diff --git a/apps/web/__tests__/e2e/outlook-draft-read-status.test.ts b/apps/web/__tests__/e2e/outlook-draft-read-status.test.ts
new file mode 100644
index 0000000000..484c5cb7ec
--- /dev/null
+++ b/apps/web/__tests__/e2e/outlook-draft-read-status.test.ts
@@ -0,0 +1,98 @@
+/**
+ * E2E test to verify our Outlook draft implementation doesn't mark emails as read
+ *
+ * Microsoft Graph's createReplyAll endpoint has an undocumented side effect:
+ * it marks the original message as read. Our implementation works around this
+ * by restoring the original read status after creating the draft.
+ *
+ * Usage: pnpm test-e2e outlook-draft-read-status
+ * Make sure TEST_OUTLOOK_EMAIL=you@email.com is set in .env.test
+ */
+
+import { beforeAll, describe, expect, test, vi } from "vitest";
+import prisma from "@/utils/prisma";
+import { createEmailProvider } from "@/utils/email/provider";
+import { findOldMessage } from "@/__tests__/e2e/helpers";
+import type { EmailProvider } from "@/utils/email/types";
+
+const RUN_E2E_TESTS = process.env.RUN_E2E_TESTS;
+const TEST_OUTLOOK_EMAIL = process.env.TEST_OUTLOOK_EMAIL;
+
+vi.mock("server-only", () => ({}));
+
+describe.skipIf(!RUN_E2E_TESTS)(
+  "Outlook Draft Read Status Preservation",
+  () => {
+    let provider: EmailProvider;
+    let emailAccountEmail: string;
+
+    beforeAll(async () => {
+      if (!TEST_OUTLOOK_EMAIL) {
+        console.warn("Set TEST_OUTLOOK_EMAIL env var to run these tests");
+        return;
+      }
+
+      const emailAccount = await prisma.emailAccount.findFirst({
+        where: {
+          email: TEST_OUTLOOK_EMAIL,
+          account: { provider: "microsoft" },
+        },
+        include: { account: true },
+      });
+
+      if (!emailAccount) {
+        throw new Error(`No Outlook account found for ${TEST_OUTLOOK_EMAIL}`);
+      }
+
+      provider = await createEmailProvider({
+        emailAccountId: emailAccount.id,
+        provider: "microsoft",
+      });
+
+      emailAccountEmail = emailAccount.email;
+    });
+
+    test("should preserve unread status when creating draft reply", async () => {
+      if (!provider) {
+        throw new Error("Email provider not initialized");
+      }
+
+      const testMessage = await findOldMessage(provider, 7);
+      const originalMessage = await provider.getMessage(testMessage.messageId);
+      const wasOriginallyUnread =
+        originalMessage.labelIds?.includes("UNREAD") ?? false;
+
+      let draftId: string | undefined;
+
+      try {
+        // Mark as unread for the test
+        await provider.markReadThread(testMessage.threadId, false);
+
+        // Verify unread status before creating draft
+        const beforeDraft = await provider.getMessage(testMessage.messageId);
+        expect(beforeDraft.labelIds).toContain("UNREAD");
+
+        // Create draft reply - our implementation should NOT mark the original as read
+        const draftResult = await provider.draftEmail(
+          beforeDraft,
+          { content: "Test draft for read status verification" },
+          emailAccountEmail,
+        );
+        draftId = draftResult.draftId;
+
+        // Message should still be unread after draft creation
+        const afterDraft = await provider.getMessage(testMessage.messageId);
+        expect(afterDraft.labelIds).toContain("UNREAD");
+      } finally {
+        // Cleanup: restore original state
+        if (draftId) {
+          await provider.deleteDraft(draftId);
+        }
+        await provider.markReadThread(
+          testMessage.threadId,
+          !wasOriginallyUnread,
+        );
+      }
+    }, 30_000);
+  },
+);
diff --git a/apps/web/utils/outlook/mail.ts b/apps/web/utils/outlook/mail.ts
index 4464cd7a96..f613026b46 100644
--- a/apps/web/utils/outlook/mail.ts
+++ b/apps/web/utils/outlook/mail.ts
@@ -208,6 +208,17 @@ export async function draftEmail(
     },
   }));
 
+  // Get the original message's isRead status before creating the draft
+  // Microsoft Graph's createReplyAll automatically marks the original as read
+  const originalMessage: Message = await withOutlookRetry(() =>
+    client
+      .getClient()
+      .api(`/me/messages/${originalEmail.id}`)
+      .select("isRead")
+      .get(),
+  );
+  const wasUnread = originalMessage.isRead === false;
+
   // Use createReplyAll endpoint to create a proper reply draft
   // This ensures the draft is linked to the original message as a reply all
   const replyDraft: Message = await withOutlookRetry(() =>
@@ -238,6 +249,17 @@ export async function draftEmail(
     }),
   );
 
+  // Restore the original message's unread status if it was unread before
+  // createReplyAll automatically marks the original message as read
+  if (wasUnread) {
+    await withOutlookRetry(() =>
+      client
+        .getClient()
+        .api(`/me/messages/${originalEmail.id}`)
+        .patch({ isRead: false }),
+    );
+  }
+
   // Use the original replyDraft.id since that's the stable ID
   // The PATCH response might not always include the full object?
   return { ...updatedDraft, id: replyDraft.id };
diff --git a/version.txt b/version.txt
index 22b8db2cdf..d89fcbe0af 100644
--- a/version.txt
+++ b/version.txt
@@ -1 +1 @@
-v2.21.62
+v2.21.63