diff --git a/e2e/sidebar-active-state.spec.ts b/e2e/sidebar-active-state.spec.ts
new file mode 100644
index 000000000..fa770df24
--- /dev/null
+++ b/e2e/sidebar-active-state.spec.ts
@@ -0,0 +1,205 @@
+/*
+ * Licensed to the Apache Software Foundation (ASF) under one
+ * or more contributor license agreements.  See the NOTICE file
+ * distributed with this work for additional information
+ * regarding copyright ownership.  The ASF licenses this file
+ * to you under the Apache License, Version 2.0 (the
+ * "License"); you may not use this file except in compliance
+ * with the License.  You may obtain a copy of the License at
+ *
+ *   http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing,
+ * software distributed under the License is distributed on
+ * an "AS IS" BASIS, WITHOUT WARRANTIES OR CONDITIONS OF ANY
+ * KIND, either express or implied.  See the License for the
+ * specific language governing permissions and limitations
+ * under the License.
+ */
+
+import { test, expect, Page } from './fixtures';
+
+const TEST_USER = 'mifos';
+const TEST_PASSWORD = 'password';
+const TENANT_DEFAULT = 'default';
+const API_BASE = '/api/v1';
+
+async function loginWithMockedApi(page: Page) {
+  await page.route('**/config.json*', async (route) => {
+    await route.fulfill({
+      status: 200,
+      contentType: 'application/json',
+      body: JSON.stringify({ fineractApiUrl: API_BASE, defaultTenant: TENANT_DEFAULT }),
+    });
+  });
+  await page.route(/\/api\/v1\//, async (route) => {
+    await route.fulfill({
+      status: 200,
+      contentType: 'application/json',
+      body: '{}',
+    });
+  });
+  await page.route('**/api/v1/authentication**', async (route) => {
+    await route.fulfill({
+      status: 200,
+      contentType: 'application/json',
+      body: JSON.stringify({
+        username: TEST_USER,
+        userId: 1,
+        base64EncodedAuthenticationKey: 'YmFzZTY0',
+        authenticated: true,
+        officeId: 1,
+        officeName: 'Head Office',
+        roles: [{ id: 1, name: 'Super User', description: 'Super user' }],
+        permissions: ['ALL_FUNCTIONS'],
+      }),
+    });
+  });
+  await page.route('**/api/v1/businessdate**', async (route) => {
+    await route.fulfill({ json: [{ type: 'BUSINESS_DATE', date: [2026, 10, 2] }] });
+  });
+
+  // Nested client routes load the client and office before rendering. Keep those
+  // requests in the mocked API so they cannot reach a real Fineract instance.
+  await page.route(/\/api\/v1\/clients\/1(?:\?.*)?$/, async (route) => {
+    await route.fulfill({
+      status: 200,
+      contentType: 'application/json',
+      body: JSON.stringify({
+        id: 1,
+        accountNo: 'TEST-CLIENT-001',
+        externalId: 'TEST-CLIENT-001',
+        status: { id: 300, code: 'clientStatusType.active', value: 'Active' },
+        active: true,
+        activationDate: [2026, 10, 2],
+        firstname: 'Test',
+        lastname: 'Client',
+        displayName: 'Test Client',
+        isStaff: false,
+        officeId: 1,
+        officeName: 'Test Office',
+        timeline: { submittedOnDate: [2026, 10, 2], activatedOnDate: [2026, 10, 2] },
+        legalForm: { id: 1, code: 'legalFormType.person', value: 'Person' },
+        clientCollateralManagements: [],
+        groups: [],
+      }),
+    });
+  });
+
+  await page.route(/\/api\/v1\/offices(?:\?.*)?$/, async (route) => {
+    await route.fulfill({
+      status: 200,
+      contentType: 'application/json',
+      body: JSON.stringify([
+        {
+          id: 1,
+          name: 'Test Office',
+          nameDecorated: 'Test Office',
+          externalId: 'TEST-OFFICE-001',
+          openingDate: [2026, 10, 2],
+          hierarchy: '.',
+        },
+      ]),
+    });
+  });
+
+  await page.goto('/login');
+  if (!page.url().includes('/dashboard')) {
+    await page.locator('#tenantId').fill(TENANT_DEFAULT);
+    await page.locator('#username').fill(TEST_USER);
+    await page.locator('#password').fill(TEST_PASSWORD);
+    await page.getByRole('button', { name: 'Sign In' }).click();
+    await expect(page).toHaveURL('/dashboard');
+  }
+}
+
+/**
+ * Routes that share their leading path with a sidebar link. Each is a nested page
+ * where partial routerLinkActive matching used to mark the parent link as active too.
