How do I create sub-folders (nested folders) in Thunderbird?

Subfolders (nested folders) allow you to organize your mailboxes in multiple levels of folders. This can be helpful in sorting and managing large numbers of mailboxes.

When you use the New Folder... command in Thunderbird, by default it creates an actual mailbox within your IMAP folder or your Local Folders. You cannot add a subfolder to a mailbox.

To nest folders within your IMAP directory on the server: