diff --git a/src-tauri/src/main.rs b/src-tauri/src/main.rs
index 114a5c06..3dcf7492 100644
--- a/src-tauri/src/main.rs
+++ b/src-tauri/src/main.rs
@@ -405,6 +405,7 @@ async fn create_request(
     workspace_id: &str,
     name: &str,
     sort_priority: f64,
+    folder_id: Option<&str>,
     window: Window<Wry>,
     db_instance: State<'_, Mutex<Pool<Sqlite>>>,
 ) -> Result<models::HttpRequest, String> {
@@ -415,6 +416,7 @@ async fn create_request(
             workspace_id: workspace_id.to_string(),
             name: name.to_string(),
             method: "GET".to_string(),
+            folder_id: folder_id.map(|s| s.to_string()),
             sort_priority,
             ..Default::default()
         },
diff --git a/src-web/components/Sidebar.tsx b/src-web/components/Sidebar.tsx
index 9f720a22..ea0faf57 100644
--- a/src-web/components/Sidebar.tsx
+++ b/src-web/components/Sidebar.tsx
@@ -8,8 +8,10 @@ import { useActiveEnvironmentId } from '../hooks/useActiveEnvironmentId';
 import { useActiveRequestId } from '../hooks/useActiveRequestId';
 import { useActiveWorkspace } from '../hooks/useActiveWorkspace';
 import { useAppRoutes } from '../hooks/useAppRoutes';
+import { useCreateFolder } from '../hooks/useCreateFolder';
 import { useCreateRequest } from '../hooks/useCreateRequest';
 import { useDeleteAnyRequest } from '../hooks/useDeleteAnyRequest';
+import { useDeleteFolder } from '../hooks/useDeleteFolder';
 import { useFolders } from '../hooks/useFolders';
 import { useLatestResponse } from '../hooks/useLatestResponse';
 import { useListenToTauriEvent } from '../hooks/useListenToTauriEvent';
@@ -20,7 +22,9 @@ import { useUpdateAnyRequest } from '../hooks/useUpdateAnyRequest';
 import { useUpdateRequest } from '../hooks/useUpdateRequest';
 import type { Folder, HttpRequest, Workspace } from '../lib/models';
 import { isResponseLoading } from '../lib/models';
+import { Dropdown } from './core/Dropdown';
 import { Icon } from './core/Icon';
+import { IconButton } from './core/IconButton';
 import { VStack } from './core/Stacks';
 import { StatusTag } from './core/StatusTag';
 import { DropMarker } from './DropMarker';
@@ -386,7 +390,17 @@ function SidebarItems({
   handleDragStart,
 }: SidebarItemsProps) {
   return (
-    <VStack as="ul" role="menu" aria-orientation="vertical" dir="ltr">
+    <VStack
+      as="ul"
+      role="menu"
+      aria-orientation="vertical"
+      dir="ltr"
+      className={classNames(
+        tree.depth > 0 && 'border-l border-highlight',
+        tree.depth === 0 && 'ml-0',
+        tree.depth >= 1 && 'ml-[1.3em]',
+      )}
+    >
       {tree.children.map((child, i) => (
         <Fragment key={child.item.id}>
           {hoveredIndex === i && hoveredTree?.item.id === tree.item.id && (
@@ -403,7 +417,6 @@ function SidebarItems({
             onDragStart={handleDragStart}
             useProminentStyles={focused}
             collapsed={collapsed}
-            className={classNames(tree.depth > 0 && 'border-l border-highlight ml-5')}
           >
             {child.item.model === 'folder' &&
               !collapsed[child.item.id] &&
@@ -461,6 +474,9 @@ const SidebarItem = forwardRef(function SidebarItem(
   }: SidebarItemProps,
   ref: ForwardedRef<HTMLLIElement>,
 ) {
+  const createRequest = useCreateRequest();
+  const createFolder = useCreateFolder();
+  const deleteRequest = useDeleteFolder(itemId);
   const latestResponse = useLatestResponse(itemId);
   const updateRequest = useUpdateRequest(itemId);
   const [editing, setEditing] = useState<boolean>(false);
@@ -515,7 +531,37 @@ const SidebarItem = forwardRef(function SidebarItem(
 
