diff --git a/application/single_app/config.py b/application/single_app/config.py
index 1e040ce02..f5c1fe6f4 100644
--- a/application/single_app/config.py
+++ b/application/single_app/config.py
@@ -101,7 +101,7 @@
 EXECUTOR_TYPE = 'thread'
 EXECUTOR_MAX_WORKERS = 30
 SESSION_TYPE = 'filesystem'
-VERSION = "0.261.266"
+VERSION = "0.261.267"
 IS_DEVELOPMENT = is_development_env_enabled()
 
 # Opt-out for deployments where App Service Easy Auth is active but the platform
diff --git a/application/single_app/route_backend_users.py b/application/single_app/route_backend_users.py
index af83d7648..edd089156 100644
--- a/application/single_app/route_backend_users.py
+++ b/application/single_app/route_backend_users.py
@@ -557,6 +557,9 @@ def user_settings():
                     # Whether the personal workspace's own section rail is collapsed to
                     # icons. Separate from v2RailCollapsed, which is the shell's rail.
                     'v2WorkspaceRailCollapsed',
+                    # Whether the V2 Admin Settings categories rail is collapsed to icons.
+                    # Separate from the shell and workspace rails so each keeps its own state.
+                    'v2AdminRailCollapsed',
                     # V2 document explorer: how the workspace documents list is presented
                     # (view mode, visible columns, page size, details pane) and the saved
                     # filter combinations pinned in its navigation rail.
diff --git a/application/v2_ui/src/lib/userSettings.ts b/application/v2_ui/src/lib/userSettings.ts
index c4ba25e30..b7fa62b3c 100644
--- a/application/v2_ui/src/lib/userSettings.ts
+++ b/application/v2_ui/src/lib/userSettings.ts
@@ -73,6 +73,15 @@ export interface UserSettings {
      */
     v2WorkspaceRailCollapsed?: boolean;
 
+    /**
+     * Whether the Admin Settings categories rail shows icons only.
+     *
+     * Its own key rather than `v2WorkspaceRailCollapsed` or `v2RailCollapsed`: making room for
+     * the settings cards should not also change how the workspace pages or the application
+     * shell are laid out.
+     */
+    v2AdminRailCollapsed?: boolean;
+
     /**
      * How the workspace documents explorer is presented, and the views pinned in its rail.
      *
@@ -208,6 +217,9 @@ export const WRITABLE_USER_SETTING_KEYS = [
     // Separate from v2RailCollapsed, which is the rail of the application shell:
     // collapsing one should not collapse the other.
     'v2WorkspaceRailCollapsed',
+    // Whether the Admin Settings categories rail is showing icons only. Separate from the
+    // shell and workspace rails for the same reason they are separate from each other.
+    'v2AdminRailCollapsed',
     // Workspace documents explorer: how the list is presented, and the saved filter
     // combinations pinned in its navigation rail.
     'v2DocumentsPrefs',
diff --git a/application/v2_ui/src/pages/AdminSettingsPage.tsx b/application/v2_ui/src/pages/AdminSettingsPage.tsx
index 359f91189..4053d8de4 100644
--- a/application/v2_ui/src/pages/AdminSettingsPage.tsx
+++ b/application/v2_ui/src/pages/AdminSettingsPage.tsx
@@ -26,9 +26,10 @@
 
 import { useCallback, useEffect, useMemo, useRef, useState } from 'react';
 import { clsx } from 'clsx';
-import { Loader2, Network, Search, ShieldAlert, TriangleAlert, type LucideIcon } from 'lucide-react';
+import { Loader2, Network, PanelLeftClose, PanelLeftOpen, Search, ShieldAlert, TriangleAlert, type LucideIcon } from 'lucide-react';
 import { ApiError, api } from '../lib/apiClient';
 import { useBootstrapStore } from '../stores/bootstrapStore';
+import { useUserSettingsStore } from '../stores/userSettingsStore';
 import { PageHeader } from '../components/layout/PageHeader';
 import { GlassButton, GlassPanel, Skeleton, Toggle } from '../components/ui/primitives';
 import { AdminModal } from '../components/admin/AdminModal';
@@ -222,6 +223,10 @@ function buildCapabilityIndex(
 export function AdminSettingsPage() {
     const isAdmin = useBootstrapStore((state) => Boolean(state.data?.user?.is_admin));
     const bootstrapVersion = useBootstrapStore((state) => state.data?.version);
+    // The categories rail's icons-only state is its own per-user preference, so making room
+    // here leaves the workspace and shell rails as they are.
