diff --git a/web/e2e-tests/admin.test.ts b/web/e2e-tests/admin.test.ts
index 585aedb209..e462a91c45 100644
--- a/web/e2e-tests/admin.test.ts
+++ b/web/e2e-tests/admin.test.ts
@@ -103,7 +103,6 @@ async function test_changing_create_streams_and_invite_to_stream_policies(
     page: Page,
 ): Promise<void> {
     const policies = {
-        "create private stream": "#id_realm_create_private_stream_policy",
         "invite to stream": "#id_realm_invite_to_stream_policy",
     };
     const policy_values = {
diff --git a/web/src/server_events_dispatch.js b/web/src/server_events_dispatch.js
index 090cb0c7da..a4f2e4b1c4 100644
--- a/web/src/server_events_dispatch.js
+++ b/web/src/server_events_dispatch.js
@@ -204,7 +204,6 @@ export function dispatch_normal_event(event) {
                 avatar_changes_disabled: settings_account.update_avatar_change_display,
                 bot_creation_policy: settings_bots.update_bot_permissions_ui,
                 create_multiuse_invite_group: noop,
-                create_private_stream_policy: noop,
                 create_web_public_stream_policy: noop,
                 invite_to_stream_policy: noop,
                 default_code_block_language: noop,
@@ -265,15 +264,10 @@ export function dispatch_normal_event(event) {
                             gear_menu.rerender();
                         }
 
-                        const stream_creation_settings = [
-                            "create_private_stream_policy",
-                            "create_web_public_stream_policy",
-                        ];
-                        if (stream_creation_settings.includes(event.property)) {
-                            stream_settings_ui.update_stream_privacy_choices(event.property);
-                        }
-
-                        if (event.property === "enable_spectator_access") {
+                        if (
+                            event.property === "create_web_public_stream_policy" ||
+                            event.property === "enable_spectator_access"
+                        ) {
                             stream_settings_ui.update_stream_privacy_choices(
                                 "create_web_public_stream_policy",
                             );
@@ -295,7 +289,10 @@ export function dispatch_normal_event(event) {
                                     gear_menu.rerender();
                                 }
 
-                                if (key === "can_create_public_channel_group") {
+                                if (
+                                    key === "can_create_public_channel_group" ||
+                                    key === "can_create_private_channel_group"
+                                ) {
                                     stream_settings_ui.update_stream_privacy_choices(key);
                                 }
 
diff --git a/web/src/settings_components.ts b/web/src/settings_components.ts
index dde54bf292..269f0eec22 100644
--- a/web/src/settings_components.ts
+++ b/web/src/settings_components.ts
@@ -473,6 +473,7 @@ const dropdown_widget_map = new Map<string, DropdownWidget | null>([
     ["realm_can_access_all_users_group", null],
     ["can_mention_group", null],
     ["realm_can_create_public_channel_group", null],
+    ["realm_can_create_private_channel_group", null],
 ]);
 
 export function get_widget_for_dropdown_list_settings(
@@ -779,6 +780,7 @@ export function check_realm_settings_property_changed(elem: HTMLElement): boolea
         case "realm_create_multiuse_invite_group":
         case "realm_can_access_all_users_group":
         case "realm_can_create_public_channel_group":
+        case "realm_can_create_private_channel_group":
             proposed_val = get_dropdown_list_widget_setting_value($elem);
             break;
         case "realm_message_content_edit_limit_seconds":
@@ -976,6 +978,15 @@ export function populate_data_for_realm_settings_request(
                     });
                     continue;
                 }
+
+                if (property_name === "can_create_private_channel_group") {
+                    data[property_name] = JSON.stringify({
+                        new: input_value,
+                        old: realm.realm_can_create_private_channel_group,
+                    });
+                    continue;
+                }
+
                 data[property_name] = input_value;
             }
         }
diff --git a/web/src/settings_data.ts b/web/src/settings_data.ts
index 7ab2cb8247..73bd311653 100644
--- a/web/src/settings_data.ts
+++ b/web/src/settings_data.ts
@@ -140,7 +140,13 @@ export function user_can_subscribe_other_users(): boolean {
 }
 
 export function user_can_create_private_streams(): boolean {
-    return user_has_permission(realm.realm_create_private_stream_policy);
+    if (page_params.is_spectator) {
+        return false;
+    }
+    return user_groups.is_user_in_group(
+        realm.realm_can_create_private_channel_group,
+        current_user.user_id,
+    );
 }
 
