diff --git a/src/lib/components/chat/Placeholder/FolderTitle.svelte b/src/lib/components/chat/Placeholder/FolderTitle.svelte
index d2546f595a..c48654accd 100644
--- a/src/lib/components/chat/Placeholder/FolderTitle.svelte
+++ b/src/lib/components/chat/Placeholder/FolderTitle.svelte
@@ -11,7 +11,12 @@
 
 	import { selectedFolder } from '$lib/stores';
 
-	import { deleteFolderById, getFolderById, updateFolderById } from '$lib/apis/folders';
+	import {
+		deleteFolderById,
+		getFolderById,
+		updateFolderById,
+		createNewFolder
+	} from '$lib/apis/folders';
 	import { getChatsByFolderId } from '$lib/apis/chats';
 
 	import FolderModal from '$lib/components/layout/Sidebar/Folders/FolderModal.svelte';
@@ -30,6 +35,7 @@
 	export let onDelete: Function = (folderId) => {};
 
 	let showFolderModal = false;
+	let showCreateSubFolderModal = false;
 	let showDeleteConfirm = false;
 	let deleteFolderContents = true;
 
@@ -127,6 +133,30 @@
 
 		saveAs(blob, `folder-${folder.name}-export-${Date.now()}.json`);
 	};
+
+	const createSubFolderHandler = async ({ name, meta, data, parent_id }) => {
+		if (name === '') {
+			toast.error($i18n.t('Folder name cannot be empty.'));
+			return;
+		}
+
+		name = name.trim();
+
+		const res = await createNewFolder(localStorage.token, {
+			name,
+			data,
+			meta,
+			parent_id
+		}).catch((error) => {
+			toast.error(`${error}`);
+			return null;
+		});
+
+		if (res) {
+			toast.success($i18n.t('Folder created successfully'));
+			onUpdate();
+		}
+	};
 </script>
 
 {#if folder}
@@ -137,6 +167,12 @@
 		onSubmit={updateHandler}
 	/>
 
+	<FolderModal
+		bind:show={showCreateSubFolderModal}
+		parentId={folder.id}
+		onSubmit={createSubFolderHandler}
+	/>
+
 	<DeleteConfirmDialog
 		bind:show={showDeleteConfirm}
 		title={$i18n.t('Delete folder?')}
@@ -146,11 +182,11 @@
 	>
 		<div class=" text-sm text-gray-700 dark:text-gray-300 flex-1 line-clamp-3 mb-2">
 			<!-- {$i18n.t('This will delete <strong>{{NAME}}</strong> and <strong>all its contents</strong>.', {
-				NAME: folders[folderId].name
+				NAME: folder.name
 			})} -->
 
 			{$i18n.t(`Are you sure you want to delete "{{NAME}}"?`, {
-				NAME: folders[folderId].name
+				NAME: folder.name
 			})}
 		</div>
 
@@ -202,6 +238,9 @@
 				onExport={() => {
 					exportHandler();
 				}}
+				onCreateSubFolder={() => {
+					showCreateSubFolderModal = true;
+				}}
 			>
 				<button
 					class="p-1.5 dark:hover:bg-gray-850 rounded-full touch-auto"
diff --git a/src/lib/components/layout/Sidebar/Folders/FolderMenu.svelte b/src/lib/components/layout/Sidebar/Folders/FolderMenu.svelte
index be999b1783..e9ac8d204a 100644
--- a/src/lib/components/layout/Sidebar/Folders/FolderMenu.svelte
+++ b/src/lib/components/layout/Sidebar/Folders/FolderMenu.svelte
@@ -15,7 +15,7 @@
 	export let onEdit = () => {};
 	export let onExport = () => {};
 	export let onDelete = () => {};
-	export let onCreateSub = () => {};
+	export let onCreateSubFolder = () => {};
 
 	let show = false;
 </script>
@@ -47,7 +47,7 @@
 			<button
 				class="flex gap-2 items-center px-3 py-1.5 text-sm select-none cursor-pointer hover:bg-gray-50 dark:hover:bg-gray-800 rounded-xl w-full"
 				on:click={() => {
-					onCreateSub();
+					onCreateSubFolder();
 				}}
 			>
 				<Folder />
diff --git a/src/lib/components/layout/Sidebar/RecursiveFolder.svelte b/src/lib/components/layout/Sidebar/RecursiveFolder.svelte
index 2403c8e9ae..fa80719d5a 100644
--- a/src/lib/components/layout/Sidebar/RecursiveFolder.svelte
+++ b/src/lib/components/layout/Sidebar/RecursiveFolder.svelte
@@ -627,7 +627,7 @@
 						onExport={() => {
 							exportHandler();
 						}}
-						onCreateSub={() => {
+						onCreateSubFolder={() => {
 							createSubFolderParentId = folderId;
 							showCreateSubFolderModal = true;
 						}}