+    const railCollapsed = useUserSettingsStore((state) => state.settings.v2AdminRailCollapsed === true);
+    const updateUserSettings = useUserSettingsStore((state) => state.update);
 
     /**
      * Re-read the bootstrap payload once a save lands.
@@ -1274,9 +1279,28 @@ export function AdminSettingsPage() {
             <div className="flex min-h-0 flex-1">
                 <aside
                     aria-label="Settings categories"
-                    className="hidden w-56 shrink-0 overflow-y-auto border-r border-edge p-3 lg:block"
+                    className={clsx(
+                        'hidden shrink-0 overflow-y-auto border-r border-edge transition-[width] motion-reduce:transition-none lg:block',
+                        railCollapsed ? 'w-16 px-2 py-3' : 'w-56 p-3',
+                    )}
                 >
-                    <div className="space-y-0.5">
+                    <button
+                        type="button"
+                        onClick={() => updateUserSettings({ v2AdminRailCollapsed: !railCollapsed })}
+                        aria-label={railCollapsed ? 'Expand settings categories' : 'Collapse settings categories'}
+                        aria-expanded={!railCollapsed}
+                        aria-controls="admin-settings-category-list"
+                        title={railCollapsed ? 'Expand settings categories' : 'Collapse settings categories'}
+                        className={clsx(
+                            'mb-2 flex w-full items-center gap-2 rounded-lg py-1.5 text-xs text-text-3 transition-colors hover:bg-surface-2 hover:text-text-1',
+                            railCollapsed ? 'justify-center px-2' : 'px-3',
+                        )}
+                    >
+                        {railCollapsed ? <PanelLeftOpen size={15} aria-hidden="true" /> : (
+                            <><PanelLeftClose size={15} aria-hidden="true" /><span>Collapse</span></>
+                        )}
+                    </button>
+                    <div id="admin-settings-category-list" className="space-y-0.5">
                         {categories.map((category) => {
                             const active = activeGroup === category.id;
                             return (
@@ -1285,9 +1309,11 @@ export function AdminSettingsPage() {
                                     type="button"
                                     disabled={delegationDirty}
                                     aria-pressed={active}
+                                    title={railCollapsed ? category.label : undefined}
                                     onClick={() => setActiveGroup(category.id)}
                                     className={clsx(
-                                        'flex w-full items-center gap-2.5 rounded-lg px-3 py-2.5 text-left text-sm transition-colors',
+                                        'flex w-full items-center gap-2.5 rounded-lg py-2.5 text-left text-sm transition-colors',
+                                        railCollapsed ? 'justify-center px-2' : 'px-3',
                                         'disabled:cursor-not-allowed disabled:opacity-60',
                                         active
                                             ? 'bg-accent-soft font-semibold text-accent'
@@ -1299,7 +1325,8 @@ export function AdminSettingsPage() {
                                         aria-hidden="true"
                                         className={clsx('shrink-0', active ? 'text-accent' : 'text-text-3')}
                                     />
-                                    <span className="min-w-0 flex-1">{category.label}</span>
+                                    {/* Collapsed, the label stays as the button's accessible name. */}
+                                    <span className={railCollapsed ? 'sr-only' : 'min-w-0 flex-1'}>{category.label}</span>
                                 </button>
                             );
                         })}
diff --git a/docs/admin/index.md b/docs/admin/index.md
index 7367a5b55..2e4b85297 100644
--- a/docs/admin/index.md
+++ b/docs/admin/index.md
@@ -73,6 +73,23 @@ the target, the page clears the search or switches to the target's category firs
 
 This layout was implemented in **0.261.258**.
 
+### Collapsing the category list
+
+The category list on the left can shrink to a strip of icons, giving its width to the
+settings cards. That matters most at larger text sizes, where the list grows with the
+text, and on mid-sized screens, where the extra width can leave room for the **On this
+page** list. Select **Collapse** at the top of the list to shrink it, and the expand
+icon in the same place to bring the labels back.
+
+Collapsed, each icon still switches category, shows its category name as a tooltip,
+and is announced by name to screen readers. The choice is saved with your user
+preferences, so it applies wherever you sign in, and it is kept separately from the
+workspace section rail and the main navigation, so collapsing one leaves the others
+alone. On narrower windows the page offers a category drop-down instead of the list,
+whichever way the list was left.
+
+The collapsible category list was added in **0.261.267**.
