diff --git a/code/core/src/manager-api/lib/intersect.ts b/code/core/src/manager-api/lib/intersect.ts
index 84eae122322d..5918f7c8babf 100644
--- a/code/core/src/manager-api/lib/intersect.ts
+++ b/code/core/src/manager-api/lib/intersect.ts
@@ -1,6 +1,6 @@
 export default <T>(a: T[], b: T[]): T[] => {
   // no point in intersecting if one of the input is ill-defined
-  if (!a || !b) {
+  if (!Array.isArray(a) || !Array.isArray(b) || !a.length || !b.length) {
     return [];
   }
 
diff --git a/code/core/src/manager-api/lib/stories.ts b/code/core/src/manager-api/lib/stories.ts
index eed677371ef0..59b59f070a10 100644
--- a/code/core/src/manager-api/lib/stories.ts
+++ b/code/core/src/manager-api/lib/stories.ts
@@ -1,4 +1,5 @@
 import type {
+  API_BaseEntry,
   API_ComponentEntry,
   API_DocsEntry,
   API_GroupEntry,
@@ -16,6 +17,7 @@ import type {
   StoryId,
   StoryIndexV2,
   StoryIndexV3,
+  Tag,
 } from '@storybook/core/types';
 import { sanitize } from '@storybook/csf';
 
@@ -248,6 +250,7 @@ export const transformStoryIndexToStoriesHash = (
           type: 'root',
           id,
           name: names[idx],
+          tags: [],
           depth: idx,
           renderLabel,
           startCollapsed: collapsedRoots.includes(id),
@@ -267,6 +270,7 @@ export const transformStoryIndexToStoriesHash = (
           type: 'component',
           id,
           name: names[idx],
+          tags: [],
           parent: paths[idx - 1],
           depth: idx,
           renderLabel,
@@ -274,14 +278,12 @@ export const transformStoryIndexToStoriesHash = (
             children: [childId],
           }),
         });
-        // merge computes a union of arrays but we want an intersection on this
-        // specific array property, so it's easier to add it after the merge.
-        acc[id].tags = intersect(acc[id]?.tags ?? item.tags, item.tags);
       } else {
         acc[id] = merge<API_GroupEntry>((acc[id] || {}) as API_GroupEntry, {
           type: 'group',
           id,
           name: names[idx],
+          tags: [],
           parent: paths[idx - 1],
           depth: idx,
           renderLabel,
@@ -295,6 +297,7 @@ export const transformStoryIndexToStoriesHash = (
     // Finally add an entry for the docs/story itself
     acc[item.id] = {
       type: 'story',
+      tags: [],
       ...item,
       depth: paths.length,
       parent: paths[paths.length - 1],
@@ -313,9 +316,18 @@ export const transformStoryIndexToStoriesHash = (
     }
 