 export function user_can_create_public_streams(): boolean {
diff --git a/web/src/settings_org.js b/web/src/settings_org.js
index 5c5bfe03ed..834a6c5361 100644
--- a/web/src/settings_org.js
+++ b/web/src/settings_org.js
@@ -119,7 +119,6 @@ export function get_org_type_dropdown_options() {
 }
 
 const simple_dropdown_properties = [
-    "realm_create_private_stream_policy",
     "realm_create_web_public_stream_policy",
     "realm_invite_to_stream_policy",
     "realm_user_group_edit_policy",
@@ -487,6 +486,7 @@ export function discard_realm_property_element_changes(elem) {
         case "realm_create_multiuse_invite_group":
         case "realm_can_access_all_users_group":
         case "realm_can_create_public_channel_group":
+        case "realm_can_create_private_channel_group":
             settings_components.set_dropdown_list_widget_setting_value(
                 property_name,
                 property_value,
diff --git a/web/src/state_data.ts b/web/src/state_data.ts
index f049050e08..e57a21b1d1 100644
--- a/web/src/state_data.ts
+++ b/web/src/state_data.ts
@@ -85,6 +85,7 @@ export const realm_schema = z.object({
     realm_bot_domain: z.string(),
     realm_can_access_all_users_group: z.number(),
     realm_can_create_public_channel_group: z.number(),
+    realm_can_create_private_channel_group: z.number(),
     realm_create_multiuse_invite_group: z.number(),
     realm_create_private_stream_policy: z.number(),
     realm_create_web_public_stream_policy: z.number(),
diff --git a/web/src/stream_settings_ui.js b/web/src/stream_settings_ui.js
index 0d139984dc..1f0fc98ba8 100644
--- a/web/src/stream_settings_ui.js
+++ b/web/src/stream_settings_ui.js
@@ -947,7 +947,7 @@ export function update_stream_privacy_choices(policy) {
         $container = $("#stream_permission_settings");
     }
 
-    if (policy === "create_private_stream_policy") {
+    if (policy === "can_create_private_channel_group") {
         stream_ui_updates.update_private_stream_privacy_option_state($container);
     }
     if (policy === "can_create_public_channel_group") {
diff --git a/web/src/ui_init.js b/web/src/ui_init.js
index 9aff0809eb..4ef60c2ca6 100644
--- a/web/src/ui_init.js
+++ b/web/src/ui_init.js
@@ -560,9 +560,9 @@ export function initialize_everything(state_data) {
         "realm_bot_creation_policy",
         "realm_bot_domain",
         "realm_can_access_all_users_group",
+        "realm_can_create_private_channel_group",
         "realm_can_create_public_channel_group",
         "realm_create_multiuse_invite_group",
-        "realm_create_private_stream_policy",
         "realm_create_web_public_stream_policy",
         "realm_date_created",
         "realm_default_code_block_language",
diff --git a/web/templates/settings/organization_permissions_admin.hbs b/web/templates/settings/organization_permissions_admin.hbs
index 36d28c5f63..2af872cd7a 100644
--- a/web/templates/settings/organization_permissions_admin.hbs
+++ b/web/templates/settings/organization_permissions_admin.hbs
@@ -87,12 +87,12 @@
                         {{> dropdown_options_widget option_values=create_web_public_stream_policy_values}}
                     </select>
                 </div>
-                <div class="input-group">
-                    <label for="realm_create_private_stream_policy" class="settings-field-label">{{t "Who can create private channels" }}</label>
-                    <select name="realm_create_private_stream_policy" id="id_realm_create_private_stream_policy" class="prop-element settings_select bootstrap-focus-style" data-setting-widget-type="number">
-                        {{> dropdown_options_widget option_values=common_policy_values}}
-                    </select>
-                </div>
+
+                {{> ../dropdown_widget_with_label
+                  widget_name="realm_can_create_private_channel_group"
+                  label=(t 'Who can create private channels')
+                  value_type="number"}}
+
                 <div class="input-group">
                     <label for="realm_invite_to_stream_policy" class="settings-field-label">{{t "Who can add users to channels" }}</label>
                     <select name="realm_invite_to_stream_policy" id="id_realm_invite_to_stream_policy" class="prop-element settings_select bootstrap-focus-style" data-setting-widget-type="number">
diff --git a/web/tests/dispatch.test.js b/web/tests/dispatch.test.js
index a16b62d3d4..5a51635580 100644
--- a/web/tests/dispatch.test.js
+++ b/web/tests/dispatch.test.js
@@ -489,15 +489,7 @@ run_test("realm settings", ({override}) => {
     }
 