   return (
     <li ref={ref}>
-      <div className={classNames(className, 'block group/item px-2 pb-0.5')}>
+      <div className={classNames(className, 'block relative group/item px-2 pb-0.5')}>
+        {itemModel === 'folder' && (
+          <Dropdown
+            items={[
+              {
+                key: 'createRequest',
+                label: 'New Request',
+                onSelect: () => createRequest.mutate({ folderId: itemId, sortPriority: -1 }),
+              },
+              {
+                key: 'createFolder',
+                label: 'New Folder',
+                onSelect: () => createFolder.mutate({ folderId: itemId, sortPriority: -1 }),
+              },
+              { type: 'separator' },
+              {
+                key: 'deleteFolder',
+                label: 'Delete',
+                variant: 'danger',
+                onSelect: () => deleteRequest.mutate(),
+              },
+            ]}
+          >
+            <IconButton
+              title="Folder options"
+              size="xs"
+              icon="dotsV"
+              className="ml-auto !bg-transparent absolute right-2 opacity-20 group-hover/item:opacity-70 transition-opacity"
+            />
+          </Dropdown>
+        )}
         <button
           // tabIndex={-1} // Will prevent drag-n-drop
           onClick={handleSelect}
@@ -535,8 +581,11 @@ const SidebarItem = forwardRef(function SidebarItem(
           {itemModel === 'folder' && (
             <Icon
               size="sm"
-              icon={collapsed[itemId] ? 'chevronRight' : 'chevronDown'}
-              className="-ml-0.5 mr-2"
+              icon="chevronRight"
+              className={classNames(
+                '-ml-0.5 mr-2 transition-transform',
+                !collapsed[itemId] && 'transform rotate-90',
+              )}
             />
           )}
           {editing ? (
diff --git a/src-web/components/SidebarActions.tsx b/src-web/components/SidebarActions.tsx
index d4f82e53..c4dc6383 100644
--- a/src-web/components/SidebarActions.tsx
+++ b/src-web/components/SidebarActions.tsx
@@ -1,11 +1,14 @@
 import { memo } from 'react';
-import { useSidebarHidden } from '../hooks/useSidebarHidden';
-import { IconButton } from './core/IconButton';
+import { useCreateFolder } from '../hooks/useCreateFolder';
 import { useCreateRequest } from '../hooks/useCreateRequest';
+import { useSidebarHidden } from '../hooks/useSidebarHidden';
+import { Dropdown } from './core/Dropdown';
+import { IconButton } from './core/IconButton';
 import { HStack } from './core/Stacks';
 
 export const SidebarActions = memo(function SidebarActions() {
   const createRequest = useCreateRequest();
+  const createFolder = useCreateFolder();
   const { hidden, toggle } = useSidebarHidden();
 
   return (
@@ -19,12 +22,22 @@ export const SidebarActions = memo(function SidebarActions() {
           icon={hidden ? 'leftPanelHidden' : 'leftPanelVisible'}
         />
       )}
-      <IconButton
-        size="sm"
-        icon="plusCircle"
-        title="Create Request"
-        onClick={() => createRequest.mutate({})}
-      />
+      <Dropdown
+        items={[
+          {
+            key: 'create-request',
+            label: 'Create Request',
+            onSelect: () => createRequest.mutate({}),
+          },
+          {
+            key: 'create-folder',
+            label: 'Create Folder',
+            onSelect: () => createFolder.mutate({}),
+          },
+        ]}
+      >
+        <IconButton size="sm" icon="plusCircle" title="Add Resource" />
+      </Dropdown>
     </HStack>
   );
 });
diff --git a/src-web/components/core/Dropdown.tsx b/src-web/components/core/Dropdown.tsx
index 150505c9..b908fd48 100644
--- a/src-web/components/core/Dropdown.tsx
+++ b/src-web/components/core/Dropdown.tsx
@@ -1,6 +1,13 @@
 import classNames from 'classnames';
 import { motion } from 'framer-motion';
-import type { CSSProperties, HTMLAttributes, MouseEvent, ReactElement, ReactNode } from 'react';
+import type {
+  CSSProperties,
+  FocusEvent as ReactFocusEvent,
+  HTMLAttributes,
+  MouseEvent,
+  ReactElement,
+  ReactNode,
+} from 'react';
 import React, {
   Children,
   cloneElement,
@@ -13,10 +20,10 @@ import React, {
   useState,
 } from 'react';
 import { useKey, useKeyPressEvent, useWindowSize } from 'react-use';
+import { Overlay } from '../Overlay';
 import { Button } from './Button';
 import { Separator } from './Separator';
 import { VStack } from './Stacks';
-import { Overlay } from '../Overlay';
 
 export type DropdownItemSeparator = {
   type: 'separator';
@@ -334,7 +341,13 @@ interface MenuItemProps {
 
 function MenuItem({ className, focused, onFocus, item, onSelect, ...props }: MenuItemProps) {
   const handleClick = useCallback(() => onSelect?.(item), [item, onSelect]);
-  const handleFocus = useCallback(() => onFocus?.(item), [item, onFocus]);
+  const handleFocus = useCallback(
+    (e: ReactFocusEvent<HTMLButtonElement>) => {
+      e.stopPropagation(); // Don't trigger focus on any parents
+      return onFocus?.(item);
+    },
+    [item, onFocus],
+  );
 
