diff --git a/src-web/components/DropMarker.tsx b/src-web/components/DropMarker.tsx
index 80e42319..49e6d214 100644
--- a/src-web/components/DropMarker.tsx
+++ b/src-web/components/DropMarker.tsx
@@ -1,14 +1,17 @@
 import classNames from 'classnames';
+import type { CSSProperties} from 'react';
 import React, { memo } from 'react';
 
 interface Props {
   className?: string;
+  style?: CSSProperties;
 }
 
 export const DropMarker = memo(
-  function DropMarker({ className }: Props) {
+  function DropMarker({ className, style }: Props) {
     return (
       <div
+        style={style}
         className={classNames(
           className,
           'relative w-full h-0 overflow-visible pointer-events-none',
diff --git a/src-web/components/NewSidebar.tsx b/src-web/components/NewSidebar.tsx
index 149e8245..8a24f766 100644
--- a/src-web/components/NewSidebar.tsx
+++ b/src-web/components/NewSidebar.tsx
@@ -18,7 +18,7 @@ import {
 import classNames from 'classnames';
 import { atom, useAtomValue } from 'jotai';
 import { selectAtom } from 'jotai/utils';
-import React, { useCallback, useEffect, useMemo, useRef } from 'react';
+import React, { memo, useCallback, useEffect, useMemo, useRef } from 'react';
 import { moveToWorkspace } from '../commands/moveToWorkspace';
 import { openFolderSettings } from '../commands/openFolderSettings';
 import { activeCookieJarAtom } from '../hooks/useActiveCookieJar';
@@ -71,7 +71,13 @@ function getItemKey(item: Model) {
   ].join('::');
 }
 
-function SidebarLeftSlot({ treeId, item }: { treeId: string; item: Model }) {
+const SidebarLeftSlot = memo(function SidebarLeftSlot({
+  treeId,
+  item,
+}: {
+  treeId: string;
+  item: Model;
+}) {
   if (item.model === 'folder') {
     return <Icon icon="folder" />;
   } else if (item.model === 'workspace') {
@@ -86,9 +92,9 @@ function SidebarLeftSlot({ treeId, item }: { treeId: string; item: Model }) {
       />
     );
   }
-}
+});
 
-function SidebarInnerItem({ item }: { treeId: string; item: Model }) {
+const SidebarInnerItem = memo(function SidebarInnerItem({ item }: { treeId: string; item: Model }) {
   const response = useAtomValue(
     useMemo(
       () =>
@@ -119,7 +125,7 @@ function SidebarInnerItem({ item }: { treeId: string; item: Model }) {
       )}
     </div>
   );
-}
+});
 
 function NewSidebar({ className }: { className?: string }) {
   const [hidden, setHidden] = useSidebarHidden();
@@ -292,7 +298,7 @@ const sidebarTreeAtom = atom((get) => {
   }
 
   // Put requests and folders into a tree structure
-  const next = (node: TreeNode<Model>): TreeNode<Model> => {
+  const next = (node: TreeNode<Model>, depth: number): TreeNode<Model> => {
     const childItems = childrenMap[node.item.id] ?? [];
 
     // Recurse to children
@@ -301,18 +307,22 @@ const sidebarTreeAtom = atom((get) => {
       node.children = node.children ?? [];
       for (const item of childItems) {
         treeParentMap[item.id] = node;
-        node.children.push(next({ item, parent: node }));
+        node.children.push(next({ item, parent: node, depth }, depth + 1));
       }
     }
 
     return node;
   };
 
-  return next({
-    item: activeWorkspace,
-    children: [],
-    parent: null,
-  });
+  return next(
+    {
+      item: activeWorkspace,
+      children: [],
+      parent: null,
+      depth: 0,
+    },
+    1,
+  );
 });
 
 const actions = {
diff --git a/src-web/components/core/HttpMethodTag.tsx b/src-web/components/core/HttpMethodTag.tsx
index e2192056..04605870 100644
--- a/src-web/components/core/HttpMethodTag.tsx
+++ b/src-web/components/core/HttpMethodTag.tsx
@@ -2,6 +2,7 @@ import type { GrpcRequest, HttpRequest, WebsocketRequest } from '@yaakapp-intern
 import { settingsAtom } from '@yaakapp-internal/models';
 import classNames from 'classnames';
 import { useAtomValue } from 'jotai';
+import { memo } from 'react';
 
 interface Props {
   request: HttpRequest | GrpcRequest | WebsocketRequest;
@@ -23,7 +24,7 @@ const methodNames: Record<string, string> = {
   websocket: 'WS',
 };
 
-export function HttpMethodTag({ request, className, short }: Props) {
+export const HttpMethodTag = memo(function HttpMethodTag({ request, className, short }: Props) {
   const settings = useAtomValue(settingsAtom);
   const method =
     request.model === 'http_request' && request.bodyType === 'graphql'
@@ -42,9 +43,9 @@ export function HttpMethodTag({ request, className, short }: Props) {
       short={short}
     />
   );
-}
+});
 
