diff --git a/public/app/features/alerting/unified/components/expressions/util.test.ts b/public/app/features/alerting/unified/components/expressions/util.test.ts
index 18600e64d85..f8cb2d39d23 100644
--- a/public/app/features/alerting/unified/components/expressions/util.test.ts
+++ b/public/app/features/alerting/unified/components/expressions/util.test.ts
@@ -6,6 +6,7 @@ import { GRAFANA_RULES_SOURCE_NAME } from '../../utils/datasource';
 
 import {
   decodeGrafanaNamespace,
+  encodeGrafanaNamespace,
   formatLabels,
   getSeriesLabels,
   getSeriesName,
@@ -58,7 +59,8 @@ describe('decodeGrafanaNamespace', () => {
         },
       ],
     };
-    expect(decodeGrafanaNamespace(grafanaNamespace)).toBe('my_rule_namespace');
+    expect(decodeGrafanaNamespace(grafanaNamespace)).toHaveProperty('name', 'my_rule_namespace');
+    expect(decodeGrafanaNamespace(grafanaNamespace)).toHaveProperty('parents', []);
   });
 
   it('should work for Grafana namespaces in nested folders format', () => {
@@ -74,7 +76,8 @@ describe('decodeGrafanaNamespace', () => {
       ],
     };
 
-    expect(decodeGrafanaNamespace(grafanaNamespace)).toBe('my_rule_namespace');
+    expect(decodeGrafanaNamespace(grafanaNamespace)).toHaveProperty('name', 'my_rule_namespace');
+    expect(decodeGrafanaNamespace(grafanaNamespace)).toHaveProperty('parents', ['parentUID']);
   });
 
   it('should default to name if format is invalid: invalid JSON', () => {
@@ -90,7 +93,8 @@ describe('decodeGrafanaNamespace', () => {
       ],
     };
 
-    expect(decodeGrafanaNamespace(grafanaNamespace)).toBe(`["parentUID"`);
+    expect(decodeGrafanaNamespace(grafanaNamespace)).toHaveProperty('name', `["parentUID"`);
+    expect(decodeGrafanaNamespace(grafanaNamespace)).toHaveProperty('parents', []);
   });
 
   it('should default to name if format is invalid: empty array', () => {
@@ -106,7 +110,8 @@ describe('decodeGrafanaNamespace', () => {
       ],
     };
 
-    expect(decodeGrafanaNamespace(grafanaNamespace)).toBe(`[]`);
+    expect(decodeGrafanaNamespace(grafanaNamespace)).toHaveProperty('name', `[]`);
+    expect(decodeGrafanaNamespace(grafanaNamespace)).toHaveProperty('parents', []);
   });
 
   it('grab folder name if format is long array', () => {
@@ -122,7 +127,8 @@ describe('decodeGrafanaNamespace', () => {
       ],
     };
 
-    expect(decodeGrafanaNamespace(grafanaNamespace)).toBe('another_part');
+    expect(decodeGrafanaNamespace(grafanaNamespace)).toHaveProperty('name', 'another_part');
+    expect(decodeGrafanaNamespace(grafanaNamespace)).toHaveProperty('parents', ['parentUID', 'my_rule_namespace']);
   });
 
   it('should not change output for cloud namespaces', () => {
@@ -138,7 +144,23 @@ describe('decodeGrafanaNamespace', () => {
       ],
     };
 
-    expect(decodeGrafanaNamespace(cloudNamespace)).toBe(`["parentUID","my_rule_namespace"]`);
+    expect(decodeGrafanaNamespace(cloudNamespace)).toHaveProperty('name', `["parentUID","my_rule_namespace"]`);
+    expect(decodeGrafanaNamespace(cloudNamespace)).toHaveProperty('parents', []);
+  });
+});
+
+describe('encodeGrafanaNamespace', () => {
+  it('should encode with parents', () => {
+    const name = 'folder';
+    const parents = ['1', '2', '3'];
+
+    expect(encodeGrafanaNamespace(name, parents)).toBe(`["1","2","3","folder"]`);
+  });
+
+  it('should encode without parents', () => {
+    const name = 'folder';
+
+    expect(encodeGrafanaNamespace(name)).toBe(`["folder"]`);
   });
 });
 
diff --git a/public/app/features/alerting/unified/components/expressions/util.ts b/public/app/features/alerting/unified/components/expressions/util.ts
index e6794e4ab26..07d732eb27b 100644
--- a/public/app/features/alerting/unified/components/expressions/util.ts
+++ b/public/app/features/alerting/unified/components/expressions/util.ts
@@ -1,3 +1,5 @@
+import { dropRight, last } from 'lodash';
+
 import { DataFrame, Labels, roundDecimals } from '@grafana/data';
 import { CombinedRuleNamespace } from 'app/types/unified-alerting';
 
@@ -40,29 +42,66 @@ const formatLabels = (labels: Labels): string => {
     .join(', ');
 };
 
