diff --git a/public/app/features/browse-dashboards/BrowseDashboardsPage.tsx b/public/app/features/browse-dashboards/BrowseDashboardsPage.tsx
index c67fe825014..e2c1700633c 100644
--- a/public/app/features/browse-dashboards/BrowseDashboardsPage.tsx
+++ b/public/app/features/browse-dashboards/BrowseDashboardsPage.tsx
@@ -16,7 +16,7 @@ import { skipToken, useGetFolderQuery, useSaveFolderMutation } from './api/brows
 import { BrowseActions } from './components/BrowseActions/BrowseActions';
 import { BrowseFilters } from './components/BrowseFilters';
 import { BrowseView } from './components/BrowseView';
-import { CreateNewButton } from './components/CreateNewButton';
+import CreateNewButton from './components/CreateNewButton';
 import { FolderActionsButton } from './components/FolderActionsButton';
 import { SearchView } from './components/SearchView';
 import { getFolderPermissions } from './permissions';
@@ -104,7 +104,8 @@ const BrowseDashboardsPage = memo(({ match }: Props) => {
           {folderDTO && <FolderActionsButton folder={folderDTO} />}
           {(canCreateDashboards || canCreateFolder) && (
             <CreateNewButton
-              inFolder={folderUID}
+              parentFolderTitle={folderDTO?.title}
+              parentFolderUid={folderUID}
               canCreateDashboard={canCreateDashboards}
               canCreateFolder={canCreateFolder}
             />
diff --git a/public/app/features/browse-dashboards/components/CreateNewButton.test.tsx b/public/app/features/browse-dashboards/components/CreateNewButton.test.tsx
index d81b3818161..d5811f9903d 100644
--- a/public/app/features/browse-dashboards/components/CreateNewButton.test.tsx
+++ b/public/app/features/browse-dashboards/components/CreateNewButton.test.tsx
@@ -1,11 +1,16 @@
-import { render, screen } from '@testing-library/react';
+import { render as rtlRender, screen, within } from '@testing-library/react';
 import userEvent from '@testing-library/user-event';
 import React from 'react';
+import { TestProvider } from 'test/helpers/TestProvider';
 
-import { CreateNewButton } from './CreateNewButton';
+import CreateNewButton from './CreateNewButton';
+
+function render(...[ui, options]: Parameters<typeof rtlRender>) {
+  rtlRender(<TestProvider>{ui}</TestProvider>, options);
+}
 
 async function renderAndOpen(folderUID?: string) {
-  render(<CreateNewButton canCreateDashboard canCreateFolder inFolder={folderUID} />);
+  render(<CreateNewButton canCreateDashboard canCreateFolder parentFolderUid={folderUID} />);
   const newButton = screen.getByText('New');
   await userEvent.click(newButton);
 }
@@ -14,27 +19,39 @@ describe('NewActionsButton', () => {
   it('should display the correct urls with a given folderUID', async () => {
     await renderAndOpen('123');
 
-    expect(screen.getByText('New Dashboard')).toHaveAttribute('href', '/dashboard/new?folderUid=123');
-    expect(screen.getByText('New Folder')).toHaveAttribute('href', '/dashboards/folder/new?folderUid=123');
+    expect(screen.getByText('New dashboard')).toHaveAttribute('href', '/dashboard/new?folderUid=123');
     expect(screen.getByText('Import')).toHaveAttribute('href', '/dashboard/import?folderUid=123');
   });
 
   it('should display urls without params when there is no folderUID', async () => {
     await renderAndOpen();
 
-    expect(screen.getByText('New Dashboard')).toHaveAttribute('href', '/dashboard/new');
-    expect(screen.getByText('New Folder')).toHaveAttribute('href', '/dashboards/folder/new');
+    expect(screen.getByText('New dashboard')).toHaveAttribute('href', '/dashboard/new');
     expect(screen.getByText('Import')).toHaveAttribute('href', '/dashboard/import');
   });
 
+  it('clicking the "New folder" button opens the drawer', async () => {
+    const mockParentFolderTitle = 'mockParentFolderTitle';
+    render(<CreateNewButton canCreateDashboard canCreateFolder parentFolderTitle={mockParentFolderTitle} />);
+
+    const newButton = screen.getByText('New');
+    await userEvent.click(newButton);
+    await userEvent.click(screen.getByText('New folder'));
+
+    const drawer = screen.getByRole('dialog', { name: 'Drawer title New folder' });
+    expect(drawer).toBeInTheDocument();
+    expect(within(drawer).getByRole('heading', { name: 'New folder' })).toBeInTheDocument();
+    expect(within(drawer).getByText(`Location: ${mockParentFolderTitle}`)).toBeInTheDocument();
+  });
+
   it('should only render dashboard items when folder creation is disabled', async () => {
     render(<CreateNewButton canCreateDashboard canCreateFolder={false} />);
     const newButton = screen.getByText('New');
     await userEvent.click(newButton);
 