-export function HttpMethodTagRaw({
+function HttpMethodTagRaw({
   className,
   method,
   colored,
diff --git a/src-web/components/core/Icon.tsx b/src-web/components/core/Icon.tsx
index efd033ff..aa30b6f3 100644
--- a/src-web/components/core/Icon.tsx
+++ b/src-web/components/core/Icon.tsx
@@ -1,7 +1,7 @@
 import type { Color } from '@yaakapp-internal/plugins';
 import classNames from 'classnames';
 import * as lucide from 'lucide-react';
-import type { HTMLAttributes } from 'react';
+import type { CSSProperties, HTMLAttributes } from 'react';
 import { memo } from 'react';
 
 const icons = {
@@ -127,6 +127,7 @@ const icons = {
 export interface IconProps {
   icon: keyof typeof icons;
   className?: string;
+  style?: CSSProperties;
   size?: '2xs' | 'xs' | 'sm' | 'md' | 'lg' | 'xl';
   spin?: boolean;
   title?: string;
@@ -138,12 +139,14 @@ export const Icon = memo(function Icon({
   color = 'default',
   spin,
   size = 'md',
+  style,
   className,
   title,
 }: IconProps) {
   const Component = icons[icon] ?? icons._unknown;
   return (
     <Component
+      style={style}
       title={title}
       className={classNames(
         className,
diff --git a/src-web/components/core/tree/Tree.tsx b/src-web/components/core/tree/Tree.tsx
index 5183b620..640ff52f 100644
--- a/src-web/components/core/tree/Tree.tsx
+++ b/src-web/components/core/tree/Tree.tsx
@@ -9,31 +9,27 @@ import {
 } from '@dnd-kit/core';
 import { type } from '@tauri-apps/plugin-os';
 import classNames from 'classnames';
-import { useAtomValue } from 'jotai';
 import type { ComponentType, ReactElement, Ref, RefAttributes } from 'react';
-import {
-  forwardRef,
-  memo,
-  useCallback,
-  useEffect,
-  useImperativeHandle,
-  useMemo,
-  useRef,
-  useState,
-} from 'react';
+import { forwardRef, memo, useCallback, useImperativeHandle, useMemo, useRef } from 'react';
 import { useKey, useKeyPressEvent } from 'react-use';
 import type { HotkeyAction, HotKeyOptions } from '../../../hooks/useHotKey';
 import { useHotKey } from '../../../hooks/useHotKey';
-import { sidebarCollapsedAtom } from '../../../hooks/useSidebarItemCollapsed';
 import { jotaiStore } from '../../../lib/jotai';
 import type { ContextMenuProps } from '../Dropdown';
-import { draggingIdsFamily, focusIdsFamily, hoveredParentFamily, selectedIdsFamily } from './atoms';
+import {
+  collapsedFamily,
+  draggingIdsFamily,
+  focusIdsFamily,
+  hoveredParentFamily,
+  selectedIdsFamily,
+} from './atoms';
 import type { SelectableTreeNode, TreeNode } from './common';
 import { computeSideForDragMove, equalSubtree, getSelectedItems, hasAncestor } from './common';
 import { TreeDragOverlay } from './TreeDragOverlay';
 import type { TreeItemProps } from './TreeItem';
 import type { TreeItemListProps } from './TreeItemList';
 import { TreeItemList } from './TreeItemList';
+import { useSelectableItems } from './useSelectableItems';
 
 export interface TreeProps<T extends { id: string }> {
   root: TreeNode<T>;
@@ -75,8 +71,7 @@ function TreeInner<T extends { id: string }>(
   ref: Ref<TreeHandle>,
 ) {
   const treeRef = useRef<HTMLDivElement>(null);
-  const { treeParentMap, selectableItems } = useTreeParentMap(root, getItemKey);
-  const [isFocused, setIsFocused] = useState<boolean>(false);
+  const selectableItems = useSelectableItems(root);
 
   const tryFocus = useCallback(() => {
     treeRef.current?.querySelector<HTMLButtonElement>('.tree-item button[tabindex="0"]')?.focus();
@@ -228,7 +223,12 @@ function TreeInner<T extends { id: string }>(
       const over = e.over;
       if (!over) {
         // Clear the drop indicator when hovering outside the tree
-        jotaiStore.set(hoveredParentFamily(treeId), { parentId: null, index: null });
+        jotaiStore.set(hoveredParentFamily(treeId), {
+          parentId: null,
+          parentDepth: null,
+          childIndex: null,
+          index: null,
+        });
         return;
       }
 
@@ -242,39 +242,59 @@ function TreeInner<T extends { id: string }>(
       if (hoveringRoot) {
         jotaiStore.set(hoveredParentFamily(treeId), {
           parentId: root.item.id,
-          index: root.children?.length ?? 0,
+          parentDepth: root.depth,
+          index: selectableItems.length,
+          childIndex: selectableItems.length,
         });
         return;
       }
 
-      const node = selectableItems.find((i) => i.node.item.id === over.id)?.node ?? null;
-      if (node == null) {
+      const selectableItem = selectableItems.find((i) => i.node.item.id === over.id) ?? null;
+      if (selectableItem == null) {
         return;
       }
+      const node = selectableItem.node;
 
       const side = computeSideForDragMove(node, e);
 
       const item = node.item;
-      let hoveredParent = treeParentMap[item.id] ?? null;
-      const dragIndex = hoveredParent?.children?.findIndex((n) => n.item.id === item.id) ?? -99;
-      const hovered = hoveredParent?.children?.[dragIndex] ?? null;
-      let hoveredIndex = dragIndex + (side === 'above' ? 0 : 1);
+      let hoveredParent = node.parent;
+      const dragIndex = selectableItems.findIndex((n) => n.node.item.id === item.id) ?? -1;
+      const hovered = selectableItems[dragIndex]?.node ?? null;
+      const hoveredIndex = dragIndex + (side === 'above' ? 0 : 1);
+      let hoveredChildIndex = selectableItem.index + (side === 'above' ? 0 : 1);
 
-      const collapsedMap = jotaiStore.get(jotaiStore.get(sidebarCollapsedAtom));
+      const collapsedMap = jotaiStore.get(collapsedFamily(treeId));
       const isHoveredItemCollapsed = hovered != null ? collapsedMap[hovered.item.id] : false;
 
       if (hovered?.children != null && side === 'below' && !isHoveredItemCollapsed) {
         // Move into the folder if it's open and we're moving below it
-        hoveredParent = hoveredParent?.children?.find((n) => n.item.id === item.id) ?? null;
-        hoveredIndex = 0;
+        hoveredParent = hovered;
+        hoveredChildIndex = 0;
       }
 
-      jotaiStore.set(hoveredParentFamily(treeId), {
-        parentId: hoveredParent?.item.id ?? null,
-        index: hoveredIndex,
-      });
+      const parentId = hoveredParent?.item.id ?? null;
+      const parentDepth = hoveredParent?.depth ?? null;
+      const index = hoveredIndex;
+      const childIndex = hoveredChildIndex;
+      const existing = jotaiStore.get(hoveredParentFamily(treeId));
+      if (
+        !(
+          parentId === existing.parentId &&
+          parentDepth === existing.parentDepth &&
+          index === existing.index &&
+          childIndex === existing.childIndex
+        )
+      ) {
+        jotaiStore.set(hoveredParentFamily(treeId), {
+          parentId: hoveredParent?.item.id ?? null,
+          parentDepth: hoveredParent?.depth ?? null,
+          index: hoveredIndex,
+          childIndex: hoveredChildIndex,
+        });
+      }
     },
-    [root.children?.length, root.item.id, selectableItems, treeId, treeParentMap],
+    [root.depth, root.item.id, selectableItems, treeId],
   );
 
   const handleDragStart = useCallback(
@@ -299,46 +319,57 @@ function TreeInner<T extends { id: string }>(
   );
 
   const clearDragState = useCallback(() => {
-    jotaiStore.set(hoveredParentFamily(treeId), { parentId: null, index: null });
+    jotaiStore.set(hoveredParentFamily(treeId), {
+      parentId: null,
+      parentDepth: null,
+      index: null,
+      childIndex: null,
+    });
     jotaiStore.set(draggingIdsFamily(treeId), []);
   }, [treeId]);
 
   const handleDragEnd = useCallback(
     function handleDragEnd(e: DragEndEvent) {
       // Get this from the store so our callback doesn't change all the time
-      const hovered = jotaiStore.get(hoveredParentFamily(treeId));
+      const {
+        index: hoveredIndex,
+        parentId: hoveredParentId,
+        childIndex: hoveredChildIndex,
+      } = jotaiStore.get(hoveredParentFamily(treeId));
       const draggingItems = jotaiStore.get(draggingIdsFamily(treeId));
       clearDragState();
 
       // Dropped outside the tree?
-      if (e.over == null) return;
+      if (e.over == null) {
+        return;
+      }
 
-      const hoveredParent =
-        hovered.parentId == root.item.id
-          ? root
-          : selectableItems.find((n) => n.node.item.id === hovered.parentId)?.node;
+      const hoveredParentS =
+        hoveredParentId === root.item.id
+          ? { node: root, depth: 0, index: 0 }
+          : (selectableItems.find((i) => i.node.item.id === hoveredParentId) ?? null);
+      const hoveredParent = hoveredParentS?.node ?? null;
 
-      if (hoveredParent == null || hovered.index == null || !draggingItems?.length) return;
-
-      // Optional tiny guard: don't drop into itself
-      if (draggingItems.some((id) => id === hovered.parentId)) return;
+      if (hoveredParent == null || hoveredIndex == null || !draggingItems?.length) {
+        return;
+      }
 
       // Resolve the actual tree nodes for each dragged item (keeps order of draggingItems)
       const draggedNodes: TreeNode<T>[] = draggingItems
         .map((id) => {
-          const parent = treeParentMap[id];
-          const idx = parent?.children?.findIndex((n) => n.item.id === id) ?? -1;
-          return idx >= 0 ? parent!.children![idx]! : null;
+          return selectableItems.find((i) => i.node.item.id === id)?.node ?? null;
         })
         .filter((n) => n != null)
         // Filter out invalid drags (dragging into descendant)
-        .filter((n) => !hasAncestor(hoveredParent, n.item.id));
+        .filter(
+          (n) => hoveredParent.item.id !== n.item.id && !hasAncestor(hoveredParent, n.item.id),
+        );
 
       // Work on a local copy of target children
       const nextChildren = [...(hoveredParent.children ?? [])];
 
       // Remove any of the dragged nodes already in the target, adjusting hoveredIndex
-      let insertAt = hovered.index;
+      let insertAt = hoveredChildIndex ?? 0;
       for (const node of draggedNodes) {
         const i = nextChildren.findIndex((n) => n.item.id === node.item.id);
         if (i !== -1) {
@@ -355,14 +386,13 @@ function TreeInner<T extends { id: string }>(
         insertAt,
       });
     },
-    [treeId, clearDragState, root, selectableItems, onDragEnd, treeParentMap],
+    [treeId, clearDragState, selectableItems, root, onDragEnd],
   );
 
   const treeItemListProps: Omit<
     TreeItemListProps<T>,
-    'node' | 'treeId' | 'activeIdAtom' | 'hoveredParent' | 'hoveredIndex'
+    'nodes' | 'treeId' | 'activeIdAtom' | 'hoveredParent' | 'hoveredIndex'
   > = {
-    depth: 0,
     getItemKey,
     getContextMenu: handleGetContextMenu,
     onClick: handleClick,
@@ -371,14 +401,6 @@ function TreeInner<T extends { id: string }>(
     ItemLeftSlot,
   };
 
