diff --git a/res/values/colors.xml b/res/values/colors.xml
index 9ac248a..52c61e7 100644
--- a/res/values/colors.xml
+++ b/res/values/colors.xml
@@ -33,6 +33,7 @@
     <!-- Popup container -->
     <color name="notification_icon_default_color">#757575</color> <!-- Gray 600 -->
     <color name="badge_color">#1DE9B6</color> <!-- Teal A400 -->
+    <color name="folder_badge_color">#1DE9B6</color> <!-- Teal A400 -->
 
     <color name="icon_background">#E0E0E0</color> <!-- Gray 300 -->
     <color name="legacy_icon_background">#FFFFFF</color>
diff --git a/src/com/android/launcher3/BubbleTextView.java b/src/com/android/launcher3/BubbleTextView.java
index ea1ee9e..b0e8b1e 100644
--- a/src/com/android/launcher3/BubbleTextView.java
+++ b/src/com/android/launcher3/BubbleTextView.java
@@ -100,7 +100,7 @@
 
     private BadgeInfo mBadgeInfo;
     private BadgeRenderer mBadgeRenderer;
-    private IconPalette mIconPalette;
+    private IconPalette mBadgePalette;
     private float mBadgeScale;
     private boolean mForceHideBadge;
     private Point mTempSpaceForBadgeOffset = new Point();
@@ -463,7 +463,7 @@
             final int scrollX = getScrollX();
             final int scrollY = getScrollY();
             canvas.translate(scrollX, scrollY);
-            mBadgeRenderer.draw(canvas, mBadgeInfo, mTempIconBounds, mBadgeScale,
+            mBadgeRenderer.draw(canvas, mBadgePalette, mBadgeInfo, mTempIconBounds, mBadgeScale,
                     mTempSpaceForBadgeOffset);
             canvas.translate(-scrollX, -scrollY);
         }
@@ -597,7 +597,10 @@
             float newBadgeScale = isBadged ? 1f : 0;
             mBadgeRenderer = mLauncher.getDeviceProfile().mBadgeRenderer;
             if (wasBadged || isBadged) {
-                mIconPalette = ((FastBitmapDrawable) mIcon).getIconPalette();
+                mBadgePalette = IconPalette.getBadgePalette(getResources());
+                if (mBadgePalette == null) {
+                    mBadgePalette = ((FastBitmapDrawable) mIcon).getIconPalette();
+                }
                 // Animate when a badge is first added or when it is removed.
                 if (animate && (wasBadged ^ isBadged) && isShown()) {
                     ObjectAnimator.ofFloat(this, BADGE_SCALE_PROPERTY, newBadgeScale).start();
@@ -609,6 +612,10 @@
         }
     }
 
+    public IconPalette getBadgePalette() {
+        return mBadgePalette;
+    }
+
     /**
      * Sets the icon for this view based on the layout direction.
      */
diff --git a/src/com/android/launcher3/FastBitmapDrawable.java b/src/com/android/launcher3/FastBitmapDrawable.java
index a096a1d..199baaf 100644
--- a/src/com/android/launcher3/FastBitmapDrawable.java
+++ b/src/com/android/launcher3/FastBitmapDrawable.java
@@ -124,7 +124,7 @@
     public IconPalette getIconPalette() {
         if (mIconPalette == null) {
             mIconPalette = IconPalette.fromDominantColor(Utilities
-                    .findDominantColorByHue(mBitmap, 20));
+                    .findDominantColorByHue(mBitmap, 20), true /* desaturateBackground */);
         }
         return mIconPalette;
     }
diff --git a/src/com/android/launcher3/badge/BadgeRenderer.java b/src/com/android/launcher3/badge/BadgeRenderer.java
index adde4a2..ba1977a 100644
--- a/src/com/android/launcher3/badge/BadgeRenderer.java
+++ b/src/com/android/launcher3/badge/BadgeRenderer.java
@@ -63,7 +63,6 @@
     private final Paint mBackgroundPaint = new Paint(Paint.ANTI_ALIAS_FLAG
             | Paint.FILTER_BITMAP_FLAG);
     private final SparseArray<Bitmap> mBackgroundsWithShadow;
-    private final IconPalette mIconPalette;
 
     public BadgeRenderer(Context context, int iconSizePx) {
         mContext = context;
@@ -83,25 +82,24 @@
         mTextHeight = tempTextHeight.height();
 
         mBackgroundsWithShadow = new SparseArray<>(3);
-
-        mIconPalette = IconPalette.fromDominantColor(context.getColor(R.color.badge_color));
     }
 
     /**
      * Draw a circle in the top right corner of the given bounds, and draw
      * {@link BadgeInfo#getNotificationCount()} on top of the circle.
+     * @param palette The colors (based on the icon) to use for the badge.
      * @param badgeInfo Contains data to draw on the badge. Could be null if we are animating out.
      * @param iconBounds The bounds of the icon being badged.
      * @param badgeScale The progress of the animation, from 0 to 1.
      * @param spaceForOffset How much space is available to offset the badge up and to the right.
      */
-    public void draw(Canvas canvas, @Nullable BadgeInfo badgeInfo,
+    public void draw(Canvas canvas, IconPalette palette, @Nullable BadgeInfo badgeInfo,
             Rect iconBounds, float badgeScale, Point spaceForOffset) {
-        mTextPaint.setColor(mIconPalette.textColor);
+        mTextPaint.setColor(palette.textColor);
         IconDrawer iconDrawer = badgeInfo != null && badgeInfo.isIconLarge()
                 ? mLargeIconDrawer : mSmallIconDrawer;
         Shader icon = badgeInfo == null ? null : badgeInfo.getNotificationIconForBadge(
-                mContext, mIconPalette.backgroundColor, mSize, iconDrawer.mPadding);
+                mContext, palette.backgroundColor, mSize, iconDrawer.mPadding);
         String notificationCount = badgeInfo == null ? "0"
                 : String.valueOf(badgeInfo.getNotificationCount());
         int numChars = notificationCount.length();
@@ -127,7 +125,7 @@
         canvas.translate(badgeCenterX + offsetX, badgeCenterY - offsetY);
         canvas.scale(badgeScale, badgeScale);
         // Prepare the background and shadow and possible stacking effect.
-        mBackgroundPaint.setColorFilter(mIconPalette.backgroundColorMatrixFilter);
+        mBackgroundPaint.setColorFilter(palette.backgroundColorMatrixFilter);
         int backgroundWithShadowSize = backgroundWithShadow.getHeight(); // Same as width.
         boolean shouldStack = !isDot && badgeInfo != null
                 && badgeInfo.getNotificationKeys().size() > 1;
@@ -149,7 +147,7 @@
                     -backgroundWithShadowSize / 2, mBackgroundPaint);
             iconDrawer.drawIcon(icon, canvas);
         } else if (isDot) {
-            mBackgroundPaint.setColorFilter(mIconPalette.saturatedBackgroundColorMatrixFilter);
+            mBackgroundPaint.setColorFilter(palette.saturatedBackgroundColorMatrixFilter);
             canvas.drawBitmap(backgroundWithShadow, -backgroundWithShadowSize / 2,
                     -backgroundWithShadowSize / 2, mBackgroundPaint);
         }
diff --git a/src/com/android/launcher3/folder/FolderIcon.java b/src/com/android/launcher3/folder/FolderIcon.java
index 236bf24..b793f49 100644
--- a/src/com/android/launcher3/folder/FolderIcon.java
+++ b/src/com/android/launcher3/folder/FolderIcon.java
@@ -78,6 +78,7 @@
 import com.android.launcher3.dragndrop.DragLayer;
 import com.android.launcher3.dragndrop.DragView;
 import com.android.launcher3.util.Themes;
+import com.android.launcher3.graphics.IconPalette;
 import com.android.launcher3.util.Thunk;
 import com.android.launcher3.widget.PendingAddShortcutInfo;
 
@@ -933,7 +934,8 @@
             // If we are animating to the accepting state, animate the badge out.
             float badgeScale = Math.max(0, mBadgeScale - mBackground.getScaleProgress());
             mTempSpaceForBadgeOffset.set(getWidth() - mTempBounds.right, mTempBounds.top);
-            mBadgeRenderer.draw(canvas, mBadgeInfo, mTempBounds,
+            IconPalette badgePalette = IconPalette.getFolderBadgePalette(getResources());
+            mBadgeRenderer.draw(canvas, badgePalette, mBadgeInfo, mTempBounds,
                     badgeScale, mTempSpaceForBadgeOffset);
         }
     }
diff --git a/src/com/android/launcher3/graphics/IconPalette.java b/src/com/android/launcher3/graphics/IconPalette.java
index 750f4de..6e01ed5 100644
--- a/src/com/android/launcher3/graphics/IconPalette.java
+++ b/src/com/android/launcher3/graphics/IconPalette.java
@@ -18,9 +18,12 @@
 
 import android.app.Notification;
 import android.content.Context;
+import android.content.res.Resources;
 import android.graphics.Color;
 import android.graphics.ColorMatrix;
 import android.graphics.ColorMatrixColorFilter;
+import android.support.annotation.NonNull;
+import android.support.annotation.Nullable;
 import android.support.v4.graphics.ColorUtils;
 import android.util.Log;
 
@@ -35,11 +38,12 @@
     private static final boolean DEBUG = false;
     private static final String TAG = "IconPalette";
 
