diff --git a/e2e/cypress/integration/notifications/direct_messages_do_not_add_indicator_spec.js b/e2e/cypress/integration/notifications/direct_messages_do_not_add_indicator_spec.js
new file mode 100644
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+++ b/e2e/cypress/integration/notifications/direct_messages_do_not_add_indicator_spec.js
@@ -0,0 +1,69 @@
+// Copyright (c) 2015-present Mattermost, Inc. All Rights Reserved.
+// See LICENSE.txt for license information.
+
+// ***************************************************************
+// - [#] indicates a test step (e.g. # Go to a page)
+// - [*] indicates an assertion (e.g. * Check the title)
+// - Use element ID when selecting an element. Create one if none.
+// ***************************************************************
+
+// Group: @notifications
+
+describe('Notifications', () => {
+    let user1;
+    let user2;
+    let team1;
+    let team2;
+    let testTeam1TownSquareUrl;
+    let siteName;
+
+    before(() => {
+        cy.apiInitSetup().then(({team, user}) => {
+            team1 = team;
+            user1 = user;
+            testTeam1TownSquareUrl = `/${team.name}/channels/town-square`;
+
+            cy.apiCreateUser().then(({user: otherUser}) => {
+                user2 = otherUser;
+                cy.apiAddUserToTeam(team.id, user2.id);
+            });
+
+            cy.apiCreateTeam('team-b', 'Team B').then(({team: anotherTeam}) => {
+                team2 = anotherTeam;
+                cy.apiAddUserToTeam(team2.id, user1.id);
+                cy.apiAddUserToTeam(team2.id, user2.id);
+            });
+
+            cy.apiGetConfig().then(({config}) => {
+                siteName = config.TeamSettings.SiteName;
+            });
+
+            // # Remove mention notification (for initial channel).
+            cy.apiLogin(user1);
+            cy.visit(testTeam1TownSquareUrl);
+            cy.get('#publicChannelList').get('.unread-title').click();
+            cy.apiLogout();
+        });
+    });
+
+    it('MM-T561 Browser tab and team sidebar - direct messages don\'t add indicator on team icon in team sidebar (but do in browser tab)', () => {
+        // # User A: Join teams A and B. Open team A
+        cy.apiLogin(user1);
+        cy.visit(testTeam1TownSquareUrl);
+
+        // # User B: Join team B
+        // # User B: Post a direct message to user A
+        cy.apiCreateDirectChannel([user1.id, user2.id]).then(({channel: ownDMChannel}) => {
+            cy.postMessageAs({sender: user2, message: `@${user1.username}`, channelId: ownDMChannel.id});
+        });
+
+        // * Browser tab shows: (1) * Town Square - [team name] Mattermost
+        cy.title().should('include', `(1) Town Square - ${team1.display_name} ${siteName}`);
+
+        // * Team sidebar shows: No unread / mention indicator in team sidebar on either team
+        cy.get(`#${team2.name}TeamButton`).parent('.unread').should('not.be.visible');
+        cy.get(`#${team2.name}TeamButton`).parent().within(() => {
+            cy.get('.badge').should('not.be.visible');
+        });
+    });
+});