+interface DecodedNamespace {
+  name: string;
+  parents: string[];
+}
+
 /**
  * After https://github.com/grafana/grafana/pull/74600,
  * Grafana folder names will be returned from the API as a combination of the folder name and parent UID in a format of JSON array,
  * where first element is parent UID and the second element is Title.
+ *
+ * Here we parse this to return the name of the last folder and the array of parent folders
  */
-const decodeGrafanaNamespace = (namespace: CombinedRuleNamespace): string => {
+const decodeGrafanaNamespace = (namespace: CombinedRuleNamespace): DecodedNamespace => {
   const namespaceName = namespace.name;
 
   if (isCloudRulesSource(namespace.rulesSource)) {
-    return namespaceName;
+    return {
+      name: namespaceName,
+      parents: [],
+    };
   }
 
+  // try to parse the folder as a nested folder, if it fails fall back to returning the folder name as-is.
   try {
-    return JSON.parse(namespaceName).at(-1) ?? namespaceName;
+    const folderParts: string[] = JSON.parse(namespaceName);
+    if (!Array.isArray(folderParts)) {
+      throw new Error('not a nested Grafana folder');
+    }
+
+    const name = last(folderParts) ?? namespaceName;
+    const parents = dropRight(folderParts, 1);
+
+    return {
+      name,
+      parents,
+    };
   } catch {
-    return namespaceName;
+    return {
+      name: namespace.name,
+      parents: [],
+    };
   }
 };
 
+const encodeGrafanaNamespace = (name: string, parents: string[] | undefined = []) => {
+  return JSON.stringify(parents.concat(name));
+};
+
 const isEmptySeries = (series: DataFrame[]): boolean => {
   const isEmpty = series.every((serie) => serie.fields.every((field) => field.values.every((value) => value == null)));
 
   return isEmpty;
 };
 
-export { decodeGrafanaNamespace, formatLabels, getSeriesLabels, getSeriesName, getSeriesValue, isEmptySeries };
+export {
+  decodeGrafanaNamespace,
+  encodeGrafanaNamespace,
+  formatLabels,
+  getSeriesLabels,
+  getSeriesName,
+  getSeriesValue,
+  isEmptySeries,
+};
diff --git a/public/app/features/alerting/unified/components/rule-viewer/RuleViewer.v1.tsx b/public/app/features/alerting/unified/components/rule-viewer/RuleViewer.v1.tsx
index 78d793b1a31..d1ff060bdd7 100644
--- a/public/app/features/alerting/unified/components/rule-viewer/RuleViewer.v1.tsx
+++ b/public/app/features/alerting/unified/components/rule-viewer/RuleViewer.v1.tsx
@@ -154,7 +154,7 @@ export function RuleViewer({ match }: RuleViewerProps) {
             <RuleDetailsDataSources rule={rule} rulesSource={rulesSource} />
             {isFederatedRule && <RuleDetailsFederatedSources group={rule.group} />}
             <DetailsField label="Namespace / Group" className={styles.rightSideDetails}>
-              {decodeGrafanaNamespace(rule.namespace)} / {rule.group.name}
+              {decodeGrafanaNamespace(rule.namespace).name} / {rule.group.name}
             </DetailsField>
             {isGrafanaRulerRule(rule.rulerRule) && <GrafanaRuleUID rule={rule.rulerRule.grafana_alert} />}
           </div>
diff --git a/public/app/features/alerting/unified/components/rule-viewer/v2/RuleViewer.v2.tsx b/public/app/features/alerting/unified/components/rule-viewer/v2/RuleViewer.v2.tsx
index 29d4c0607c4..0088ddd0833 100644
--- a/public/app/features/alerting/unified/components/rule-viewer/v2/RuleViewer.v2.tsx
+++ b/public/app/features/alerting/unified/components/rule-viewer/v2/RuleViewer.v2.tsx
@@ -259,7 +259,7 @@ function usePageNav(rule: CombinedRule) {
   const isAlertType = isAlertingRule(promRule);
   const numberOfInstance = isAlertType ? (promRule.alerts ?? []).length : undefined;
 
-  const namespaceName = decodeGrafanaNamespace(rule.namespace);
+  const namespaceName = decodeGrafanaNamespace(rule.namespace).name;
   const groupName = rule.group.name;
 