-    public static final IconPalette FOLDER_ICON_PALETTE = new IconPalette(Color.parseColor("#BDC1C6"));
-
     private static final float MIN_PRELOAD_COLOR_SATURATION = 0.2f;
     private static final float MIN_PRELOAD_COLOR_LIGHTNESS = 0.6f;
 
+    private static IconPalette sBadgePalette;
+    private static IconPalette sFolderBadgePalette;
+
     public final int dominantColor;
     public final int backgroundColor;
     public final ColorMatrixColorFilter backgroundColorMatrixFilter;
@@ -47,15 +51,19 @@
     public final int textColor;
     public final int secondaryColor;
 
-    private IconPalette(int color) {
+    private IconPalette(int color, boolean desaturateBackground) {
         dominantColor = color;
-        backgroundColor = dominantColor;
+        backgroundColor = desaturateBackground ? getMutedColor(dominantColor, 0.87f) : dominantColor;
         ColorMatrix backgroundColorMatrix = new ColorMatrix();
         Themes.setColorScaleOnMatrix(backgroundColor, backgroundColorMatrix);
         backgroundColorMatrixFilter = new ColorMatrixColorFilter(backgroundColorMatrix);
-        // Get slightly more saturated background color.
-        Themes.setColorScaleOnMatrix(getMutedColor(dominantColor, 0.54f), backgroundColorMatrix);
-        saturatedBackgroundColorMatrixFilter = new ColorMatrixColorFilter(backgroundColorMatrix);
+        if (!desaturateBackground) {
+            saturatedBackgroundColorMatrixFilter = backgroundColorMatrixFilter;
+        } else {
+            // Get slightly more saturated background color.
+            Themes.setColorScaleOnMatrix(getMutedColor(dominantColor, 0.54f), backgroundColorMatrix);
+            saturatedBackgroundColorMatrixFilter = new ColorMatrixColorFilter(backgroundColorMatrix);
+        }
         textColor = getTextColorForBackground(backgroundColor);
         secondaryColor = getLowContrastColor(backgroundColor);
     }
@@ -78,8 +86,35 @@
         return result;
     }
 
-    public static IconPalette fromDominantColor(int dominantColor) {
-        return new IconPalette(dominantColor);
+    public static IconPalette fromDominantColor(int dominantColor, boolean desaturateBackground) {
+        return new IconPalette(dominantColor, desaturateBackground);
+    }
+
+    /**
+     * Returns an IconPalette based on the badge_color in colors.xml.
+     * If that color is Color.TRANSPARENT, then returns null instead.
+     */
+    public static @Nullable IconPalette getBadgePalette(Resources resources) {
+        int badgeColor = resources.getColor(R.color.badge_color);
+        if (badgeColor == Color.TRANSPARENT) {
+            // Colors will be extracted per app icon, so a static palette won't work.
+            return null;
+        }
+        if (sBadgePalette == null) {
+            sBadgePalette = fromDominantColor(badgeColor, false);
+        }
+        return sBadgePalette;
+    }
+
+    /**
+     * Returns an IconPalette based on the folder_badge_color in colors.xml.
+     */
+    public static @NonNull IconPalette getFolderBadgePalette(Resources resources) {
+        if (sFolderBadgePalette == null) {
+            int badgeColor = resources.getColor(R.color.folder_badge_color);
+            sFolderBadgePalette = fromDominantColor(badgeColor, false);
+        }
+        return sFolderBadgePalette;
     }
 
     /**
diff --git a/src/com/android/launcher3/popup/PopupContainerWithArrow.java b/src/com/android/launcher3/popup/PopupContainerWithArrow.java
index 131abba..5463ef7 100644
--- a/src/com/android/launcher3/popup/PopupContainerWithArrow.java
+++ b/src/com/android/launcher3/popup/PopupContainerWithArrow.java
@@ -49,7 +49,6 @@
 import com.android.launcher3.BubbleTextView;
 import com.android.launcher3.DragSource;
 import com.android.launcher3.DropTarget;
-import com.android.launcher3.FastBitmapDrawable;
 import com.android.launcher3.ItemInfo;
 import com.android.launcher3.Launcher;
 import com.android.launcher3.LauncherAnimUtils;
@@ -628,9 +627,7 @@
         ItemInfo itemInfo = (ItemInfo) mOriginalIcon.getTag();
         BadgeInfo badgeInfo = mLauncher.getPopupDataProvider().getBadgeInfoForItem(itemInfo);
         if (mNotificationItemView != null && badgeInfo != null) {
-            IconPalette palette = mOriginalIcon.getIcon() instanceof FastBitmapDrawable
-                    ? ((FastBitmapDrawable) mOriginalIcon.getIcon()).getIconPalette()
-                    : null;
+            IconPalette palette = mOriginalIcon.getBadgePalette();
             mNotificationItemView.updateHeader(badgeInfo.getNotificationCount(), palette);
         }
     }