diff --git a/apps/studio/components/interfaces/SQLEditor/SQLTemplates/SQLTemplates.tsx b/apps/studio/components/interfaces/SQLEditor/SQLTemplates/SQLTemplates.tsx
index fd3c18223f6..f115661367b 100644
--- a/apps/studio/components/interfaces/SQLEditor/SQLTemplates/SQLTemplates.tsx
+++ b/apps/studio/components/interfaces/SQLEditor/SQLTemplates/SQLTemplates.tsx
@@ -13,6 +13,7 @@ import { useProfile } from 'lib/profile'
 import { useSqlEditorV2StateSnapshot } from 'state/sql-editor-v2'
 import { createSqlSnippetSkeletonV2 } from '../SQLEditor.utils'
 import SQLCard from './SQLCard'
+import { getTabsStore } from 'state/tabs'
 
 const SQLTemplates = () => {
   const router = useRouter()
@@ -49,6 +50,18 @@ const SQLTemplates = () => {
       })
       snapV2.addSnippet({ projectRef: ref, snippet })
       snapV2.addNeedsSaving(snippet.id)
+
+      const store = getTabsStore('explorer')
+      const tabId = `sql-${snippet.id}`
+      store.openTabs = [...store.openTabs, tabId]
+      store.tabsMap[tabId] = {
+        id: tabId,
+        type: 'sql',
+        // Remove the label since we'll derive it dynamically
+        metadata: { sqlId: snippet.id },
+      }
+      store.activeTab = tabId
+
       router.push(`/project/${ref}/sql/${snippet.id}`)
     } catch (error: any) {
       toast.error(`Failed to create new query: ${error.message}`)
diff --git a/apps/studio/components/layouts/tabs/explorer-tabs.tsx b/apps/studio/components/layouts/tabs/explorer-tabs.tsx
index 2e279f5d528..9042422debd 100644
--- a/apps/studio/components/layouts/tabs/explorer-tabs.tsx
+++ b/apps/studio/components/layouts/tabs/explorer-tabs.tsx
@@ -1,38 +1,26 @@
-import { useRouter } from 'next/router'
-import { useSnapshot } from 'valtio'
-import {
-  FileJson2,
-  Table2,
-  Database,
-  Code2,
-  Eye,
-  X,
-  Workflow,
-  PanelLeftClose,
-  PanelLeftOpen,
-} from 'lucide-react'
-import {
-  cn,
-  SQL_ICON,
-  Tabs_Shadcn_,
-  TabsList_Shadcn_,
-  TabsTrigger_Shadcn_,
-  ScrollArea,
-  ScrollBar,
-} from 'ui'
-import { getTabsStore, type Tab, type TabType } from 'state/tabs'
 import { DndContext, DragEndEvent, PointerSensor, useSensor, useSensors } from '@dnd-kit/core'
-import { SortableContext, horizontalListSortingStrategy, useSortable } from '@dnd-kit/sortable'
+import { horizontalListSortingStrategy, SortableContext, useSortable } from '@dnd-kit/sortable'
 import { CSS } from '@dnd-kit/utilities'
-import { useRef, useEffect } from 'react'
-import { sidebarState } from './sidebar-state'
 import { useActionKey } from 'hooks/useActionKey'
+import { Eye, FileJson2, PanelLeftClose, PanelLeftOpen, Table2, Workflow, X } from 'lucide-react'
+import { useRouter } from 'next/router'
+import { useMemo } from 'react'
+import { useSqlEditorV2StateSnapshot } from 'state/sql-editor-v2'
+import { getTabsStore, type Tab, type TabType } from 'state/tabs'
+import { cn, SQL_ICON, Tabs_Shadcn_, TabsList_Shadcn_, TabsTrigger_Shadcn_ } from 'ui'
+import { useSnapshot } from 'valtio'
+import { sidebarState } from './sidebar-state'
+import { motion, AnimatePresence } from 'framer-motion'
 
 interface TabsProps {
   storeKey: string
   onClose?: (id: string) => void
 }
 
+/**
+ * Returns the appropriate icon component for each tab type
+ * Icons are consistently styled with the same size and color
+ */
 const getTabIcon = (type: TabType) => {
   switch (type) {
     case 'schema':
@@ -61,7 +49,14 @@ const getTabIcon = (type: TabType) => {
   }
 }
 
