diff --git a/mautrix_telegram/user.py b/mautrix_telegram/user.py
index 5c3b2472..2216d817 100644
--- a/mautrix_telegram/user.py
+++ b/mautrix_telegram/user.py
@@ -19,7 +19,7 @@ from collections import defaultdict
 import logging
 import asyncio
 
-from telethon.tl.types import (TypeUpdate, UpdateNewMessage, UpdateNewChannelMessage, PeerUser,
+from telethon.tl.types import (TypeUpdate, UpdateNewMessage, UpdateNewChannelMessage,
                                UpdateShortChatMessage, UpdateShortMessage, User as TLUser, Chat,
                                ChatForbidden)
 from telethon.tl.custom import Dialog
@@ -35,7 +35,7 @@ from mautrix.util.logging import TraceLogger
 from mautrix.util.opt_prometheus import Gauge
 
 from .types import TelegramID
-from .db import User as DBUser, Portal as DBPortal
+from .db import User as DBUser, Portal as DBPortal, Message as DBMessage
 from .abstract_user import AbstractUser
 from . import portal as po, puppet as pu
 
@@ -376,6 +376,34 @@ class User(AbstractUser, BaseUser):
             if portal.mxid
         }
 
+    async def _sync_dialog(self, portal: po.Portal, dialog: Dialog, should_create: bool,
+                           puppet: Optional[pu.Puppet]) -> None:
+        if portal.mxid:
+            try:
+                await portal.backfill(self, last_id=dialog.message.id)
+            except Exception:
+                self.log.exception(f"Error while backfilling {portal.tgid_log}")
+            try:
+                await portal.update_matrix_room(self, dialog.entity)
+            except Exception:
+                self.log.exception(f"Error while updating {portal.tgid_log}")
+        elif should_create:
+            try:
+                await portal.create_matrix_room(self, dialog.entity, invites=[self.mxid])
+            except Exception:
+                self.log.exception(f"Error while creating {portal.tgid_log}")
+        if portal.mxid and puppet and puppet.is_real_user:
+            tg_space = portal.tgid if portal.peer_type == "channel" else self.tgid
+            if dialog.unread_count == 0:
+                # This is usually more reliable than finding a specific message
+                # e.g. if the last read message is a service message that isn't in the message db
+                last_read = DBMessage.find_last(portal.mxid, tg_space)
+            else:
+                last_read = DBMessage.get_one_by_tgid(portal.tgid, tg_space,
+                                                      dialog.dialog.read_inbox_max_id)
+            if last_read:
+                await puppet.intent.mark_read(last_read.mx_room, last_read.mxid)
+
     async def sync_dialogs(self) -> None:
         if self.is_bot:
             return
@@ -385,6 +413,7 @@ class User(AbstractUser, BaseUser):
         index = 0
         self.log.debug(f"Syncing dialogs (update_limit={update_limit}, "
                        f"create_limit={create_limit})")
+        puppet = await pu.Puppet.get_by_custom_mxid(self.mxid)
         dialog: Dialog
         async for dialog in self.client.iter_dialogs(limit=update_limit, ignore_migrated=True,
                                                      archived=False):
@@ -400,17 +429,9 @@ class User(AbstractUser, BaseUser):
                 continue
             portal = po.Portal.get_by_entity(entity, receiver_id=self.tgid)
             self.portals[portal.tgid_full] = portal
-            if portal.mxid:
-                update_task = portal.update_matrix_room(self, entity)
-                backfill_task = portal.backfill(self, last_id=dialog.message.id)
-                creators.append(self._catch(f"updating {portal.tgid_log}",
-                                            self.loop.create_task(update_task)))
-                creators.append(self._catch(f"backfilling {portal.tgid_log}",
-                                            self.loop.create_task(backfill_task)))
-            elif not create_limit or index < create_limit:
-                create_task = portal.create_matrix_room(self, entity, invites=[self.mxid])
-                creators.append(self._catch(f"creating {portal.tgid_log}",
-                                            self.loop.create_task(create_task)))
+            coro = self._sync_dialog(portal=portal, dialog=dialog, puppet=puppet,
+                                     should_create=not create_limit or index < create_limit)
+            creators.append(self.loop.create_task(coro))
             index += 1
         await self.save(portals=True)
         await asyncio.gather(*creators)