diff --git a/app/main/views/templates.py b/app/main/views/templates.py
index 98eee35af..3285534d9 100644
--- a/app/main/views/templates.py
+++ b/app/main/views/templates.py
@@ -119,6 +119,7 @@ def choose_template(service_id, template_type='all', template_folder_id=None):
 
     return render_template(
         'views/templates/choose.html',
+        current_template_folder_id=template_folder_id,
         template_folder_path=current_service.get_template_folder_path(template_folder_id),
         template_folders=current_service.get_template_folders(template_folder_id),
         templates=current_service.get_templates(template_type, template_folder_id),
@@ -179,9 +180,10 @@ def view_template_version_preview(service_id, template_id, version, filetype):
 
 
 @main.route("/services/<service_id>/templates/add", methods=['GET', 'POST'])
+@main.route("/services/<service_id>/templates/folders/<template_folder_id>/add", methods=['GET', 'POST'])
 @login_required
 @user_has_permissions('manage_templates')
-def add_template_by_type(service_id):
+def add_template_by_type(service_id, template_folder_id=None):
 
     form = ChooseTemplateType(
         include_letters=current_service.has_permission('letter'),
@@ -228,6 +230,7 @@ def add_template_by_type(service_id):
                 '.add_service_template',
                 service_id=service_id,
                 template_type=form.template_type.data,
+                template_folder_id=template_folder_id,
             ))
 
     return render_template('views/templates/add.html', form=form)
@@ -296,16 +299,19 @@ def action_blocked(service_id, notification_type, return_to, template_id):
 
 
 @main.route("/services/<service_id>/templates/add-folder", methods=['GET', 'POST'])
-def add_template_folder(service_id):
+@main.route("/services/<service_id>/templates/folders/<template_folder_id>/add-folder", methods=['GET', 'POST'])
+def add_template_folder(service_id, template_folder_id=None):
     if not current_service.has_permission('edit_folders'):
         abort(403)
 
     form = TemplateFolderForm()
 
     if form.validate_on_submit():
-        template_folder_api_client.create_template_folder(current_service.id, name=form.name.data, parent_id=None)
+        template_folder_api_client.create_template_folder(
+            current_service.id, name=form.name.data, parent_id=template_folder_id
+        )
         return redirect(
-            url_for('.choose_template', service_id=service_id)
+            url_for('.choose_template', service_id=service_id, template_folder_id=template_folder_id)
         )
 
     return render_template(
@@ -315,9 +321,11 @@ def add_template_folder(service_id):
 
 
 @main.route("/services/<service_id>/templates/add-<template_type>", methods=['GET', 'POST'])
+@main.route("/services/<service_id>/templates/folders/<template_folder_id>/add-<template_type>",
+            methods=['GET', 'POST'])
 @login_required
 @user_has_permissions('manage_templates')
-def add_service_template(service_id, template_type):
+def add_service_template(service_id, template_type, template_folder_id=None):
 
     if template_type not in ['sms', 'email', 'letter']:
         abort(404)
diff --git a/app/templates/views/templates/choose.html b/app/templates/views/templates/choose.html
index 25d51820e..dfff6b425 100644
--- a/app/templates/views/templates/choose.html
+++ b/app/templates/views/templates/choose.html
@@ -64,7 +64,7 @@
       </div>
       {% if current_user.has_permissions('manage_templates') %}
         <div class="column-one-third">
-          <a href="{{ url_for('.add_template_by_type', service_id=current_service.id) }}" class="button align-with-heading">Add new template</a>
+          <a href="{{ url_for('.add_template_by_type', service_id=current_service.id, template_folder_id=current_template_folder_id) }}" class="button align-with-heading">Add new template</a>
         </div>
       {% endif %}
     </div>
diff --git a/tests/app/main/views/test_template_folders.py b/tests/app/main/views/test_template_folders.py
index 6c5acbc5e..74429813b 100644
--- a/tests/app/main/views/test_template_folders.py
+++ b/tests/app/main/views/test_template_folders.py
@@ -9,9 +9,11 @@ PARENT_FOLDER_ID = '7e979e79-d970-43a5-ac69-b625a8d147b0'
 CHILD_FOLDER_ID = '92ee1ee0-e4ee-4dcc-b1a7-a5da9ebcfa2b'
 
 
+@pytest.mark.parametrize('parent_folder_id', [None, PARENT_FOLDER_ID])
 def test_add_page_shows_option_for_folder(
     client_request,
     service_one,
+    parent_folder_id,
     mocker,
     mock_get_service_templates,
     mock_get_organisations_and_services_for_user,
@@ -22,6 +24,7 @@ def test_add_page_shows_option_for_folder(
     page = client_request.get(
         'main.add_template_by_type',
         service_id=service_one['id'],
+        template_folder_id=parent_folder_id,
         _test_page_title=False
     )
 
@@ -37,10 +40,15 @@ def test_add_page_shows_option_for_folder(
     ]
 
 
-def test_get_add_template_folder_page(client_request, service_one):
+@pytest.mark.parametrize('parent_folder_id', [None, PARENT_FOLDER_ID])
+def test_get_add_template_folder_page(client_request, service_one, parent_folder_id):
     service_one['permissions'] += ['edit_folders']
 
-    page = client_request.get('main.add_template_folder', service_id=service_one['id'])
+    page = client_request.get(
+        'main.add_template_folder',
+        service_id=service_one['id'],
+        template_folder_id=parent_folder_id
+    )
 
     assert page.find('input', attrs={'name': 'name'}) is not None
 
@@ -50,7 +58,8 @@ def test_add_template_folder_page_rejects_if_service_doesnt_have_permission(clie
     client_request.post('main.add_template_folder', service_id=service_one['id'], _expected_status=403)
 
 
-def test_post_add_template_folder_page(client_request, service_one, mocker):
+@pytest.mark.parametrize('parent_folder_id', [None, PARENT_FOLDER_ID])
+def test_post_add_template_folder_page(client_request, service_one, mocker, parent_folder_id):
     mock_create = mocker.patch('app.template_folder_api_client.create_template_folder')
 
     service_one['permissions'] += ['edit_folders']
@@ -58,15 +67,17 @@ def test_post_add_template_folder_page(client_request, service_one, mocker):
     client_request.post(
         'main.add_template_folder',
         service_id=service_one['id'],
+        template_folder_id=parent_folder_id,
         _data={'name': 'foo'},
         _expected_redirect=url_for(
             'main.choose_template',
             service_id=service_one['id'],
+            template_folder_id=parent_folder_id,
             _external=True,
         )
     )
 
-    mock_create.assert_called_once_with(service_one['id'], name='foo', parent_id=None)
+    mock_create.assert_called_once_with(service_one['id'], name='foo', parent_id=parent_folder_id)
 
 
 @pytest.mark.parametrize(