diff --git a/packages/manager/src/features/Marketplace/MarketplaceLanding/MarketplaceLanding.tsx b/packages/manager/src/features/Marketplace/MarketplaceLanding/MarketplaceLanding.tsx
index c6fffcfbe42..aaed9155f7d 100644
--- a/packages/manager/src/features/Marketplace/MarketplaceLanding/MarketplaceLanding.tsx
+++ b/packages/manager/src/features/Marketplace/MarketplaceLanding/MarketplaceLanding.tsx
@@ -87,10 +87,11 @@ export const MarketplaceLanding = () => {
     updateSearchParam('query', searchString || undefined);
   };
 
-  // Filter products here based on search and type filters. If no filters are set, shows all available products.
+  // Filter products here based on category, search and type filters. If no filters are set, shows all available products.
   const filteredProducts = React.useMemo(
-    () => filterProducts(PRODUCTS, { searchQuery, selectedType }),
-    [searchQuery, selectedType]
+    () =>
+      filterProducts(PRODUCTS, { searchQuery, selectedCategory, selectedType }),
+    [searchQuery, selectedCategory, selectedType]
   );
 
   // Group filtered products by category
@@ -107,22 +108,37 @@ export const MarketplaceLanding = () => {
     return map;
   }, [filteredProducts]);
 
+  // Get categories that have at least one filtered product
+  const categoriesWithFilteredProducts = React.useMemo(
+    () => Object.keys(filteredProductsByCategory) as Category[],
+    [filteredProductsByCategory]
+  );
+
   // Filter categories based on:
   // 1. Selected category from dropdown (if set)
-  // 2. All categories, sorted by product count (if no filters)
+  // 2. All categories that have filtered products, sorted by product count (if no category selected)
   const filteredCategories = React.useMemo(() => {
     if (selectedCategory) {
-      return categoriesWithProducts.filter((cat) => cat === selectedCategory);
+      return categoriesWithFilteredProducts.filter(
+        (cat) => cat === selectedCategory
+      );
     }
-    // No filters - show all categories, sorted by product count (highest to lowest)
-    return [...categoriesWithProducts].sort((a, b) => {
+
+    // Show all categories sorted by product count (highest to lowest)
+    return [...categoriesWithFilteredProducts].sort((a, b) => {
       const countA = filteredProductsByCategory[a]?.length || 0;
       const countB = filteredProductsByCategory[b]?.length || 0;
       return countB - countA;
     });
-  }, [selectedCategory, categoriesWithProducts, filteredProductsByCategory]);
+  }, [
+    selectedCategory,
+    categoriesWithFilteredProducts,
+    filteredProductsByCategory,
+  ]);
 
-  const hasFiltersApplied = Boolean(searchQuery || selectedType);
+  const hasFiltersApplied = Boolean(
+    searchQuery || selectedCategory || selectedType
+  );
 
   // Show empty state if there are no products to display (either no products exist, or filters return no results)
   const showEmptyState = filteredProducts.length === 0;
diff --git a/packages/manager/src/features/Marketplace/MarketplaceLanding/utils.test.ts b/packages/manager/src/features/Marketplace/MarketplaceLanding/utils.test.ts
index beb62002a30..37f932d8915 100644
--- a/packages/manager/src/features/Marketplace/MarketplaceLanding/utils.test.ts
+++ b/packages/manager/src/features/Marketplace/MarketplaceLanding/utils.test.ts
@@ -91,4 +91,65 @@ describe('filterProducts', () => {
     const filtered = filterProducts(products, { searchQuery: 'randomtext' });
     expect(filtered).toHaveLength(0);
   });
+
+  it('filters by category', () => {
+    const filtered = filterProducts(products, {
+      selectedCategory: 'Kubernetes',
+    });
+    expect(filtered).toHaveLength(1);
+    expect(filtered[0].name).toBe('SpinKube');
+  });
+
+  it('filters by category and search query: category first, then search', () => {
+    const filtered = filterProducts(products, {
+      selectedCategory: 'Kubernetes',
+      searchQuery: 'spin',
+    });
+    expect(filtered).toHaveLength(1);
+    expect(filtered[0].name).toBe('SpinKube');
+  });
+
+  it('filters by category and search query: returns empty when search does not match category products', () => {
+    const filtered = filterProducts(products, {
+      selectedCategory: 'Kubernetes',
+      searchQuery: 'titan', // TITAN-Edge is not in Kubernetes category
+    });
+    expect(filtered).toHaveLength(0);
+  });
+
+  it('filters by category and type: category first, then type', () => {
+    const filtered = filterProducts(products, {
+      selectedCategory: 'Development Tools',
+      selectedType: 'SaaS & APIs',
+    });
+    expect(filtered).toHaveLength(1);
+    expect(filtered[0].name).toBe('APImetrics');
+  });
+
+  it('filters by category and type: returns empty when type does not match category products', () => {
+    const filtered = filterProducts(products, {
+      selectedCategory: 'Development Tools',
+      selectedType: 'Virtual Machines', // No VM products in Development Tools
+    });
+    expect(filtered).toHaveLength(0);
+  });
+
+  it('filters by all three filters: category, type, and search', () => {
+    const filtered = filterProducts(products, {
+      selectedCategory: 'Kubernetes',
+      selectedType: 'SaaS & APIs',
+      searchQuery: 'kube',
+    });
+    expect(filtered).toHaveLength(1);
+    expect(filtered[0].name).toBe('SpinKube');
+  });
+
+  it('filters by all three filters: returns empty when all filters applied but no match', () => {
+    const filtered = filterProducts(products, {
+      selectedCategory: 'Kubernetes',
+      selectedType: 'SaaS & APIs',
+      searchQuery: 'titan', // TITAN-Edge is not in Kubernetes
+    });
+    expect(filtered).toHaveLength(0);
+  });
 });
diff --git a/packages/manager/src/features/Marketplace/MarketplaceLanding/utils.ts b/packages/manager/src/features/Marketplace/MarketplaceLanding/utils.ts
index bd64286ff52..23e4a51bd59 100644
--- a/packages/manager/src/features/Marketplace/MarketplaceLanding/utils.ts
+++ b/packages/manager/src/features/Marketplace/MarketplaceLanding/utils.ts
@@ -1,21 +1,32 @@
-import type { Product } from '../shared';
+import type { Category, Product } from '../shared';
 
 /**
- * Filters the given list of products by type and/or search query.
+ * Filters the given list of products by category, type and/or search query.
  *
  * - If no filters are provided, returns all products.
+ * - If a category is provided, only products that have that category are included (applied first).
  * - If a type is provided, only products matching that type are included.
  * - If a search query is provided, only products whose name, short description,
  *   partner name, or type name include the query (case-insensitive) are included.
  *
  * @param products The list of products to filter.
- * @param filters An object containing optional searchQuery and selectedType.
+ * @param filters An object containing optional selectedCategory, searchQuery and selectedType.
  */
 export const filterProducts = (
   products: Product[],
-  filters: { searchQuery?: string; selectedType?: string }
+  filters: {
+    searchQuery?: string;
+    selectedCategory?: string;
+    selectedType?: string;
+  }
 ): Product[] => {
   let result = products;
+  if (filters.selectedCategory) {
+    // Apply category filter first if present
+    result = result.filter((p) =>
+      p.categories.includes(filters.selectedCategory as Category)
+    );
+  }
   if (filters.selectedType) {
     result = result.filter((p) => p.type.name === filters.selectedType);
   }