diff --git a/packages/node_modules/@node-red/editor-client/src/js/ui/palette.js b/packages/node_modules/@node-red/editor-client/src/js/ui/palette.js
index 23f30fc61..2a6d0bdc6 100644
--- a/packages/node_modules/@node-red/editor-client/src/js/ui/palette.js
+++ b/packages/node_modules/@node-red/editor-client/src/js/ui/palette.js
@@ -35,6 +35,8 @@ RED.palette = (function() {
     var categoryContainers = {};
     var sidebarControls;
 
+    let paletteState = { filter: "", collapsed: [] };
+
     function createCategory(originalCategory,rootCategory,category,ns) {
         if ($("#red-ui-palette-base-category-"+rootCategory).length === 0) {
             createCategoryContainer(originalCategory,rootCategory, ns+":palette.label."+rootCategory);
@@ -60,20 +62,57 @@ RED.palette = (function() {
         catDiv.data('label',label);
         categoryContainers[category] = {
             container: catDiv,
-            close: function() {
+            hide: function (instant) {
+                if (instant) {
+                    catDiv.hide()
+                } else {
+                    catDiv.slideUp()
+                }
+            },
+            show: function () {
+                catDiv.show()
+            },
+            isOpen: function () {
+                return !!catDiv.hasClass("red-ui-palette-open")
+            },
+            getNodeCount: function (visibleOnly) {
+                const nodes = catDiv.find(".red-ui-palette-node")
+                if (visibleOnly) {
+                    return nodes.filter(function() { return $(this).css('display') !== 'none'}).length
+                } else {
+                    return nodes.length
+                }
+            },
+            close: function(instant, skipSaveState) {
                 catDiv.removeClass("red-ui-palette-open");
                 catDiv.addClass("red-ui-palette-closed");
-                $("#red-ui-palette-base-category-"+category).slideUp();
+                if (instant) {
+                    $("#red-ui-palette-base-category-"+category).hide();
+                } else {
+                    $("#red-ui-palette-base-category-"+category).slideUp();
+                }
                 $("#red-ui-palette-header-"+category+" i").removeClass("expanded");
+                if (!skipSaveState) {
+                    if (!paletteState.collapsed.includes(category)) {
+                        paletteState.collapsed.push(category);
+                        savePaletteState();
+                    }
+                }
             },
-            open: function() {
+            open: function(skipSaveState) {
                 catDiv.addClass("red-ui-palette-open");
                 catDiv.removeClass("red-ui-palette-closed");
                 $("#red-ui-palette-base-category-"+category).slideDown();
                 $("#red-ui-palette-header-"+category+" i").addClass("expanded");
+                if (!skipSaveState) {
+                    if (paletteState.collapsed.includes(category)) {
+                        paletteState.collapsed.splice(paletteState.collapsed.indexOf(category), 1);
+                        savePaletteState();
+                    }
+                }
             },
             toggle: function() {
-                if (catDiv.hasClass("red-ui-palette-open")) {
+                if (categoryContainers[category].isOpen()) {
                     categoryContainers[category].close();
                 } else {
                     categoryContainers[category].open();
@@ -415,7 +454,11 @@ RED.palette = (function() {
 
             var categoryNode = $("#red-ui-palette-container-"+rootCategory);
             if (categoryNode.find(".red-ui-palette-node").length === 1) {
-                categoryContainers[rootCategory].open();
+                if (!paletteState?.collapsed?.includes(rootCategory)) {
+                    categoryContainers[rootCategory].open();
+                } else {
+                    categoryContainers[rootCategory].close(true);
+                }
             }
 
         }
@@ -528,16 +571,26 @@ RED.palette = (function() {
             }
         });
 
-        for (var category in categoryContainers) {
+        for (let category in categoryContainers) {
             if (categoryContainers.hasOwnProperty(category)) {
-                if (categoryContainers[category].container
-                        .find(".red-ui-palette-node")
-                        .filter(function() { return $(this).css('display') !== 'none'}).length === 0) {
-                    categoryContainers[category].close();
-                    categoryContainers[category].container.slideUp();
+                const categorySection = categoryContainers[category]
+                if (categorySection.getNodeCount(true) === 0) {
+                    categorySection.hide()
                 } else {
-                    categoryContainers[category].open();
-                    categoryContainers[category].container.show();
+                    categorySection.show()
+                    if (val) {
+                        // There is a filter being applied and it has matched
+                        // something in this category - show the contents
+                        categorySection.open(true)
+                    } else {
+                        // No filter. Only show the category if it isn't in lastState
+                        if (!paletteState.collapsed.includes(category)) {
+                            categorySection.open(true)
+                        } else if (categorySection.isOpen()) {
+                            // This section should be collapsed but isn't - so make it so
+                            categorySection.close(true, true)
+                        }
+                    }
                 }
             }
         }
@@ -553,6 +606,9 @@ RED.palette = (function() {
 
         $("#red-ui-palette > .red-ui-palette-spinner").show();
 
+        RED.events.on('logout', function () {
+            RED.settings.removeLocal('palette-state')
+        })
 
         RED.events.on('registry:node-type-added', function(nodeType) {
             var def = RED.nodes.getType(nodeType);
@@ -596,14 +652,14 @@ RED.palette = (function() {
 
         RED.events.on("subflows:change",refreshSubflow);
 
-
-
         $("#red-ui-palette-search input").searchBox({
             delay: 100,
             change: function() {
                 filterChange($(this).val());
+                paletteState.filter = $(this).val();
+                savePaletteState();
             }
-        })
+        });
 
         sidebarControls = $('<div class="red-ui-sidebar-control-left"><i class="fa fa-chevron-left"></i></div>').appendTo($("#red-ui-palette"));
         RED.popover.tooltip(sidebarControls,RED._("keyboard.togglePalette"),"core:toggle-palette");
@@ -669,7 +725,18 @@ RED.palette = (function() {
                 togglePalette(state);
             }
         });
+
+        try {
+            paletteState = JSON.parse(RED.settings.getLocal("palette-state") || '{"filter":"", "collapsed": []}');
+            if (paletteState.filter) {
+                // Apply the category filter
+                $("#red-ui-palette-search input").searchBox("value", paletteState.filter);
+            }
+        } catch (error) {
+            console.error("Unexpected error loading palette state from localStorage: ", error);
+        }
     }
+
     function togglePalette(state) {
         if (!state) {
             $("#red-ui-main-container").addClass("red-ui-palette-closed");
@@ -689,6 +756,15 @@ RED.palette = (function() {
         })
         return categories;
     }
+
+    function savePaletteState() {
+        try {
+            RED.settings.setLocal("palette-state", JSON.stringify(paletteState));
+        } catch (error) {
+            console.error("Unexpected error saving palette state to localStorage: ", error);
+        }
+    }
+
     return {
         init: init,
         add:addNodeType,