diff --git a/lib/gollum/file_view.rb b/lib/gollum/file_view.rb
index 032d6028..6f56d541 100644
--- a/lib/gollum/file_view.rb
+++ b/lib/gollum/file_view.rb
@@ -19,16 +19,15 @@ module Gollum
       %Q(  <li class="file"><a href="#{url}">#{name}</a></li>\n)
     end
 
-    def new_folder page
-      new_sub_folder ::File.dirname(page.path), page.name, page.filename_stripped
+    def new_folder folder_path
+      new_sub_folder folder_path
     end
 
-    def new_sub_folder path, name, url
+    def new_sub_folder path
       <<-HTML
       <li>
         <label>#{path}</label> <input type="checkbox" checked />
         <ol>
-          <li class="file"><a href="#{url}">#{name}</a></li>
       HTML
     end
 
@@ -101,54 +100,38 @@ module Gollum
         end
       end
 
-      # Process first folder
-      page = @pages[ sorted_folders[ 0 ][1] ]
-      html += new_folder page
-
-      last_folder =  ::File.dirname page.path # define last_folder
-
       # keep track of folder depth, 0 = at root.
-      depth = 0
+      cwd_array = []
+      changed = false
 
       # process rest of folders
-      1.upto(sorted_folders.size - 1) do | index |
+      0.upto(sorted_folders.size - 1) do | index |
           page =  @pages[ sorted_folders[ index ][1] ]
           path = page.path
           folder = ::File.dirname path
 
-          if last_folder == folder
-            # same folder
-            html += new_page page
-          elsif folder.include?('/')
-            # check if we're going up or down a depth level
-            if last_folder.scan('/').size > folder.scan('/').size
-              # end tag for 1 subfolder & 1 parent folder
-              # so emit 2 end tags
-              2.times { html += end_folder; }
-              depth -= 1
-            else
-              depth += 1
-            end
+          tmp_array = folder.split('/')
 
-            # subfolder
-            html += new_sub_folder ::File.dirname(page.path).split('/').last, page.name, page.filename_stripped
-          else
-            # depth+1 because we need an additional end_folder
-            (depth+1).times { html += end_folder; }
-            depth = 0
-            # New root folder
-            html += new_folder page
+          0.upto(tmp_array.size - 1) do |index|
+                 if cwd_array[index].nil? or changed then
+                  html += new_sub_folder tmp_array[index]
+                  next
+              end
+
+              if  cwd_array[index] != tmp_array[index] then
+                  changed = true
+                  index.upto(cwd_array.size - 1) do |i|
+                      html += end_folder
+                  end
+                  html += new_sub_folder tmp_array[index]
+              end
           end
 
-          last_folder = folder
+          html += new_page page
+          cwd_array = tmp_array
+          changed = false
       end
 
-      # Process last folder's ending tags.
-      (depth+1).times {       
-        depth.times { html += end_folder; }
-        depth = 0
-      }
-
       # return the completed html
       enclose_tree html
     end # end render_files
diff --git a/test/file_view/2_files_2_folders.txt b/test/file_view/2_files_2_folders.txt
index 11da79d0..a481bb0e 100644
--- a/test/file_view/2_files_2_folders.txt
+++ b/test/file_view/2_files_2_folders.txt
@@ -2,11 +2,11 @@
       <li>
         <label>folder0</label> <input type="checkbox" checked />
         <ol>
-          <li class="file"><a href="0">0</a></li>
+  <li class="file"><a href="0">0</a></li>
         </ol>
       </li>
       <li>
         <label>folder1</label> <input type="checkbox" checked />
         <ol>
-          <li class="file"><a href="1">1</a></li>
+  <li class="file"><a href="1">1</a></li>
 </ol>
\ No newline at end of file
diff --git a/test/file_view/2_files_2_folders_1_root.txt b/test/file_view/2_files_2_folders_1_root.txt
index 7c1e4a96..95ba363b 100644
--- a/test/file_view/2_files_2_folders_1_root.txt
+++ b/test/file_view/2_files_2_folders_1_root.txt
@@ -3,11 +3,11 @@
       <li>
         <label>folder0</label> <input type="checkbox" checked />
         <ol>
-          <li class="file"><a href="0">0</a></li>
+  <li class="file"><a href="0">0</a></li>
         </ol>
       </li>
       <li>
         <label>folder1</label> <input type="checkbox" checked />
         <ol>
-          <li class="file"><a href="1">1</a></li>
+  <li class="file"><a href="1">1</a></li>
 </ol>
\ No newline at end of file
diff --git a/test/file_view/nested_folders.txt b/test/file_view/nested_folders.txt
index 5daae668..d026e8be 100644
--- a/test/file_view/nested_folders.txt
+++ b/test/file_view/nested_folders.txt
@@ -1,12 +1,22 @@
 <ol class="tree">
       <li>
-        <label>folder0/folder1/folder2</label> <input type="checkbox" checked />
+        <label>folder0</label> <input type="checkbox" checked />
         <ol>
-          <li class="file"><a href="0">0</a></li>
+      <li>
+        <label>folder1</label> <input type="checkbox" checked />
+        <ol>
+      <li>
+        <label>folder2</label> <input type="checkbox" checked />
+        <ol>
+  <li class="file"><a href="0">0</a></li>
+        </ol>
+      </li>
       <li>
         <label>folder3</label> <input type="checkbox" checked />
         <ol>
-          <li class="file"><a href="1">1</a></li>
+  <li class="file"><a href="1">1</a></li>
+        </ol>
+      </li>
         </ol>
       </li>
         </ol>
@@ -14,5 +24,5 @@
       <li>
         <label>folder4</label> <input type="checkbox" checked />
         <ol>
-          <li class="file"><a href="2">2</a></li>
+  <li class="file"><a href="2">2</a></li>
 </ol>
\ No newline at end of file