-  const handleFocus = useCallback(function handleFocus() {
-    setIsFocused(true);
-  }, []);
-
-  const handleBlur = useCallback(function handleBlur() {
-    setIsFocused(false);
-  }, []);
-
   const sensors = useSensors(useSensor(PointerSensor, { activationConstraint: { distance: 6 } }));
 
   return (
@@ -396,30 +418,37 @@ function TreeInner<T extends { id: string }>(
       >
         <div
           ref={treeRef}
-          onFocus={handleFocus}
-          onBlur={handleBlur}
           className={classNames(
             className,
             'outline-none h-full',
             'overflow-y-auto overflow-x-hidden',
             'grid grid-rows-[auto_1fr]',
-            ' [&_.tree-item.selected]:text-text',
-            isFocused
-              ? '[&_.tree-item.selected]:bg-surface-active'
-              : '[&_.tree-item.selected]:bg-surface-highlight',
           )}
         >
-          <TreeItemList node={root} treeId={treeId} {...treeItemListProps} />
+          <div
+            className={classNames(
+              '[&_.tree-item-inner]:bg-surface',
+              '[&_.tree-item-selectable.selected]:text-text',
+              '[&:focus-within]:[&_.tree-item.selected]:bg-surface-active',
+              '[&:not(:focus-within)]:[&_.tree-item.selected]:bg-surface-highlight',
+
+              // Round the items, but only if the ends of the selection
+              '[&_.tree-item]:rounded-md',
+              '[&_.tree-item.selected+.tree-item.selected]:rounded-t-none',
+              '[&_.tree-item.selected:has(+.tree-item.selected)]:rounded-b-none',
+            )}
+          >
+            <TreeItemList nodes={selectableItems} treeId={treeId} {...treeItemListProps} />
+          </div>
           {/* Assign root ID so we can reuse our same move/end logic */}
           <DropRegionAfterList id={root.item.id} />
-          <TreeDragOverlay
-            treeId={treeId}
-            root={root}
-            selectableItems={selectableItems}
-            ItemInner={ItemInner}
-            getItemKey={getItemKey}
-          />
         </div>
+        <TreeDragOverlay
+          treeId={treeId}
+          selectableItems={selectableItems}
+          ItemInner={ItemInner}
+          getItemKey={getItemKey}
+        />
       </DndContext>
     </>
   );
@@ -447,63 +476,6 @@ function DropRegionAfterList({ id }: { id: string }) {
   return <div ref={setNodeRef} />;
 }
 
-function useTreeParentMap<T extends { id: string }>(
-  root: TreeNode<T>,
-  getItemKey: (item: T) => string,
-) {
-  const collapsedMap = useAtomValue(useAtomValue(sidebarCollapsedAtom));
-  const [{ treeParentMap, selectableItems }, setData] = useState(() => {
-    return compute(root, collapsedMap);
-  });
-
-  const prevRoot = useRef<TreeNode<T> | null>(null);
-
-  useEffect(() => {
-    const shouldRecompute =
-      root == null || prevRoot.current == null || !equalSubtree(root, prevRoot.current, getItemKey);
-    if (!shouldRecompute) return;
-    setData(compute(root, collapsedMap));
-    prevRoot.current = root;
-  }, [collapsedMap, getItemKey, root]);
-
-  return { treeParentMap, selectableItems };
-}
-
-function compute<T extends { id: string }>(
-  root: TreeNode<T>,
-  collapsedMap: Record<string, boolean>,
-) {
-  const treeParentMap: Record<string, TreeNode<T>> = {};
-  const selectableItems: SelectableTreeNode<T>[] = [];
-
-  // Put requests and folders into a tree structure
-  const next = (node: TreeNode<T>, depth: number = 0) => {
-    const isCollapsed = collapsedMap[node.item.id] === true;
-    // console.log("IS COLLAPSED", node.item.name, isCollapsed);
-    if (node.children == null) {
-      return;
-    }
-
-    // Recurse to children
-    let selectableIndex = 0;
-    for (const child of node.children) {
-      treeParentMap[child.item.id] = node;
-      if (!isCollapsed) {
-        selectableItems.push({
-          node: child,
-          index: selectableIndex++,
-          depth,
-        });
-      }
-
-      next(child, depth + 1);
-    }
-  };
-
-  next(root);
-  return { treeParentMap, selectableItems };
-}
-
 interface TreeHotKeyProps<T extends { id: string }> extends HotKeyOptions {
   action: HotkeyAction;
   selectableItems: SelectableTreeNode<T>[];
diff --git a/src-web/components/core/tree/TreeDragOverlay.tsx b/src-web/components/core/tree/TreeDragOverlay.tsx
index 4a029d0b..0fdf61fd 100644
--- a/src-web/components/core/tree/TreeDragOverlay.tsx
+++ b/src-web/components/core/tree/TreeDragOverlay.tsx
@@ -1,20 +1,18 @@
 import { DragOverlay } from '@dnd-kit/core';
 import { useAtomValue } from 'jotai';
 import { draggingIdsFamily } from './atoms';
-import type { SelectableTreeNode, TreeNode } from './common';
+import type { SelectableTreeNode } from './common';
 import type { TreeProps } from './Tree';
 import { TreeItemList } from './TreeItemList';
 