+
 ## Settings groups
 
 | Group | What it controls | Tabs | Link |
diff --git a/docs/explanation/features/V2_ADMIN_SETTINGS_LAYOUT_AND_HIERARCHY.md b/docs/explanation/features/V2_ADMIN_SETTINGS_LAYOUT_AND_HIERARCHY.md
index 90e12affb..9b6821607 100644
--- a/docs/explanation/features/V2_ADMIN_SETTINGS_LAYOUT_AND_HIERARCHY.md
+++ b/docs/explanation/features/V2_ADMIN_SETTINGS_LAYOUT_AND_HIERARCHY.md
@@ -34,7 +34,8 @@ packages, settings, routes, or browser asset sources are required.
 container. At 76rem and above it becomes a grid of the cards and a 15rem index; the
 whole frame stays within 112rem so an ultra-wide monitor does not stretch it. The
 search bar aligns with the content instead of floating in the middle. The category
-rail shows each group's icon from the navigation definition.
+rail shows each group's icon from the navigation definition, and can be collapsed to
+those icons; see [V2 Admin Settings Rail Collapse](V2_ADMIN_SETTINGS_RAIL_COLLAPSE.md).
 
 ### Section presentation
 
diff --git a/docs/explanation/features/V2_ADMIN_SETTINGS_RAIL_COLLAPSE.md b/docs/explanation/features/V2_ADMIN_SETTINGS_RAIL_COLLAPSE.md
new file mode 100644
index 000000000..56ce26ead
--- /dev/null
+++ b/docs/explanation/features/V2_ADMIN_SETTINGS_RAIL_COLLAPSE.md
@@ -0,0 +1,98 @@
+# V2 Admin Settings Rail Collapse
+
+## Overview
+
+The V2 workspace pages let people collapse their section rail to icons to give the
+content more room. V2 Admin Settings now does the same for its **Settings categories**
+rail. A control at the top of the rail shrinks it from 14rem to a 4rem strip of category
+icons, the settings cards take the freed width, and the choice is remembered per
+administrator.
+
+The admin page shares its width with up to three navigation columns: the application
+shell's rail, the categories rail, and, on wide screens, the **On this page** index. The
+categories rail is sized in `rem`, so it grows with the text size and reaches 448px at
+the largest size. Collapsing it returns that room to the cards, and on mid-sized screens
+can make room for the index, whose container query responds to the wider pane on its own.
+
+## Implemented in version: **0.261.267**
+
+The application version is maintained in `application/single_app/config.py`.
+
+**Dependencies:** the React/TypeScript V2 UI, local `lucide-react` icons
+(`PanelLeftClose`, `PanelLeftOpen`), and the `/api/user/settings` preference store. No new
+packages, routes, admin settings, or browser asset sources are required.
+
+## Technical specifications
+
+### Behaviour
+
+| State | Rail | Category entries | Control |
+| --- | --- | --- | --- |
+| Expanded (default) | `w-56` | Icon and label | `PanelLeftClose` with **Collapse** |
+| Collapsed | `w-16` | Icon only; the label stays as screen-reader text and a `title` tooltip | `PanelLeftOpen` |
+
+- The control is named "Collapse settings categories" or "Expand settings categories",
+  and carries `aria-expanded` and `aria-controls="admin-settings-category-list"`.
+- Category entries keep `aria-pressed` on the active category and stay locked while Call
+  agent changes are unsaved. The collapse control is not locked, because it does not
+  change the category.
+- The width change animates, except when the browser asks for reduced motion.
+- The rail is still drawn only at the `lg` breakpoint and above. Narrower windows use the
+  existing **Settings category** select whatever the preference says.
+
+### Persistence
+
+| Key | Contents |
+| --- | --- |
+| `v2AdminRailCollapsed` | `true` when the categories rail shows icons only. Absent, or any other value, means expanded. |
+
+The key is whitelisted in `allowed_keys` in `route_backend_users.py` and declared in
+`WRITABLE_USER_SETTING_KEYS` in `userSettings.ts`. The route drops an unlisted key without
+reporting it, so both are required. Writes go through `useUserSettingsStore.update`, which
+debounces them and rolls the value back if the save fails.
+
+The key is deliberately separate from `v2WorkspaceRailCollapsed`, the workspace section
+rail, and `v2RailCollapsed`, the application shell's rail. Making room on the admin page
+should not rearrange the workspace pages or the shell.
