diff --git a/app/main/views/templates.py b/app/main/views/templates.py
index 297bbba21..71949b9f3 100644
--- a/app/main/views/templates.py
+++ b/app/main/views/templates.py
@@ -126,7 +126,7 @@ def choose_template(service_id, template_type='all', template_folder_id=None):
         current_template_folder_id=template_folder_id,
         can_manage_folders=can_manage_folders(),
         template_folder_path=current_service.get_template_folder_path(template_folder_id),
-        template_folders=current_service.get_template_folders(template_folder_id),
+        template_folders=current_service.get_template_folders(template_folder_id, template_type),
         templates=current_service.get_templates(template_type, template_folder_id),
         show_search_box=(len(current_service.get_templates(template_type)) > 7),
         show_template_nav=(
diff --git a/app/models/service.py b/app/models/service.py
index 7780347f4..f60151b38 100644
--- a/app/models/service.py
+++ b/app/models/service.py
@@ -298,12 +298,31 @@ class Service():
     def all_template_folder_ids(self):
         return {folder['id'] for folder in self.all_template_folders}
 
-    def get_template_folders(self, parent_folder_id=None):
+    def get_template_folders(self, parent_folder_id=None, template_type='all'):
         return [
             folder for folder in self.all_template_folders
-            if folder['parent_id'] == parent_folder_id
+            if (
+                folder['parent_id'] == parent_folder_id and
+                self.show_folder(folder['id'], template_type)
+            )
         ]
 
+    def show_folder(self, template_folder_id, template_type='all'):
+
+        if template_type == 'all':
+            return True
+
+        if self.get_templates(template_type, template_folder_id):
+            return True
+
+        if any(
+            self.show_folder(child_folder['id'], template_type)
+            for child_folder in self.get_template_folders(template_folder_id, template_type)
+        ):
+            return True
+
+        return False
+
     def get_template_folder_path(self, template_folder_id):
         if template_folder_id is None:
             return []
@@ -322,7 +341,7 @@ class Service():
     def get_template_folders_and_templates(self, template_type, template_folder_id):
         return (
             self.get_templates(template_type, template_folder_id) +
-            self.get_template_folders(template_folder_id)
+            self.get_template_folders(template_folder_id, template_type)
         )
 
     def move_to_folder(self, ids_to_move, move_to):
diff --git a/tests/app/main/views/test_template_folders.py b/tests/app/main/views/test_template_folders.py
index eb14ceb9a..c03de789f 100644
--- a/tests/app/main/views/test_template_folders.py
+++ b/tests/app/main/views/test_template_folders.py
@@ -111,8 +111,6 @@ def test_post_add_template_folder_page(client_request, service_one, mocker, pare
             {'template_type': 'sms'},
             ['All', 'Email', 'Letter'],
             [
-                'folder_one Folder containing templates',
-                'folder_two Folder containing templates',
                 'sms_template_one Text message template',
                 'sms_template_two Text message template',
             ],
@@ -122,8 +120,6 @@ def test_post_add_template_folder_page(client_request, service_one, mocker, pare
             {'template_type': 'sms', 'template_folder_id': PARENT_FOLDER_ID},
             ['All', 'Email', 'Letter'],
             [
-                'folder_one_one Folder containing templates',
-                'folder_one_two Folder containing templates',
             ],
         ),
         (