diff --git a/src/CONST/index.ts b/src/CONST/index.ts
index 2bff68a44111..dbf9a74a32aa 100644
--- a/src/CONST/index.ts
+++ b/src/CONST/index.ts
@@ -1276,6 +1276,7 @@ const CONST = {
         MAX_COUNT_BEFORE_FOCUS_UPDATE: 30,
         MIN_INITIAL_REPORT_ACTION_COUNT: 15,
         UNREPORTED_REPORT_ID: '0',
+        TRASH_REPORT_ID: '-1',
         SPLIT_REPORT_ID: '-2',
         SECONDARY_ACTIONS: {
             SUBMIT: 'submit',
@@ -7345,6 +7346,7 @@ const CONST = {
             DONE: 'done',
             EXPORT_TO_ACCOUNTING: 'exportToAccounting',
             PAID: 'paid',
+            UNDELETE: 'undelete',
         },
         HAS_VALUES: {
             RECEIPT: 'receipt',
@@ -7365,6 +7367,7 @@ const CONST = {
             REJECT: 'reject',
             CHANGE_REPORT: 'changeReport',
             SPLIT: 'split',
+            UNDELETE: 'undelete',
         },
         TRANSACTION_TYPE: {
             CASH: 'cash',
@@ -7599,6 +7602,7 @@ const CONST = {
                 APPROVED: 'approved',
                 DONE: 'done',
                 PAID: 'paid',
+                DELETED: 'deleted',
             },
             EXPENSE_REPORT: {
                 ALL: '',
diff --git a/src/components/Search/SearchList/ListItem/ActionCell/actionTranslationsMap.ts b/src/components/Search/SearchList/ListItem/ActionCell/actionTranslationsMap.ts
index b27d9ee4f090..90d490038bd3 100644
--- a/src/components/Search/SearchList/ListItem/ActionCell/actionTranslationsMap.ts
+++ b/src/components/Search/SearchList/ListItem/ActionCell/actionTranslationsMap.ts
@@ -10,6 +10,7 @@ const actionTranslationsMap: Record<SearchTransactionAction, TranslationPaths> =
     [CONST.SEARCH.ACTION_TYPES.EXPORT_TO_ACCOUNTING]: 'common.export',
     [CONST.SEARCH.ACTION_TYPES.DONE]: 'common.done',
     [CONST.SEARCH.ACTION_TYPES.PAID]: 'iou.settledExpensify',
+    [CONST.SEARCH.ACTION_TYPES.UNDELETE]: 'search.bulkActions.undelete',
 };
 
 export default actionTranslationsMap;
diff --git a/src/components/Search/SearchList/ListItem/StatusCell.tsx b/src/components/Search/SearchList/ListItem/StatusCell.tsx
index 87b3797a61fd..d0326959178e 100644
--- a/src/components/Search/SearchList/ListItem/StatusCell.tsx
+++ b/src/components/Search/SearchList/ListItem/StatusCell.tsx
@@ -1,4 +1,4 @@
-import React, {useMemo} from 'react';
+import React from 'react';
 import {View} from 'react-native';
 import StatusBadge from '@components/StatusBadge';
 import useLocalize from '@hooks/useLocalize';
@@ -15,15 +15,18 @@ type StatusCellProps = {
 
     /** Whether the report's state/status is pending */
     isPending?: boolean;
+
+    /** Whether the transaction was deleted */
+    isDeleted?: boolean;
 };
 
-function StatusCell({stateNum, statusNum, isPending}: StatusCellProps) {
+function StatusCell({stateNum, statusNum, isPending, isDeleted}: StatusCellProps) {
     const styles = useThemeStyles();
     const theme = useTheme();
     const {translate} = useLocalize();
 
-    const statusText = useMemo(() => getReportStatusTranslation({stateNum, statusNum, translate}), [stateNum, statusNum, translate]);
-    const reportStatusColorStyle = useMemo(() => getReportStatusColorStyle(theme, stateNum, statusNum), [theme, stateNum, statusNum]);
+    const statusText = getReportStatusTranslation({stateNum, statusNum, isDeleted, translate});
+    const reportStatusColorStyle = getReportStatusColorStyle(theme, stateNum, statusNum, isDeleted);
 
     if (!statusText || !reportStatusColorStyle) {
         return null;
diff --git a/src/components/Search/SearchList/ListItem/TransactionListItem.tsx b/src/components/Search/SearchList/ListItem/TransactionListItem.tsx
index 8dbb9a127cad..cf6e0d5fbd38 100644
--- a/src/components/Search/SearchList/ListItem/TransactionListItem.tsx
+++ b/src/components/Search/SearchList/ListItem/TransactionListItem.tsx
@@ -24,7 +24,7 @@ import {handleActionButtonPress as handleActionButtonPressUtil} from '@libs/acti
 import {syncMissingAttendeesViolation} from '@libs/AttendeeUtils';
 import getNonEmptyStringOnyxID from '@libs/getNonEmptyStringOnyxID';
 import {isInvoiceReport} from '@libs/ReportUtils';
-import {isViolationDismissed, mergeProhibitedViolations, shouldShowViolation} from '@libs/TransactionUtils';
+import {isDeletedTransaction as isDeletedTransactionUtil, isViolationDismissed, mergeProhibitedViolations, shouldShowViolation} from '@libs/TransactionUtils';
 import variables from '@styles/variables';
 import CONST from '@src/CONST';
 import ONYXKEYS from '@src/ONYXKEYS';
@@ -51,8 +51,10 @@ function TransactionListItem<TItem extends ListItem>({
     customCardNames,
     lastPaymentMethod,
     personalPolicyID,
+    onUndelete,
 }: TransactionListItemProps<TItem>) {
     const transactionItem = item as unknown as TransactionListItemType;
+    const isDeletedTransaction = isDeletedTransactionUtil(transactionItem);
     const styles = useThemeStyles();
     const theme = useTheme();
 
@@ -163,6 +165,7 @@ function TransactionListItem<TItem extends ListItem>({
             isDelegateAccessRestricted,
             onDelegateAccessRestricted: showDelegateNoAccessModal,
             personalPolicyID,
+            onUndelete: () => onUndelete?.(transactionItem.transactionID),
         });
     };
 
