diff --git a/Code/Framework/AzToolsFramework/AzToolsFramework/UI/Outliner/EntityOutlinerListModel.cpp b/Code/Framework/AzToolsFramework/AzToolsFramework/UI/Outliner/EntityOutlinerListModel.cpp
index 93e4ffd3da..45363f4bb5 100644
--- a/Code/Framework/AzToolsFramework/AzToolsFramework/UI/Outliner/EntityOutlinerListModel.cpp
+++ b/Code/Framework/AzToolsFramework/AzToolsFramework/UI/Outliner/EntityOutlinerListModel.cpp
@@ -80,7 +80,6 @@ namespace AzToolsFramework
     EntityOutlinerListModel::EntityOutlinerListModel(QObject* parent)
         : QAbstractItemModel(parent)
         , m_entitySelectQueue()
-        , m_entityExpandQueue()
         , m_entityChangeQueue()
         , m_entityChangeQueued(false)
         , m_entityLayoutQueued(false)
@@ -1275,7 +1274,6 @@ namespace AzToolsFramework
     void EntityOutlinerListModel::QueueEntityToExpand(AZ::EntityId entityId, bool expand)
     {
         m_entityExpansionState[entityId] = expand;
-        m_entityExpandQueue.insert(entityId);
         QueueEntityUpdate(entityId);
     }
 
@@ -1300,16 +1298,7 @@ namespace AzToolsFramework
         {
             return;
         }
-
-        {
-            AZ_PROFILE_SCOPE(Editor, "EntityOutlinerListModel::ProcessEntityUpdates:ExpandQueue");
-            for (auto entityId : m_entityExpandQueue)
-            {
-                emit ExpandEntity(entityId, IsExpanded(entityId));
-            };
-            m_entityExpandQueue.clear();
-        }
-
+        
         {
             AZ_PROFILE_SCOPE(Editor, "EntityOutlinerListModel::ProcessEntityUpdates:SelectQueue");
             for (auto entityId : m_entitySelectQueue)
diff --git a/Code/Framework/AzToolsFramework/AzToolsFramework/UI/Outliner/EntityOutlinerListModel.hxx b/Code/Framework/AzToolsFramework/AzToolsFramework/UI/Outliner/EntityOutlinerListModel.hxx
index f099ed504a..51d047e81a 100644
--- a/Code/Framework/AzToolsFramework/AzToolsFramework/UI/Outliner/EntityOutlinerListModel.hxx
+++ b/Code/Framework/AzToolsFramework/AzToolsFramework/UI/Outliner/EntityOutlinerListModel.hxx
@@ -156,7 +156,6 @@ namespace AzToolsFramework
         void ProcessEntityUpdates();
 
     Q_SIGNALS:
-        void ExpandEntity(const AZ::EntityId& entityId, bool expand);
         void SelectEntity(const AZ::EntityId& entityId, bool select);
         void EnableSelectionUpdates(bool enable);
         void ResetFilter();
@@ -190,7 +189,6 @@ namespace AzToolsFramework
         void QueueEntityToExpand(AZ::EntityId entityId, bool expand);
         void ProcessEntityInfoResetEnd();
         AZStd::unordered_set<AZ::EntityId> m_entitySelectQueue;
-        AZStd::unordered_set<AZ::EntityId> m_entityExpandQueue;
         AZStd::unordered_set<AZ::EntityId> m_entityChangeQueue;
         bool m_entityChangeQueued;
         bool m_entityLayoutQueued;
diff --git a/Code/Framework/AzToolsFramework/AzToolsFramework/UI/Outliner/EntityOutlinerTreeView.cpp b/Code/Framework/AzToolsFramework/AzToolsFramework/UI/Outliner/EntityOutlinerTreeView.cpp
index 857fdb5f80..c2bbebb72e 100644
--- a/Code/Framework/AzToolsFramework/AzToolsFramework/UI/Outliner/EntityOutlinerTreeView.cpp
+++ b/Code/Framework/AzToolsFramework/AzToolsFramework/UI/Outliner/EntityOutlinerTreeView.cpp
@@ -81,6 +81,61 @@ namespace AzToolsFramework
         update();
     }
 
