diff --git a/mod/lti/edit_form.php b/mod/lti/edit_form.php
index 3fc992e491ae7..dc5f4fbb93a52 100644
--- a/mod/lti/edit_form.php
+++ b/mod/lti/edit_form.php
@@ -421,9 +421,11 @@ public function lti_build_category_tree(array $elements, int $parentid = 0): arr
                 if ($children) {
                     $element['nodes'] = $children;
                     $element['haschildren'] = true;
+                    $element['name'] = format_string($element['name'], false, ["context" => \core\context\system::instance()]);
                 } else {
                     $element['nodes'] = null;
                     $element['haschildren'] = false;
+                    $element['name'] = format_string($element['name'], false, ["context" => \core\context\system::instance()]);
                 }
                 $branch[] = $element;
             }
diff --git a/mod/lti/tests/course_categories_trait.php b/mod/lti/tests/course_categories_trait.php
index c4ed7fd6bf87e..0561342cacf71 100644
--- a/mod/lti/tests/course_categories_trait.php
+++ b/mod/lti/tests/course_categories_trait.php
@@ -34,7 +34,8 @@ public function setup_course_categories(): array {
 
         $topcatdbrecord = $DB->get_record('course_categories', ['parent' => 0]);
 
-        $subcata = $this->getDataGenerator()->create_category(['parent' => $topcatdbrecord->id, 'name' => 'cata']);
+        $subcata = $this->getDataGenerator()->create_category(['parent' => $topcatdbrecord->id,
+            'name' => '<span lang="en" class="multilang">cata</span><span lang="de" class="multilang">kata</span>']);
         $subcatadbrecord = $DB->get_record('course_categories', ['id' => $subcata->id]);
 
         $subcatca = $this->getDataGenerator()->create_category(['parent' => $subcata->id, 'name' => 'catca']);
@@ -50,7 +51,7 @@ public function setup_course_categories(): array {
             'topcat' => $topcatdbrecord,
             'subcata' => $subcatadbrecord,
             'subcatca' => $subcatcadbrecord,
-            'subcatb' => $subcatb,
+            'subcatb' => $subcatbdbrecord,
             'subcatcb' => $subcatcbdbrecord
         ];
     }
diff --git a/mod/lti/tests/mod_lti_edit_types_form_test.php b/mod/lti/tests/mod_lti_edit_types_form_test.php
index 75c80dd84df1c..0c18d836273fe 100644
--- a/mod/lti/tests/mod_lti_edit_types_form_test.php
+++ b/mod/lti/tests/mod_lti_edit_types_form_test.php
@@ -52,6 +52,10 @@ public function test_set_nested_categories(): void {
         $this->resetAfterTest(true);
         $this->setAdminUser();
 
+        // Enable multilang filter to on content and heading.
+        filter_set_global_state('multilang', TEXTFILTER_ON);
+        filter_set_applies_to_strings('multilang', 1);
+
         $ltiform = new test_edit_form(null);
         $ltiform->definition_after_data();
 
@@ -66,7 +70,8 @@ public function test_set_nested_categories(): void {
                             [
                                 "id" => $coursecategories['subcata']->id,
                                 "parent" => $coursecategories['topcat']->id,
-                                "name" => $coursecategories['subcata']->name,
+                                "name" => format_string($coursecategories['subcata']->name, false,
+                                    ["context" => \core\context\system::instance()]),
                                 "nodes" => [
                                     [
                                         "id" => $coursecategories['subcatca']->id,
@@ -98,6 +103,9 @@ public function test_set_nested_categories(): void {
         ];
 
         $records = $DB->get_records('course_categories', [], 'sortorder, id', 'id, parent, name');
+        foreach ($records as &$record) {
+            $record->name = format_string($record->name, false, ["context" => \core\context\system::instance()]);
+        }
         $allcategories = json_decode(json_encode($records), true);
         $coursecategoriesarray = $ltiform->lti_build_category_tree($allcategories);