 export function TreeDragOverlay<T extends { id: string }>({
   treeId,
-  root,
   selectableItems,
   getItemKey,
   ItemInner,
   ItemLeftSlot,
 }: {
   treeId: string;
-  root: TreeNode<T>;
   selectableItems: SelectableTreeNode<T>[];
 } & Pick<TreeProps<T>, 'getItemKey' | 'ItemInner' | 'ItemLeftSlot'>) {
   const draggingItems = useAtomValue(draggingIdsFamily(treeId));
@@ -22,22 +20,11 @@ export function TreeDragOverlay<T extends { id: string }>({
     <DragOverlay dropAnimation={null}>
       <TreeItemList
         treeId={treeId + '.dragging'}
-        node={{
-          item: { ...root.item, id: `${root.item.id}_dragging` },
-          parent: null,
-          children: draggingItems
-            .map((id) => {
-              const child = selectableItems.find((i2) => {
-                return i2.node.item.id === id;
-              })?.node;
-              return child == null ? null : { ...child, children: undefined };
-            })
-            .filter((c) => c != null),
-        }}
+        nodes={selectableItems.filter((i) => draggingItems.includes(i.node.item.id))}
         getItemKey={getItemKey}
         ItemInner={ItemInner}
         ItemLeftSlot={ItemLeftSlot}
-        depth={0}
+        forceDepth={0}
       />
     </DragOverlay>
   );
diff --git a/src-web/components/core/tree/TreeDropMarker.tsx b/src-web/components/core/tree/TreeDropMarker.tsx
new file mode 100644
index 00000000..19fcaa4e
--- /dev/null
+++ b/src-web/components/core/tree/TreeDropMarker.tsx
@@ -0,0 +1,34 @@
+import classNames from 'classnames';
+import { useAtomValue } from 'jotai';
+import { memo } from 'react';
+import { DropMarker } from '../../DropMarker';
+import { hoveredParentDepthFamily, isCollapsedFamily, isIndexHoveredFamily } from './atoms';
+
+export const TreeDropMarker = memo(function TreeDropMarker({
+  className,
+  treeId,
+  itemId,
+  index,
+}: {
+  treeId: string;
+  index: number;
+  itemId: string | null;
+  className?: string;
+}) {
+  const isHovered = useAtomValue(isIndexHoveredFamily({ treeId, index }));
+  const parentDepth = useAtomValue(hoveredParentDepthFamily(treeId));
+  const collapsed = useAtomValue(isCollapsedFamily({ treeId, itemId: itemId ?? undefined }));
+
+  // Only show if we're hovering over this index
+  if (!isHovered)  return null;
+
+  // Don't show if we're right under a collapsed folder. We have a separate delayed expansion
+  // animation for that.
+  if (collapsed) return null;
+
+  return (
+    <div style={{ paddingLeft: `${parentDepth}rem` }}>
+      <DropMarker className={classNames(className)} />
+    </div>
+  );
+});
diff --git a/src-web/components/core/tree/TreeIndentGuide.tsx b/src-web/components/core/tree/TreeIndentGuide.tsx
new file mode 100644
index 00000000..942719c3
--- /dev/null
+++ b/src-web/components/core/tree/TreeIndentGuide.tsx
@@ -0,0 +1,28 @@
+import classNames from 'classnames';
+import { useAtomValue } from 'jotai';
+import { memo } from 'react';
+import { hoveredParentDepthFamily } from './atoms';
+
+export const TreeIndentGuide = memo(function TreeIndentGuide({
+  treeId,
+  depth,
+}: {
+  treeId: string;
+  depth: number;
+}) {
+  const parentDepth = useAtomValue(hoveredParentDepthFamily(treeId));
+
+  return (
+    <div className="flex">
+      {Array.from({ length: depth }).map((_, i) => (
+        <div
+          key={i}
+          className={classNames(
+            'w-[1rem] border-r border-r-text-subtlest',
+            parentDepth !== i + 1 && 'opacity-30',
+          )}
+        />
+      ))}
+    </div>
+  );
+});
diff --git a/src-web/components/core/tree/TreeItem.tsx b/src-web/components/core/tree/TreeItem.tsx
index 37cc5941..be957019 100644
--- a/src-web/components/core/tree/TreeItem.tsx
+++ b/src-web/components/core/tree/TreeItem.tsx
@@ -2,21 +2,18 @@ import type { DragMoveEvent } from '@dnd-kit/core';
 import { useDndMonitor, useDraggable, useDroppable } from '@dnd-kit/core';
 import classNames from 'classnames';
 import { useAtomValue } from 'jotai';
+import { selectAtom } from 'jotai/utils';
 import type { MouseEvent, PointerEvent } from 'react';
-import React, { useCallback, useEffect, useRef, useState } from 'react';
+import React, { memo, useCallback, useEffect, useMemo, useRef, useState } from 'react';
 import { jotaiStore } from '../../../lib/jotai';
 import type { ContextMenuProps, DropdownItem } from '../Dropdown';
 import { ContextMenu } from '../Dropdown';
 import { Icon } from '../Icon';
-import {
-  isCollapsedFamily,
-  isLastFocusedFamily,
-  isParentHoveredFamily,
-  isSelectedFamily,
-} from './atoms';
+import { collapsedFamily, isCollapsedFamily, isLastFocusedFamily, isSelectedFamily } from './atoms';
 import type { TreeNode } from './common';
 import { computeSideForDragMove } from './common';
 import type { TreeProps } from './Tree';
+import { TreeIndentGuide } from './TreeIndentGuide';
 
 interface OnClickEvent {
   shiftKey: boolean;
@@ -26,17 +23,18 @@ interface OnClickEvent {
 
 export type TreeItemProps<T extends { id: string }> = Pick<
   TreeProps<T>,
-  'ItemInner' | 'ItemLeftSlot' | 'treeId' | 'getEditOptions'
+  'ItemInner' | 'ItemLeftSlot' | 'treeId' | 'getEditOptions' | 'getItemKey'
 > & {
   node: TreeNode<T>;
   className?: string;
   onClick?: (item: T, e: OnClickEvent) => void;
   getContextMenu?: (item: T) => Promise<ContextMenuProps['items']>;
+  depth: number;
 };
 
 const HOVER_CLOSED_FOLDER_DELAY = 800;
 
