diff --git a/web/core/components/project-states/create-update/form.tsx b/web/core/components/project-states/create-update/form.tsx
index 14c2dc0b771..105fb984f49 100644
--- a/web/core/components/project-states/create-update/form.tsx
+++ b/web/core/components/project-states/create-update/form.tsx
@@ -3,7 +3,7 @@
 import { FormEvent, FC, useEffect, useState, useMemo } from "react";
 import { TwitterPicker } from "react-color";
 import { IState } from "@plane/types";
-import { Button, Popover, Input } from "@plane/ui";
+import { Button, Popover, Input, TextArea } from "@plane/ui";
 
 type TStateForm = {
   data: Partial<IState>;
@@ -59,47 +59,49 @@ export const StateForm: FC<TStateForm> = (props) => {
   );
 
   return (
-    <form onSubmit={formSubmit} className="relative flex items-center gap-2">
+    <form onSubmit={formSubmit} className="relative flex space-x-2 bg-custom-background-100 p-3 rounded">
       {/* color */}
-      <div className="flex-shrink-0">
+      <div className="flex-shrink-0 h-full mt-2">
         <Popover button={PopoverButton} panelClassName="mt-4 -ml-3">
           <TwitterPicker color={formData?.color} onChange={(value) => handleFormData("color", value.hex)} />
         </Popover>
       </div>
 
-      {/* title */}
-      <Input
-        id="name"
-        type="text"
-        name="name"
-        placeholder="Name"
-        value={formData?.name}
-        onChange={(e) => handleFormData("name", e.target.value)}
-        hasError={(errors && Boolean(errors.name)) || false}
-        className="w-full"
-        maxLength={100}
-        autoFocus
-      />
-
-      {/* description */}
-      <Input
-        id="description"
-        type="text"
-        name="description"
-        placeholder="Description"
-        value={formData?.description}
-        onChange={(e) => handleFormData("description", e.target.value)}
-        hasError={(errors && Boolean(errors.description)) || false}
-        className="w-full"
-      />
+      <div className="w-full space-y-2">
+        {/* title */}
+        <Input
+          id="name"
+          type="text"
+          name="name"
+          placeholder="Name"
+          value={formData?.name}
+          onChange={(e) => handleFormData("name", e.target.value)}
+          hasError={(errors && Boolean(errors.name)) || false}
+          className="w-full"
+          maxLength={100}
+          autoFocus
+        />
 
-      <Button type="button" variant="neutral-primary" size="sm" disabled={buttonDisabled} onClick={onCancel}>
-        Cancel
-      </Button>
+        {/* description */}
+        <TextArea
+          id="description"
+          name="description"
+          placeholder="Describe this state for your members."
+          value={formData?.description}
+          onChange={(e) => handleFormData("description", e.target.value)}
+          hasError={(errors && Boolean(errors.description)) || false}
+          className="w-full text-sm min-h-14 resize-none"
+        />
 
-      <Button type="submit" variant="primary" size="sm" disabled={buttonDisabled}>
-        {buttonTitle}
-      </Button>
+        <div className="flex space-x-2 items-center">
+          <Button type="submit" variant="primary" size="sm" disabled={buttonDisabled}>
+            {buttonTitle}
+          </Button>
+          <Button type="button" variant="neutral-primary" size="sm" disabled={buttonDisabled} onClick={onCancel}>
+            Cancel
+          </Button>
+        </div>
+      </div>
     </form>
   );
 };
diff --git a/web/core/components/project-states/group-item.tsx b/web/core/components/project-states/group-item.tsx
index 9abd94d531c..ca72c008e19 100644
--- a/web/core/components/project-states/group-item.tsx
+++ b/web/core/components/project-states/group-item.tsx
@@ -1,64 +1,108 @@
 "use client";
 