@@ -176,10 +179,10 @@ function TransactionListItem<TItem extends ListItem>({
             <PressableWithFeedback
                 ref={pressableRef}
                 onLongPress={() => onLongPressRow?.(item)}
-                onPress={() => onSelectRow(item, transactionPreviewData)}
+                onPress={isDeletedTransaction ? undefined : () => onSelectRow(item, transactionPreviewData)}
                 disabled={isDisabled && !item.isSelected}
                 accessibilityLabel={item.text ?? ''}
-                role={getButtonRole(true)}
+                role={isDeletedTransaction ? getButtonRole(true) : 'none'}
                 isNested
                 onMouseDown={(e) => e.preventDefault()}
                 hoverStyle={[!item.isDisabled && styles.hoveredComponentBG, item.isSelected && styles.activeComponentBG]}
@@ -189,6 +192,7 @@ function TransactionListItem<TItem extends ListItem>({
                 style={[
                     pressableStyle,
                     isFocused && StyleUtils.getItemBackgroundColorStyle(!!item.isSelected, !!isFocused, !!item.isDisabled, theme.activeComponentBG, theme.hoverComponentBG),
+                    isDeletedTransaction && styles.cursorDefault,
                 ]}
                 onFocus={onFocus}
                 wrapperStyle={[styles.mb2, styles.mh5, styles.flex1, animatedHighlightStyle, styles.userSelectNone]}
@@ -199,7 +203,7 @@ function TransactionListItem<TItem extends ListItem>({
                             <UserInfoAndActionButtonRow
                                 item={transactionItem}
                                 handleActionButtonPress={handleActionButtonPress}
-                                shouldShowUserInfo={!!transactionItem?.from}
+                                shouldShowUserInfo={!isDeletedTransaction && !!transactionItem?.from}
                                 isInMobileSelectionMode={shouldUseNarrowLayout && !!canSelectMultiple}
                                 isDisabledItem={!!isDisabled}
                             />
@@ -227,7 +231,7 @@ function TransactionListItem<TItem extends ListItem>({
                             checkboxSentryLabel={CONST.SENTRY_LABEL.SEARCH.TRANSACTION_LIST_ITEM_CHECKBOX}
                             style={[styles.p3, styles.pv2, shouldUseNarrowLayout ? styles.pt2 : {}]}
                             violations={transactionViolations}
-                            onArrowRightPress={() => onSelectRow(item, transactionPreviewData)}
+                            onArrowRightPress={isDeletedTransaction ? undefined : () => onSelectRow(item, transactionPreviewData)}
                             isHover={hovered}
                             customCardNames={customCardNames}
                             reportActions={exportedReportActions}
diff --git a/src/components/Search/SearchList/ListItem/types.ts b/src/components/Search/SearchList/ListItem/types.ts
index b564d34cf155..e01b87817d5c 100644
--- a/src/components/Search/SearchList/ListItem/types.ts
+++ b/src/components/Search/SearchList/ListItem/types.ts
@@ -401,6 +401,8 @@ type TransactionListItemProps<TItem extends ListItem> = ListItemProps<TItem> & {
     lastPaymentMethod?: OnyxEntry<LastPaymentMethod>;
     /** The user's personal policy ID */
     personalPolicyID?: string;
+    /** Callback to undelete a transaction by its ID */
+    onUndelete?: (transactionID: string) => void;
 };
 
 type TransactionGroupListItemProps<TItem extends ListItem> = ListItemProps<TItem> & {
diff --git a/src/components/Search/SearchList/index.tsx b/src/components/Search/SearchList/index.tsx
index 73fd8a20e432..e9dd35bd5920 100644
--- a/src/components/Search/SearchList/index.tsx
+++ b/src/components/Search/SearchList/index.tsx
@@ -27,6 +27,7 @@ import usePrevious from '@hooks/usePrevious';
 import useResponsiveLayout from '@hooks/useResponsiveLayout';
 import useSafeAreaPaddings from '@hooks/useSafeAreaPaddings';
 import useThemeStyles from '@hooks/useThemeStyles';
+import useUndeleteTransactions from '@hooks/useUndeleteTransactions';
 import useWindowDimensions from '@hooks/useWindowDimensions';
 import {turnOnMobileSelectionMode} from '@libs/actions/MobileSelectionMode';
 import DateUtils from '@libs/DateUtils';
@@ -301,6 +302,9 @@ function SearchList({
     const [userBillingFundID] = useOnyx(ONYXKEYS.NVP_BILLING_FUND_ID);
     const [lastPaymentMethod] = useOnyx(ONYXKEYS.NVP_LAST_PAYMENT_METHOD);
     const [personalPolicyID] = useOnyx(ONYXKEYS.PERSONAL_POLICY_ID);
+    const undeleteTransactions = useUndeleteTransactions();
+
+    const handleUndelete = (transactionID: string) => undeleteTransactions([transactionID]);
 
     const route = useRoute();
     const {getScrollOffset} = useContext(ScrollOffsetContext);
@@ -450,6 +454,7 @@ function SearchList({
                         customCardNames={customCardNames}
                         onFocus={onFocus}
                         newTransactionID={newTransactionID}
+                        onUndelete={handleUndelete}
                         keyForList={item.keyForList}
                     />
                 </Animated.View>
@@ -482,6 +487,7 @@ function SearchList({
             personalPolicyID,
             customCardNames,
             selectedTransactions,
+            handleUndelete,
         ],
     );
 
diff --git a/src/components/TransactionItemRow/index.tsx b/src/components/TransactionItemRow/index.tsx
index b3c999f9ab7f..4f2d5c900048 100644
--- a/src/components/TransactionItemRow/index.tsx
+++ b/src/components/TransactionItemRow/index.tsx
@@ -39,6 +39,7 @@ import {
     getCreated as getTransactionCreated,
     hasMissingSmartscanFields,
     isAmountMissing,
+    isDeletedTransaction as isDeletedTransactionUtil,
     isMerchantMissing,
     isScanning,
     isTimeRequest,
@@ -203,6 +204,7 @@ function TransactionItemRow({
     const createdAt = getTransactionCreated(transactionItem);
     const expensicons = useMemoizedLazyExpensifyIcons(['ArrowRight']);
     const transactionThreadReportID = reportActions ? getIOUActionForTransactionID(reportActions, transactionItem.transactionID)?.childReportID : undefined;
+    const isDeletedTransaction = isDeletedTransactionUtil(transactionItem);
 
     const isDateColumnWide = dateColumnSize === CONST.SEARCH.TABLE_COLUMN_SIZES.WIDE;
     const isSubmittedColumnWide = submittedColumnSize === CONST.SEARCH.TABLE_COLUMN_SIZES.WIDE;
@@ -615,6 +617,7 @@ function TransactionItemRow({
                         <StatusCell
                             stateNum={transactionItem.report?.stateNum}
                             statusNum={transactionItem.report?.statusNum}
+                            isDeleted={isDeletedTransaction}
                         />
                     </View>
                 );
diff --git a/src/hooks/useSearchBulkActions.ts b/src/hooks/useSearchBulkActions.ts
index bf6564e974da..38fa9f5119d8 100644
--- a/src/hooks/useSearchBulkActions.ts
+++ b/src/hooks/useSearchBulkActions.ts
@@ -47,7 +47,7 @@ import {
 } from '@libs/ReportUtils';
 import {navigateToSearchRHP, shouldShowDeleteOption} from '@libs/SearchUIUtils';
 import {shouldRestrictUserBillableActions} from '@libs/SubscriptionUtils';
-import {hasTransactionBeenRejected} from '@libs/TransactionUtils';
+import {hasTransactionBeenRejected, isDeletedTransaction} from '@libs/TransactionUtils';
 import variables from '@styles/variables';
 import {canIOUBePaid, dismissRejectUseExplanation} from '@userActions/IOU';
 import CONST from '@src/CONST';
@@ -67,6 +67,7 @@ import usePersonalPolicy from './usePersonalPolicy';
 import useSelfDMReport from './useSelfDMReport';
 import useTheme from './useTheme';
 import useThemeStyles from './useThemeStyles';
+import useUndeleteTransactions from './useUndeleteTransactions';
 
 type SearchHeaderOptionValue = DeepValueOf<typeof CONST.SEARCH.BULK_ACTION_TYPES> | undefined;
 
@@ -103,6 +104,7 @@ function useSearchBulkActions({queryJSON}: UseSearchBulkActionsParams) {
     const [allTransactionViolations] = useOnyx(ONYXKEYS.COLLECTION.TRANSACTION_VIOLATIONS);
     const personalPolicy = usePersonalPolicy();
     const [userBillingGraceEndPeriods] = useOnyx(ONYXKEYS.COLLECTION.SHARED_NVP_PRIVATE_USER_BILLING_GRACE_PERIOD_END);
+    const undeleteTransactions = useUndeleteTransactions();
 
     // Cache the last search results that had data, so the merge option remains available
     // while results are temporarily unset (e.g. during sorting/loading).
@@ -143,6 +145,7 @@ function useSearchBulkActions({queryJSON}: UseSearchBulkActionsParams) {
         'Exclamation',
         'MoneyBag',
         'ArrowSplit',
+        'RotateLeft',
         'QBOSquare',
         'XeroSquare',
         'NetSuiteSquare',
@@ -681,6 +684,23 @@ function useSearchBulkActions({queryJSON}: UseSearchBulkActionsParams) {
             return CONST.EMPTY_ARRAY as unknown as Array<DropdownOption<SearchHeaderOptionValue>>;
         }
 