+
+### File structure
+
+| File | Change |
+| --- | --- |
+| `application/v2_ui/src/pages/AdminSettingsPage.tsx` | Collapse control, collapsed rail and entries. |
+| `application/v2_ui/src/lib/userSettings.ts` | `v2AdminRailCollapsed` type and writable key. |
+| `application/single_app/route_backend_users.py` | `v2AdminRailCollapsed` added to `allowed_keys`. |
+| `ui_tests/fixtures/v2_admin_settings.py` | `open(preferences=...)` seeds saved user preferences. |
+
+## Usage
+
+Open **Admin Settings** in V2 and select **Collapse** at the top of the category list.
+Select the expand icon in the same place to bring the labels back. Hover an icon to see
+its category name. See the
+[administration guide](../../admin/index.md#collapsing-the-category-list).
+
+## Testing and validation
+
+- `functional_tests/test_v2_admin_settings_rail_collapse.py` pins the contracts: the page
+  reads and writes `v2AdminRailCollapsed`, and neither other rail key, before its
+  non-admin return; the control's accessibility attributes; screen-reader labels and
+  tooltips on collapsed entries; the control staying usable while categories are locked;
+  and the key being in both the route whitelist and the client's writable keys.
+- `ui_tests/test_v2_admin_settings_rail_collapse.py` drives the built SPA with intercepted
+  APIs: the rail goes from 224px to 64px and the cards gain the width, the save carries
+  only the admin rail key, the choice survives a reload and can be undone, collapsed icons
+  still switch categories, the control works from the keyboard and keeps focus, the
+  collapsed rail fits at 200% text, and the select replaces the rail on narrow screens, in
+  light and dark.
+- `functional_tests/test_v2_settings_and_workspace_tags.py` keeps checking that every key
+  the client writes is whitelisted.
+
+### Known limitations
+
+- Until the user's preferences load, the rail draws expanded, the same as the workspace
+  rail.
+- The classic Admin Settings page is unchanged.
+
+Related: [V2 Admin Settings Layout and Hierarchy](V2_ADMIN_SETTINGS_LAYOUT_AND_HIERARCHY.md),
+and [V2 Documents Explorer](V2_DOCUMENTS_EXPLORER.md), which introduced the collapsible
+workspace rail.
diff --git a/docs/explanation/release_notes.md b/docs/explanation/release_notes.md
index f558efd0f..bd1648cdb 100644
--- a/docs/explanation/release_notes.md
+++ b/docs/explanation/release_notes.md
@@ -2,6 +2,15 @@
 
 For feature-focused and fix-focused drill-downs by version, see [Features by Version](https://github.com/microsoft/simplechat/tree/main/docs/explanation/features) and [Fixes by Version](https://github.com/microsoft/simplechat/tree/main/docs/explanation/fixes).
 
+### **(v0.261.267)**
+
+#### User Interface Enhancements
+
+*   **Collapsible Category List in V2 Admin Settings**
+    *   The category list on the left of V2 Admin Settings can now collapse to a strip of icons, as the workspace section rail does, giving its width to the settings cards. **Collapse** sits at the top of the list. Collapsed, each icon still switches category, shows its name as a tooltip, and is announced by name to screen readers.
+    *   The choice is remembered per administrator in a new `v2AdminRailCollapsed` user preference, kept separate from the workspace section rail and the main navigation so collapsing one leaves the others alone. Narrower windows keep the category drop-down.
+    *   (Ref: `AdminSettingsPage.tsx`, `userSettings.ts`, `route_backend_users.py`, `test_v2_admin_settings_rail_collapse.py`, `ui_tests/test_v2_admin_settings_rail_collapse.py`, [V2 Admin Settings Rail Collapse](features/V2_ADMIN_SETTINGS_RAIL_COLLAPSE.md))
+
 ### **(v0.261.265)**
 
 #### User Interface Enhancements
diff --git a/functional_tests/test_v2_admin_settings_rail_collapse.py b/functional_tests/test_v2_admin_settings_rail_collapse.py
new file mode 100644
index 000000000..8059e5884
--- /dev/null
+++ b/functional_tests/test_v2_admin_settings_rail_collapse.py
@@ -0,0 +1,151 @@
+#!/usr/bin/env python3
+# test_v2_admin_settings_rail_collapse.py
+"""
+Functional test for the collapsible V2 Admin Settings categories rail.
+Version: 0.261.267
+Implemented in: 0.261.267
+
+The workspace section rail collapses to icons and remembers that per user. The Admin
+Settings categories rail now does the same, under its own preference, so making room for
+the settings cards does not rearrange the workspace pages or the application shell. This
+file pins the contracts: the page reads and writes its own key ahead of its non-admin
+return, the settings route accepts the key (an unlisted key is dropped silently), and a
+collapsed entry keeps its label for screen readers. The browser behaviour is exercised by
+ui_tests/test_v2_admin_settings_rail_collapse.py.
