diff --git a/src/SharpIDE.Application/Features/FileWatching/IdeFileExternalChangeHandler.cs b/src/SharpIDE.Application/Features/FileWatching/IdeFileExternalChangeHandler.cs
index 2a9bd8b..894e91e 100644
--- a/src/SharpIDE.Application/Features/FileWatching/IdeFileExternalChangeHandler.cs
+++ b/src/SharpIDE.Application/Features/FileWatching/IdeFileExternalChangeHandler.cs
@@ -14,6 +14,28 @@ public class IdeFileExternalChangeHandler
 		_fileChangedService = fileChangedService;
 		GlobalEvents.Instance.FileSystemWatcherInternal.FileChanged.Subscribe(OnFileChanged);
 		GlobalEvents.Instance.FileSystemWatcherInternal.FileCreated.Subscribe(OnFileCreated);
+		GlobalEvents.Instance.FileSystemWatcherInternal.DirectoryCreated.Subscribe(OnFolderCreated);
+	}
+
+	private async Task OnFolderCreated(string folderPath)
+	{
+		var sharpIdeFolder = SolutionModel.AllFolders.SingleOrDefault(f => f.Path == folderPath);
+		if (sharpIdeFolder is not null)
+		{
+			Console.WriteLine($"Error - Folder {folderPath} already exists");
+			return;
+		}
+		var containingFolderPath = Path.GetDirectoryName(folderPath)!;
+		var containingFolder = SolutionModel.AllFolders.SingleOrDefault(f => f.Path == containingFolderPath);
+		if (containingFolder is null)
+		{
+			Console.WriteLine($"Error - Containing Folder of {folderPath} does not exist");
+			return;
+		}
+		// Passing [] to allFiles and allFolders, as we assume that a brand new folder has no subfolders or files yet
+		sharpIdeFolder = new SharpIdeFolder(new DirectoryInfo(folderPath), containingFolder, [], []);
+		containingFolder.Folders.Add(sharpIdeFolder);
+		SolutionModel.AllFolders.Add(sharpIdeFolder);
 	}
 
 	private async Task OnFileCreated(string filePath)
diff --git a/src/SharpIDE.Application/Features/FileWatching/IdeFileWatcher.cs b/src/SharpIDE.Application/Features/FileWatching/IdeFileWatcher.cs
index 0d5b59d..8809f89 100644
--- a/src/SharpIDE.Application/Features/FileWatching/IdeFileWatcher.cs
+++ b/src/SharpIDE.Application/Features/FileWatching/IdeFileWatcher.cs
@@ -73,9 +73,16 @@ public sealed class IdeFileWatcher : IDisposable
 
 	private void HandleCreated(string fullPath)
 	{
-		if (Path.HasExtension(fullPath) is false) return; // we don't care about directory changes
+		var isDirectory = Path.HasExtension(fullPath) is false;
+		if (isDirectory)
+		{
+			GlobalEvents.Instance.FileSystemWatcherInternal.DirectoryCreated.InvokeParallelFireAndForget(fullPath);
+		}
+		else
+		{
+			GlobalEvents.Instance.FileSystemWatcherInternal.FileCreated.InvokeParallelFireAndForget(fullPath);
+		}
 		//Console.WriteLine($"FileSystemWatcher: Created - {fullPath}");
-		GlobalEvents.Instance.FileSystemWatcherInternal.FileCreated.InvokeParallelFireAndForget(fullPath);
 	}
 
 	// The only changed event we care about is files, not directories
diff --git a/src/SharpIDE.Godot/Features/Common/TreeItemContainer.cs b/src/SharpIDE.Godot/Features/Common/TreeItemContainer.cs
index 5e77335..cb01708 100644
--- a/src/SharpIDE.Godot/Features/Common/TreeItemContainer.cs
+++ b/src/SharpIDE.Godot/Features/Common/TreeItemContainer.cs
@@ -1,7 +1,6 @@
 using System.Collections.Specialized;
 using Godot;
 using ObservableCollections;
-using SharpIDE.Application.Features.SolutionDiscovery.VsPersistence;
 
 namespace SharpIDE.Godot.Features.Common;