+        const allSelectedAreDeleted = selectedTransactionsKeys.length > 0 && selectedTransactionsKeys.every((id) => isDeletedTransaction(selectedTransactions[id] ?? {}));
+
+        if (allSelectedAreDeleted) {
+            return [
+                {
+                    icon: expensifyIcons.RotateLeft,
+                    text: translate('search.bulkActions.undelete'),
+                    value: CONST.SEARCH.BULK_ACTION_TYPES.UNDELETE,
+                    shouldCloseModalOnSelect: true,
+                    onSelected: () => {
+                        undeleteTransactions(selectedTransactionsKeys);
+                        clearSelectedTransactions();
+                    },
+                },
+            ];
+        }
+
         const options: Array<DropdownOption<SearchHeaderOptionValue>> = [];
         const isAnyTransactionOnHold = Object.values(selectedTransactions).some((transaction) => transaction.isHeld);
 
@@ -1153,6 +1173,7 @@ function useSearchBulkActions({queryJSON}: UseSearchBulkActionsParams) {
         expensifyIcons.DocumentMerge,
         expensifyIcons.ArrowSplit,
         expensifyIcons.Trashcan,
+        expensifyIcons.RotateLeft,
         expensifyIcons.Exclamation,
         translate,
         areAllMatchingItemsSelected,
@@ -1194,6 +1215,8 @@ function useSearchBulkActions({queryJSON}: UseSearchBulkActionsParams) {
         firstTransaction,
         firstTransactionPolicy,
         handleDeleteSelectedTransactions,
+        undeleteTransactions,
+        currentUserPersonalDetails?.email,
         theme.icon,
         styles.colorMuted,
         styles.fontWeightNormal,
diff --git a/src/hooks/useUndeleteTransactions.ts b/src/hooks/useUndeleteTransactions.ts
new file mode 100644
index 000000000000..bc4e8452920e
--- /dev/null
+++ b/src/hooks/useUndeleteTransactions.ts
@@ -0,0 +1,33 @@
+import {changeTransactionsReport} from '@libs/actions/Transaction';
+import CONST from '@src/CONST';
+import ONYXKEYS from '@src/ONYXKEYS';
+import useAllTransactions from './useAllTransactions';
+import useCurrentUserPersonalDetails from './useCurrentUserPersonalDetails';
+import useLocalize from './useLocalize';
+import useOnyx from './useOnyx';
+import usePermissions from './usePermissions';
+
+function useUndeleteTransactions() {
+    const currentUserPersonalDetails = useCurrentUserPersonalDetails();
+    const allTransactions = useAllTransactions();
+    const {isBetaEnabled} = usePermissions();
+    const isASAPSubmitBetaEnabled = isBetaEnabled(CONST.BETAS.ASAP_SUBMIT);
+    const {translate, toLocaleDigit} = useLocalize();
+    const [personalPolicyID] = useOnyx(ONYXKEYS.PERSONAL_POLICY_ID);
+    const [policy] = useOnyx(`${ONYXKEYS.COLLECTION.POLICY}${personalPolicyID}`);
+
+    return (transactionIDs: string[]) => {
+        changeTransactionsReport({
+            transactionIDs,
+            isASAPSubmitBetaEnabled,
+            accountID: currentUserPersonalDetails.accountID ?? CONST.DEFAULT_NUMBER_ID,
+            email: currentUserPersonalDetails.email ?? '',
+            policy,
+            allTransactions,
+            translate,
+            toLocaleDigit,
+        });
+    };
+}
+
+export default useUndeleteTransactions;
diff --git a/src/languages/de.ts b/src/languages/de.ts
index d1773b887b64..333a92aff08e 100644
--- a/src/languages/de.ts
+++ b/src/languages/de.ts
@@ -1605,6 +1605,7 @@ const translations: TranslationDeepObject<typeof en> = {
         failedToApproveViaDEW: (reason: string) => `Genehmigung fehlgeschlagen. ${reason}`,
         cannotDuplicateDistanceExpense:
             'Sie können Entfernungsausgaben nicht über mehrere Arbeitsbereiche hinweg duplizieren, da sich die Sätze zwischen den Arbeitsbereichen unterscheiden können.',
+        deleted: 'Gelöscht',
     },
     transactionMerge: {
         listPage: {
@@ -7327,6 +7328,7 @@ Fordern Sie Spesendetails wie Belege und Beschreibungen an, legen Sie Limits und
             unhold: 'Zurückhalten aufheben',
             reject: 'Ablehnen',
             noOptionsAvailable: 'Für die ausgewählte Ausgabengruppe sind keine Optionen verfügbar.',
+            undelete: 'Wiederherstellen',
         },
         filtersHeader: 'Filter',
         filters: {
diff --git a/src/languages/en.ts b/src/languages/en.ts
index 60bc4dd47a11..7305c159d1c9 100644
--- a/src/languages/en.ts
+++ b/src/languages/en.ts
@@ -1356,6 +1356,7 @@ const translations = {
         }),
         settledExpensify: 'Paid',
         done: 'Done',
+        deleted: 'Deleted',
         settledElsewhere: 'Paid elsewhere',
         individual: 'Individual',
         business: 'Business',
@@ -7316,6 +7317,7 @@ const translations = {
             hold: 'Hold',
             unhold: 'Remove hold',
             reject: 'Reject',
+            undelete: 'Undelete',
             noOptionsAvailable: 'No options available for the selected group of expenses.',
         },
         filtersHeader: 'Filters',
diff --git a/src/languages/es.ts b/src/languages/es.ts
index 5d06b64cda74..b7708b5271eb 100644
--- a/src/languages/es.ts
+++ b/src/languages/es.ts
@@ -1224,6 +1224,7 @@ const translations: TranslationDeepObject<typeof en> = {
         }),
         settledExpensify: 'Pagado',
         done: 'Listo',
+        deleted: 'Eliminado',
         settledElsewhere: 'Pagado de otra forma',
         individual: 'Individual',
         business: 'Empresa',
@@ -7218,6 +7219,7 @@ ${amount} para ${merchant} - ${date}`,
             hold: 'Retener',
             unhold: 'Desbloquear',
             reject: 'Rechazar',
+            undelete: 'Restaurar',
             noOptionsAvailable: 'No hay opciones disponibles para el grupo de gastos seleccionado.',
         },
         filtersHeader: 'Filtros',
diff --git a/src/languages/fr.ts b/src/languages/fr.ts
index 0038fe534f55..63e01d10160e 100644
--- a/src/languages/fr.ts
+++ b/src/languages/fr.ts
@@ -1610,6 +1610,7 @@ const translations: TranslationDeepObject<typeof en> = {
             `impossible d’approuver via les <a href="${CONST.CONFIGURE_EXPENSE_REPORT_RULES_HELP_URL}">règles de l’espace de travail</a>. ${reason}`,
         failedToApproveViaDEW: (reason: string) => `échec de l’approbation. ${reason}`,
         cannotDuplicateDistanceExpense: 'Vous ne pouvez pas dupliquer des dépenses de distance entre espaces de travail, car les taux peuvent différer d’un espace de travail à l’autre.',
+        deleted: 'Supprimé',
     },
     transactionMerge: {
         listPage: {
@@ -7351,6 +7352,7 @@ Rendez obligatoires des informations de dépense comme les reçus et les descrip
             unhold: 'Supprimer la mise en attente',
             reject: 'Rejeter',
             noOptionsAvailable: 'Aucune option n’est disponible pour le groupe de dépenses sélectionné.',
