diff --git a/scene/gui/text_edit.cpp b/scene/gui/text_edit.cpp
index 5d092e6c0df..3477e69b61c 100644
--- a/scene/gui/text_edit.cpp
+++ b/scene/gui/text_edit.cpp
@@ -6341,7 +6341,8 @@ void TextEdit::fold_line(int p_line) {
 	int last_line = start_indent;
 	for (int i = p_line + 1; i < text.size(); i++) {
 		if (text[i].strip_edges().size() != 0) {
-			if (is_line_comment(i)) {
+			if (is_line_comment(i) && get_indent_level(i) <= start_indent) {
+				// Checked indent to make sure indented comments that finish a code block are folded.
 				continue;
 			} else if (get_indent_level(i) > start_indent) {
 				last_line = i;