diff --git a/mailnews/local/src/nsLocalMailFolder.cpp b/mailnews/local/src/nsLocalMailFolder.cpp
index bd878d83e794..aad8125bfe18 100644
--- a/mailnews/local/src/nsLocalMailFolder.cpp
+++ b/mailnews/local/src/nsLocalMailFolder.cpp
@@ -1241,6 +1241,8 @@ NS_IMETHODIMP nsMsgLocalMailFolder::Rename(const PRUnichar *aNewName, nsIMsgWind
       if (cnt > 0)
         newFolder->RenameSubFolders(msgWindow, this);
       
+      // save folder flags, because PropagateDelete will clear them.
+      PRUint32 saveFolderFlags = mFlags;
       if (parentFolder)
       {
         SetParent(nsnull);
@@ -1249,6 +1251,8 @@ NS_IMETHODIMP nsMsgLocalMailFolder::Rename(const PRUnichar *aNewName, nsIMsgWind
       }
       SetPath(nsnull); // forget our path, since this folder object renamed itself
       folderRenameAtom = do_GetAtom("RenameCompleted");
+      // restore saved folder flags, after PropagateDelete cleared them.
+      newFolder->SetFlags(saveFolderFlags);
       newFolder->NotifyFolderEvent(folderRenameAtom);
     }
   }