+    void EntityOutlinerTreeView::dataChanged(const QModelIndex& topLeft, const QModelIndex& bottomRight, const QVector<int>& roles)
+    {
+        AzQtComponents::StyledTreeView::dataChanged(topLeft, bottomRight, roles);
+
+        if (topLeft.isValid() && topLeft.parent() == bottomRight.parent() && topLeft.row() <= bottomRight.row() &&
+            topLeft.column() <= bottomRight.column())
+        {
+            for (int i = topLeft.row(); i <= bottomRight.row(); i++)
+            {
+                auto modelRow = topLeft.sibling(i, EntityOutlinerListModel::ColumnName);
+                if (modelRow.isValid())
+                {
+                    checkExpandedState(modelRow);
+                }
+            }
+        }
+    }
+
+    void EntityOutlinerTreeView::rowsInserted(const QModelIndex& parent, int start, int end)
+    {
+        if (parent.isValid())
+        {
+            for (int i = start; i <= end; i++)
+            {
+                auto modelRow = model()->index(i, EntityOutlinerListModel::ColumnName, parent);
+                if (modelRow.isValid())
+                {
+                    checkExpandedState(modelRow);
+                    recursiveCheckExpandedStates(modelRow);
+                }
+            }
+        }
+        AzQtComponents::StyledTreeView::rowsInserted(parent, start, end);
+    }
+
+    void EntityOutlinerTreeView::recursiveCheckExpandedStates(const QModelIndex& current)
+    {
+        const int rowCount = model()->rowCount(current);
+        for (int i = 0; i < rowCount; i++)
+        {
+            auto modelRow = model()->index(i, EntityOutlinerListModel::ColumnName, current);
+            if (modelRow.isValid())
+            {
+                checkExpandedState(modelRow);
+                recursiveCheckExpandedStates(modelRow);
+            }
+        }
+    }
+
+    void EntityOutlinerTreeView::checkExpandedState(const QModelIndex& current)
+    {
+        const bool expandState = current.data(EntityOutlinerListModel::ExpandedRole).template value<bool>();
+        setExpanded(current, expandState);
+    }
+
     void EntityOutlinerTreeView::mousePressEvent(QMouseEvent* event)
     {
         //postponing normal mouse pressed logic until mouse is released or dragged
diff --git a/Code/Framework/AzToolsFramework/AzToolsFramework/UI/Outliner/EntityOutlinerTreeView.hxx b/Code/Framework/AzToolsFramework/AzToolsFramework/UI/Outliner/EntityOutlinerTreeView.hxx
index 9262da9a73..014bb7bd48 100644
--- a/Code/Framework/AzToolsFramework/AzToolsFramework/UI/Outliner/EntityOutlinerTreeView.hxx
+++ b/Code/Framework/AzToolsFramework/AzToolsFramework/UI/Outliner/EntityOutlinerTreeView.hxx
@@ -51,6 +51,10 @@ namespace AzToolsFramework
     Q_SIGNALS:
         void ItemDropped();
 
+    protected Q_SLOTS:
+        void dataChanged(const QModelIndex &topLeft, const QModelIndex &bottomRight, const QVector<int> &roles = QVector<int>()) override;
+        void rowsInserted(const QModelIndex &parent, int start, int end) override;
+
     protected:
         // Qt overrides
         void mousePressEvent(QMouseEvent* event) override;
@@ -75,6 +79,8 @@ namespace AzToolsFramework
         void ClearQueuedMouseEvent();
 
         void processQueuedMousePressedEvent(QMouseEvent* event);
+        void recursiveCheckExpandedStates(const QModelIndex& parent);
+        void checkExpandedState(const QModelIndex& current);
 
         void StartCustomDrag(const QModelIndexList& indexList, Qt::DropActions supportedActions) override;
 
diff --git a/Code/Framework/AzToolsFramework/AzToolsFramework/UI/Outliner/EntityOutlinerWidget.cpp b/Code/Framework/AzToolsFramework/AzToolsFramework/UI/Outliner/EntityOutlinerWidget.cpp
index 31bb067603..52b688543a 100644
--- a/Code/Framework/AzToolsFramework/AzToolsFramework/UI/Outliner/EntityOutlinerWidget.cpp
+++ b/Code/Framework/AzToolsFramework/AzToolsFramework/UI/Outliner/EntityOutlinerWidget.cpp
@@ -224,7 +224,6 @@ namespace AzToolsFramework
         connect(m_gui->m_objectTree, &QTreeView::expanded, this, &EntityOutlinerWidget::OnTreeItemExpanded);
         connect(m_gui->m_objectTree, &QTreeView::collapsed, this, &EntityOutlinerWidget::OnTreeItemCollapsed);
         connect(m_gui->m_objectTree, &EntityOutlinerTreeView::ItemDropped, this, &EntityOutlinerWidget::OnDropEvent);
-        connect(m_listModel, &EntityOutlinerListModel::ExpandEntity, this, &EntityOutlinerWidget::OnExpandEntity);
         connect(m_listModel, &EntityOutlinerListModel::SelectEntity, this, &EntityOutlinerWidget::OnSelectEntity);
         connect(m_listModel, &EntityOutlinerListModel::EnableSelectionUpdates, this, &EntityOutlinerWidget::OnEnableSelectionUpdates);
         connect(m_listModel, &EntityOutlinerListModel::ResetFilter, this, &EntityOutlinerWidget::ClearFilter);
@@ -972,10 +971,6 @@ namespace AzToolsFramework
         m_listModel->OnEntityCollapsed(entityId);
     }
 
-    void EntityOutlinerWidget::OnExpandEntity(const AZ::EntityId& entityId, bool expand)
-    {
-        m_gui->m_objectTree->setExpanded(GetIndexFromEntityId(entityId), expand);
-    }
 
     void EntityOutlinerWidget::OnSelectEntity(const AZ::EntityId& entityId, bool selected)
     {
diff --git a/Code/Framework/AzToolsFramework/AzToolsFramework/UI/Outliner/EntityOutlinerWidget.hxx b/Code/Framework/AzToolsFramework/AzToolsFramework/UI/Outliner/EntityOutlinerWidget.hxx
index e6c42fa64e..38d2e16199 100644
--- a/Code/Framework/AzToolsFramework/AzToolsFramework/UI/Outliner/EntityOutlinerWidget.hxx
+++ b/Code/Framework/AzToolsFramework/AzToolsFramework/UI/Outliner/EntityOutlinerWidget.hxx
@@ -155,7 +155,6 @@ namespace AzToolsFramework
         void OnTreeItemDoubleClicked(const QModelIndex& index);
         void OnTreeItemExpanded(const QModelIndex& index);
         void OnTreeItemCollapsed(const QModelIndex& index);
-        void OnExpandEntity(const AZ::EntityId& entityId, bool expand);
         void OnSelectEntity(const AZ::EntityId& entityId, bool selected);
         void OnEnableSelectionUpdates(bool enable);
         void OnDropEvent();