+"""
+
+import re
+import sys
+from pathlib import Path
+
+sys.path.append(str(Path(__file__).resolve().parent))
+
+from test_support.versioning import assert_app_version_at_least
+
+
+REPO_ROOT = Path(__file__).resolve().parents[1]
+V2_SRC = REPO_ROOT / "application" / "v2_ui" / "src"
+PAGE_TSX = V2_SRC / "pages" / "AdminSettingsPage.tsx"
+USER_SETTINGS_TS = V2_SRC / "lib" / "userSettings.ts"
+USERS_ROUTE = REPO_ROOT / "application" / "single_app" / "route_backend_users.py"
+PREFERENCE_KEY = "v2AdminRailCollapsed"
+
+
+def _read(path):
+    assert path.is_file(), f"Missing expected file: {path}"
+    return path.read_text(encoding="utf-8")
+
+
+def _categories_rail(page):
+    """The categories rail markup, from its landmark to its closing tag."""
+    match = re.search(r'<aside\s+aria-label="Settings categories".*?</aside>', page, re.DOTALL)
+    assert match, "The Settings categories rail is missing from AdminSettingsPage.tsx"
+    return match.group(0)
+
+
+def test_version_is_at_least_the_implementing_release():
+    print("Testing the application version...")
+    assert_app_version_at_least("0.261.267")
+    print("  ok  the version includes the collapsible admin rail")
+    return True
+
+
+def test_the_rail_uses_its_own_preference():
+    print("Testing the admin rail preference...")
+    page = _read(PAGE_TSX)
+
+    assert f"state.settings.{PREFERENCE_KEY} === true" in page, (
+        "The rail should read its own preference and treat anything but true as expanded"
+    )
+    assert f"updateUserSettings({{ {PREFERENCE_KEY}: !railCollapsed }})" in page, (
+        "The collapse control should write the admin rail's own preference"
+    )
+    for other in ("v2WorkspaceRailCollapsed", "v2RailCollapsed"):
+        assert other not in page, (
+            f"The admin rail must not reuse {other}; collapsing it should not change the "
+            "workspace pages or the application shell"
+        )
+
+    # A hook after the early return would change the hook count once the bootstrap says
+    # the user is an admin, which React reports as an error.
+    hook = page.find(f"state.settings.{PREFERENCE_KEY}")
+    early_return = re.search(r"\n    if \(!isAdmin\) \{\s*return \(", page)
+    assert early_return, "Could not find the page's non-admin return"
+    assert hook < early_return.start(), (
+        "The preference must be read before the page returns early for non-admins"
+    )
+    print("  ok  the rail reads and writes v2AdminRailCollapsed, ahead of the early return")
+    return True
+
+
+def test_the_rail_collapses_to_labelled_icons():
+    print("Testing the collapse control and the collapsed entries...")
+    rail = _categories_rail(_read(PAGE_TSX))
+
+    assert "PanelLeftClose" in rail and "PanelLeftOpen" in rail, (
+        "The rail should use the same collapse and expand icons as the workspace rail"
+    )
+    assert "aria-expanded={!railCollapsed}" in rail
+    assert 'aria-controls="admin-settings-category-list"' in rail
+    assert 'id="admin-settings-category-list"' in rail
+    assert "'Collapse settings categories'" in rail and "'Expand settings categories'" in rail
+    assert "railCollapsed ? 'sr-only'" in rail, (
+        "A collapsed entry still needs its label available to a screen reader"
+    )
+    assert "title={railCollapsed ? category.label : undefined}" in rail, (
+        "A collapsed entry should name its category in a tooltip"
+    )
+    assert "railCollapsed ? 'w-16" in rail and "'w-56" in rail
+    assert "motion-reduce:transition-none" in rail, "The width change must respect reduced motion"
+    assert "lg:block" in rail, "Below lg the category select should still replace the rail"
+
+    # Unsaved Call agent changes lock the categories, collapsed or not, but the collapse
+    # control changes no category and must stay usable.
+    toggle = rail.split("<button", 2)[1].split("</button>", 1)[0]
+    assert "aria-expanded" in toggle, "The collapse control should be the rail's first button"
+    assert "disabled" not in toggle, "The collapse control must not be locked by unsaved changes"
+    assert "disabled={delegationDirty}" in rail
+    print("  ok  the rail collapses to icons that keep their names")
+    return True
+
+
+def test_the_preference_is_accepted_by_the_settings_route():
+    print("Testing that the preference is whitelisted...")