+ */
+const nestedRoutes = [
+  { parentHref: '/clients', url: '/clients/create' },
+  { parentHref: '/clients', url: '/clients/edit/1' },
+  { parentHref: '/clients', url: '/clients/view/1' },
+  { parentHref: '/clients', url: '/clients/1/identifiers/create' },
+  { parentHref: '/clients', url: '/clients/1/identifiers/edit/1' },
+  { parentHref: '/clients', url: '/clients/1/addresses/create' },
+  { parentHref: '/clients', url: '/clients/1/addresses/edit/1' },
+  { parentHref: '/clients', url: '/clients/1/family-members/create' },
+  { parentHref: '/clients', url: '/clients/1/family-members/edit/1' },
+  { parentHref: '/clients', url: '/clients/1/notes/create' },
+  { parentHref: '/clients', url: '/clients/1/notes/edit/1' },
+  { parentHref: '/clients', url: '/clients/1/documents/create' },
+  { parentHref: '/clients', url: '/clients/1/documents/edit/1' },
+  { parentHref: '/clients', url: '/clients/1/charges' },
+  { parentHref: '/clients', url: '/clients/1/charges/create' },
+  { parentHref: '/clients', url: '/clients/1/collaterals' },
+  { parentHref: '/clients', url: '/clients/1/collaterals/create' },
+  { parentHref: '/clients', url: '/clients/1/collaterals/edit/1' },
+  { parentHref: '/clients', url: '/clients/1/transactions' },
+  { parentHref: '/groups', url: '/groups/create' },
+  { parentHref: '/groups', url: '/groups/view/1' },
+  { parentHref: '/groups', url: '/groups/1/notes/create' },
+  { parentHref: '/centers', url: '/centers/create' },
+  { parentHref: '/centers', url: '/centers/view/1' },
+  { parentHref: '/centers', url: '/centers/1/notes/create' },
+  { parentHref: '/loans', url: '/loans/create' },
+  { parentHref: '/loans', url: '/loans/view/1' },
+  { parentHref: '/loans', url: '/loans/1/charges' },
+  { parentHref: '/loans', url: '/loans/1/charges/add' },
+  { parentHref: '/loans', url: '/loans/1/rescheduling' },
+  { parentHref: '/loans', url: '/loans/1/rescheduling/create' },
+  { parentHref: '/loans', url: '/loans/1/collateral' },
+  { parentHref: '/loans', url: '/loans/1/collateral/create' },
+  { parentHref: '/loans', url: '/loans/1/collateral/edit/1' },
+  { parentHref: '/loans', url: '/loans/1/transactions/chargeRefund' },
+  { parentHref: '/loans', url: '/loans/1/transactions/repayment' },
+  { parentHref: '/loans', url: '/loans/1/guarantors' },
+  { parentHref: '/loans', url: '/loans/1/guarantors/create' },
+  { parentHref: '/loans', url: '/loans/1/guarantors/edit/1' },
+  { parentHref: '/loans', url: '/loans/1/interest-pauses' },
+  { parentHref: '/loans', url: '/loans/1/interest-pauses/create' },
+  { parentHref: '/loans', url: '/loans/1/interest-pauses/edit/1' },
+  { parentHref: '/loans', url: '/loans/1/post-dated-checks' },
+  { parentHref: '/loans', url: '/loans/1/post-dated-checks/edit/1' },
+  {
+    parentHref: '/transfers/standing-instructions',
+    url: '/transfers/standing-instructions/history',
+  },
+  { parentHref: '/working-capital/loans', url: '/working-capital/loans/account-locks' },
+  { parentHref: '/working-capital/loans', url: '/working-capital/loans/cob-catchup' },
+  { parentHref: '/accounting/chart-of-accounts', url: '/accounting/chart-of-accounts/create' },
+  { parentHref: '/accounting/journal-entries', url: '/accounting/journal-entries/create' },
+  { parentHref: '/security/users', url: '/security/users/create' },
+  { parentHref: '/security/roles', url: '/security/roles/create' },
+  { parentHref: '/settings/holidays', url: '/settings/holidays/create' },
+  { parentHref: '/organization/offices', url: '/organization/offices/create' },
+  { parentHref: '/organization/funds', url: '/organization/funds/create' },
+  { parentHref: '/system/data-tables', url: '/system/data-tables/create' },
+];
+
+test.describe('Sidebar active route matching', () => {
+  test('does not mark a parent sidebar link active on nested routes', async ({ page }) => {
+    await loginWithMockedApi(page);
+    test.setTimeout(120_000);
+
+    const sidebar = page.locator('nav.sidebar');
+    for (const { parentHref, url } of nestedRoutes) {
+      page.on('response', async (response) => {
+        if (response.url().includes('/api/v1/') && response.status() >= 400) {
+          console.log('API error:', response.status(), response.url());
+          console.log('Response body:', await response.text().catch(() => '<unavailable>'));
+        }
+      });
+
+      await page.goto(url);
+      await expect(page).toHaveURL(new RegExp(`${url}$`));
+
+      const parentLink = sidebar.locator(`a[href="${parentHref}"]`);
+      await expect(parentLink).toHaveCount(1);
+      await expect(parentLink, `${url} should not activate ${parentHref}`).not.toHaveClass(
+        /\bactive\b/,
+      );
+    }
+  });
+});
diff --git a/src/app/layout/sidebar.component.ts b/src/app/layout/sidebar.component.ts
index 7984b8a2b..91e50aa71 100644
--- a/src/app/layout/sidebar.component.ts
+++ b/src/app/layout/sidebar.component.ts
@@ -140,6 +140,7 @@ function entityOf(code: string): string | null {
             <a
               [routerLink]="item.route"
               routerLinkActive="active"
+              [routerLinkActiveOptions]="{ exact: true }"
               class="nav-item"
               [class.sub-item]="depth > 0"
               [attr.title]="capabilities(item)"