+            undelete: 'Restaurer',
         },
         filtersHeader: 'Filtres',
         filters: {
diff --git a/src/languages/it.ts b/src/languages/it.ts
index 3cdcd967b43a..1ce21ee538db 100644
--- a/src/languages/it.ts
+++ b/src/languages/it.ts
@@ -1603,6 +1603,7 @@ const translations: TranslationDeepObject<typeof en> = {
             `approvazione non riuscita tramite le <a href="${CONST.CONFIGURE_EXPENSE_REPORT_RULES_HELP_URL}">regole dello spazio di lavoro</a>. ${reason}`,
         failedToApproveViaDEW: (reason: string) => `approvazione non riuscita. ${reason}`,
         cannotDuplicateDistanceExpense: 'Non puoi duplicare le spese chilometriche tra diversi spazi di lavoro perché le tariffe potrebbero essere diverse.',
+        deleted: 'Eliminato',
     },
     transactionMerge: {
         listPage: {
@@ -7315,6 +7316,7 @@ Richiedi dettagli sulle spese come ricevute e descrizioni, imposta limiti e valo
             unhold: 'Rimuovi blocco',
             reject: 'Rifiuta',
             noOptionsAvailable: 'Nessuna opzione disponibile per il gruppo di spese selezionato.',
+            undelete: 'Ripristina',
         },
         filtersHeader: 'Filtri',
         filters: {
diff --git a/src/languages/ja.ts b/src/languages/ja.ts
index d8d6b48c73e2..dc6d955a598a 100644
--- a/src/languages/ja.ts
+++ b/src/languages/ja.ts
@@ -1583,6 +1583,7 @@ const translations: TranslationDeepObject<typeof en> = {
         failedToAutoApproveViaDEW: (reason: string) => `<a href="${CONST.CONFIGURE_EXPENSE_REPORT_RULES_HELP_URL}">ワークスペースルール</a>で承認に失敗しました。${reason}`,
         failedToApproveViaDEW: (reason: string) => `承認に失敗しました。${reason}`,
         cannotDuplicateDistanceExpense: '距離精算はワークスペースごとにレートが異なる可能性があるため、ワークスペース間で複製することはできません。',
+        deleted: '削除済み',
     },
     transactionMerge: {
         listPage: {
@@ -7229,6 +7230,7 @@ ${reportName}
             unhold: '保留を解除',
             reject: '却下',
             noOptionsAvailable: '選択した経費グループには利用できるオプションがありません。',
+            undelete: '削除を取り消す',
         },
         filtersHeader: 'フィルター',
         filters: {
diff --git a/src/languages/nl.ts b/src/languages/nl.ts
index 6c8670a9375a..0b2dcf392e8f 100644
--- a/src/languages/nl.ts
+++ b/src/languages/nl.ts
@@ -1599,6 +1599,7 @@ const translations: TranslationDeepObject<typeof en> = {
         failedToAutoApproveViaDEW: (reason: string) => `goedkeuren via <a href="${CONST.CONFIGURE_EXPENSE_REPORT_RULES_HELP_URL}">werkruimte­regels</a> is mislukt. ${reason}`,
         failedToApproveViaDEW: (reason: string) => `goedkeuren mislukt. ${reason}`,
         cannotDuplicateDistanceExpense: 'Je kunt afstandsvergoedingen niet dupliceren tussen werkruimtes, omdat de tarieven per werkruimte kunnen verschillen.',
+        deleted: 'Verwijderd',
     },
     transactionMerge: {
         listPage: {
@@ -7293,6 +7294,7 @@ Vereis onkostendetails zoals bonnen en beschrijvingen, stel limieten en standaar
             unhold: 'Blokkering opheffen',
             reject: 'Afwijzen',
             noOptionsAvailable: 'Geen opties beschikbaar voor de geselecteerde groep onkosten.',
+            undelete: 'Terugzetten',
         },
         filtersHeader: 'Filters',
         filters: {
diff --git a/src/languages/pl.ts b/src/languages/pl.ts
index 1a80b954af5b..22c7b501defe 100644
--- a/src/languages/pl.ts
+++ b/src/languages/pl.ts
@@ -1600,6 +1600,7 @@ const translations: TranslationDeepObject<typeof en> = {
             `nie udało się zatwierdzić przez <a href="${CONST.CONFIGURE_EXPENSE_REPORT_RULES_HELP_URL}">zasady w przestrzeni roboczej</a>. ${reason}`,
         failedToApproveViaDEW: (reason: string) => `nie udało się zaakceptować. ${reason}`,
         cannotDuplicateDistanceExpense: 'Nie możesz duplikować wydatków za przejazdy między przestrzeniami roboczymi, ponieważ stawki mogą się różnić między poszczególnymi przestrzeniami.',
+        deleted: 'Usunięto',
     },
     transactionMerge: {
         listPage: {
@@ -7282,6 +7283,7 @@ Wymagaj szczegółów wydatków, takich jak paragony i opisy, ustawiaj limity i
             unhold: 'Usuń blokadę',
             reject: 'Odrzuć',
             noOptionsAvailable: 'Brak opcji dostępnych dla wybranej grupy wydatków.',
+            undelete: 'Cofnij usunięcie',
         },
         filtersHeader: 'Filtry',
         filters: {
diff --git a/src/languages/pt-BR.ts b/src/languages/pt-BR.ts
index 6226e66c8f91..a31e57a3fd59 100644
--- a/src/languages/pt-BR.ts
+++ b/src/languages/pt-BR.ts
@@ -1596,6 +1596,7 @@ const translations: TranslationDeepObject<typeof en> = {
         failedToAutoApproveViaDEW: (reason: string) => `falha ao aprovar pelas <a href="${CONST.CONFIGURE_EXPENSE_REPORT_RULES_HELP_URL}">regras do workspace</a>. ${reason}`,
         failedToApproveViaDEW: (reason: string) => `falha ao aprovar. ${reason}`,
         cannotDuplicateDistanceExpense: 'Você não pode duplicar despesas de distância entre espaços de trabalho porque as tarifas podem ser diferentes entre eles.',
+        deleted: 'Excluído',
     },
     transactionMerge: {
         listPage: {
@@ -7285,6 +7286,7 @@ Exija dados de despesas como recibos e descrições, defina limites e padrões e
             unhold: 'Remover bloqueio',
             reject: 'Rejeitar',
             noOptionsAvailable: 'Nenhuma opção disponível para o grupo de despesas selecionado.',
+            undelete: 'Restaurar',
         },
         filtersHeader: 'Filtros',
         filters: {
diff --git a/src/languages/zh-hans.ts b/src/languages/zh-hans.ts
index 8ed909dd956a..6e2544acc9a2 100644
--- a/src/languages/zh-hans.ts
+++ b/src/languages/zh-hans.ts
@@ -1554,6 +1554,7 @@ const translations: TranslationDeepObject<typeof en> = {
         failedToAutoApproveViaDEW: (reason: string) => `未能通过<a href="${CONST.CONFIGURE_EXPENSE_REPORT_RULES_HELP_URL}">工作区规则</a>批准。${reason}`,
         failedToApproveViaDEW: (reason: string) => `批准失败。${reason}`,
         cannotDuplicateDistanceExpense: '你无法在不同工作区之间复制里程报销，因为各个工作区的费率可能不同。',
+        deleted: '已删除',
     },
     transactionMerge: {
         listPage: {
@@ -7105,6 +7106,7 @@ ${reportName}
             unhold: '解除保留',
             reject: '拒绝',
             noOptionsAvailable: '所选报销的费用组没有可用选项。',
+            undelete: '取消删除',
         },
         filtersHeader: '筛选器',
         filters: {
diff --git a/src/libs/ReportUtils.ts b/src/libs/ReportUtils.ts
index 41df98e7e2d1..58fc36288e79 100644
--- a/src/libs/ReportUtils.ts
+++ b/src/libs/ReportUtils.ts
@@ -993,6 +993,7 @@ type GetReportNameParams = {
 type GetReportStatusParams = {
     stateNum?: number;
     statusNum?: number;
+    isDeleted?: boolean;
     translate: LocaleContextProps['translate'];
 };
 
