diff --git a/docs/pages/components/tree-item.md b/docs/pages/components/tree-item.md
index cb50f69bd9..b17cacbdae 100644
--- a/docs/pages/components/tree-item.md
+++ b/docs/pages/components/tree-item.md
@@ -166,3 +166,66 @@ const App = () => (
   </SlTree>
 );
 ```
+
+### Lazy Loading
+
+Use the `lazy` attribute on a tree item to indicate that the content is not yet present and will be loaded later. When the user tries to expand the node, the `loading` state is set to `true` and the `sl-lazy-load` event will be emitted to allow you to load data asynchronously. The item will remain in a loading state until its content is changed.
+
+If you want to disable this behavior after the first load, simply remove the `lazy` attribute and, on the next expand, the existing content will be shown instead.
+
+```html:preview
+<sl-tree>
+  <sl-tree-item lazy>Available Trees</sl-tree-item>
+</sl-tree>
+
+<script type="module">
+  const lazyItem = document.querySelector('sl-tree-item[lazy]');
+
+  lazyItem.addEventListener('sl-lazy-load', () => {
+    // Simulate asynchronous loading
+    setTimeout(() => {
+      const subItems = ['Birch', 'Cedar', 'Maple', 'Pine'];
+
+      for (const item of subItems) {
+        const treeItem = document.createElement('sl-tree-item');
+        treeItem.innerText = item;
+        lazyItem.append(treeItem);
+      }
+
+      // Disable lazy mode once the content has been loaded
+      lazyItem.lazy = false;
+    }, 1000);
+  });
+</script>
+```
+
+```jsx:react
+import SlTree from '@shoelace-style/shoelace/dist/react/tree';
+import SlTreeItem from '@shoelace-style/shoelace/dist/react/tree-item';
+
+const App = () => {
+  const [childItems, setChildItems] = useState([]);
+  const [lazy, setLazy] = useState(true);
+
+  const handleLazyLoad = () => {
+    // Simulate asynchronous loading
+    setTimeout(() => {
+      setChildItems(['Birch', 'Cedar', 'Maple', 'Pine']);
+
+      // Disable lazy mode once the content has been loaded
+      setLazy(false);
+    }, 1000);
+  };
+
+  return (
+    <SlTree>
+      <SlTreeItem lazy={lazy} onSlLazyLoad={handleLazyLoad}>
+        Available Trees
+        {childItems.map(item => (
+          <SlTreeItem>{item}</SlTreeItem>
+        ))}
+      </SlTreeItem>
+    </SlTree>
+  );
+};
+```
diff --git a/docs/pages/components/tree.md b/docs/pages/components/tree.md
index 65816b8b81..8bddde8133 100644
--- a/docs/pages/components/tree.md
+++ b/docs/pages/components/tree.md
@@ -235,69 +235,6 @@ const App = () => (
 
 {% endraw %}
 
-### Lazy Loading
-
-Use the `lazy` attribute on a tree item to indicate that the content is not yet present and will be loaded later. When the user tries to expand the node, the `loading` state is set to `true` and the `sl-lazy-load` event will be emitted to allow you to load data asynchronously. The item will remain in a loading state until its content is changed.
-
-If you want to disable this behavior after the first load, simply remove the `lazy` attribute and, on the next expand, the existing content will be shown instead.
-
-```html:preview
-<sl-tree>
-  <sl-tree-item lazy>Available Trees</sl-tree-item>
-</sl-tree>
-
-<script type="module">
-  const lazyItem = document.querySelector('sl-tree-item[lazy]');
-
-  lazyItem.addEventListener('sl-lazy-load', () => {
-    // Simulate asynchronous loading
-    setTimeout(() => {
-      const subItems = ['Birch', 'Cedar', 'Maple', 'Pine'];
-
-      for (const item of subItems) {
-        const treeItem = document.createElement('sl-tree-item');
-        treeItem.innerText = item;
-        lazyItem.append(treeItem);
-      }
-
-      // Disable lazy mode once the content has been loaded
-      lazyItem.lazy = false;
-    }, 1000);
-  });
-</script>
-```
-
-```jsx:react
-import SlTree from '@shoelace-style/shoelace/dist/react/tree';
-import SlTreeItem from '@shoelace-style/shoelace/dist/react/tree-item';
-
-const App = () => {
-  const [childItems, setChildItems] = useState([]);
-  const [lazy, setLazy] = useState(true);
-
-  const handleLazyLoad = () => {
-    // Simulate asynchronous loading
-    setTimeout(() => {
-      setChildItems(['Birch', 'Cedar', 'Maple', 'Pine']);
-
-      // Disable lazy mode once the content has been loaded
-      setLazy(false);
-    }, 1000);
-  };
-
-  return (
-    <SlTree>
-      <SlTreeItem lazy={lazy} onSlLazyLoad={handleLazyLoad}>
-        Available Trees
-        {childItems.map(item => (
-          <SlTreeItem>{item}</SlTreeItem>
-        ))}
-      </SlTreeItem>
-    </SlTree>
-  );
-};
-```
-
 ### Customizing the Expand and Collapse Icons
 
 Use the `expand-icon` and `collapse-icon` slots to change the expand and collapse icons, respectively. To disable the animation, override the `rotate` property on the `expand-button` part as shown below.
diff --git a/src/components/tree-item/tree-item.component.ts b/src/components/tree-item/tree-item.component.ts
index 8b1cbffb31..417f372ce5 100644
--- a/src/components/tree-item/tree-item.component.ts
+++ b/src/components/tree-item/tree-item.component.ts
@@ -170,6 +170,9 @@ export default class SlTreeItem extends ShoelaceElement {
     this.setAttribute('aria-busy', this.loading ? 'true' : 'false');
 
     if (!this.loading) {
+      this.getChildrenItems().forEach(item => {
+        item.selected = this.selected;
+      });
       this.animateExpand();
     }
   }
diff --git a/src/components/tree-item/tree-item.test.ts b/src/components/tree-item/tree-item.test.ts
index 023eb1f288..29e154c348 100644
--- a/src/components/tree-item/tree-item.test.ts
+++ b/src/components/tree-item/tree-item.test.ts
@@ -177,4 +177,25 @@ describe('<sl-tree-item>', () => {
       expect(lazyChangeSpy).to.have.been.calledTwice;
     });
   });
+
+  it('should update children select state after loading', async () => {
+    // Arrange
+    const lazyLoadSpy = sinon.spy();
+
+    parentItem.addEventListener('sl-lazy-load', lazyLoadSpy);
+    parentItem.selected = true;
+    parentItem.lazy = true;
+
+    // Act
+    parentItem.expanded = true;
+    await waitUntil(() => lazyLoadSpy.calledOnce);
+    parentItem.loading = false;
+    await parentItem.updateComplete;
+
+    // Assert
+    expect(parentItem.childElementCount).to.be.greaterThan(0);
+    parentItem.getChildrenItems().forEach(child => {
+      expect(child.selected).to.be.true;
+    });
+  });
 });