-import { FC, useState } from "react";
+import { FC, useState, useRef } from "react";
 import { observer } from "mobx-react";
-import { Plus } from "lucide-react";
+import { ChevronDown, Plus } from "lucide-react";
 import { IState, TStateGroups } from "@plane/types";
 // components
+import { StateGroupIcon } from "@plane/ui";
+import { cn } from "@plane/utils";
 import { StateList, StateCreate } from "@/components/project-states";
+// hooks
 import { useUserPermissions } from "@/hooks/store";
-import { EUserPermissions, EUserPermissionsLevel } from "ee/constants/user-permissions";
+import { EUserPermissions, EUserPermissionsLevel } from "@/plane-web/constants/user-permissions";
 
 type TGroupItem = {
   workspaceSlug: string;
   projectId: string;
   groupKey: TStateGroups;
+  groupsExpanded: Partial<TStateGroups>[];
+  handleGroupCollapse: (groupKey: TStateGroups) => void;
+  handleExpand: (groupKey: TStateGroups) => void;
   groupedStates: Record<string, IState[]>;
   states: IState[];
 };
 
 export const GroupItem: FC<TGroupItem> = observer((props) => {
-  const { workspaceSlug, projectId, groupKey, groupedStates, states } = props;
+  const {
+    workspaceSlug,
+    projectId,
+    groupKey,
+    groupedStates,
+    states,
+    groupsExpanded,
+    handleExpand,
+    handleGroupCollapse,
+  } = props;
   // store hooks
   const { allowPermissions } = useUserPermissions();
   // state
   const [createState, setCreateState] = useState(false);
 
+  // derived values
+  const currentStateExpanded = groupsExpanded.includes(groupKey);
+  // refs
+  const dropElementRef = useRef<HTMLDivElement | null>(null);
+
   const isEditable = allowPermissions([EUserPermissions.ADMIN], EUserPermissionsLevel.PROJECT);
 
   return (
-    <div className="space-y-3">
-      <div className="flex justify-between items-center">
-        <div className="text-base font-medium text-custom-text-200 capitalize">{groupKey}</div>
-        {isEditable && (
+    <div
+      className="space-y-1 border border-custom-border-200 rounded bg-custom-background-90 transition-all p-2"
+      ref={dropElementRef}
+    >
+      <div className="flex justify-between items-center gap-2">
+        <div
+          className="w-full flex items-center cursor-pointer py-1"
+          onClick={() => (!currentStateExpanded ? handleExpand(groupKey) : handleGroupCollapse(groupKey))}
+        >
           <div
-            className="flex-shrink-0 w-6 h-6 rounded flex justify-center items-center overflow-hidden transition-colors hover:bg-custom-background-80 cursor-pointer text-custom-primary-100/80 hover:text-custom-primary-100"
-            onClick={() => !createState && setCreateState(true)}
+            className={cn(
+              "flex-shrink-0 w-5 h-5 rounded flex justify-center items-center overflow-hidden transition-all",
+              {
+                "rotate-0": currentStateExpanded,
+                "-rotate-90": !currentStateExpanded,
+              }
+            )}
           >
-            <Plus className="w-4 h-4" />
+            <ChevronDown className="w-4 h-4" />
+          </div>
+          <div className="flex-shrink-0 w-6 h-6 rounded flex justify-center items-center overflow-hidden">
+            <StateGroupIcon stateGroup={groupKey} height="16px" width="16px" />
           </div>
-        )}
+          <div className="text-base font-medium text-custom-text-200 capitalize px-1">{groupKey}</div>
+        </div>
+        <div
+          className="flex-shrink-0 w-6 h-6 rounded flex justify-center items-center overflow-hidden transition-colors hover:bg-custom-background-80 cursor-pointer text-custom-primary-100/80 hover:text-custom-primary-100"
+          onClick={() => !createState && setCreateState(true)}
+        >
+          <Plus className="w-4 h-4" />
+        </div>
       </div>
 
-      {isEditable && createState && (
-        <StateCreate
-          workspaceSlug={workspaceSlug}
-          projectId={projectId}
-          groupKey={groupKey}
-          handleClose={() => setCreateState(false)}
-        />
+      {groupedStates[groupKey].length > 0 && currentStateExpanded && (
+        <div id="group-droppable-container">
+          <StateList
+            workspaceSlug={workspaceSlug}
+            projectId={projectId}
+            groupKey={groupKey}
+            groupedStates={groupedStates}
+            states={states}
+            disabled={!isEditable}
+          />
+        </div>
       )}
 