+    users = _read(USERS_ROUTE)
+    allowed = re.search(r"allowed_keys = \{(.*?)\}", users, re.DOTALL)
+    assert allowed, "Could not find allowed_keys in route_backend_users.py"
+    assert f"'{PREFERENCE_KEY}'" in allowed.group(1), (
+        "The settings route drops unlisted keys silently, so the rail would forget its state"
+    )
+
+    settings = _read(USER_SETTINGS_TS)
+    writable = re.search(
+        r"export const WRITABLE_USER_SETTING_KEYS = \[(.*?)\] as const;", settings, re.DOTALL
+    )
+    assert writable, "Could not find WRITABLE_USER_SETTING_KEYS in userSettings.ts"
+    assert f"'{PREFERENCE_KEY}'" in writable.group(1), (
+        "The client must declare the key it writes so the whitelist check covers it"
+    )
+    assert f"{PREFERENCE_KEY}?: boolean;" in settings
+    print("  ok  the route accepts the key the client writes")
+    return True
+
+
+TESTS = [
+    test_version_is_at_least_the_implementing_release,
+    test_the_rail_uses_its_own_preference,
+    test_the_rail_collapses_to_labelled_icons,
+    test_the_preference_is_accepted_by_the_settings_route,
+]
+
+
+if __name__ == "__main__":
+    results = []
+    for test in TESTS:
+        try:
+            results.append(test() is True)
+        except Exception as exc:
+            print(f"FAILED {test.__name__}: {exc}")
+            results.append(False)
+    print(f"\nResults: {sum(results)}/{len(results)} tests passed")
+    sys.exit(0 if all(results) else 1)
diff --git a/ui_tests/fixtures/v2_admin_settings.py b/ui_tests/fixtures/v2_admin_settings.py
index 9a8f0e52a..d598b60aa 100644
--- a/ui_tests/fixtures/v2_admin_settings.py
+++ b/ui_tests/fixtures/v2_admin_settings.py
@@ -1,11 +1,12 @@
 # v2_admin_settings.py
 """
 Schema-backed browser fixtures for V2 Admin Settings.
-Version: 0.261.258
+Version: 0.261.267
 Implemented in: 0.261.093
 Separate release check boundary: 0.261.133
 The rail's notification count is answered: 0.261.195
 Selectable sections, Model Catalog, and AI Connections stubs: 0.261.258
+Seeded user preferences on open: 0.261.267
 
 Serve the real built SPA through Playwright request interception, using the real
 Agents field schema and synthetic settings. No application server, signed-in
@@ -295,7 +296,7 @@ def _model_catalog(self, route: Route):
         route.fulfill(json=self._catalog_payload(admin=True))
 
     def open(self, theme="light", width=1440, font_size="m", *, wait_until="networkidle",
-             height=1000, ready_region="Agent Runtime"):
+             height=1000, ready_region="Agent Runtime", preferences=None):
         if not SPA_INDEX.is_file():
             pytest.fail("Build the V2 SPA first: npm --prefix application/v2_ui run build")
         source_root = REPO_ROOT / "application" / "v2_ui" / "src"
@@ -309,6 +310,8 @@ def open(self, theme="light", width=1440, font_size="m", *, wait_until="networki
             "darkModeEnabled": theme == "dark",
             "v2RailCollapsed": width < 1024,
             "fontSizePreference": font_size,
+            # Saved user preferences the page should start from, e.g. a collapsed rail.
+            **(preferences or {}),
         }
         self.page.set_viewport_size({"width": width, "height": height})
         # A held release check keeps a request open, which networkidle would wait on.
diff --git a/ui_tests/test_v2_admin_settings_rail_collapse.py b/ui_tests/test_v2_admin_settings_rail_collapse.py
new file mode 100644
index 000000000..c3dcc1470
--- /dev/null
+++ b/ui_tests/test_v2_admin_settings_rail_collapse.py
@@ -0,0 +1,205 @@
+# test_v2_admin_settings_rail_collapse.py
+"""
+Browser coverage for the collapsible V2 Admin Settings categories rail.
+Version: 0.261.267
+Implemented in: 0.261.267
+
+Exercise the built application with the real field schema and intercepted APIs. Check
+that the categories rail collapses to icons that keep their names, hands its width to the
+settings, saves the choice under its own preference and restores it on the next visit,
+still switches categories while collapsed, works from the keyboard, fits at large text
+sizes, and steps aside for the category select on narrow screens -- in light and dark,
+without writing to live settings.