@@ -13065,7 +13066,10 @@ function buildOptimisticMarkedAsResolvedReportAction(created = DateUtils.getDBTi
  * ========================================
  */
 
-function getReportStatusTranslation({stateNum, statusNum, translate}: GetReportStatusParams): string {
+function getReportStatusTranslation({stateNum, statusNum, isDeleted, translate}: GetReportStatusParams): string {
+    if (isDeleted) {
+        return translate('iou.deleted');
+    }
     if (stateNum === undefined || statusNum === undefined) {
         return '';
     }
@@ -13093,7 +13097,10 @@ function getReportStatusTranslation({stateNum, statusNum, translate}: GetReportS
     return '';
 }
 
-function getReportStatusColorStyle(theme: ThemeColors, stateNum?: number, statusNum?: number): {backgroundColor?: ColorValue; textColor?: ColorValue} | undefined {
+function getReportStatusColorStyle(theme: ThemeColors, stateNum?: number, statusNum?: number, isDeleted?: boolean): {backgroundColor?: ColorValue; textColor?: ColorValue} | undefined {
+    if (isDeleted) {
+        return theme.reportStatusBadge.deleted;
+    }
     if (stateNum === undefined || statusNum === undefined) {
         return undefined;
     }
diff --git a/src/libs/SearchUIUtils.ts b/src/libs/SearchUIUtils.ts
index 2ea11db30963..bea5a640f35f 100644
--- a/src/libs/SearchUIUtils.ts
+++ b/src/libs/SearchUIUtils.ts
@@ -165,6 +165,7 @@ import {
     getAmount as getTransactionAmount,
     getCreated as getTransactionCreatedDate,
     getMerchant as getTransactionMerchant,
+    isDeletedTransaction,
     isPending,
     isScanning,
     isViolationDismissed,
@@ -342,18 +343,18 @@ const transactionQuarterGroupColumnNamesToSortingProperty: TransactionQuarterGro
     ...transactionGroupBaseSortingProperties,
 };
 
-const expenseStatusActionMapping = {
-    [CONST.SEARCH.STATUS.EXPENSE.DRAFTS]: (expenseReport?: OnyxTypes.Report) =>
-        expenseReport?.stateNum === CONST.REPORT.STATE_NUM.OPEN && expenseReport.statusNum === CONST.REPORT.STATUS_NUM.OPEN,
-    [CONST.SEARCH.STATUS.EXPENSE.OUTSTANDING]: (expenseReport?: OnyxTypes.Report) =>
+type ExpenseStatusPredicate = (expenseReport?: OnyxTypes.Report, transactionReportID?: string) => boolean;
+
+const expenseStatusActionMapping: Record<string, ExpenseStatusPredicate> = {
+    [CONST.SEARCH.STATUS.EXPENSE.DRAFTS]: (expenseReport) => expenseReport?.stateNum === CONST.REPORT.STATE_NUM.OPEN && expenseReport.statusNum === CONST.REPORT.STATUS_NUM.OPEN,
+    [CONST.SEARCH.STATUS.EXPENSE.OUTSTANDING]: (expenseReport) =>
         expenseReport?.stateNum === CONST.REPORT.STATE_NUM.SUBMITTED && expenseReport.statusNum === CONST.REPORT.STATUS_NUM.SUBMITTED,
-    [CONST.SEARCH.STATUS.EXPENSE.APPROVED]: (expenseReport?: OnyxTypes.Report) =>
-        expenseReport?.stateNum === CONST.REPORT.STATE_NUM.APPROVED && expenseReport.statusNum === CONST.REPORT.STATUS_NUM.APPROVED,
-    [CONST.SEARCH.STATUS.EXPENSE.PAID]: (expenseReport?: OnyxTypes.Report) =>
+    [CONST.SEARCH.STATUS.EXPENSE.APPROVED]: (expenseReport) => expenseReport?.stateNum === CONST.REPORT.STATE_NUM.APPROVED && expenseReport.statusNum === CONST.REPORT.STATUS_NUM.APPROVED,
+    [CONST.SEARCH.STATUS.EXPENSE.PAID]: (expenseReport) =>
         (expenseReport?.stateNum ?? 0) >= CONST.REPORT.STATE_NUM.APPROVED && expenseReport?.statusNum === CONST.REPORT.STATUS_NUM.REIMBURSED,
-    [CONST.SEARCH.STATUS.EXPENSE.DONE]: (expenseReport?: OnyxTypes.Report) =>
-        expenseReport?.stateNum === CONST.REPORT.STATE_NUM.APPROVED && expenseReport.statusNum === CONST.REPORT.STATUS_NUM.CLOSED,
-    [CONST.SEARCH.STATUS.EXPENSE.UNREPORTED]: (expenseReport?: OnyxTypes.Report) => !expenseReport,
+    [CONST.SEARCH.STATUS.EXPENSE.DONE]: (expenseReport) => expenseReport?.stateNum === CONST.REPORT.STATE_NUM.APPROVED && expenseReport.statusNum === CONST.REPORT.STATUS_NUM.CLOSED,
+    [CONST.SEARCH.STATUS.EXPENSE.UNREPORTED]: (expenseReport, transactionReportID) => !expenseReport && transactionReportID !== CONST.REPORT.TRASH_REPORT_ID,
+    [CONST.SEARCH.STATUS.EXPENSE.DELETED]: (_expenseReport, transactionReportID) => transactionReportID === CONST.REPORT.TRASH_REPORT_ID,
     [CONST.SEARCH.STATUS.EXPENSE.ALL]: () => true,
 };
 
@@ -392,6 +393,7 @@ function getExpenseStatusOptions(translate: LocalizedTranslate): Array<MultiSele
         {text: translate('iou.approved'), value: CONST.SEARCH.STATUS.EXPENSE.APPROVED},
         {text: translate('iou.settledExpensify'), value: CONST.SEARCH.STATUS.EXPENSE.PAID},
         {text: translate('iou.done'), value: CONST.SEARCH.STATUS.EXPENSE.DONE},
+        {text: translate('iou.deleted'), value: CONST.SEARCH.STATUS.EXPENSE.DELETED},
     ];
 }
 
@@ -1729,10 +1731,10 @@ function getTransactionsSections({
                 const status = currentQueryJSON.status;
                 if (Array.isArray(status)) {
                     shouldShow = status.some((expenseStatus) => {
-                        return isValidExpenseStatus(expenseStatus) ? expenseStatusActionMapping[expenseStatus](report) : false;
+                        return isValidExpenseStatus(expenseStatus) ? expenseStatusActionMapping[expenseStatus](report, transactionItem.reportID) : false;
                     });
                 } else {
-                    shouldShow = isValidExpenseStatus(status) ? expenseStatusActionMapping[status](report) : false;
+                    shouldShow = isValidExpenseStatus(status) ? expenseStatusActionMapping[status](report, transactionItem.reportID) : false;
                 }
             }
         }
@@ -1936,6 +1938,11 @@ function getActions(
     }
 
