diff --git a/frontend/src/lib/components/graph/FlowGraphV2.svelte b/frontend/src/lib/components/graph/FlowGraphV2.svelte
index 47f6905148..15851b812c 100644
--- a/frontend/src/lib/components/graph/FlowGraphV2.svelte
+++ b/frontend/src/lib/components/graph/FlowGraphV2.svelte
@@ -251,8 +251,8 @@
 		movingIds = undefined
 	}: Props = $props()
 
-	// Runtime state for expanded containers (collapsed by default)
-	let expandedContainers = $state<Set<string>>(new Set())
+	// Runtime state for collapsed containers (expanded by default)
+	let collapsedContainers = $state<Set<string>>(new Set())
 
 	// Initialize note manager with fine-grained reactivity
 	const noteManager = new NoteManager(
@@ -438,10 +438,10 @@
 			groupEditorContext?.groupEditor.expandGroup(groupId)
 		},
 		expandContainer: (moduleId: string) => {
-			expandedContainers = new Set([...expandedContainers, moduleId])
+			collapsedContainers = new Set([...collapsedContainers].filter((id) => id !== moduleId))
 		},
 		collapseContainer: (moduleId: string) => {
-			expandedContainers = new Set([...expandedContainers].filter((id) => id !== moduleId))
+			collapsedContainers = new Set([...collapsedContainers, moduleId])
 		},
 		updateMock: (detail) => {
 			onUpdateMock?.(detail)
@@ -852,7 +852,7 @@
 			triggerNode ? path : undefined,
 			expandedSubflows,
 			collapsedGroups,
-			expandedContainers,
+			collapsedContainers,
 			showNotes
 		)
 	})
diff --git a/frontend/src/lib/components/graph/graphBuilder.svelte.ts b/frontend/src/lib/components/graph/graphBuilder.svelte.ts
index 10c05abe13..1a0d52a0d4 100644
--- a/frontend/src/lib/components/graph/graphBuilder.svelte.ts
+++ b/frontend/src/lib/components/graph/graphBuilder.svelte.ts
@@ -412,7 +412,7 @@ export function graphBuilder(
 		collapsed?: boolean
 		module_ids: string[]
 	}>,
-	expandedContainers: Set<string>,
+	collapsedContainers: Set<string>,
 	showNotes: boolean
 	// triggerProps?: {
 	// 	path?: string
@@ -738,7 +738,7 @@ export function graphBuilder(
 						module.value.type === 'branchone' ||
 						module.value.type === 'forloopflow' ||
 						module.value.type === 'whileloopflow'
-					if (isContainer && !expandedContainers.has(module.id)) {
+					if (isContainer && collapsedContainers.has(module.id)) {
 						const containerModules = getContainerModules(module)
 						addNode(module, { isCollapsedContainer: true, containerModules })