-export function TreeItem<T extends { id: string }>({
+function TreeItem_<T extends { id: string }>({
   treeId,
   node,
   ItemInner,
@@ -45,17 +43,34 @@ export function TreeItem<T extends { id: string }>({
   onClick,
   getEditOptions,
   className,
+  depth,
 }: TreeItemProps<T>) {
-  const ref = useRef<HTMLDivElement>(null);
+  const ref = useRef<HTMLLIElement>(null);
   const draggableRef = useRef<HTMLButtonElement>(null);
   const isSelected = useAtomValue(isSelectedFamily({ treeId, itemId: node.item.id }));
   const isCollapsed = useAtomValue(isCollapsedFamily({ treeId, itemId: node.item.id }));
-  const isHoveredAsParent = useAtomValue(isParentHoveredFamily({ treeId, parentId: node.item.id }));
   const isLastSelected = useAtomValue(isLastFocusedFamily({ treeId, itemId: node.item.id }));
   const [editing, setEditing] = useState<boolean>(false);
   const [isDropHover, setIsDropHover] = useState<boolean>(false);
   const startedHoverTimeout = useRef<NodeJS.Timeout>(undefined);
 
+  const isAncestorCollapsedAtom = useMemo(
+    () =>
+      selectAtom(
+        collapsedFamily(treeId),
+        (collapsed) => {
+          const next = (n: TreeNode<T>) => {
+            if (n.parent == null) return false;
+            if (collapsed[n.parent.item.id]) return true;
+            return next(n.parent);
+          };
+          return next(node);
+        },
+        (a, b) => a === b, // re-render only when boolean flips
+      ),
+    [node, treeId],
+  );
+
   const [showContextMenu, setShowContextMenu] = useState<{
     items: DropdownItem[];
     x: number;
@@ -160,7 +175,7 @@ export function TreeItem<T extends { id: string }>({
   });
 
   const handleContextMenu = useCallback(
-    async (e: MouseEvent<HTMLDivElement>) => {
+    async (e: MouseEvent<HTMLElement>) => {
       if (getContextMenu == null) return;
 
       e.preventDefault();
@@ -197,77 +212,107 @@ export function TreeItem<T extends { id: string }>({
     [setDraggableRef, setDroppableRef],
   );
 
