diff --git a/libs/components/src/navigation/nav-base.component.ts b/libs/components/src/navigation/nav-base.component.ts
index 9092ac4447c..706df2b25ad 100644
--- a/libs/components/src/navigation/nav-base.component.ts
+++ b/libs/components/src/navigation/nav-base.component.ts
@@ -1,4 +1,4 @@
-import { Directive, EventEmitter, Output, input } from "@angular/core";
+import { Directive, EventEmitter, Output, input, model } from "@angular/core";
 import { RouterLink, RouterLinkActive } from "@angular/router";
 
 /**
@@ -21,6 +21,16 @@ export abstract class NavBaseComponent {
    */
   readonly icon = input<string>();
 
+  /**
+   * If this item is used within a tree, set `variant` to `"tree"`
+   */
+  readonly variant = input<"default" | "tree">("default");
+
+  /**
+   * Depth level when nested inside of a `'tree'` variant
+   */
+  readonly treeDepth = model(0);
+
   /**
    * Optional route to be passed to internal `routerLink`. If not provided, the nav component will render as a button.
    *
diff --git a/libs/components/src/navigation/nav-group.component.html b/libs/components/src/navigation/nav-group.component.html
index bcf6ae2b5b7..5a66eeafbf7 100644
--- a/libs/components/src/navigation/nav-group.component.html
+++ b/libs/components/src/navigation/nav-group.component.html
@@ -1,9 +1,13 @@
 <!-- This a higher order component that composes `NavItemComponent`  -->
+@let variantValue = variant();
+
 @if (!hideIfEmpty() || nestedNavComponents().length > 0) {
   <bit-nav-item
     [text]="text()"
     [icon]="icon()"
     [route]="route()"
+    [variant]="variantValue"
+    [treeDepth]="treeDepth()"
     [relativeTo]="relativeTo()"
     [routerLinkActiveOptions]="routerLinkActiveOptions()"
     (mainContentClicked)="handleMainContentClicked()"
@@ -15,7 +19,10 @@
       <button
         type="button"
         class="tw-ms-auto"
-        [bitIconButton]="open() ? 'bwi-angle-up' : 'bwi-angle-down'"
+        [ngClass]="{
+          'tw-transform tw-rotate-[90deg]': variantValue === 'tree' && !open(),
+        }"
+        [bitIconButton]="toggleButtonIcon()"
         [buttonType]="'nav-contrast'"
         (click)="toggle($event)"
         size="small"
@@ -24,9 +31,16 @@
         [label]="['toggleCollapse' | i18n, text()].join(' ')"
       ></button>
     </ng-template>
+    @if (variantValue === "tree") {
+      <ng-container slot="start">
+        <ng-container *ngTemplateOutlet="button"></ng-container>
+      </ng-container>
+    }
     <ng-container slot="end">
       <ng-content select="[slot=end]"></ng-content>
-      <ng-container *ngTemplateOutlet="button"></ng-container>
+      @if (variantValue !== "tree") {
+        <ng-container *ngTemplateOutlet="button"></ng-container>
+      }
     </ng-container>
   </bit-nav-item>
   <!-- [attr.aria-controls] of the above button expects a unique ID on the controlled element -->
diff --git a/libs/components/src/navigation/nav-group.component.ts b/libs/components/src/navigation/nav-group.component.ts
index 3408af3d734..5797d34da5d 100644
--- a/libs/components/src/navigation/nav-group.component.ts
+++ b/libs/components/src/navigation/nav-group.component.ts
@@ -34,7 +34,8 @@ import { SideNavService } from "./side-nav.service";
   imports: [CommonModule, NavItemComponent, IconButtonModule, I18nPipe],
 })
 export class NavGroupComponent extends NavBaseComponent {
-  readonly nestedNavComponents = contentChildren(NavBaseComponent, { descendants: true });
+  // Query direct children for hideIfEmpty functionality
+  readonly nestedNavComponents = contentChildren(NavBaseComponent, { descendants: false });
 
   readonly sideNavOpen = toSignal(this.sideNavService.open$);
 
@@ -47,6 +48,18 @@ export class NavGroupComponent extends NavBaseComponent {
     return this.hideActiveStyles() || this.sideNavAndGroupOpen();
   });
 