+"""
+
+import sys
+from pathlib import Path
+
+import pytest
+from playwright.sync_api import expect
+
+sys.path.insert(0, str(Path(__file__).resolve().parent / "fixtures"))
+
+from v2_admin_settings import AdminSettingsFixture, connect_options  # noqa: E402,F401
+
+
+pytestmark = pytest.mark.ui
+
+RAIL_SECTIONS = {
+    "appearance": ("classification-banner-section",),
+    "agents-actions": ("agents-config",),
+    "knowledge": ("web-search-section",),
+}
+CATEGORIES = ("All settings", "Appearance", "Agents & Actions", "Knowledge")
+PREFERENCE_KEY = "v2AdminRailCollapsed"
+READY_REGION = "Classification Banner"
+ARTIFACTS = "v2_admin_rail"
+
+
+@pytest.fixture
+def rail_ui(page):
+    fixture = AdminSettingsFixture(page, sections=RAIL_SECTIONS)
+    yield fixture
+    fixture.assert_clean()
+
+
+def _box(locator):
+    box = locator.bounding_box()
+    assert box, "Element is not rendered"
+    return box
+
+
+def _rail(page):
+    return page.get_by_role("complementary", name="Settings categories")
+
+
+def _category(rail, label):
+    return rail.get_by_role("button", name=label, exact=True)
+
+
+def _saves_rail_preference(response, value=None):
+    """A settings save carrying the rail preference, optionally with a specific value."""
+    request = response.request
+    if request.method != "POST" or not request.url.endswith("/api/user/settings"):
+        return False
+    saved = (request.post_data_json or {}).get("settings", {})
+    return PREFERENCE_KEY in saved and (value is None or saved[PREFERENCE_KEY] is value)
+
+
+def _click_and_capture_save(page, button):
+    """Click, then return the preferences the debounced save sent once it is answered."""
+    with page.expect_response(_saves_rail_preference) as save:
+        button.click()
+    return save.value.request.post_data_json["settings"]
+
+
+@pytest.mark.parametrize("theme", ["light", "dark"])
+def test_collapsing_gives_the_rail_width_to_the_settings(rail_ui, theme):
+    rail_ui.open(theme=theme, width=1440, ready_region=READY_REGION)
+    page = rail_ui.page
+    rail = _rail(page)
+    content = page.get_by_test_id("admin-settings-content")
+
+    collapse = rail.get_by_role("button", name="Collapse settings categories")
+    expect(collapse).to_have_attribute("aria-expanded", "true")
+    expect(collapse).to_have_attribute("aria-controls", "admin-settings-category-list")
+    expect(rail).to_have_css("width", "224px")
+    for label in CATEGORIES:
+        assert _box(_category(rail, label).locator("span"))["width"] > 1, f"{label} should be readable"
+    expanded_content = _box(content)["width"]
+    rail_ui.capture(f"expanded-{theme}", ARTIFACTS)
+
+    saved = _click_and_capture_save(page, collapse)
+    assert saved[PREFERENCE_KEY] is True
+    assert "v2WorkspaceRailCollapsed" not in saved and "v2RailCollapsed" not in saved, (
+        "Collapsing the admin rail must not collapse the workspace or shell rails"
+    )
+
+    expect(rail.get_by_role("button", name="Expand settings categories")).to_have_attribute(
+        "aria-expanded", "false"
+    )
+    expect(rail).to_have_css("width", "64px")
+    assert _box(content)["width"] >= expanded_content + 150, "The settings should take the freed width"
+
+    rail_box = _box(rail)
+    for label in CATEGORIES:
+        button = _category(rail, label)
+        expect(button).to_have_attribute("title", label)
+        assert _box(button.locator("span"))["width"] <= 1, f"{label} should only be screen-reader text"
+        box = _box(button)
+        assert rail_box["x"] <= box["x"] and box["x"] + box["width"] <= rail_box["x"] + rail_box["width"] + 0.5
+    expect(_category(rail, "All settings")).to_have_attribute("aria-pressed", "true")
+    assert rail.evaluate("element => element.scrollWidth - element.clientWidth") <= 1
+    assert page.evaluate("document.documentElement.scrollWidth <= window.innerWidth")
+    rail_ui.capture(f"collapsed-{theme}", ARTIFACTS)
+
+
+def test_the_choice_is_remembered_and_can_be_undone(rail_ui):
+    rail_ui.open(width=1440, ready_region=READY_REGION)
+    page = rail_ui.page
+