+  if (useAtomValue(isAncestorCollapsedAtom)) return null;
+
   return (
-    <div
+    <li
       ref={ref}
+      role="treeitem"
+      aria-level={depth + 1}
+      aria-expanded={node.children == null ? undefined : !isCollapsed}
+      aria-selected={isSelected}
       onContextMenu={handleContextMenu}
       className={classNames(
         className,
         'tree-item',
+        'h-sm',
+        'grid grid-cols-[auto_minmax(0,1fr)]',
         isSelected && 'selected',
-        'text-text-subtle',
-        'h-sm grid grid-cols-[auto_minmax(0,1fr)] items-center rounded-md px-1.5',
-        editing && 'ring-1 focus-within:ring-focus',
-        isDropHover && 'relative z-10 ring-2 ring-primary animate-blinkRing',
       )}
     >
-      {showContextMenu && (
-        <ContextMenu
-          items={showContextMenu.items}
-          triggerPosition={showContextMenu}
-          onClose={handleCloseContextMenu}
-        />
-      )}
-      {node.children != null ? (
-        <button
-          tabIndex={-1}
-          className="h-full w-[2.8rem] pr-[0.5rem] -ml-[1rem]"
-          onClick={toggleCollapsed}
-        >
-          <Icon
-            icon="chevron_right"
-            className={classNames(
-              'transition-transform text-text-subtlest',
-              'ml-auto !h-[1rem] !w-[1rem]',
-              node.children.length == 0 && 'opacity-0',
-              !isCollapsed && 'rotate-90',
-              isHoveredAsParent && '!text-text',
-            )}
-          />
-        </button>
-      ) : (
-        <span />
-      )}
-      <button
-        ref={handleSetDraggableRef}
-        onPointerDown={handlePointerDown}
-        onClick={handleClick}
-        onDoubleClick={handleDoubleClick}
-        disabled={editing}
-        className="focus:outline-none flex items-center gap-2 h-full whitespace-nowrap"
-        {...attributes}
-        {...listeners}
-        tabIndex={isLastSelected ? 0 : -1}
-      >
-        {ItemLeftSlot != null && <ItemLeftSlot treeId={treeId} item={node.item} />}
-        {getEditOptions != null && editing ? (
-          (() => {
-            const { defaultValue, placeholder } = getEditOptions(node.item);
-            return (
-              <input
-                ref={handleEditFocus}
-                defaultValue={defaultValue}
-                placeholder={placeholder}
-                className="bg-transparent outline-none w-full cursor-text"
-                onBlur={handleEditBlur}
-                onKeyDown={handleEditKeyDown}
-              />
-            );
-          })()
-        ) : (
-          <ItemInner treeId={treeId} item={node.item} />
+      <TreeIndentGuide treeId={treeId} depth={depth} />
+      <div
+        className={classNames(
+          'tree-item-selectable',
+          'text-text-subtle',
+          isSelected && 'selected',
+          'grid grid-cols-[auto_minmax(0,1fr)] items-center rounded-md',
+          editing && 'ring-1 focus-within:ring-focus',
+          isDropHover && 'relative z-10 ring-2 ring-primary animate-blinkRing',
         )}
-      </button>
-    </div>
+      >
+        {showContextMenu && (
+          <ContextMenu
+            items={showContextMenu.items}
+            triggerPosition={showContextMenu}
+            onClose={handleCloseContextMenu}
+          />
+        )}
+        {node.children != null ? (
+          <button tabIndex={-1} className="h-full pl-[0.5rem]" onClick={toggleCollapsed}>
+            <Icon
+              icon="chevron_right"
+              className={classNames(
+                'transition-transform text-text-subtlest',
+                'ml-auto',
+                'w-[1rem] h-[1rem]',
+                // node.children.length == 0 && 'opacity-0',
+                !isCollapsed && 'rotate-90',
+                // isHoveredAsParent && '!text-text',
+              )}
+            />
+          </button>
+        ) : (
+          <span aria-hidden /> // Make the grid happy
+        )}
+
+        <button
+          ref={handleSetDraggableRef}
+          onPointerDown={handlePointerDown}
+          onClick={handleClick}
+          onDoubleClick={handleDoubleClick}
+          disabled={editing}
+          className="px-2 focus:outline-none flex items-center gap-2 h-full whitespace-nowrap"
+          {...attributes}
+          {...listeners}
+          tabIndex={isLastSelected ? 0 : -1}
+        >
+          {ItemLeftSlot != null && <ItemLeftSlot treeId={treeId} item={node.item} />}
+          {getEditOptions != null && editing ? (
+            (() => {
+              const { defaultValue, placeholder } = getEditOptions(node.item);
+              return (
+                <input
+                  ref={handleEditFocus}
+                  defaultValue={defaultValue}
+                  placeholder={placeholder}
+                  className="bg-transparent outline-none w-full cursor-text"
+                  onBlur={handleEditBlur}
+                  onKeyDown={handleEditKeyDown}
+                />
+              );
+            })()
+          ) : (
+            <ItemInner treeId={treeId} item={node.item} />
+          )}
+        </button>
+      </div>
+    </li>
   );
 }
+
+export const TreeItem = memo(
+  TreeItem_,
+  ({ node: prevNode, ...prevProps }, { node: nextNode, ...nextProps }) => {
+    const nonEqualKeys = [];
+    for (const key of Object.keys(prevProps)) {
+      if (prevProps[key as keyof typeof prevProps] !== nextProps[key as keyof typeof nextProps]) {
+        nonEqualKeys.push(key);
+      }
+    }
+    if (nonEqualKeys.length > 0) {
+      return false;
+    }
+    return nextProps.getItemKey(prevNode.item) === nextProps.getItemKey(nextNode.item);
+  },
+) as typeof TreeItem_;
diff --git a/src-web/components/core/tree/TreeItemList.tsx b/src-web/components/core/tree/TreeItemList.tsx
index 9c161500..d81c37ea 100644
--- a/src-web/components/core/tree/TreeItemList.tsx
+++ b/src-web/components/core/tree/TreeItemList.tsx
@@ -1,12 +1,8 @@
-import classNames from 'classnames';
-import { useAtomValue } from 'jotai';
 import type { CSSProperties } from 'react';
 import { Fragment, memo } from 'react';
-import { DropMarker } from '../../DropMarker';
-import { isCollapsedFamily, isItemHoveredFamily, isParentHoveredFamily } from './atoms';
-import type { TreeNode } from './common';
-import { equalSubtree } from './common';
+import type { SelectableTreeNode } from './common';
 import type { TreeProps } from './Tree';
+import { TreeDropMarker } from './TreeDropMarker';
 import type { TreeItemProps } from './TreeItem';
 import { TreeItem } from './TreeItem';
 
@@ -15,81 +11,54 @@ export type TreeItemListProps<T extends { id: string }> = Pick<
   'ItemInner' | 'ItemLeftSlot' | 'treeId' | 'getItemKey' | 'getEditOptions'
 > &
   Pick<TreeItemProps<T>, 'onClick' | 'getContextMenu'> & {
-    node: TreeNode<T>;
-    depth: number;
+    nodes: SelectableTreeNode<T>[];
     style?: CSSProperties;
     className?: string;
+    forceDepth?: number;
   };
 