   const isGrafanaAlertRule = isGrafanaRulerRule(rule.rulerRule) && isAlertType;
@@ -309,6 +309,7 @@ function usePageNav(rule: CombinedRule) {
         ['namespace', namespaceName],
         ['group', groupName],
       ]),
+      // @TODO support nested folders here
       parentItem: {
         text: namespaceName,
         url: createListFilterLink([['namespace', namespaceName]]),
diff --git a/public/app/features/alerting/unified/components/rules/EditRuleGroupModal.tsx b/public/app/features/alerting/unified/components/rules/EditRuleGroupModal.tsx
index bc24dd8be88..4864237c17c 100644
--- a/public/app/features/alerting/unified/components/rules/EditRuleGroupModal.tsx
+++ b/public/app/features/alerting/unified/components/rules/EditRuleGroupModal.tsx
@@ -20,6 +20,7 @@ import { AlertInfo, getAlertInfo, isRecordingRulerRule } from '../../utils/rules
 import { parsePrometheusDuration, safeParseDurationstr } from '../../utils/time';
 import { DynamicTable, DynamicTableColumnProps, DynamicTableItemProps } from '../DynamicTable';
 import { EvaluationIntervalLimitExceeded } from '../InvalidIntervalWarning';
+import { decodeGrafanaNamespace, encodeGrafanaNamespace } from '../expressions/util';
 import { MIN_TIME_RANGE_STEP_S } from '../rule-editor/GrafanaEvaluationBehavior';
 
 const ITEMS_PER_PAGE = 10;
@@ -173,7 +174,7 @@ export function EditCloudGroupModal(props: ModalProps): React.ReactElement {
 
   const defaultValues = useMemo(
     (): FormValues => ({
-      namespaceName: namespace.name,
+      namespaceName: decodeGrafanaNamespace(namespace).name,
       groupName: group.name,
       groupInterval: group.interval ?? '',
     }),
@@ -183,6 +184,9 @@ export function EditCloudGroupModal(props: ModalProps): React.ReactElement {
   const rulesSourceName = getRulesSourceName(namespace.rulesSource);
   const isGrafanaManagedGroup = rulesSourceName === GRAFANA_RULES_SOURCE_NAME;
 
+  // parse any parent folders the alert rule might be stored in
+  const nestedFolderParents = decodeGrafanaNamespace(namespace).parents;
+
   const nameSpaceLabel = isGrafanaManagedGroup ? 'Folder' : 'Namespace';
 
   // close modal if successfully saved
@@ -194,13 +198,18 @@ export function EditCloudGroupModal(props: ModalProps): React.ReactElement {
 
   useCleanup((state) => (state.unifiedAlerting.updateLotexNamespaceAndGroup = initialAsyncRequestState));
   const onSubmit = (values: FormValues) => {
+    // make sure that when dealing with a nested folder for Grafana managed rules we encode the folder properly
+    const newNamespaceName = isGrafanaManagedGroup
+      ? encodeGrafanaNamespace(values.namespaceName, nestedFolderParents)
+      : values.namespaceName;
+
     dispatch(
       updateLotexNamespaceAndGroupAction({
         rulesSourceName: rulesSourceName,
         groupName: group.name,
         newGroupName: values.groupName,
         namespaceName: namespace.name,
-        newNamespaceName: values.namespaceName,
+        newNamespaceName: newNamespaceName,
         groupInterval: values.groupInterval || undefined,
         folderUid,
       })
@@ -212,6 +221,7 @@ export function EditCloudGroupModal(props: ModalProps): React.ReactElement {
     defaultValues,
     shouldFocusError: true,
   });
+
   const {
     handleSubmit,
     register,
diff --git a/public/app/features/alerting/unified/components/rules/RulesGroup.tsx b/public/app/features/alerting/unified/components/rules/RulesGroup.tsx
index f98ad2b7424..fd6072e359f 100644
--- a/public/app/features/alerting/unified/components/rules/RulesGroup.tsx
+++ b/public/app/features/alerting/unified/components/rules/RulesGroup.tsx
@@ -205,9 +205,9 @@ export const RulesGroup = React.memo(({ group, namespace, expandAll, viewMode }:
 
   // ungrouped rules are rules that are in the "default" group name
   const groupName = isListView ? (
-    <RuleLocation namespace={decodeGrafanaNamespace(namespace)} />
+    <RuleLocation namespace={decodeGrafanaNamespace(namespace).name} />
   ) : (
-    <RuleLocation namespace={decodeGrafanaNamespace(namespace)} group={group.name} />
+    <RuleLocation namespace={decodeGrafanaNamespace(namespace).name} group={group.name} />
   );
 
   const closeEditModal = (saved = false) => {
diff --git a/public/app/features/alerting/unified/utils/misc.ts b/public/app/features/alerting/unified/utils/misc.ts
index cb41bea1e15..21115d42ec7 100644
--- a/public/app/features/alerting/unified/utils/misc.ts
+++ b/public/app/features/alerting/unified/utils/misc.ts
@@ -150,7 +150,7 @@ export function makeFolderAlertsLink(folderUID: string, title: string): string {
 }
 
 export function makeFolderSettingsLink(folder: FolderDTO): string {
-  return createUrl(`/dashboards/f/${folder.uid}/${folder.title}/settings`);
+  return createUrl(`/dashboards/f/${folder.uid}/settings`);
 }
 
 export function makeDashboardLink(dashboardUID: string): string {