diff --git a/src/pages/home/ReportScreen.tsx b/src/pages/home/ReportScreen.tsx
index c557229aca72..1de9fc14dfbc 100644
--- a/src/pages/home/ReportScreen.tsx
+++ b/src/pages/home/ReportScreen.tsx
@@ -704,6 +704,7 @@ function ReportScreen({
                             <View
                                 style={[styles.flex1, styles.justifyContentEnd, styles.overflowHidden]}
                                 onLayout={onListLayout}
+                                testID={'reportActionsViewWrapper'}
                             >
                                 {shouldShowReportActionList && (
                                     <ReportActionsView
diff --git a/tests/ui/UnreadIndicatorsTest.tsx b/tests/ui/UnreadIndicatorsTest.tsx
index 7b820281a5a6..c168fc1b9d8b 100644
--- a/tests/ui/UnreadIndicatorsTest.tsx
+++ b/tests/ui/UnreadIndicatorsTest.tsx
@@ -197,12 +197,15 @@ const USER_C_EMAIL = 'user_c@test.com';
 let reportAction3CreatedDate: string;
 let reportAction9CreatedDate: string;
 
+// store render result, used to trigger onLayout event
+let renderResult: ReturnType<typeof render> | null = null;
+
 /**
  * Sets up a test with a logged in user that has one unread chat from another user. Returns the <App/> test instance.
  */
 function signInAndGetAppWithUnreadChat(): Promise<void> {
     // Render the App and sign in as a test user.
-    render(<App />);
+    renderResult = render(<App />);
     return waitForBatchedUpdatesWithAct()
         .then(async () => {
             await waitForBatchedUpdatesWithAct();
@@ -462,7 +465,57 @@ describe('Unread Indicators', () => {
                 expect(screen.getAllByText('C User')[0]).toBeOnTheScreen();
                 expect(displayNameTexts[1]?.props?.style?.fontWeight).toBe(FontUtils.fontWeight.bold);
                 expect(screen.getByText('B User')).toBeOnTheScreen();
-            }));
+            })
+        );
+        it('Delete a chat message and verify the unread indicator is moved', async () => {
+            const getUnreadIndicator = () => {
+                const newMessageLineIndicatorHintText = Localize.translateLocal('accessibilityHints.newMessageLineIndicator');
+                return screen.queryAllByLabelText(newMessageLineIndicatorHintText);
+            }
+    
+            return signInAndGetAppWithUnreadChat()
+                .then(() => navigateToSidebarOption(0))
+                .then(async () => await act(() => transitionEndCB?.()))
+                .then(async () => {
+                    const reportActionsViewWrapper = await renderResult?.findByTestId('reportActionsViewWrapper');
+                    if(reportActionsViewWrapper) {
+                        act(() => {
+                            fireEvent(reportActionsViewWrapper, 'onLayout', { nativeEvent: { layout: { x: 0, y: 0, width: 100, height: 100 } } });
+                        })
+                    }
+                    return waitForBatchedUpdates();
+                })
+                .then(() => {
+                    // Verify the new line indicator is present, and it's before the action with ID 4
+                    const unreadIndicator = getUnreadIndicator();
+                    expect(unreadIndicator).toHaveLength(1);
+                    const reportActionID = unreadIndicator[0]?.props?.['data-action-id'];
+                    expect(reportActionID).toBe('4');
+                    
+                    // simulate delete comment event from Pusher
+                    PusherHelper.emitOnyxUpdate([
+                        {
+                            onyxMethod: Onyx.METHOD.MERGE,
+                            key: `${ONYXKEYS.COLLECTION.REPORT_ACTIONS}${REPORT_ID}`,
+                            value: {
+                                '4': {
+                                    message: []
+                                }
+                            }
+                        },
+                    ]);
+                    return waitForBatchedUpdates();
+                })
+                .then(() => {
+                    // Verify the new line indicator is now before the action with ID 5
+                    return waitFor(() => {
+                        const unreadIndicator = getUnreadIndicator();
+                        expect(unreadIndicator).toHaveLength(1);
+                        const reportActionID = unreadIndicator[0]?.props?.['data-action-id'];
+                        expect(reportActionID).toBe('5');
+                    })
+                })
+        })
 
     xit('Manually marking a chat message as unread shows the new line indicator and updates the LHN', () =>
         signInAndGetAppWithUnreadChat()