diff --git a/app/controllers/concerns/group_tree.rb b/app/controllers/concerns/group_tree.rb
index 6d5682ff769..d094216aa58 100644
--- a/app/controllers/concerns/group_tree.rb
+++ b/app/controllers/concerns/group_tree.rb
@@ -1,8 +1,12 @@
 module GroupTree
   def render_group_tree(groups)
-    # Only show root groups if no parent-id is given
-    @groups = groups.where(parent_id: params[:parent_id])
-    @groups = @groups.search(params[:filter]) if params[:filter].present?
+    if params[:filter].present?
+      @groups = Gitlab::GroupHierarchy.new(groups).all_groups
+      @groups = @groups.search(params[:filter])
+    else
+      # Only show root groups if no parent-id is given
+      @groups = groups.where(parent_id: params[:parent_id])
+    end
     @groups = @groups.includes(:route)
     @groups = @groups.sort(@sort = params[:sort])
     @groups = @groups.page(params[:page])
@@ -12,6 +16,7 @@ module GroupTree
       format.json do
         serializer = GroupChildSerializer.new(current_user: current_user)
                        .with_pagination(request, response)
+        serializer.expand_hierarchy if params[:filter].present?
         render json: serializer.represent(@groups)
       end
     end
diff --git a/spec/controllers/concerns/group_tree_spec.rb b/spec/controllers/concerns/group_tree_spec.rb
index 19387f2d271..5d4fb66b492 100644
--- a/spec/controllers/concerns/group_tree_spec.rb
+++ b/spec/controllers/concerns/group_tree_spec.rb
@@ -5,7 +5,8 @@ describe GroupTree do
   let(:user) { create(:user) }
 
   controller(ApplicationController) do
-    include GroupTree # rubocop:disable Rspec/DescribedClass
+    # `described_class` is not available in this context
+    include GroupTree # rubocop:disable RSpec/DescribedClass
 
     def index
       render_group_tree Group.all
@@ -43,6 +44,14 @@ describe GroupTree do
 
         expect(assigns(:groups)).to contain_exactly(subgroup)
       end
+
+      it 'allows filtering for subgroups' do
+        subgroup = create(:group, :public, parent: group, name: 'filter')
+
+        get :index, filter: 'filt', format: :json
+
+        expect(assigns(:groups)).to contain_exactly(subgroup)
+      end
     end
 
     context 'json content' do
@@ -51,6 +60,19 @@ describe GroupTree do
 
         expect(json_response.first['id']).to eq(group.id)
       end
+
+      context 'nested groups', :nested_groups do
+        it 'expands the tree when filtering' do
+          subgroup = create(:group, :public, parent: group, name: 'filter')
+
+          get :index, filter: 'filt', format: :json
+
+          children_response = json_response.first['children']
+
+          expect(json_response.first['id']).to eq(group.id)
+          expect(children_response.first['id']).to eq(subgroup.id)
+        end
+      end
     end
   end
 end
diff --git a/spec/controllers/explore/groups_controller_spec.rb b/spec/controllers/explore/groups_controller_spec.rb
index 1923d054e95..9e0ad9ea86f 100644
--- a/spec/controllers/explore/groups_controller_spec.rb
+++ b/spec/controllers/explore/groups_controller_spec.rb
@@ -20,5 +20,4 @@ describe Explore::GroupsController do
 
     expect(assigns(:groups)).to contain_exactly(member_of_group, public_group)
   end
-
 end