(CategoryUser.indirectly_muted_category_ids(user)).to contain_exactly(category2.id, category3.id)
+        expect(CategoryUser.muted_category_ids(user)).to contain_exactly(category1.id, category2.id, category3.id)
 
         CategoryUser.create!(user: user, category: category3, notification_level: CategoryUser.notification_levels[:muted])
         expect(CategoryUser.indirectly_muted_category_ids(user)).to contain_exactly(category2.id)
+        expect(CategoryUser.muted_category_ids(user)).to contain_exactly(category1.id, category2.id, category3.id)
 
-        category_user.update(notification_level: CategoryUser.notification_levels[:regular])
+        category_user.update!(notification_level: CategoryUser.notification_levels[:regular])
         expect(CategoryUser.indirectly_muted_category_ids(user)).to eq([])
+        expect(CategoryUser.muted_category_ids(user)).to contain_exactly(category3.id)
       end
     end
     context "max category nesting 3" do
@@ -302,16 +306,20 @@ describe CategoryUser do
 
         CategoryUser.create!(user: user, category: category1, notification_level: CategoryUser.notification_levels[:muted])
         expect(CategoryUser.indirectly_muted_category_ids(user)).to contain_exactly(category2.id, category3.id)
+        expect(CategoryUser.muted_category_ids(user)).to contain_exactly(category1.id, category2.id, category3.id)
 
         category_user3 = CategoryUser.create!(user: user, category: category3, notification_level: CategoryUser.notification_levels[:muted])
         expect(CategoryUser.indirectly_muted_category_ids(user)).to contain_exactly(category2.id)
+        expect(CategoryUser.muted_category_ids(user)).to contain_exactly(category1.id, category2.id, category3.id)
 
-        category_user3.destroy
+        category_user3.destroy!
         category_user2 = CategoryUser.create!(user: user, category: category2, notification_level: CategoryUser.notification_levels[:muted])
         expect(CategoryUser.indirectly_muted_category_ids(user)).to contain_exactly(category3.id)
+        expect(CategoryUser.muted_category_ids(user)).to contain_exactly(category1.id, category2.id, category3.id)
 
-        category_user2.update(notification_level: CategoryUser.notification_levels[:regular])
+        category_user2.update!(notification_level: CategoryUser.notification_levels[:regular])
         expect(CategoryUser.indirectly_muted_category_ids(user)).to eq([])
+        expect(CategoryUser.muted_category_ids(user)).to contain_exactly(category1.id)
       end
     end
   end
diff --git a/spec/models/topic_tracking_state_spec.rb b/spec/models/topic_tracking_state_spec.rb
index 5f6d70caba2..e4288540957 100644
--- a/spec/models/topic_tracking_state_spec.rb
+++ b/spec/models/topic_tracking_state_spec.rb
@@ -352,6 +352,33 @@ describe TopicTrackingState do
     expect(report.length).to eq(1)
   end
 
+  it "correctly handles indirectly muted categories" do
+    parent_category = Fabricate(:category)
+    sub_category = Fabricate(:category, parent_category_id: parent_category.id)
+    create_post(category: sub_category)
+
+    report = TopicTrackingState.report(user)
+    expect(report.length).to eq(1)
+
+    CategoryUser.create!(
+      user_id: user.id,
+      notification_level: CategoryUser.notification_levels[:muted],
+      category_id: parent_category.id
+    )
+
+    report = TopicTrackingState.report(user)
+    expect(report.length).to eq(0)
+
+    CategoryUser.create!(
+      user_id: user.id,
+      notification_level: CategoryUser.notification_levels[:regular],
+      category_id: sub_category.id
+    )
+
+    report = TopicTrackingState.report(user)
+    expect(report.length).to eq(1)
+  end
+
   it "works when categories are default muted" do
     SiteSetting.mute_all_categories_by_default = true