+  /**
+   * Determines the appropriate icon for the toggle button based on variant and open state.
+   * - Tree variant: Always uses 'bwi-up-solid'
+   * - Default variant: Uses 'bwi-angle-up' when open, 'bwi-angle-down' when closed
+   */
+  readonly toggleButtonIcon = computed(() => {
+    if (this.variant() === "tree") {
+      return "bwi-up-solid";
+    }
+    return this.open() ? "bwi-angle-up" : "bwi-angle-down";
+  });
+
   /**
    * Allow overriding of the RouterLink['ariaCurrentWhenActive'] property.
    *
@@ -89,14 +102,20 @@ export class NavGroupComponent extends NavBaseComponent {
     @Optional() @SkipSelf() private parentNavGroup: NavGroupComponent,
   ) {
     super();
+
+    // Set tree depth based on parent's depth
+    // Both NavGroups and NavItems use constructor-based depth initialization
+    if (this.parentNavGroup) {
+      this.treeDepth.set(this.parentNavGroup.treeDepth() + 1);
+    }
   }
 
   setOpen(isOpen: boolean) {
     this.open.set(isOpen);
     this.openChange.emit(this.open());
-    // FIXME: Remove when updating file. Eslint update
-    // eslint-disable-next-line @typescript-eslint/no-unused-expressions
-    this.open() && this.parentNavGroup?.setOpen(this.open());
+    if (this.open()) {
+      this.parentNavGroup?.setOpen(this.open());
+    }
   }
 
   protected toggle(event?: MouseEvent) {
diff --git a/libs/components/src/navigation/nav-group.stories.ts b/libs/components/src/navigation/nav-group.stories.ts
index 9910c99fab4..fc9df19a3e2 100644
--- a/libs/components/src/navigation/nav-group.stories.ts
+++ b/libs/components/src/navigation/nav-group.stories.ts
@@ -132,3 +132,24 @@ export const Secondary: StoryObj<NavGroupComponent> = {
     `,
   }),
 };
+
+export const Tree: StoryObj<NavGroupComponent> = {
+  render: (args) => ({
+    props: args,
+    template: /*html*/ `
+      <bit-side-nav>
+        <bit-nav-group text="Tree example" icon="bwi-collection-shared" [open]="true">
+          <bit-nav-item text="Level 1 - no children" route="t2" icon="bwi-collection-shared" [variant]="'tree'"></bit-nav-item>
+          <bit-nav-group text="Level 1 - with children" route="t3" icon="bwi-collection-shared" [variant]="'tree'" [open]="true">
+            <bit-nav-group text="Level 2 - with children" route="t4" icon="bwi-collection-shared" variant="tree" [open]="true">
+              <bit-nav-item text="Level 3 - no children, no icon" route="t5" variant="tree"></bit-nav-item>
+              <bit-nav-group text="Level 3 - with children" route="t6" icon="bwi-collection-shared" variant="tree" [open]="true">
+                <bit-nav-item text="Level 4 - no children, no icon" route="t7" variant="tree"></bit-nav-item>
+              </bit-nav-group>
+            </bit-nav-group>
+          </bit-nav-group>
+        </bit-nav-group>
+      </bit-side-nav>
+    `,
+  }),
+};
diff --git a/libs/components/src/navigation/nav-item.component.html b/libs/components/src/navigation/nav-item.component.html
index 10f68145a4d..9f6ea3373b7 100644
--- a/libs/components/src/navigation/nav-item.component.html
+++ b/libs/components/src/navigation/nav-item.component.html
@@ -2,6 +2,12 @@
   @let open = sideNavService.open$ | async;
   @if (open || icon()) {
     <div
+      [ngStyle]="{
+        'padding-inline-start':
+          open && variant() === 'tree'
+            ? TREE_BASE_PADDING + (treeDepth() ?? 0) * TREE_DEPTH_PADDING + 'rem'
+            : '0',
+      }"
       class="tw-relative tw-rounded-md tw-h-10"
       [ngClass]="[
         showActiveStyles
@@ -11,20 +17,33 @@
       ]"
     >
       <div class="tw-relative tw-flex tw-items-center tw-h-full">
+        @if (open) {
+          <div
+            class="tw-absolute tw-left-[0px] tw-transform tw--translate-x-[calc(100%_-_4px)] tw-pe-2 [&>*:focus-visible::before]:!tw-ring-text-alt2 [&>*:hover]:!tw-border-text-alt2 [&>*]:tw-text-alt2"
+          >
+            <ng-content select="[slot=start]"></ng-content>
+          </div>
+        }
         <ng-container *ngIf="route(); then isAnchor; else isButton"></ng-container>
 