     let update_called = false;
-    let event = event_fixtures.realm__update__create_private_stream_policy;
-    stream_settings_ui.update_stream_privacy_choices = (property) => {
-        assert_same(property, "create_private_stream_policy");
-        update_called = true;
-    };
-    test_realm_integer(event, "realm_create_private_stream_policy");
-
-    update_called = false;
-    event = event_fixtures.realm__update__create_web_public_stream_policy;
+    let event = event_fixtures.realm__update__create_web_public_stream_policy;
     stream_settings_ui.update_stream_privacy_choices = (property) => {
         assert_same(property, "create_web_public_stream_policy");
         update_called = true;
diff --git a/web/tests/lib/events.js b/web/tests/lib/events.js
index 63691223de..e0395fcf7a 100644
--- a/web/tests/lib/events.js
+++ b/web/tests/lib/events.js
@@ -263,13 +263,6 @@ exports.fixtures = {
         value: 1,
     },
 
-    realm__update__create_private_stream_policy: {
-        type: "realm",
-        op: "update",
-        property: "create_private_stream_policy",
-        value: 2,
-    },
-
     realm__update__create_web_public_stream_policy: {
         type: "realm",
         op: "update",
diff --git a/web/tests/settings_data.test.js b/web/tests/settings_data.test.js
index e77dcf557e..1980dd6bf6 100644
--- a/web/tests/settings_data.test.js
+++ b/web/tests/settings_data.test.js
@@ -141,11 +141,6 @@ function test_policy(label, policy, validation_func) {
     });
 }
 
-test_policy(
-    "user_can_create_private_streams",
-    "realm_create_private_stream_policy",
-    settings_data.user_can_create_private_streams,
-);
 test_policy(
     "user_can_subscribe_other_users",
     "realm_invite_to_stream_policy",
@@ -471,3 +466,9 @@ test_realm_group_settings(
     "realm_can_create_public_channel_group",
     settings_data.user_can_create_public_streams,
 );
+
+test_realm_group_settings(
+    "user_can_create_private_streams",
+    "realm_can_create_private_channel_group",
+    settings_data.user_can_create_private_streams,
+);
diff --git a/web/tests/settings_org.test.js b/web/tests/settings_org.test.js
index 26f2bd1b08..7f456206d9 100644
--- a/web/tests/settings_org.test.js
+++ b/web/tests/settings_org.test.js
@@ -99,7 +99,6 @@ function test_submit_settings_form(override, submit_form) {
         realm_waiting_period_threshold: 1,
         realm_default_language: '"es"',
         realm_invite_to_stream_policy: settings_config.common_policy_values.by_admins_only.code,
-        realm_create_private_stream_policy: settings_config.common_policy_values.by_members.code,
         realm_invite_to_realm_policy: settings_config.common_policy_values.by_members.code,
     });
 
@@ -133,11 +132,6 @@ function test_submit_settings_form(override, submit_form) {
     $invite_to_stream_policy_elem.attr("id", "id_realm_invite_to_stream_policy");
     $invite_to_stream_policy_elem.data = () => "number";
 
-    const $create_private_stream_policy_elem = $("#id_realm_create_private_stream_policy");
-    $create_private_stream_policy_elem.val("2");
-    $create_private_stream_policy_elem.attr("id", "id_realm_create_private_stream_policy");
-    $create_private_stream_policy_elem.data = () => "number";
-
     const $add_custom_emoji_policy_elem = $("#id_realm_add_custom_emoji_policy");
     $add_custom_emoji_policy_elem.val("1");
     $add_custom_emoji_policy_elem.attr("id", "id_realm_add_custom_emoji_policy");
@@ -157,7 +151,6 @@ function test_submit_settings_form(override, submit_form) {
     $subsection_elem.set_find_results(".prop-element", [
         $bot_creation_policy_elem,
         $add_custom_emoji_policy_elem,
-        $create_private_stream_policy_elem,
         $invite_to_realm_policy_elem,
         $invite_to_stream_policy_elem,
     ]);
@@ -171,7 +164,6 @@ function test_submit_settings_form(override, submit_form) {
         invite_to_realm_policy: 2,
         invite_to_stream_policy: 1,
         add_custom_emoji_policy: 1,
-        create_private_stream_policy: 2,
     };
     assert.deepEqual(data, expected_value);
 
@@ -325,7 +317,6 @@ function test_sync_realm_settings() {
         }
     }
 
-    test_common_policy("create_private_stream_policy");
     test_common_policy("invite_to_stream_policy");
     test_common_policy("invite_to_realm_policy");