diff --git a/spec/unit/notifications.spec.ts b/spec/unit/notifications.spec.ts
index 02388f9f0dd..c8e1267df2e 100644
--- a/spec/unit/notifications.spec.ts
+++ b/spec/unit/notifications.spec.ts
@@ -96,7 +96,7 @@ describe("fixNotificationCountOnDecryption", () => {
 
         event.getPushActions = jest.fn().mockReturnValue(mkPushAction(false, false));
         threadEvent.getPushActions = jest.fn().mockReturnValue(mkPushAction(false, false));
-    });
+        });
 
     it("changes the room count to highlight on decryption", () => {
         expect(room.getUnreadNotificationCount(NotificationCountType.Total)).toBe(2);
@@ -138,6 +138,29 @@ describe("fixNotificationCountOnDecryption", () => {
         expect(room.getThreadUnreadNotificationCount(THREAD_ID, NotificationCountType.Highlight)).toBe(0);
     });
 
+    it("does not calculate for threads unknown to the room", () => {
+        room.setThreadUnreadNotificationCount(THREAD_ID, NotificationCountType.Total, 0);
+        room.setThreadUnreadNotificationCount(THREAD_ID, NotificationCountType.Highlight, 0);
+
+        const unknownThreadEvent = mkEvent({
+            type: EventType.RoomMessage,
+            content: {
+                "m.relates_to": {
+                    rel_type: RelationType.Thread,
+                    event_id: "$unknownthread",
+                },
+                "msgtype": MsgType.Text,
+                "body": "Thread reply",
+            },
+            event: true,
+        });
+
+        fixNotificationCountOnDecryption(mockClient, unknownThreadEvent);
+
+        expect(room.getThreadUnreadNotificationCount(THREAD_ID, NotificationCountType.Total)).toBe(0);
+        expect(room.getThreadUnreadNotificationCount(THREAD_ID, NotificationCountType.Highlight)).toBe(0);
+    });
+
     it("emits events", () => {
         const cb = jest.fn();
         room.on(RoomEvent.UnreadNotifications, cb);
@@ -151,4 +174,5 @@ describe("fixNotificationCountOnDecryption", () => {
         room.setThreadUnreadNotificationCount("$123", NotificationCountType.Highlight, 5);
         expect(cb).toHaveBeenLastCalledWith({ highlight: 5 }, "$123");
     });
+
 });
diff --git a/src/client.ts b/src/client.ts
index ce44d32fd66..564191de4b3 100644
--- a/src/client.ts
+++ b/src/client.ts
@@ -9363,9 +9363,26 @@ export function fixNotificationCountOnDecryption(cli: MatrixClient, event: Matri
     if (oldHighlight !== newHighlight || currentCount > 0) {
         // TODO: Handle mentions received while the client is offline
         // See also https://github.com/vector-im/element-web/issues/9069
-        const hasReadEvent = isThreadEvent
-            ? room.getThread(event.threadRootId)?.hasUserReadEvent(cli.getUserId()!, event.getId()!)
-            : room.hasUserReadEvent(cli.getUserId()!, event.getId()!);
+        let hasReadEvent;
+        if (isThreadEvent) {
+            const thread = room.getThread(event.threadRootId);
+            hasReadEvent = thread
+                ? thread.hasUserReadEvent(cli.getUserId()!, event.getId()!)
+                // If the thread object does not exist in the room yet, we don't
+                // want to calculate notification for this event yet. We have not
+                // restored the read receipts yet and can't accurately calculate
+                // highlight notifications at this stage.
+                //
+                // This issue can likely go away when MSC3874 is implemented
+                : true
+            if (!thread) {
+                hasReadEvent = true;
+            } else {
+
+            }
+        } else {
+            hasReadEvent = room.hasUserReadEvent(cli.getUserId()!, event.getId()!);
+        }
 
         if (!hasReadEvent) {
             let newCount = currentCount;