     acc[item.id] = item;
-    // Ensure we add the children depth-first *before* inserting any other entries
+    // Ensure we add the children depth-first *before* inserting any other entries,
+    // and compute tags from the children put in the accumulator afterwards, once
+    // they're all known and we can compute a sound intersection.
     if (item.type === 'root' || item.type === 'group' || item.type === 'component') {
       item.children.forEach((childId: any) => addItem(acc, storiesHashOutOfOrder[childId]));
+
+      item.tags = item.children.reduce((currentTags: Tag[] | null, childId: any): Tag[] => {
+        const child = acc[childId];
+
+        // On the first child, we have nothing to intersect against so we use it as a source of data.
+        return currentTags === null ? child.tags : intersect(currentTags, child.tags);
+      }, null);
     }
     return acc;
   }
diff --git a/code/core/src/manager-api/tests/stories.test.ts b/code/core/src/manager-api/tests/stories.test.ts
index 9d3c4433fdec..b652c87cd7a1 100644
--- a/code/core/src/manager-api/tests/stories.test.ts
+++ b/code/core/src/manager-api/tests/stories.test.ts
@@ -162,6 +162,7 @@ describe('stories API', () => {
       expect(index!['design-system']).toMatchObject({
         type: 'root',
         name: 'Design System', // root name originates from `kind`, so it gets trimmed
+        tags: [],
       });
       expect(index!['design-system-some-component']).toMatchObject({
         type: 'component',
@@ -186,6 +187,7 @@ describe('stories API', () => {
             title: 'Root/First',
             name: 'Story 1',
             importPath: './path/to/root/first.ts',
+            tags: [],
           },
           ...mockEntries,
         },
@@ -207,6 +209,7 @@ describe('stories API', () => {
         type: 'root',
         id: 'root',
         children: ['root-first'],
+        tags: [],
       });
     });
     it('sets roots when showRoots = true', () => {
@@ -222,6 +225,7 @@ describe('stories API', () => {
             id: 'a-b--1',
             title: 'a/b',
             name: '1',
+            tags: [],
             importPath: './a/b.ts',
           },
         },
@@ -233,6 +237,7 @@ describe('stories API', () => {
         type: 'root',
         id: 'a',
         children: ['a-b'],
+        tags: [],
       });
       expect(index!['a-b']).toMatchObject({
         type: 'component',
@@ -332,6 +337,76 @@ describe('stories API', () => {
         tags: ['shared', 'two-specific'],
       });
     });
+
+    it('intersects story/docs tags to compute tags for root and group entries', () => {
+      const moduleArgs = createMockModuleArgs({});
+      const { api } = initStories(moduleArgs as unknown as ModuleArgs);
+      const { store } = moduleArgs;
+      api.setIndex({
+        v: 5,
+        entries: {
+          'a-sampleone': {
+            type: 'story',
+            id: 'a-sampleone',
+            title: 'A/SampleOne',
+            name: '1',
+            tags: ['shared', 'one-specific'],
+            importPath: './a.ts',
+          },
+          'a-sampletwo': {
+            type: 'story',
+            id: 'a-sampletwo',
+            title: 'A/SampleTwo',
+            name: '2',
+            tags: ['shared', 'two-specific'],
+            importPath: './a.ts',
+          },
+          'a-embedded-othertopic': {
+            type: 'docs',
+            id: 'a-embedded-othertopic',
+            title: 'A/Embedded/OtherTopic',
+            name: '3',
+            tags: ['shared', 'embedded-docs-specific', 'other'],
+            storiesImports: [],
+            importPath: './embedded/other.mdx',
+          },
+          'a-embedded-extras': {
+            type: 'docs',
+            id: 'a-embedded-extras',
+            title: 'A/Embedded/Extras',
+            name: '3',
+            tags: ['shared', 'embedded-docs-specific', 'extras'],
+            storiesImports: [],
+            importPath: './embedded/extras.mdx',
+          },
+        },
+      });
+      const { index } = store.getState();
+      // We need exact key ordering, even if in theory JS doesn't guarantee it
+      expect(Object.keys(index!)).toEqual([
+        'a',
+        'a-sampleone',
+        'a-sampletwo',
+        'a-embedded',
+        'a-embedded-othertopic',
+        'a-embedded-extras',
+      ]);
+      // Acts as the root, so that the next level is a group we're testing.
+      expect(index!.a).toMatchObject({
+        type: 'root',
+        id: 'a',
+        children: ['a-sampleone', 'a-sampletwo', 'a-embedded'],
+        tags: ['shared'],
+      });
+      // The object of this test.
+      expect(index!['a-embedded']).toMatchObject({
+        type: 'group',
+        id: 'a-embedded',
+        parent: 'a',
+        name: 'Embedded',
+        tags: ['shared', 'embedded-docs-specific'],
+      });
+    });
     // Stories can get out of order for a few reasons -- see reproductions on
     //   https://github.com/storybookjs/storybook/issues/5518
     it('does the right thing for out of order stories', async () => {
@@ -1515,6 +1590,7 @@ describe('stories API', () => {
             "parent": "a",
             "prepared": false,
             "renderLabel": undefined,
+            "tags": [],
             "title": "a",
             "type": "story",
           },
@@ -1526,6 +1602,7 @@ describe('stories API', () => {
             "parent": "a",
             "prepared": false,
             "renderLabel": undefined,
+            "tags": [],
             "title": "a",
             "type": "story",
           },
@@ -1581,6 +1658,7 @@ describe('stories API', () => {
             "parent": "a",
             "prepared": false,
             "renderLabel": undefined,
+            "tags": [],
             "title": "a",
             "type": "story",
           },
@@ -1623,6 +1701,7 @@ describe('stories API', () => {
             "parent": "a",
             "prepared": false,
             "renderLabel": undefined,
+            "tags": [],
             "title": "a",
             "type": "story",
           },
@@ -1634,6 +1713,7 @@ describe('stories API', () => {
             "parent": "a",
             "prepared": false,
             "renderLabel": undefined,
+            "tags": [],
             "title": "a",
             "type": "story",
           },
diff --git a/code/core/src/manager/components/sidebar/__tests__/Sidebar.test.tsx b/code/core/src/manager/components/sidebar/__tests__/Sidebar.test.tsx
index 2e1583fdcf87..0840be5fcd71 100644
--- a/code/core/src/manager/components/sidebar/__tests__/Sidebar.test.tsx
+++ b/code/core/src/manager/components/sidebar/__tests__/Sidebar.test.tsx
@@ -50,6 +50,7 @@ const generateStories = ({ title, refId }: { title: string; refId?: string }): A
       name: root,
       children: [componentId],
       startCollapsed: false,
+      tags: [],
     },
     {
       type: 'component',
diff --git a/code/core/src/types/modules/api-stories.ts b/code/core/src/types/modules/api-stories.ts
index c53d379b7192..5f7b8dfe864b 100644
--- a/code/core/src/types/modules/api-stories.ts
+++ b/code/core/src/types/modules/api-stories.ts
@@ -7,6 +7,7 @@ export interface API_BaseEntry {
   id: StoryId;
   depth: number;
   name: string;
+  tags: Tag[];
   refId?: string;
   renderLabel?: (item: API_BaseEntry, api: any) => any;
 }
@@ -27,7 +28,6 @@ export interface API_ComponentEntry extends API_BaseEntry {
   type: 'component';
   parent?: StoryId;
   children: StoryId[];
-  tags: Tag[];
 }
 
 export interface API_DocsEntry extends API_BaseEntry {
@@ -35,7 +35,6 @@ export interface API_DocsEntry extends API_BaseEntry {
   parent: StoryId;
   title: ComponentTitle;
   importPath: Path;
-  tags: Tag[];
   prepared: boolean;
   parameters?: {
     [parameterName: string]: any;
@@ -47,7 +46,6 @@ export interface API_StoryEntry extends API_BaseEntry {
   parent: StoryId;
   title: ComponentTitle;
   importPath: Path;
-  tags: Tag[];
   prepared: boolean;
   parameters?: {
     [parameterName: string]: any;