diff --git a/src/pages/home/report/ReportActionsList.tsx b/src/pages/home/report/ReportActionsList.tsx
index 688d0d675cd6..24119bedaa8c 100644
--- a/src/pages/home/report/ReportActionsList.tsx
+++ b/src/pages/home/report/ReportActionsList.tsx
@@ -211,6 +211,13 @@ function ReportActionsList({
         return ReportConnection.getReport(report.reportID)?.lastReadTime ?? report.lastReadTime ?? '';
     }, [report.reportID, report.lastReadTime]);
 
+    // In a one-expense report, the report actions from the expense report and transaction thread are combined.
+    // If the transaction thread has a newer action, it will show an unread marker if we compare it with the expense report lastReadTime.
+    // - expense report action A <- expense report lastReadTime
+    // - transaction thread action A <- transaction thread lastReadTime
+    // So, we use whichever lastReadTime that is bigger.
+    const lastReadTime = transactionThreadReport?.lastReadTime && transactionThreadReport.lastReadTime > reportLastReadTime ? transactionThreadReport.lastReadTime : reportLastReadTime;
+
     /**
      * The timestamp for the unread marker.
      *
@@ -219,9 +226,9 @@ function ReportActionsList({
      * - marks a message as read/unread
      * - reads a new message as it is received
      */
-    const [unreadMarkerTime, setUnreadMarkerTime] = useState(reportLastReadTime);
+    const [unreadMarkerTime, setUnreadMarkerTime] = useState(lastReadTime);
     useEffect(() => {
-        setUnreadMarkerTime(reportLastReadTime);
+        setUnreadMarkerTime(lastReadTime);
 
         // eslint-disable-next-line react-compiler/react-compiler, react-hooks/exhaustive-deps
     }, [report.reportID]);