     const transaction = isTransaction ? data[key] : undefined;
+
+    if (transaction && isDeletedTransaction(transaction)) {
+        return [CONST.SEARCH.ACTION_TYPES.UNDELETE];
+    }
+
     // Tracked and unreported expenses don't have a report, so we return early.
     if (!report) {
         return [CONST.SEARCH.ACTION_TYPES.VIEW];
@@ -2109,6 +2116,7 @@ function createAndOpenSearchTransactionThread(
     shouldNavigate = true,
 ) {
     const isFromSelfDM = item.reportID === CONST.REPORT.UNREPORTED_REPORT_ID;
+    const isDeleted = isDeletedTransaction(item);
     const iouReportAction = getIOUActionForReportID(isFromSelfDM ? findSelfDMReportID() : item.reportID, item.transactionID);
     const moneyRequestReportActionID = item.reportAction?.reportActionID ?? undefined;
     const previewData = transactionPreviewData
@@ -2122,16 +2130,16 @@ function createAndOpenSearchTransactionThread(
     // The transaction thread can be created from the chat page and the snapshot data is stale
     if (hasActualTransactionThread) {
         transactionThreadReport = getReportOrDraftReport(iouReportAction.childReportID);
-    } else {
-        // For legacy transactions without an IOU action in the backend, pass transaction data
-        // This allows OpenReport to create the IOU action and transaction thread on the backend
+    }
+
+    // Only create a new thread when there's no existing childReportID.
+    // When childReportID exists but the report isn't in Onyx (e.g. search snapshot didn't include it),
+    // skip creation so the navigation below falls back to the real childReportID.
+    if (!transactionThreadReport && !hasActualTransactionThread) {
         const reportActionID = moneyRequestReportActionID ?? iouReportAction?.reportActionID;
-        // Pass transaction data when there's no reportActionID OR when the item is from self DM
-        // (unreported transactions have a valid reportActionID but still need transaction data for proper detection)
         const shouldPassTransactionData = !reportActionID || isFromSelfDM;
         const transaction = shouldPassTransactionData ? getTransactionFromTransactionListItem(item) : undefined;
         const transactionViolations = shouldPassTransactionData ? item.violations : undefined;
-        // Use the full reportAction to preserve originalMessage.type (e.g., "track") for proper expense type detection
         const reportActionToPass = iouReportAction ?? item.reportAction ?? ({reportActionID} as OnyxTypes.ReportAction);
         transactionThreadReport = createTransactionThreadReport(
             introSelected,
@@ -2147,7 +2155,7 @@ function createAndOpenSearchTransactionThread(
     if (shouldNavigate) {
         // Navigate to transaction thread if there are multiple transactions in the report, or to the parent report if it's the only transaction
         const isFromOneTransactionReport = isOneTransactionReport(item.report);
-        const shouldNavigateToTransactionThread = (!isFromOneTransactionReport || isFromSelfDM) && transactionThreadReport?.reportID !== CONST.REPORT.UNREPORTED_REPORT_ID;
+        const shouldNavigateToTransactionThread = (!isFromOneTransactionReport || isFromSelfDM || isDeleted) && transactionThreadReport?.reportID !== CONST.REPORT.UNREPORTED_REPORT_ID;
         // When we have an actual transaction thread (childReportID from Onyx) but the report isn't in Onyx yet
         // (e.g. Search didn't return the IOU action for deleted items), use childReportID directly so we don't navigate with undefined
         const targetReportID = shouldNavigateToTransactionThread
diff --git a/src/libs/TransactionUtils/index.ts b/src/libs/TransactionUtils/index.ts
index e35c72233149..3dc22d5aa7f0 100644
--- a/src/libs/TransactionUtils/index.ts
+++ b/src/libs/TransactionUtils/index.ts
@@ -137,6 +137,10 @@ type BuildOptimisticTransactionParams = {
     isDemoTransactionParam?: boolean;
 };
 
+function isDeletedTransaction(transaction: {reportID?: string}): boolean {
+    return transaction.reportID === CONST.REPORT.TRASH_REPORT_ID;
+}
+
 function hasDistanceCustomUnit(transaction: OnyxEntry<Transaction> | Partial<Transaction>): boolean {
     return transaction?.comment?.type === CONST.TRANSACTION.TYPE.CUSTOM_UNIT && transaction?.comment?.customUnit?.name === CONST.CUSTOM_UNITS.NAME_DISTANCE;
 }
@@ -2997,6 +3001,7 @@ export {
     isDistanceTypeRequest,
     recalculateUnreportedTransactionDetails,
     hasSmartScanFailedWithMissingFields,
+    isDeletedTransaction,
 };
 
 export type {TransactionChanges};
diff --git a/src/libs/actions/IOU/index.ts b/src/libs/actions/IOU/index.ts
index 5e835767cd9c..6b0e520769b8 100644
--- a/src/libs/actions/IOU/index.ts
+++ b/src/libs/actions/IOU/index.ts
@@ -11884,18 +11884,18 @@ function setMultipleMoneyRequestParticipantsFromReport(transactionIDs: string[],
     return Onyx.mergeCollection(ONYXKEYS.COLLECTION.TRANSACTION_DRAFT, updatedTransactions);
 }
 
-const expenseReportStatusFilterMapping = {
-    [CONST.SEARCH.STATUS.EXPENSE.DRAFTS]: (expenseReport: OnyxEntry<OnyxTypes.Report>) =>
-        expenseReport?.stateNum === CONST.REPORT.STATE_NUM.OPEN && expenseReport?.statusNum === CONST.REPORT.STATUS_NUM.OPEN,
-    [CONST.SEARCH.STATUS.EXPENSE.OUTSTANDING]: (expenseReport: OnyxEntry<OnyxTypes.Report>) =>
+type ExpenseReportStatusPredicate = (expenseReport: OnyxEntry<OnyxTypes.Report>, transactionReportID?: string) => boolean;
+
+const expenseReportStatusFilterMapping: Record<string, ExpenseReportStatusPredicate> = {
+    [CONST.SEARCH.STATUS.EXPENSE.DRAFTS]: (expenseReport) => expenseReport?.stateNum === CONST.REPORT.STATE_NUM.OPEN && expenseReport?.statusNum === CONST.REPORT.STATUS_NUM.OPEN,
+    [CONST.SEARCH.STATUS.EXPENSE.OUTSTANDING]: (expenseReport) =>
         expenseReport?.stateNum === CONST.REPORT.STATE_NUM.SUBMITTED && expenseReport?.statusNum === CONST.REPORT.STATUS_NUM.SUBMITTED,
-    [CONST.SEARCH.STATUS.EXPENSE.APPROVED]: (expenseReport: OnyxEntry<OnyxTypes.Report>) =>
-        expenseReport?.stateNum === CONST.REPORT.STATE_NUM.APPROVED && expenseReport?.statusNum === CONST.REPORT.STATUS_NUM.APPROVED,
-    [CONST.SEARCH.STATUS.EXPENSE.PAID]: (expenseReport: OnyxEntry<OnyxTypes.Report>) =>
+    [CONST.SEARCH.STATUS.EXPENSE.APPROVED]: (expenseReport) => expenseReport?.stateNum === CONST.REPORT.STATE_NUM.APPROVED && expenseReport?.statusNum === CONST.REPORT.STATUS_NUM.APPROVED,
+    [CONST.SEARCH.STATUS.EXPENSE.PAID]: (expenseReport) =>
         (expenseReport?.stateNum ?? 0) >= CONST.REPORT.STATE_NUM.APPROVED && expenseReport?.statusNum === CONST.REPORT.STATUS_NUM.REIMBURSED,
-    [CONST.SEARCH.STATUS.EXPENSE.DONE]: (expenseReport: OnyxEntry<OnyxTypes.Report>) =>
-        expenseReport?.stateNum === CONST.REPORT.STATE_NUM.APPROVED && expenseReport?.statusNum === CONST.REPORT.STATUS_NUM.CLOSED,
-    [CONST.SEARCH.STATUS.EXPENSE.UNREPORTED]: (expenseReport: OnyxEntry<OnyxTypes.Report>) => !expenseReport,
+    [CONST.SEARCH.STATUS.EXPENSE.DONE]: (expenseReport) => expenseReport?.stateNum === CONST.REPORT.STATE_NUM.APPROVED && expenseReport?.statusNum === CONST.REPORT.STATUS_NUM.CLOSED,
+    [CONST.SEARCH.STATUS.EXPENSE.UNREPORTED]: (expenseReport, transactionReportID) => !expenseReport && transactionReportID !== CONST.REPORT.TRASH_REPORT_ID,
+    [CONST.SEARCH.STATUS.EXPENSE.DELETED]: (_expenseReport, transactionReportID) => transactionReportID === CONST.REPORT.TRASH_REPORT_ID,
     [CONST.SEARCH.STATUS.EXPENSE.ALL]: () => true,
 };
 