         <!-- Main content of `NavItem` -->
         <ng-template #anchorAndButtonContent>
           <div
+            [ngClass]="[
+              variant() === 'tree' ? 'tw-py-0' : 'tw-py-2',
+              open ? 'tw-pe-4' : 'tw-text-center',
+            ]"
             [title]="text()"
             class="tw-gap-2 tw-flex tw-items-center tw-font-medium tw-h-full"
             [ngClass]="{ 'tw-justify-center': !open }"
           >
-            <i
-              class="!tw-m-0 tw-w-4 tw-shrink-0 bwi bwi-fw tw-text-alt2 {{ icon() }}"
-              [attr.aria-hidden]="open"
-              [attr.aria-label]="text()"
-            ></i>
+            @if (icon()) {
+              <i
+                class="!tw-m-0 tw-w-4 tw-shrink-0 bwi bwi-fw tw-text-alt2 {{ icon() }}"
+                [attr.aria-hidden]="open"
+                [attr.aria-label]="text()"
+              ></i>
+            }
             @if (open) {
               <span class="tw-truncate">{{ text() }}</span>
             }
@@ -37,6 +56,7 @@
           <!-- The following `class` field should match the `#isButton` class field below -->
           <a
             class="tw-size-full tw-px-4 tw-block tw-truncate tw-border-none tw-bg-transparent tw-text-start !tw-text-alt2 hover:tw-text-alt2 hover:tw-no-underline focus:tw-outline-none [&_i]:tw-leading-[1.5rem]"
+            [ngClass]="{ 'tw-ps-0': variant() === 'tree' }"
             data-fvw
             [routerLink]="route()"
             [relativeTo]="relativeTo()"
diff --git a/libs/components/src/navigation/nav-item.component.ts b/libs/components/src/navigation/nav-item.component.ts
index de757f1aec4..16332c8a387 100644
--- a/libs/components/src/navigation/nav-item.component.ts
+++ b/libs/components/src/navigation/nav-item.component.ts
@@ -1,5 +1,5 @@
 import { CommonModule } from "@angular/common";
-import { Component, HostListener, Optional, input } from "@angular/core";
+import { Component, HostListener, Optional, input, model } from "@angular/core";
 import { RouterLinkActive, RouterModule } from "@angular/router";
 import { BehaviorSubject, map } from "rxjs";
 
@@ -11,6 +11,7 @@ import { SideNavService } from "./side-nav.service";
 // Resolves a circular dependency between `NavItemComponent` and `NavItemGroup` when using standalone components.
 export abstract class NavGroupAbstraction {
   abstract setOpen(open: boolean): void;
+  abstract treeDepth: ReturnType<typeof model<number>>;
 }
 
 // FIXME(https://bitwarden.atlassian.net/browse/CL-764): Migrate to OnPush
@@ -22,6 +23,18 @@ export abstract class NavGroupAbstraction {
   imports: [CommonModule, IconButtonModule, RouterModule],
 })
 export class NavItemComponent extends NavBaseComponent {
+  /**
+   * Base padding for tree variant items (in rem)
+   * This provides the initial indentation for tree items before depth-based padding
+   */
+  protected readonly TREE_BASE_PADDING = 1.25;
+
+  /**
+   * Padding increment per tree depth level (in rem)
+   * Each nested level adds this amount of padding to visually indicate hierarchy
+   */
+  protected readonly TREE_DEPTH_PADDING = 1.25;
+
   /** Forces active styles to be shown, regardless of the `routerLinkActiveOptions` */
   readonly forceActiveStyles = input<boolean>(false);
 
@@ -78,5 +91,10 @@ export class NavItemComponent extends NavBaseComponent {
     @Optional() private parentNavGroup: NavGroupAbstraction,
   ) {
     super();
+
+    // Set tree depth based on parent's depth
+    if (this.parentNavGroup) {
+      this.treeDepth.set(this.parentNavGroup.treeDepth() + 1);
+    }
   }
 }