diff --git a/grade/tests/behat/grade_hidden_items.feature b/grade/tests/behat/grade_hidden_items.feature
new file mode 100644
index 00000000000..724fb0a7490
--- /dev/null
+++ b/grade/tests/behat/grade_hidden_items.feature
@@ -0,0 +1,67 @@
+@core @core_grades
+Feature: Student and teacher's view of aggregated grade items is consistent when hidden grade items are present
+  In order to calculate grade totals
+  As an teacher
+  I need to add aggregate columns to the gradebook
+
+  Scenario: Natural aggregation of course categories with hidden items calculates correctly for teacher and student
+    Given the following "courses" exist:
+      | fullname | shortname | category | groupmode |
+      | Course 1 | C1 | 0 | 1 |
+    And the following "users" exist:
+      | username | firstname | lastname | email | idnumber |
+      | teacher1 | Teacher | 1 | teacher1@example.com | t1 |
+      | student1 | Student | 1 | student1@example.com | s1 |
+    And the following "course enrolments" exist:
+      | user | course | role |
+      | teacher1 | C1 | editingteacher |
+      | student1 | C1 | student |
+    And the following "grade categories" exist:
+      | fullname | course |
+      | Sub category 1 | C1 |
+      | Sub category 2 | C1 |
+    And the following "activities" exist:
+      | activity | course | idnumber | name | intro | gradecategory| grade |
+      | assign | C1 | a1 | Test assignment one | Submit something! | Sub category 1 | 100 |
+      | assign | C1 | a2 | Test assignment two | Submit something! | Sub category 1 | 100 |
+      | assign | C1 | a3 | Test assignment three | Submit something! | Sub category 2 | 100 |
+      | assign | C1 | a4 | Test assignment four | Submit something! | Sub category 2 | 100 |
+    And I log in as "admin"
+    And I navigate to "Overview report" node in "Site administration > Grades > Report settings"
+    And I set the field "s__grade_report_overview_showtotalsifcontainhidden" to "Show totals excluding hidden items"
+    And I navigate to "User report" node in "Site administration > Grades > Report settings"
+    And I set the field "s__grade_report_user_showtotalsifcontainhidden" to "Show totals excluding hidden items"
+    And I press "Save changes"
+    When I log out
+    And I log in as "teacher1"
+    And I follow "Course 1"
+    And I navigate to "Grades" node in "Course administration"
+    And I turn editing mode on
+    And I give the grade "50.00" to the user "Student 1" for the grade item "Test assignment one"
+    And I give the grade "50.00" to the user "Student 1" for the grade item "Test assignment three"
+    And I press "Save changes"
+    And I set the following settings for grade item "Test assignment four":
+      | Hidden | 1 |
+    And I press "Save changes"
+    And I follow "Course 1"
+    And I navigate to "Grades" node in "Course administration"
+    And I select "User report" from the "Grade report" singleselect
+    And I select "Student 1" from the "Select all or one user" singleselect
+    Then the following should exist in the "user-grade" table:
+      | Grade item | Calculated weight | Grade | Range | Percentage | Contribution to course total |
+      | Test assignment one | 100.00 % | 50.00 | 0–100 | 50.00 % | 25.00 % |
+      | Test assignment two | 0.00 %( Empty ) | - | 0–100 | - | 0.00 % |
+      | Test assignment three | 100.00 % | 50.00 | 0–100 | 50.00 % | 25.00 % |
+      | Course total | - | 100.00 | 0–200 | 50.00 % | - |
+    When I log out
+    And I log in as "student1"
+    And I follow "Course 1"
+    And I navigate to "Grades" node in "Course administration"
+    And I navigate to "User report" node in "Grade administration"
+    Then the following should exist in the "user-grade" table:
+      | Grade item | Calculated weight | Grade | Range | Percentage | Contribution to course total |
+      | Test assignment one | 100.00 % | 50.00 | 0–100 | 50.00 % |  25.00 % |
+      | Test assignment two | -( Empty ) | - | 0–100 | - | - |
+      | Test assignment three | 100.00 % | 50.00 | 0–100 | 50.00 % | 25.00 % |
+      | Course total | - | 100.00 | 0–200 | 50.00 % | - |
+    And I should not see "Test assignment four"
diff --git a/lib/grade/grade_grade.php b/lib/grade/grade_grade.php
index 5de62572abb..d258820e408 100644
--- a/lib/grade/grade_grade.php
+++ b/lib/grade/grade_grade.php
@@ -805,8 +805,18 @@ class grade_grade extends grade_object {
 
                 } else if (!array_intersect($dependson[$do], $todo)) {
                     $hidden_precursors = array_intersect($dependson[$do], array_keys($altered));
-                    if (!$hidden_precursors) {
-                        // hiding does not affect this grade
+                    // If the dependency is a sum aggregation, we need to process it as if it had hidden items.
+                    // The reason for this, is that the code will recalculate the maxgrade by removing ungraded
+                    // items and accounting for 'drop x grades' and then stored back in our virtual grade_items.
+                    // This recalculation is necessary because there will be a call to:
+                    //              $grade_category->aggregate_values_and_adjust_bounds
+                    // for the top level grade that will depend on knowing what that caclulated grademax is
+                    // and it finds that value by checking the virtual grade_items.
+                    $issumaggregate = false;
+                    if ($grade_items[$do]->itemtype == 'category') {
+                        $issumaggregate = $grade_items[$do]->load_item_category()->aggregation == GRADE_AGGREGATE_SUM;
+                    }
+                    if (!$hidden_precursors && !$issumaggregate) {
                         unset($todo[$key]);
                         $found = true;
                         continue;