+    _click_and_capture_save(page, _rail(page).get_by_role("button", name="Collapse settings categories"))
+    assert rail_ui.preferences[PREFERENCE_KEY] is True
+
+    page.reload(wait_until="networkidle")
+    expect(page.get_by_role("region", name=READY_REGION, exact=True)).to_be_visible()
+    expand = _rail(page).get_by_role("button", name="Expand settings categories")
+    expect(expand).to_be_visible()
+    expect(_rail(page)).to_have_css("width", "64px")
+
+    saved = _click_and_capture_save(page, expand)
+    assert saved[PREFERENCE_KEY] is False
+
+    page.reload(wait_until="networkidle")
+    expect(page.get_by_role("region", name=READY_REGION, exact=True)).to_be_visible()
+    expect(_rail(page).get_by_role("button", name="Collapse settings categories")).to_be_visible()
+    expect(_rail(page)).to_have_css("width", "224px")
+
+
+def test_collapsed_icons_still_switch_categories(rail_ui):
+    rail_ui.open(width=1440, ready_region=READY_REGION, preferences={PREFERENCE_KEY: True})
+    page = rail_ui.page
+    rail = _rail(page)
+    expect(rail.get_by_role("button", name="Expand settings categories")).to_be_visible()
+
+    knowledge = _category(rail, "Knowledge")
+    knowledge.click()
+    expect(knowledge).to_have_attribute("aria-pressed", "true")
+    expect(_category(rail, "All settings")).to_have_attribute("aria-pressed", "false")
+    expect(page.get_by_role("region", name="Web Search", exact=True)).to_be_visible()
+    expect(page.get_by_role("region", name=READY_REGION, exact=True)).to_have_count(0)
+
+    _category(rail, "All settings").click()
+    expect(page.get_by_role("region", name=READY_REGION, exact=True)).to_be_visible()
+    expect(rail.get_by_role("button", name="Expand settings categories")).to_be_visible()
+
+
+def test_the_rail_can_be_collapsed_from_the_keyboard(rail_ui):
+    rail_ui.open(width=1440, ready_region=READY_REGION)
+    page = rail_ui.page
+    rail = _rail(page)
+
+    rail.get_by_role("button", name="Collapse settings categories").focus()
+    page.keyboard.press("Enter")
+    expand = rail.get_by_role("button", name="Expand settings categories")
+    expect(expand).to_be_focused()
+    expect(rail).to_have_css("width", "64px")
+
+    # Both presses may land in one debounced save, so wait for the one that expands.
+    with page.expect_response(lambda response: _saves_rail_preference(response, False)):
+        page.keyboard.press("Space")
+    expect(rail.get_by_role("button", name="Collapse settings categories")).to_be_focused()
+    expect(rail).to_have_css("width", "224px")
+
+
+@pytest.mark.parametrize("theme", ["light", "dark"])
+def test_the_collapsed_rail_fits_at_large_text_sizes(rail_ui, theme):
+    rail_ui.open(theme=theme, width=1920, font_size="xl", ready_region=READY_REGION,
+                 preferences={PREFERENCE_KEY: True})
+    page = rail_ui.page
+    rail = _rail(page)
+    expect(rail.get_by_role("button", name="Expand settings categories")).to_be_visible()
+
+    rail_box = _box(rail)
+    for label in CATEGORIES:
+        box = _box(_category(rail, label))
+        assert box["x"] + box["width"] <= rail_box["x"] + rail_box["width"] + 0.5, f"{label} spills out"
+    assert rail.evaluate("element => element.scrollWidth - element.clientWidth") <= 1
+    assert page.evaluate("document.documentElement.scrollWidth <= window.innerWidth")
+    rail_ui.capture(f"collapsed-xl-{theme}", ARTIFACTS)
+
+
+def test_the_category_select_replaces_the_rail_on_narrow_screens(rail_ui):
+    rail_ui.open(width=900, ready_region=READY_REGION, preferences={PREFERENCE_KEY: True})
+    page = rail_ui.page
+
+    rail = page.get_by_role("complementary", name="Settings categories", include_hidden=True)
+    expect(rail).to_have_count(1)
+    expect(rail).to_be_hidden()
+
+    select = page.get_by_role("combobox", name="Settings category", exact=True)
+    expect(select).to_be_visible()
+    select.select_option(label="Knowledge")
+    expect(page.get_by_role("region", name="Web Search", exact=True)).to_be_visible()
+    expect(page.get_by_role("region", name=READY_REGION, exact=True)).to_have_count(0)
+    assert page.evaluate("document.documentElement.scrollWidth <= window.innerWidth")