-      <div id="group-droppable-container">
-        <StateList
-          workspaceSlug={workspaceSlug}
-          projectId={projectId}
-          groupKey={groupKey}
-          groupedStates={groupedStates}
-          states={states}
-          disabled={!isEditable}
-        />
-      </div>
+      {isEditable && createState && (
+        <div className="">
+          <StateCreate
+            workspaceSlug={workspaceSlug}
+            projectId={projectId}
+            groupKey={groupKey}
+            handleClose={() => setCreateState(false)}
+          />
+        </div>
+      )}
     </div>
   );
 });
diff --git a/web/core/components/project-states/group-list.tsx b/web/core/components/project-states/group-list.tsx
index 59b5e66be9d..1fbc8f1daa9 100644
--- a/web/core/components/project-states/group-list.tsx
+++ b/web/core/components/project-states/group-list.tsx
@@ -1,6 +1,6 @@
 "use client";
 
-import { FC } from "react";
+import { FC, useState } from "react";
 import { observer } from "mobx-react";
 import { IState, TStateGroups } from "@plane/types";
 // components
@@ -14,7 +14,26 @@ type TGroupList = {
 
 export const GroupList: FC<TGroupList> = observer((props) => {
   const { workspaceSlug, projectId, groupedStates } = props;
+  // states
+  const [groupsExpanded, setGroupsExpanded] = useState<Partial<TStateGroups>[]>([]);
 
+  const handleGroupCollapse = (groupKey: TStateGroups) => {
+    setGroupsExpanded((prev) => {
+      if (prev.includes(groupKey)) {
+        return prev.filter((key) => key !== groupKey);
+      }
+      return prev;
+    });
+  };
+
+  const handleExpand = (groupKey: TStateGroups) => {
+    setGroupsExpanded((prev) => {
+      if (prev.includes(groupKey)) {
+        return prev;
+      }
+      return [...prev, groupKey];
+    });
+  };
   return (
     <div className="space-y-5">
       {Object.entries(groupedStates).map(([key, value]) => {
@@ -28,6 +47,9 @@ export const GroupList: FC<TGroupList> = observer((props) => {
             groupKey={groupKey}
             states={groupStates}
             groupedStates={groupedStates}
+            groupsExpanded={groupsExpanded}
+            handleGroupCollapse={handleGroupCollapse}
+            handleExpand={handleExpand}
           />
         );
       })}
diff --git a/web/core/components/project-states/state-item-title.tsx b/web/core/components/project-states/state-item-title.tsx
index 6191ccd6bd2..25585499c0e 100644
--- a/web/core/components/project-states/state-item-title.tsx
+++ b/web/core/components/project-states/state-item-title.tsx
@@ -23,7 +23,7 @@ export type StateItemTitleProps = {
 export const StateItemTitle = observer((props: StateItemTitleProps) => {
   const { workspaceSlug, projectId, stateCount, setUpdateStateModal, disabled, state, currentTransitionMap } = props;
   return (
-    <div className="py-4 px-2 flex items-center gap-2 w-full justify-between">
+    <div className="flex items-center gap-2 w-full justify-between">
       <div className="flex items-center gap-2">
         {/* draggable indicator */}
         {!disabled && stateCount != 1 && (
diff --git a/web/core/components/project-states/state-item.tsx b/web/core/components/project-states/state-item.tsx
index 4e665969b1f..3ab594a81e8 100644
--- a/web/core/components/project-states/state-item.tsx
+++ b/web/core/components/project-states/state-item.tsx
@@ -107,7 +107,7 @@ export const StateItem: FC<TStateItem> = observer((props) => {
         })
       );
     }
-  }, [draggableElementRef, state, groupKey, isDraggable, groupedStates, handleStateSequence]);
+  }, [draggableElementRef, state, groupKey, isDraggable, groupedStates, handleStateSequence, disabled]);
   // DND ends
 
   if (updateStateModal)
@@ -128,7 +128,7 @@ export const StateItem: FC<TStateItem> = observer((props) => {
       <div
         ref={draggableElementRef}
         className={cn(
-          "relative border border-custom-border-100 rounded group",
+          "relative border border-custom-border-100 bg-custom-background-100 py-3 px-3.5 rounded group",
           isDragging ? `opacity-50` : `opacity-100`,
           totalStates === 1 ? `cursor-auto` : `cursor-grab`
         )}