diff --git a/src/sql/workbench/contrib/notebook/browser/cellViews/markdownToolbar.component.ts b/src/sql/workbench/contrib/notebook/browser/cellViews/markdownToolbar.component.ts
index 60148eb86f..b905430a52 100644
--- a/src/sql/workbench/contrib/notebook/browser/cellViews/markdownToolbar.component.ts
+++ b/src/sql/workbench/contrib/notebook/browser/cellViews/markdownToolbar.component.ts
@@ -221,6 +221,7 @@ export class MarkdownToolbarComponent extends AngularDisposable {
 			}
 		}
 		this._notebookEditor = this._notebookService.findNotebookEditor(this.cellModel?.notebookModel?.notebookUri);
+		this.updateActiveViewAction();
 	}
 
 	public async onInsertButtonClick(event: MouseEvent, type: MarkdownButtonType): Promise<void> {
@@ -291,7 +292,7 @@ export class MarkdownToolbarComponent extends AngularDisposable {
 		}
 	}
 
-	public removeActiveClassFromModeActions() {
+	private removeActiveClassFromModeActions() {
 		const activeClass = ' active';
 		for (let action of [this._toggleTextViewAction, this._toggleSplitViewAction, this._toggleMarkdownViewAction]) {
 			if (action.class.includes(activeClass)) {
@@ -300,6 +301,16 @@ export class MarkdownToolbarComponent extends AngularDisposable {
 		}
 	}
 
+	public updateActiveViewAction() {
+		this.removeActiveClassFromModeActions();
+		const activeClass = ' active';
+		switch (this.cellModel.currentMode) {
+			case CellEditModes.MARKDOWN: this._toggleMarkdownViewAction.class += activeClass; break;
+			case CellEditModes.SPLIT: this._toggleSplitViewAction.class += activeClass; break;
+			case CellEditModes.WYSIWYG: this._toggleTextViewAction.class += activeClass; break;
+		}
+	}
+
 	/**
 	 * Instantiate modal for use as callout when inserting Link or Image into markdown.
 	 * @param calloutStyle Style of callout passed in to determine which callout is rendered.
diff --git a/src/sql/workbench/contrib/notebook/browser/markdownToolbarActions.ts b/src/sql/workbench/contrib/notebook/browser/markdownToolbarActions.ts
index d805e2346c..fbd62f0810 100644
--- a/src/sql/workbench/contrib/notebook/browser/markdownToolbarActions.ts
+++ b/src/sql/workbench/contrib/notebook/browser/markdownToolbarActions.ts
@@ -607,8 +607,6 @@ export class ToggleViewAction extends Action {
 	}
 
 	public override async run(context: MarkdownToolbarComponent): Promise<void> {
-		context.removeActiveClassFromModeActions();
-		this.class += ' active';
 		context.cellModel.showPreview = this.showPreview;
 		context.cellModel.showMarkdown = this.showMarkdown;
 		// Hide image button in WYSIWYG mode
@@ -617,5 +615,6 @@ export class ToggleViewAction extends Action {
 		} else {
 			context.showLinkAndImageButtons();
 		}
+		context.updateActiveViewAction();
 	}
 }
diff --git a/src/sql/workbench/services/notebook/browser/models/cell.ts b/src/sql/workbench/services/notebook/browser/models/cell.ts
index a33dc019d9..dd61e16d67 100644
--- a/src/sql/workbench/services/notebook/browser/models/cell.ts
+++ b/src/sql/workbench/services/notebook/browser/models/cell.ts
@@ -87,6 +87,7 @@ export class CellModel extends Disposable implements ICellModel {
 	private _outputCounter = 0; // When re-executing the same cell, ensure that we apply chart options in the same order
 	private _attachments: nb.ICellAttachments | undefined;
 	private _preventNextChartCache: boolean = false;
+	private _lastEditMode: string | undefined;
 	public richTextCursorPosition: ICaretPosition | undefined;
 	public markdownCursorPosition: IPosition | undefined;
 
@@ -230,8 +231,9 @@ export class CellModel extends Disposable implements ICellModel {
 	public set isEditMode(isEditMode: boolean) {
 		this._isEditMode = isEditMode;
 		if (this._isEditMode) {
-			this.showPreview = this._defaultTextEditMode !== TextCellEditModes.Markdown;
-			this.showMarkdown = this._defaultTextEditMode !== TextCellEditModes.RichText;
+			const newEditMode = this._lastEditMode ?? this._defaultTextEditMode;
+			this.showPreview = newEditMode !== TextCellEditModes.Markdown;
+			this.showMarkdown = newEditMode !== TextCellEditModes.RichText;
 		}
 		this._onCellModeChanged.fire(this._isEditMode);
 		// Note: this does not require a notebook update as it does not change overall state
@@ -421,7 +423,7 @@ export class CellModel extends Disposable implements ICellModel {
 	public set showPreview(val: boolean) {
 		this._showPreview = val;
 		this._onCellPreviewChanged.fire(this._showPreview);
-		this._onCurrentEditModeChanged.fire(this.currentMode);
+		this.doModeUpdates();
 	}
 
 	public get showMarkdown(): boolean {
@@ -431,6 +433,13 @@ export class CellModel extends Disposable implements ICellModel {
 	public set showMarkdown(val: boolean) {
 		this._showMarkdown = val;
 		this._onCellMarkdownChanged.fire(this._showMarkdown);
+		this.doModeUpdates();
+	}
+
+	private doModeUpdates() {
+		if (this._isEditMode) {
+			this._lastEditMode = this._showPreview && this._showMarkdown ? TextCellEditModes.SplitView : (this._showMarkdown ? TextCellEditModes.Markdown : TextCellEditModes.RichText);
+		}
 		this._onCurrentEditModeChanged.fire(this.currentMode);
 	}