-// Sortable Tab component
+/**
+ * Individual draggable tab component that handles:
+ * - Drag
+ * - Drop functionality
+ * - Dynamic schema name display
+ * - Tab label animations
+ * - Close button interactions
+ */
 const SortableTab = ({
   tab,
   index,
@@ -73,6 +68,9 @@ const SortableTab = ({
   openTabs: Tab[]
   onClose: (id: string) => void
 }) => {
+  const router = useRouter()
+  const currentSchema = router.query.schema as string
+
   const { attributes, listeners, setNodeRef, transform, transition, isDragging } = useSortable({
     id: tab.id,
   })
@@ -83,16 +81,32 @@ const SortableTab = ({
     zIndex: isDragging ? 1 : 0,
   }
 
-  // Add logic to check for multiple schemas
+  const snapV2 = useSqlEditorV2StateSnapshot()
+
+  // For SQL tabs, get the snippet from the SQL editor state
+  // This ensures tab labels stay in sync with snippet names
+  const sqlSnippet =
+    tab.type === 'sql' && tab.metadata?.sqlId ? snapV2.snippets[tab.metadata.sqlId]?.snippet : null
+
+  // Check if we have tables from multiple schemas
+  // Used to determine if we need to show schema names in table labels
   const hasMultipleSchemas = openTabs
     .filter((t) => t.type === 'table')
     .some((t) => t.metadata?.schema !== openTabs[0]?.metadata?.schema)
 
-  // Generate the display label
-  const displayLabel =
-    tab.type === 'table' && hasMultipleSchemas && tab.metadata?.schema
-      ? `${tab.metadata.schema}.${tab.label}`
-      : tab.label
+  // Update schema visibility check to include URL param comparison
+  const shouldShowSchema = useMemo(() => {
+    const schemaInParamsDifferent =
+      currentSchema &&
+      tab.type === 'table' && // Only check for table tabs
+      tab.metadata?.schema &&
+      currentSchema !== tab.metadata.schema
+
+    return hasMultipleSchemas || schemaInParamsDifferent
+  }, [openTabs, currentSchema, tab.metadata?.schema, tab.type])
+
+  // Create a motion version of TabsTrigger while preserving all functionality
+  const MotionTabsTrigger = motion(TabsTrigger_Shadcn_)
 
   return (
     <div ref={setNodeRef} style={style} {...attributes} className="flex items-center h-10">
@@ -102,7 +116,22 @@ const SortableTab = ({
         {...listeners}
       >
         {getTabIcon(tab.type)}
-        {displayLabel}
+        <div className="flex items-center gap-0">
+          <AnimatePresence mode="popLayout">
+            {shouldShowSchema && (
+              <motion.span
+                initial={{ opacity: 0, width: 0 }}
+                animate={{ opacity: 1, width: 'auto' }}
+                exit={{ opacity: 0, width: 0 }}
+                transition={{ duration: 0.15 }}
+                className="text-foreground-muted group-data-[state=active]:text-foreground-lighter"
+              >
+                {tab.metadata.schema}.
+              </motion.span>
+            )}
+          </AnimatePresence>
+          <span>{tab.label || 'Untitled'}</span>
+        </div>
         <span
           role="button"
           onClick={(e) => {
diff --git a/apps/studio/pages/project/[ref]/sql/[id].tsx b/apps/studio/pages/project/[ref]/sql/[id].tsx
index 437f3d379f1..b536d037471 100644
--- a/apps/studio/pages/project/[ref]/sql/[id].tsx
+++ b/apps/studio/pages/project/[ref]/sql/[id].tsx
@@ -172,19 +172,17 @@ const SqlEditor: NextPageWithLayout = () => {
 
     const store = getTabsStore('explorer')
     const tabId = `sql-${id}`
-    const snippet = snippets.find((s) => s.id === id)
 
     if (!store.tabsMap[tabId]) {
       store.openTabs = [...store.openTabs, tabId]
       store.tabsMap[tabId] = {
         id: tabId,
         type: 'sql',
-        label: snippet?.name || 'Untitled Query',
         metadata: { sqlId: id },
       }
     }
     store.activeTab = tabId
-  }, [router.isReady, id, snippets])
+  }, [router.isReady, id])
 
   return <SQLEditor />
 }
diff --git a/apps/studio/state/tabs.ts b/apps/studio/state/tabs.ts
index 1be033a65a4..8a28f9a8dff 100644
--- a/apps/studio/state/tabs.ts
+++ b/apps/studio/state/tabs.ts
@@ -11,7 +11,7 @@ interface TableMetadata {
 export interface Tab {
   id: string
   type: TabType
-  label: string
+  label?: string
   icon?: ReactNode
   metadata?: {
     schema?: string
@@ -23,7 +23,7 @@ export interface Tab {
 
 interface TabsState {
   openTabs: string[]
-  activeTab: string | null
+  activeTab: string
   tabsMap: Record<string, Tab>
 }