   const initRef = useCallback(
     (el: HTMLButtonElement | null) => {
diff --git a/src-web/hooks/useCreateFolder.ts b/src-web/hooks/useCreateFolder.ts
new file mode 100644
index 00000000..3e0f2fa0
--- /dev/null
+++ b/src-web/hooks/useCreateFolder.ts
@@ -0,0 +1,24 @@
+import { useMutation, useQueryClient } from '@tanstack/react-query';
+import { invoke } from '@tauri-apps/api';
+import type { Folder } from '../lib/models';
+import { useActiveWorkspaceId } from './useActiveWorkspaceId';
+import { foldersQueryKey } from './useFolders';
+
+export function useCreateFolder() {
+  const workspaceId = useActiveWorkspaceId();
+  const queryClient = useQueryClient();
+
+  return useMutation<Folder, unknown, Partial<Pick<Folder, 'name' | 'sortPriority' | 'folderId'>>>({
+    mutationFn: (patch) => {
+      if (workspaceId === null) {
+        throw new Error("Cannot create folder when there's no active workspace");
+      }
+      patch.name = patch.name || 'New Folder';
+      patch.sortPriority = patch.sortPriority || Date.now();
+      return invoke('create_folder', { workspaceId, ...patch });
+    },
+    onSuccess: async (request) => {
+      await queryClient.invalidateQueries(foldersQueryKey({ workspaceId: request.workspaceId }));
+    },
+  });
+}
diff --git a/src-web/hooks/useCreateRequest.ts b/src-web/hooks/useCreateRequest.ts
index bf82048c..9047fa54 100644
--- a/src-web/hooks/useCreateRequest.ts
+++ b/src-web/hooks/useCreateRequest.ts
@@ -1,10 +1,10 @@
 import { useMutation, useQueryClient } from '@tanstack/react-query';
 import { invoke } from '@tauri-apps/api';
 import type { HttpRequest } from '../lib/models';
+import { useActiveEnvironmentId } from './useActiveEnvironmentId';
 import { useActiveWorkspaceId } from './useActiveWorkspaceId';
 import { useAppRoutes } from './useAppRoutes';
 import { requestsQueryKey, useRequests } from './useRequests';
-import { useActiveEnvironmentId } from './useActiveEnvironmentId';
 
 export function useCreateRequest() {
   const workspaceId = useActiveWorkspaceId();
@@ -13,7 +13,11 @@ export function useCreateRequest() {
   const requests = useRequests();
   const queryClient = useQueryClient();
 
-  return useMutation<HttpRequest, unknown, Partial<Pick<HttpRequest, 'name' | 'sortPriority'>>>({
+  return useMutation<
+    HttpRequest,
+    unknown,
+    Partial<Pick<HttpRequest, 'name' | 'sortPriority' | 'folderId'>>
+  >({
     mutationFn: (patch) => {
       if (workspaceId === null) {
         throw new Error("Cannot create request when there's no active workspace");
diff --git a/src-web/hooks/useDeleteFolder.tsx b/src-web/hooks/useDeleteFolder.tsx
new file mode 100644
index 00000000..156ec30b
--- /dev/null
+++ b/src-web/hooks/useDeleteFolder.tsx
@@ -0,0 +1,40 @@
+import { useMutation, useQueryClient } from '@tanstack/react-query';
+import { invoke } from '@tauri-apps/api';
+import { InlineCode } from '../components/core/InlineCode';
+import type { Folder } from '../lib/models';
+import { getFolder } from '../lib/store';
+import { useConfirm } from './useConfirm';
+import { foldersQueryKey } from './useFolders';
+import { requestsQueryKey } from './useRequests';
+
+export function useDeleteFolder(id: string | null) {
+  const queryClient = useQueryClient();
+  const confirm = useConfirm();
+
+  return useMutation<Folder | null, string>({
+    mutationFn: async () => {
+      const folder = await getFolder(id);
+      const confirmed = await confirm({
+        title: 'Delete Folder',
+        variant: 'delete',
+        description: (
+          <>
+            Permanently delete <InlineCode>{folder?.name}</InlineCode> and everything in it?
+          </>
+        ),
+      });
+      if (!confirmed) return null;
+      return invoke('delete_folder', { folderId: id });
+    },
+    onSuccess: async (folder) => {
+      // Was it cancelled?
+      if (folder === null) return;
+
+      const { workspaceId } = folder;
+
+      // Nesting makes it hard to clean things up, so just clear everything that could have been deleted
+      await queryClient.invalidateQueries(requestsQueryKey({ workspaceId }));
+      await queryClient.invalidateQueries(foldersQueryKey({ workspaceId }));
+    },
+  });
+}