diff --git a/src/gui/accountsettings.cpp b/src/gui/accountsettings.cpp
index 5f5ae3e0f..fc8ca8262 100644
--- a/src/gui/accountsettings.cpp
+++ b/src/gui/accountsettings.cpp
@@ -55,8 +55,6 @@
 #include <QVariant>
 #include <QJsonDocument>
 #include <QToolTip>
-#include <qstringlistmodel.h>
-#include <qpropertyanimation.h>
 
 #include "account.h"
 
@@ -66,6 +64,8 @@ constexpr auto propertyFolderInfo = "folderInfo";
 
 namespace OCC {
 
+class AccountSettings;
+
 Q_LOGGING_CATEGORY(lcAccountSettings, "nextcloud.gui.account.settings", QtInfoMsg)
 
 static const char progressBarStyleC[] =
@@ -78,6 +78,24 @@ static const char progressBarStyleC[] =
     "background-color: %1; width: 1px;"
     "}";
 
+bool showEnableE2eeWithVirtualFilesWarningDialog()
+{
+    QMessageBox e2eeWithVirtualFilesWarningMsgBox;
+    e2eeWithVirtualFilesWarningMsgBox.setText(AccountSettings::tr("End-to-End Encryption with Virtual Files"));
+    e2eeWithVirtualFilesWarningMsgBox.setInformativeText(AccountSettings::tr("You seem to have the Virtual Files feature enabled on this folder. At "
+                                                                             " the moment, it is not possible to implicitly download virtual files that are "
+                                                                             "End-to-End encrypted. To get the best experience with Virtual Files and"
+                                                                             " End-to-End Encryption, make sure the encrypted folder is marked with"
+                                                                             " \"Make always available locally\"."));
+    e2eeWithVirtualFilesWarningMsgBox.setIcon(QMessageBox::Warning);
+    const auto dontEncryptButton = e2eeWithVirtualFilesWarningMsgBox.button(QMessageBox::StandardButton::Ok);
+    const auto encryptButton = e2eeWithVirtualFilesWarningMsgBox.button(QMessageBox::StandardButton::Cancel);
+    dontEncryptButton->setText(AccountSettings::tr("Don't encrypt folder"));
+    encryptButton->setText(AccountSettings::tr("Encrypt folder"));
+
+    return e2eeWithVirtualFilesWarningMsgBox.clickedButton() != dontEncryptButton;
+}
+
 /**
  * Adjusts the mouse cursor based on the region it is on over the folder tree view.
  *
@@ -315,6 +333,14 @@ void AccountSettings::slotMarkSubfolderEncrypted(FolderStatusModel::SubFolderInf
         return;
     }
 
+    const auto folder = folderInfo->_folder;
+    Q_ASSERT(folder);
+    if (folder->virtualFilesEnabled()
+        && folder->vfs().mode() == Vfs::WindowsCfApi
+        && !showEnableE2eeWithVirtualFilesWarningDialog()) {
+        return;
+    }
+
     // Folder info have directory paths in Foo/Bar/ convention...
     Q_ASSERT(!folderInfo->_path.startsWith('/') && folderInfo->_path.endsWith('/'));
     // But EncryptFolderJob expects directory path Foo/Bar convention
diff --git a/src/libsync/vfs/cfapi/vfs_cfapi.cpp b/src/libsync/vfs/cfapi/vfs_cfapi.cpp
index 667e4c82b..9a8e81353 100644
--- a/src/libsync/vfs/cfapi/vfs_cfapi.cpp
+++ b/src/libsync/vfs/cfapi/vfs_cfapi.cpp
@@ -16,6 +16,7 @@
 
 #include <QDir>
 #include <QFile>
+#include <QMessageBox>
 
 #include "cfapiwrapper.h"
 #include "hydrationjob.h"
@@ -308,6 +309,17 @@ void VfsCfApi::requestHydration(const QString &requestId, const QString &path)
     // of the placeholder with decrypted data
     if (record._isE2eEncrypted || !record._e2eMangledName.isEmpty()) {
         qCInfo(lcCfApi) << "Couldn't hydrate, the file is E2EE this is not supported";
+
+        QMessageBox e2eeFileDownloadRequestWarningMsgBox;
+        e2eeFileDownloadRequestWarningMsgBox.setText(tr("Download of End-to-End encrypted file failed"));
+        e2eeFileDownloadRequestWarningMsgBox.setInformativeText(tr("It seems that you are trying to download a virtual file that"
+                                                                   " is End-to-End encrypted. Implicitly downloading such files is not"
+                                                                   " supported at the moment. To workaround this issue, go to the"
+                                                                   " settings and mark the encrypted folder with \"Make always available"
+                                                                   " locally\"."));
+        e2eeFileDownloadRequestWarningMsgBox.setIcon(QMessageBox::Warning);
+        e2eeFileDownloadRequestWarningMsgBox.exec();
+
         emit hydrationRequestFailed(requestId);
         return;
     }