diff --git a/src/components/viewmodels/roomlist/useFilteredRooms.tsx b/src/components/viewmodels/roomlist/useFilteredRooms.tsx
index 9a1730a7353..f30afd27d9a 100644
--- a/src/components/viewmodels/roomlist/useFilteredRooms.tsx
+++ b/src/components/viewmodels/roomlist/useFilteredRooms.tsx
@@ -14,9 +14,11 @@ import RoomListStoreV3, {
     LISTS_UPDATE_EVENT,
     type RoomsResult,
 } from "../../../stores/room-list-v3/RoomListStoreV3";
-import { useEventEmitter } from "../../../hooks/useEventEmitter";
+import { useEventEmitter, useEventEmitterState } from "../../../hooks/useEventEmitter";
 import SpaceStore from "../../../stores/spaces/SpaceStore";
 import { UPDATE_SELECTED_SPACE } from "../../../stores/spaces";
+import { useSettingValue } from "../../../hooks/useSettings";
+import type { Room } from "matrix-js-sdk/src/matrix";
 
 /**
  * Provides information about a primary filter.
@@ -99,6 +101,23 @@ export function useFilteredRooms(): FilteredRooms {
         setIsLoadingRooms(false);
     });
 
+    const currentSpace = useEventEmitterState<Room | null>(
+        SpaceStore.instance,
+        UPDATE_SELECTED_SPACE,
+        () => SpaceStore.instance.activeSpaceRoom,
+    );
+    const showPeopleFilter = useSettingValue("Spaces.showPeopleInSpace", currentSpace?.roomId);
+
+    // If the people filter is disabled in the space settings and it is currently active, unset it.
+    useEffect(() => {
+        if (primaryFilter === FilterKey.PeopleFilter && !showPeopleFilter) {
+            setPrimaryFilter(() => {
+                updateRoomsFromStore();
+                return undefined;
+            });
+        }
+    }, [primaryFilter, updateRoomsFromStore, showPeopleFilter]);
+
     /**
      * This tells the view which primary filters are available, how to toggle them
      * and whether a given primary filter is active. @see {@link PrimaryFilter}
@@ -120,10 +139,13 @@ export function useFilteredRooms(): FilteredRooms {
         };
         const filters: PrimaryFilter[] = [];
         for (const [key, name] of filterKeyToNameMap.entries()) {
+            // Don't render the people filter because it is disabled in space settings
+            if (key === FilterKey.PeopleFilter && !showPeopleFilter) continue;
+
             filters.push(createPrimaryFilter(key, _t(name)));
         }
         return filters;
-    }, [primaryFilter, updateRoomsFromStore]);
+    }, [primaryFilter, updateRoomsFromStore, showPeopleFilter]);
 
     const activePrimaryFilter = useMemo(() => primaryFilters.find((filter) => filter.active), [primaryFilters]);
 
diff --git a/src/components/views/dialogs/SpacePreferencesDialog.tsx b/src/components/views/dialogs/SpacePreferencesDialog.tsx
index 3bb34165243..f73e3c81b0b 100644
--- a/src/components/views/dialogs/SpacePreferencesDialog.tsx
+++ b/src/components/views/dialogs/SpacePreferencesDialog.tsx
@@ -33,7 +33,7 @@ const SpacePreferencesAppearanceTab: React.FC<Pick<IProps, "space">> = ({ space
 
     return (
         <SettingsTab>
-            <SettingsSection heading={_t("space|preferences|sections_section")}>
+            <SettingsSection heading={_t("space|preferences|sections_filter")}>
                 <SettingsSubsection>
                     <StyledCheckbox
                         checked={!!showPeople}
@@ -45,7 +45,7 @@ const SpacePreferencesAppearanceTab: React.FC<Pick<IProps, "space">> = ({ space
                                 !showPeople,
                             );
                         }}
-                        description={_t("space|preferences|show_people_in_space", {
+                        description={_t("space|preferences|show_people_filter_in_space", {
                             spaceName: space.name,
                         })}
                     >
diff --git a/src/i18n/strings/en_EN.json b/src/i18n/strings/en_EN.json
index 811edc15905..5a9a1f3100e 100644
--- a/src/i18n/strings/en_EN.json
+++ b/src/i18n/strings/en_EN.json
@@ -3237,8 +3237,8 @@
         "mark_suggested": "Mark as suggested",
         "no_search_result_hint": "You may want to try a different search or check for typos.",
         "preferences": {
-            "sections_section": "Sections to show",
-            "show_people_in_space": "This groups your chats with members of this space. Turning this off will hide those chats from your view of %(spaceName)s."
+            "sections_filter": "Filters to show",
+            "show_people_filter_in_space": "Show the People filter and DMs related to this Space."
         },
         "room_filter_placeholder": "Search for rooms",
         "search_children": "Search %(spaceName)s",
diff --git a/src/stores/room-list-v3/RoomListStoreV3.ts b/src/stores/room-list-v3/RoomListStoreV3.ts
index f5fb48df07a..e71cf03776c 100644
--- a/src/stores/room-list-v3/RoomListStoreV3.ts
+++ b/src/stores/room-list-v3/RoomListStoreV3.ts
@@ -81,6 +81,11 @@ export class RoomListStoreV3Class extends AsyncStoreWithClient<EmptyObject> {
         super(dispatcher);
         this.msc3946ProcessDynamicPredecessor = SettingsStore.getValue("feature_dynamic_room_predecessors");
         SpaceStore.instance.on(UPDATE_SELECTED_SPACE, () => {
+            SettingsStore.unwatchSetting("Spaces.showPeopleInSpace");
+            SettingsStore.watchSetting("Spaces.showPeopleInSpace", SpaceStore.instance.activeSpace, () =>
+                this.onActiveSpaceChanged(),
+            );
+
             this.onActiveSpaceChanged();
         });
         SpaceStore.instance.on(UPDATE_HOME_BEHAVIOUR, () => this.onActiveSpaceChanged());