@@ -11915,14 +11915,15 @@ function shouldOptimisticallyUpdateSearch(
     }
     let shouldOptimisticallyUpdateByStatus;
     const status = currentSearchQueryJSON.status;
+    const transactionReportID = transaction?.reportID;
     if (Array.isArray(status)) {
         shouldOptimisticallyUpdateByStatus = status.some((val) => {
             const expenseStatus = val as ValueOf<typeof CONST.SEARCH.STATUS.EXPENSE>;
-            return expenseReportStatusFilterMapping[expenseStatus](iouReport);
+            return expenseReportStatusFilterMapping[expenseStatus](iouReport, transactionReportID);
         });
     } else {
         const expenseStatus = status as ValueOf<typeof CONST.SEARCH.STATUS.EXPENSE>;
-        shouldOptimisticallyUpdateByStatus = expenseReportStatusFilterMapping[expenseStatus](iouReport);
+        shouldOptimisticallyUpdateByStatus = expenseReportStatusFilterMapping[expenseStatus](iouReport, transactionReportID);
     }
 
     if (currentSearchQueryJSON.policyID?.length && iouReport?.policyID) {
diff --git a/src/libs/actions/Search.ts b/src/libs/actions/Search.ts
index cea6b6356ba5..11b4e1b8a46c 100644
--- a/src/libs/actions/Search.ts
+++ b/src/libs/actions/Search.ts
@@ -108,6 +108,7 @@ type HandleActionButtonPressParams = {
     isDelegateAccessRestricted?: boolean;
     onDelegateAccessRestricted?: () => void;
     personalPolicyID: string | undefined;
+    onUndelete?: () => void;
 };
 
 type BulkDeleteReportsParams = {
@@ -138,13 +139,14 @@ function handleActionButtonPress({
     isDelegateAccessRestricted,
     onDelegateAccessRestricted,
     personalPolicyID,
+    onUndelete,
 }: HandleActionButtonPressParams) {
     // The transactionIDList is needed to handle actions taken on `status:""` where transactions on single expense reports can be approved/paid.
     // We need the transactionID to display the loading indicator for that list item's action.
     const allReportTransactions = (isTransactionGroupListItemType(item) ? item.transactions : [item]) as Transaction[];
     const hasHeldExpense = hasHeldExpenses('', allReportTransactions);
 
-    if (hasHeldExpense && item.action !== CONST.SEARCH.ACTION_TYPES.SUBMIT) {
+    if (hasHeldExpense && item.action !== CONST.SEARCH.ACTION_TYPES.SUBMIT && item.action !== CONST.SEARCH.ACTION_TYPES.UNDELETE) {
         goToItem();
         return;
     }
@@ -199,6 +201,9 @@ function handleActionButtonPress({
             exportToIntegrationOnSearch(hash, [item.reportID], connectedIntegration, currentSearchKey);
             return;
         }
+        case CONST.SEARCH.ACTION_TYPES.UNDELETE:
+            onUndelete?.();
+            return;
         default:
             goToItem();
     }
diff --git a/src/libs/actions/Transaction.ts b/src/libs/actions/Transaction.ts
index f3bfc8a02f6b..1c444f985e71 100644
--- a/src/libs/actions/Transaction.ts
+++ b/src/libs/actions/Transaction.ts
@@ -36,6 +36,7 @@ import {
     buildOptimisticUnreportedTransactionAction,
     buildTransactionThread,
     findSelfDMReportID,
+    getIOUReportActionMessage,
     getReportTransactions,
     getTransactionDetails,
     hasViolations as hasViolationsReportUtils,
@@ -43,6 +44,7 @@ import {
 } from '@libs/ReportUtils';
 import {
     hasPendingRTERViolation,
+    isDeletedTransaction,
     isManagedCardTransaction,
     isOnHold,
     recalculateUnreportedTransactionDetails,
@@ -1012,11 +1014,14 @@ function changeTransactionsReport({
     const destinationCurrency = newReport?.currency ?? policy?.outputCurrency;
 
     for (const transaction of transactions) {
+        const isDeletedExpense = isDeletedTransaction(transaction);
         const isUnreportedExpense = !transaction.reportID || transaction.reportID === CONST.REPORT.UNREPORTED_REPORT_ID;
-
         const selfDMReportID = existingSelfDMReportID ?? selfDMReport?.reportID;
 
-        const oldIOUAction = getIOUActionForReportID(isUnreportedExpense ? selfDMReportID : transaction.reportID, transaction.transactionID);
+        // Skip lookup for deleted transactions: the old IOU action is already cleaned up
+        // during deletion and its transaction thread is deleted, so reusing it is harmful.
+        const oldIOUAction = isDeletedExpense ? undefined : getIOUActionForReportID(isUnreportedExpense ? selfDMReportID : transaction.reportID, transaction.transactionID);
+
         if (!transaction.reportID || transaction.reportID === reportID) {
             continue;
         }
@@ -1032,29 +1037,36 @@ function changeTransactionsReport({
         const optimisticMoneyRequestReportActionID = rand64();
 
         const originalMessage = getOriginalMessage(oldIOUAction) as OriginalMessageIOU;
+        const actionType = isUnreported ? CONST.IOU.REPORT_ACTION_TYPE.TRACK : CONST.IOU.REPORT_ACTION_TYPE.CREATE;
         const newIOUAction = {
             ...oldIOUAction,
             originalMessage: {
                 ...originalMessage,
+                IOUTransactionID: originalMessage?.IOUTransactionID ?? transaction.transactionID,
                 IOUReportID: reportID,
-                type: isUnreported ? CONST.IOU.REPORT_ACTION_TYPE.TRACK : CONST.IOU.REPORT_ACTION_TYPE.CREATE,
+                type: actionType,
             },
             reportActionID: optimisticMoneyRequestReportActionID,
             pendingAction: CONST.RED_BRICK_ROAD_PENDING_ACTION.ADD,
-            actionName: oldIOUAction?.actionName ?? CONST.REPORT.ACTIONS.TYPE.MOVED_TRANSACTION,
+            actionName: oldIOUAction?.actionName ?? CONST.REPORT.ACTIONS.TYPE.IOU,
             created: oldIOUAction?.created ?? DateUtils.getDBTime(),
+            ...(!oldIOUAction && {
+                message: getIOUReportActionMessage(reportID, actionType, Math.abs(transaction.amount), transaction.comment?.comment ?? '', transaction.currency),
+            }),
         };
 
         const {comment, modifiedAmount, modifiedCurrency, modifiedMerchant} = isUnreported
             ? recalculateUnreportedTransactionDetails(transaction, destinationCurrency, translate, toLocaleDigit)
             : {};
 
-        // 1. Optimistically change the reportID on the passed transactions
-        // Only set pendingAction for transactions that need convertedAmount recalculation
+        // 1. Optimistically update the transaction with full data and changed fields.
+        // Spreading the full transaction ensures the TRANSACTION collection has complete data
+        // (e.g. amount) even when the existing entry was incomplete from search results.
         optimisticData.push({
             onyxMethod: Onyx.METHOD.MERGE,
             key: `${ONYXKEYS.COLLECTION.TRANSACTION}${transaction.transactionID}`,
             value: {
+                ...transaction,
                 reportID,
                 comment,
                 modifiedAmount,
@@ -1231,15 +1243,15 @@ function changeTransactionsReport({
         // 4. Optimistically update the IOU action reportID
         const trackExpenseActionableWhisper = isUnreportedExpense ? getTrackExpenseActionableWhisper(transaction.transactionID, selfDMReportID) : undefined;
 
