diff --git a/indra/newview/llsidetray.cpp b/indra/newview/llsidetray.cpp
index b0914eee6925fd9a9a14119dd7b1275663d03d10..9ee504cc4c2e6e0b56bb790b1dd7ce4b253abe9a 100644
--- a/indra/newview/llsidetray.cpp
+++ b/indra/newview/llsidetray.cpp
@@ -568,8 +568,9 @@ void LLSideTray::toggleTabButton(LLSideTrayTab* tab)
 	{
 		LLButton* btn = it->second;
 		bool new_state = !btn->getToggleState();
-		btn->setToggleState(new_state); 
-		btn->setImageOverlay( new_state ? tab->mImageSelected : tab->mImage );
+		btn->setToggleState(new_state);
+		// Only highlight the tab if side tray is expanded (STORM-157).
+		btn->setImageOverlay( new_state && !getCollapsed() ? tab->mImageSelected : tab->mImage );
 	}
 }