-    expect(screen.getByText('New Dashboard')).toBeInTheDocument();
+    expect(screen.getByText('New dashboard')).toBeInTheDocument();
     expect(screen.getByText('Import')).toBeInTheDocument();
-    expect(screen.queryByText('New Folder')).not.toBeInTheDocument();
+    expect(screen.queryByText('New folder')).not.toBeInTheDocument();
   });
 
   it('should only render folder item when dashboard creation is disabled', async () => {
@@ -42,8 +59,8 @@ describe('NewActionsButton', () => {
     const newButton = screen.getByText('New');
     await userEvent.click(newButton);
 
-    expect(screen.queryByText('New Dashboard')).not.toBeInTheDocument();
+    expect(screen.queryByText('New dashboard')).not.toBeInTheDocument();
     expect(screen.queryByText('Import')).not.toBeInTheDocument();
-    expect(screen.getByText('New Folder')).toBeInTheDocument();
+    expect(screen.getByText('New folder')).toBeInTheDocument();
   });
 });
diff --git a/public/app/features/browse-dashboards/components/CreateNewButton.tsx b/public/app/features/browse-dashboards/components/CreateNewButton.tsx
index c1757a4a744..6d9b1367313 100644
--- a/public/app/features/browse-dashboards/components/CreateNewButton.tsx
+++ b/public/app/features/browse-dashboards/components/CreateNewButton.tsx
@@ -1,6 +1,8 @@
 import React, { useState } from 'react';
+import { connect, ConnectedProps } from 'react-redux';
 
-import { Button, Dropdown, Icon, Menu, MenuItem } from '@grafana/ui';
+import { Button, Drawer, Dropdown, Icon, Menu, MenuItem } from '@grafana/ui';
+import { createNewFolder } from 'app/features/folders/state/actions';
 import {
   getNewDashboardPhrase,
   getNewFolderPhrase,
@@ -8,41 +10,78 @@ import {
   getNewPhrase,
 } from 'app/features/search/tempI18nPhrases';
 
-interface Props {
+import { NewFolderForm } from './NewFolderForm';
+
+const mapDispatchToProps = {
+  createNewFolder,
+};
+
+const connector = connect(null, mapDispatchToProps);
+
+interface OwnProps {
+  parentFolderTitle?: string;
   /**
    * Pass a folder UID in which the dashboard or folder will be created
    */
-  inFolder?: string;
+  parentFolderUid?: string;
   canCreateFolder: boolean;
   canCreateDashboard: boolean;
 }
 
-export function CreateNewButton({ inFolder, canCreateDashboard, canCreateFolder }: Props) {
+type Props = OwnProps & ConnectedProps<typeof connector>;
+
+function CreateNewButton({
+  parentFolderTitle,
+  parentFolderUid,
+  canCreateDashboard,
+  canCreateFolder,
+  createNewFolder,
+}: Props) {
   const [isOpen, setIsOpen] = useState(false);
+  const [showNewFolderDrawer, setShowNewFolderDrawer] = useState(false);
+
+  const onCreateFolder = (folderName: string) => {
+    createNewFolder(folderName, parentFolderUid);
+    setShowNewFolderDrawer(false);
+  };
+
   const newMenu = (
     <Menu>
       {canCreateDashboard && (
-        <MenuItem url={addFolderUidToUrl('/dashboard/new', inFolder)} label={getNewDashboardPhrase()} />
-      )}
-      {canCreateFolder && (
-        <MenuItem url={addFolderUidToUrl('/dashboards/folder/new', inFolder)} label={getNewFolderPhrase()} />
+        <MenuItem url={addFolderUidToUrl('/dashboard/new', parentFolderUid)} label={getNewDashboardPhrase()} />
       )}
+      {canCreateFolder && <MenuItem onClick={() => setShowNewFolderDrawer(true)} label={getNewFolderPhrase()} />}
       {canCreateDashboard && (
-        <MenuItem url={addFolderUidToUrl('/dashboard/import', inFolder)} label={getImportPhrase()} />
+        <MenuItem url={addFolderUidToUrl('/dashboard/import', parentFolderUid)} label={getImportPhrase()} />
       )}
     </Menu>
   );
 
   return (
-    <Dropdown overlay={newMenu} onVisibleChange={setIsOpen}>
-      <Button>
-        {getNewPhrase()}
-        <Icon name={isOpen ? 'angle-up' : 'angle-down'} />
-      </Button>
-    </Dropdown>
+    <>
+      <Dropdown overlay={newMenu} onVisibleChange={setIsOpen}>
+        <Button>
+          {getNewPhrase()}
+          <Icon name={isOpen ? 'angle-up' : 'angle-down'} />
+        </Button>
+      </Dropdown>
+      {showNewFolderDrawer && (
+        <Drawer
+          title={getNewFolderPhrase()}
+          subtitle={parentFolderTitle ? `Location: ${parentFolderTitle}` : undefined}
+          scrollableContent
+          onClose={() => setShowNewFolderDrawer(false)}
+          size="sm"
+        >
+          <NewFolderForm onConfirm={onCreateFolder} onCancel={() => setShowNewFolderDrawer(false)} />
+        </Drawer>
+      )}
+    </>
   );
 }
 