-        if (oldIOUAction) {
-            optimisticData.push({
-                onyxMethod: Onyx.METHOD.MERGE,
-                key: `${ONYXKEYS.COLLECTION.REPORT_ACTIONS}${targetReportID}`,
-                value: {
-                    [newIOUAction.reportActionID]: newIOUAction,
-                },
-            });
+        optimisticData.push({
+            onyxMethod: Onyx.METHOD.MERGE,
+            key: `${ONYXKEYS.COLLECTION.REPORT_ACTIONS}${targetReportID}`,
+            value: {
+                [newIOUAction.reportActionID]: newIOUAction,
+            },
+        });
 
+        if (oldIOUAction) {
             optimisticData.push({
                 onyxMethod: Onyx.METHOD.MERGE,
                 key: `${ONYXKEYS.COLLECTION.REPORT_ACTIONS}${isUnreportedExpense ? selfDMReportID : oldReportID}`,
@@ -1272,24 +1284,22 @@ function changeTransactionsReport({
                 [newIOUAction.reportActionID]: {pendingAction: null},
             },
         });
+        failureData.push({
+            onyxMethod: Onyx.METHOD.MERGE,
+            key: `${ONYXKEYS.COLLECTION.REPORT_ACTIONS}${targetReportID}`,
+            value: {
+                [newIOUAction.reportActionID]: null,
+            },
+        });
         if (oldIOUAction) {
-            failureData.push(
-                {
-                    onyxMethod: Onyx.METHOD.MERGE,
-                    key: `${ONYXKEYS.COLLECTION.REPORT_ACTIONS}${targetReportID}`,
-                    value: {
-                        [newIOUAction.reportActionID]: null,
-                    },
-                },
-                {
-                    onyxMethod: Onyx.METHOD.MERGE,
-                    key: `${ONYXKEYS.COLLECTION.REPORT_ACTIONS}${isUnreportedExpense ? selfDMReportID : oldReportID}`,
-                    value: {
-                        [oldIOUAction.reportActionID]: oldIOUAction,
-                        ...(trackExpenseActionableWhisper ? {[trackExpenseActionableWhisper.reportActionID]: trackExpenseActionableWhisper} : {}),
-                    },
+            failureData.push({
+                onyxMethod: Onyx.METHOD.MERGE,
+                key: `${ONYXKEYS.COLLECTION.REPORT_ACTIONS}${isUnreportedExpense ? selfDMReportID : oldReportID}`,
+                value: {
+                    [oldIOUAction.reportActionID]: oldIOUAction,
+                    ...(trackExpenseActionableWhisper ? {[trackExpenseActionableWhisper.reportActionID]: trackExpenseActionableWhisper} : {}),
                 },
-            );
+            });
         }
 
         const shouldRemoveOtherParticipants = !isManagedCardTransaction(transaction);
@@ -1410,7 +1420,7 @@ function changeTransactionsReport({
         const baseTransactionData = {
             movedReportActionID: movedAction.reportActionID,
             moneyRequestPreviewReportActionID: newIOUAction.reportActionID,
-            ...(oldIOUAction && !oldIOUAction.childReportID
+            ...(transactionThreadCreatedReportActionID
                 ? {
                       transactionThreadReportID,
                       transactionThreadCreatedReportActionID,
diff --git a/src/styles/theme/themes/dark.ts b/src/styles/theme/themes/dark.ts
index 668ea7fc15fa..3a3aa0c5511a 100644
--- a/src/styles/theme/themes/dark.ts
+++ b/src/styles/theme/themes/dark.ts
@@ -193,6 +193,10 @@ const darkTheme = {
             backgroundColor: colors.pink700,
             textColor: colors.pink200,
         },
+        deleted: {
+            backgroundColor: colors.tangerine700,
+            textColor: colors.productDark900,
+        },
     },
 
     statusBarStyle: CONST.STATUS_BAR_STYLE.LIGHT_CONTENT,
diff --git a/src/styles/theme/themes/light.ts b/src/styles/theme/themes/light.ts
index 87000a8f5114..407d087e26ca 100644
--- a/src/styles/theme/themes/light.ts
+++ b/src/styles/theme/themes/light.ts
@@ -193,6 +193,10 @@ const lightTheme = {
             backgroundColor: colors.pink200,
             textColor: colors.pink700,
         },
+        deleted: {
+            backgroundColor: colors.tangerine500,
+            textColor: colors.productLight100,
+        },
     },
 
     statusBarStyle: CONST.STATUS_BAR_STYLE.DARK_CONTENT,
diff --git a/src/styles/theme/types.ts b/src/styles/theme/types.ts
index b635cd6730a0..8ab7ccf191e5 100644
--- a/src/styles/theme/types.ts
+++ b/src/styles/theme/types.ts
@@ -119,7 +119,7 @@ type ThemeColors = {
     trialTimer: Color;
 
     reportStatusBadge: Record<
-        'draft' | 'outstanding' | 'paid' | 'approved' | 'closed',
+        'draft' | 'outstanding' | 'paid' | 'approved' | 'closed' | 'deleted',
         {
             backgroundColor: Color;
             textColor: Color;
diff --git a/tests/unit/ReportUtilsTest.ts b/tests/unit/ReportUtilsTest.ts
index b95adf5dba5c..1f46b97d9db2 100644
--- a/tests/unit/ReportUtilsTest.ts
+++ b/tests/unit/ReportUtilsTest.ts
@@ -9481,6 +9481,21 @@ describe('ReportUtils', () => {
             expect(getReportStatusTranslation({stateNum: CONST.REPORT.STATE_NUM.OPEN, statusNum: undefined, translate: mockTranslate})).toBe('');
             expect(getReportStatusTranslation({stateNum: undefined, statusNum: CONST.REPORT.STATUS_NUM.OPEN, translate: mockTranslate})).toBe('');
         });
+
+        it('should return "Deleted" when isDeleted is true', () => {
+            const result = getReportStatusTranslation({stateNum: CONST.REPORT.STATE_NUM.OPEN, statusNum: CONST.REPORT.STATUS_NUM.OPEN, isDeleted: true, translate: mockTranslate});
+            expect(result).toBe(mockTranslate('iou.deleted'));
+        });
+
+        it('should return "Deleted" when isDeleted is true regardless of stateNum and statusNum', () => {
+            expect(getReportStatusTranslation({stateNum: CONST.REPORT.STATE_NUM.SUBMITTED, statusNum: CONST.REPORT.STATUS_NUM.SUBMITTED, isDeleted: true, translate: mockTranslate})).toBe(
+                mockTranslate('iou.deleted'),
+            );
+            expect(getReportStatusTranslation({stateNum: CONST.REPORT.STATE_NUM.APPROVED, statusNum: CONST.REPORT.STATUS_NUM.REIMBURSED, isDeleted: true, translate: mockTranslate})).toBe(
+                mockTranslate('iou.deleted'),
+            );
+            expect(getReportStatusTranslation({stateNum: undefined, statusNum: undefined, isDeleted: true, translate: mockTranslate})).toBe(mockTranslate('iou.deleted'));
+        });
     });
 
     describe('buildOptimisticReportPreview', () => {
diff --git a/tests/unit/Search/SearchUIUtilsTest.ts b/tests/unit/Search/SearchUIUtilsTest.ts
index 5233374c7bc6..f371b061681c 100644
--- a/tests/unit/Search/SearchUIUtilsTest.ts
+++ b/tests/unit/Search/SearchUIUtilsTest.ts
@@ -7291,6 +7291,7 @@ describe('SearchUIUtils', () => {
         });
 
         test('Should fallback to childReportID from IOU action when transaction thread report is not in Onyx', async () => {
+            (createTransactionThreadReport as jest.Mock).mockReset();
             const childReportID = 'child-thread-456';
             // eslint-disable-next-line @typescript-eslint/non-nullable-type-assertion-style
             const multiTransactionItem = transactionsListItems.at(2) as TransactionListItemType;