diff --git a/.github/workflows/e2e-reusable.yml b/.github/workflows/e2e-reusable.yml
index e69c4ab260..dfd8fc9336 100644
--- a/.github/workflows/e2e-reusable.yml
+++ b/.github/workflows/e2e-reusable.yml
@@ -161,7 +161,6 @@ jobs:
         env:
           NODE_OPTIONS: --dns-result-order=ipv4first
           CYPRESS_NODE_VIEW_VERSION: 2
-          N8N_FOLDERS_ENABLED: true
           CYPRESS_RECORD_KEY: ${{ secrets.CYPRESS_RECORD_KEY }}
           GITHUB_TOKEN: ${{ secrets.GITHUB_TOKEN }}
           E2E_TESTS: true
diff --git a/cypress/e2e/49-folders.cy.ts b/cypress/e2e/49-folders.cy.ts
index 5208c5bb20..a0ee846c1c 100644
--- a/cypress/e2e/49-folders.cy.ts
+++ b/cypress/e2e/49-folders.cy.ts
@@ -51,6 +51,7 @@ describe('Folders', () => {
 	before(() => {
 		cy.resetDatabase();
 		cy.enableFeature('sharing');
+		cy.enableFeature('folders');
 		cy.enableFeature('advancedPermissions');
 		cy.enableFeature('projectRole:admin');
 		cy.enableFeature('projectRole:editor');
diff --git a/cypress/scripts/run-e2e.js b/cypress/scripts/run-e2e.js
index 545b88bcf9..c7f9ccf749 100755
--- a/cypress/scripts/run-e2e.js
+++ b/cypress/scripts/run-e2e.js
@@ -47,7 +47,6 @@ switch (scenario) {
 			testCommand: 'cypress open',
 			customEnv: {
 				CYPRESS_NODE_VIEW_VERSION: 2,
-				N8N_FOLDERS_ENABLED: true,
 			},
 		});
 		break;
@@ -59,7 +58,6 @@ switch (scenario) {
 			customEnv: {
 				CYPRESS_NODE_VIEW_VERSION: 1,
 				CYPRESS_BASE_URL: 'http://localhost:8080',
-				N8N_FOLDERS_ENABLED: true,
 			},
 		});
 		break;
@@ -71,7 +69,6 @@ switch (scenario) {
 			customEnv: {
 				CYPRESS_NODE_VIEW_VERSION: 2,
 				CYPRESS_BASE_URL: 'http://localhost:8080',
-				N8N_FOLDERS_ENABLED: true,
 			},
 		});
 		break;
@@ -85,7 +82,6 @@ switch (scenario) {
 			testCommand: `cypress run --headless ${specParam}`,
 			customEnv: {
 				CYPRESS_NODE_VIEW_VERSION: 2,
-				N8N_FOLDERS_ENABLED: true,
 			},
 		});
 		break;
diff --git a/packages/cli/src/config/schema.ts b/packages/cli/src/config/schema.ts
index 238cb80765..8cbd9b159f 100644
--- a/packages/cli/src/config/schema.ts
+++ b/packages/cli/src/config/schema.ts
@@ -364,13 +364,4 @@ export const schema = {
 		env: 'N8N_PROXY_HOPS',
 		doc: 'Number of reverse-proxies n8n is running behind',
 	},
-
-	folders: {
-		enabled: {
-			format: Boolean,
-			default: false,
-			env: 'N8N_FOLDERS_ENABLED',
-			doc: 'Temporary env variable to enable folders feature',
-		},
-	},
 };
diff --git a/packages/cli/src/services/frontend.service.ts b/packages/cli/src/services/frontend.service.ts
index 7ceeb2a758..7ec390039d 100644
--- a/packages/cli/src/services/frontend.service.ts
+++ b/packages/cli/src/services/frontend.service.ts
@@ -362,8 +362,7 @@ export class FrontendService {
 
 		this.settings.enterprise.projects.team.limit = this.license.getTeamProjectLimit();
 
-		this.settings.folders.enabled =
-			config.get('folders.enabled') || this.license.isFoldersEnabled();
+		this.settings.folders.enabled = this.license.isFoldersEnabled();
 
 		return this.settings;
 	}