+export default connector(CreateNewButton);
+
 /**
  *
  * @param url without any parameters
diff --git a/public/app/features/browse-dashboards/components/NewFolderForm.tsx b/public/app/features/browse-dashboards/components/NewFolderForm.tsx
new file mode 100644
index 00000000000..9a426df9d1a
--- /dev/null
+++ b/public/app/features/browse-dashboards/components/NewFolderForm.tsx
@@ -0,0 +1,59 @@
+import React from 'react';
+
+import { Button, Input, Form, Field, HorizontalGroup } from '@grafana/ui';
+
+import { validationSrv } from '../../manage-dashboards/services/ValidationSrv';
+
+interface Props {
+  onConfirm: (folderName: string) => void;
+  onCancel: () => void;
+}
+
+interface FormModel {
+  folderName: string;
+}
+
+const initialFormModel: FormModel = { folderName: '' };
+
+export function NewFolderForm({ onCancel, onConfirm }: Props) {
+  const validateFolderName = async (folderName: string) => {
+    try {
+      await validationSrv.validateNewFolderName(folderName);
+      return true;
+    } catch (e) {
+      if (e instanceof Error) {
+        return e.message;
+      } else {
+        throw e;
+      }
+    }
+  };
+
+  return (
+    <Form defaultValues={initialFormModel} onSubmit={(form: FormModel) => onConfirm(form.folderName)}>
+      {({ register, errors }) => (
+        <>
+          <Field
+            label="Folder name"
+            invalid={!!errors.folderName}
+            error={errors.folderName && errors.folderName.message}
+          >
+            <Input
+              id="folder-name-input"
+              {...register('folderName', {
+                required: 'Folder name is required.',
+                validate: async (v) => await validateFolderName(v),
+              })}
+            />
+          </Field>
+          <HorizontalGroup>
+            <Button variant="secondary" fill="outline" onClick={onCancel}>
+              Cancel
+            </Button>
+            <Button type="submit">Create</Button>
+          </HorizontalGroup>
+        </>
+      )}
+    </Form>
+  );
+}
diff --git a/public/app/features/search/tempI18nPhrases.ts b/public/app/features/search/tempI18nPhrases.ts
index 83b99bf2570..40c276270ae 100644
--- a/public/app/features/search/tempI18nPhrases.ts
+++ b/public/app/features/search/tempI18nPhrases.ts
@@ -10,11 +10,11 @@ export function getSearchPlaceholder(includePanels = false) {
 }
 
 export function getNewDashboardPhrase() {
-  return t('search.dashboard-actions.new-dashboard', 'New Dashboard');
+  return t('search.dashboard-actions.new-dashboard', 'New dashboard');
 }
 
 export function getNewFolderPhrase() {
-  return t('search.dashboard-actions.new-folder', 'New Folder');
+  return t('search.dashboard-actions.new-folder', 'New folder');
 }
 
 export function getImportPhrase() {
diff --git a/public/locales/en-US/grafana.json b/public/locales/en-US/grafana.json
index 920c860799c..f789b63014b 100644
--- a/public/locales/en-US/grafana.json
+++ b/public/locales/en-US/grafana.json
@@ -408,8 +408,8 @@
     "dashboard-actions": {
       "import": "Import",
       "new": "New",
-      "new-dashboard": "New Dashboard",
-      "new-folder": "New Folder"
+      "new-dashboard": "New dashboard",
+      "new-folder": "New folder"
     },
     "folder-view": {
       "go-to-folder": "Go to folder",
diff --git a/public/locales/pseudo-LOCALE/grafana.json b/public/locales/pseudo-LOCALE/grafana.json
index bbfc8c0ab83..f0f3b927701 100644
--- a/public/locales/pseudo-LOCALE/grafana.json
+++ b/public/locales/pseudo-LOCALE/grafana.json
@@ -408,8 +408,8 @@
     "dashboard-actions": {
       "import": "Ĩmpőřŧ",
       "new": "Ńęŵ",
-      "new-dashboard": "Ńęŵ Đäşĥþőäřđ",
-      "new-folder": "Ńęŵ Főľđęř"
+      "new-dashboard": "Ńęŵ đäşĥþőäřđ",
+      "new-folder": "Ńęŵ ƒőľđęř"
     },
     "folder-view": {
       "go-to-folder": "Ğő ŧő ƒőľđęř",