 function TreeItemList_<T extends { id: string }>({
   className,
-  depth,
   getContextMenu,
   getEditOptions,
   getItemKey,
-  node,
+  nodes,
   onClick,
   ItemInner,
   ItemLeftSlot,
   style,
   treeId,
+  forceDepth,
 }: TreeItemListProps<T>) {
-  const isHovered = useAtomValue(isParentHoveredFamily({ treeId, parentId: node.item.id }));
-  const isCollapsed = useAtomValue(isCollapsedFamily({ treeId, itemId: node.item.id }));
-  const childList = !isCollapsed && node.children != null && (
-    <ul
-      style={style}
-      className={classNames(
-        className,
-        depth > 0 && 'ml-[calc(1.2rem+0.5px)] pl-[0.7rem] border-l',
-        isHovered ? 'border-l-text-subtle' : 'border-l-border-subtle',
-      )}
-    >
-      {node.children.map(function mapChild(child, i) {
-        return (
-          <Fragment key={getItemKey(child.item)}>
-            <TreeDropMarker treeId={treeId} parent={node} index={i} />
-            <TreeItemList
-              treeId={treeId}
-              node={child}
-              ItemInner={ItemInner}
-              ItemLeftSlot={ItemLeftSlot}
-              onClick={onClick}
-              getEditOptions={getEditOptions}
-              depth={depth + 1}
-              getItemKey={getItemKey}
-              getContextMenu={getContextMenu}
-            />
-          </Fragment>
-        );
-      })}
-      <TreeDropMarker treeId={treeId} parent={node ?? null} index={node.children?.length ?? 0} />
-    </ul>
-  );
-
-  if (depth === 0) {
-    return childList;
-  }
-
   return (
-    <li>
-      <TreeItem
-        treeId={treeId}
-        node={node}
-        getContextMenu={getContextMenu}
-        ItemInner={ItemInner}
-        ItemLeftSlot={ItemLeftSlot}
-        onClick={onClick}
-        getEditOptions={getEditOptions}
-      />
-      {childList}
-    </li>
+    <ul role="tree" style={style} className={className}>
+      <TreeDropMarker itemId={null} treeId={treeId} index={0} />
+      {nodes.map((child, i) => (
+        <Fragment key={getItemKey(child.node.item)}>
+          <TreeItem
+            treeId={treeId}
+            node={child.node}
+            ItemInner={ItemInner}
+            ItemLeftSlot={ItemLeftSlot}
+            onClick={onClick}
+            getEditOptions={getEditOptions}
+            getContextMenu={getContextMenu}
+            getItemKey={getItemKey}
+            depth={forceDepth == null ? child.depth : forceDepth}
+          />
+          <TreeDropMarker itemId={child.node.item.id} treeId={treeId} index={i+1} />
+        </Fragment>
+      ))}
+    </ul>
   );
 }
 
 export const TreeItemList = memo(
   TreeItemList_,
-  ({ node: prevNode, ...prevProps }, { node: nextNode, ...nextProps }) => {
+  (
+    { nodes: prevNodes, getItemKey: prevGetItemKey, ...prevProps },
+    { nodes: nextNodes, getItemKey: nextGetItemKey, ...nextProps },
+  ) => {
     const nonEqualKeys = [];
     for (const key of Object.keys(prevProps)) {
       if (prevProps[key as keyof typeof prevProps] !== nextProps[key as keyof typeof nextProps]) {
@@ -100,32 +69,16 @@ export const TreeItemList = memo(
       // console.log('TreeItemList: ', nonEqualKeys);
       return false;
     }
-    return equalSubtree(prevNode, nextNode, nextProps.getItemKey);
+    if (prevNodes.length !== nextNodes.length) return false;
+
+    for (let i = 0; i < prevNodes.length; i++) {
+      const prev = prevNodes[i]!;
+      const next = nextNodes[i]!;
+      if (prevGetItemKey(prev.node.item) !== nextGetItemKey(next.node.item)) {
+        return false;
+      }
+    }
+
+    return true;
   },
 ) as typeof TreeItemList_;
-
-const TreeDropMarker = memo(function TreeDropMarker<T extends { id: string }>({
-  className,
-  treeId,
-  parent,
-  index,
-}: {
-  treeId: string;
-  parent: TreeNode<T> | null;
-  index: number;
-  className?: string;
-}) {
-  const isHovered = useAtomValue(isItemHoveredFamily({ treeId, parentId: parent?.item.id, index }));
-  const isLastItem = parent?.children?.length === index;
-  const isLastItemHovered = useAtomValue(
-    isItemHoveredFamily({
-      treeId,
-      parentId: parent?.item.id,
-      index: parent?.children?.length ?? 0,
-    }),
-  );
-
-  if (!isHovered && !(isLastItem && isLastItemHovered)) return null;
-
-  return <DropMarker className={classNames(className)} />;
-});
diff --git a/src-web/components/core/tree/atoms.ts b/src-web/components/core/tree/atoms.ts
index 16c42bb9..4a811e1e 100644
--- a/src-web/components/core/tree/atoms.ts
+++ b/src-web/components/core/tree/atoms.ts
@@ -32,43 +32,40 @@ export const draggingIdsFamily = atomFamily((_treeId: string) => {
 
 // eslint-disable-next-line @typescript-eslint/no-unused-vars
 export const hoveredParentFamily = atomFamily((_treeId: string) => {
-  return atom<{ index: number | null; parentId: string | null }>({ index: null, parentId: null });
+  return atom<{
+    index: number | null;
+    childIndex: number | null;
+    parentId: string | null;
+    parentDepth: number | null;
+  }>({
+    index: null,
+    childIndex: null,
+    parentId: null,
+    parentDepth: null,
+  });
 });
 
-export const isParentHoveredFamily = atomFamily(
-  ({ treeId, parentId }: { treeId: string; parentId: string | null | undefined }) =>
-    selectAtom(hoveredParentFamily(treeId), (v) => v.parentId === parentId, Object.is),
-  (a, b) => a.treeId === b.treeId && a.parentId === b.parentId,
+export const isIndexHoveredFamily = atomFamily(
+  ({ treeId, index }: { treeId: string; index: number}) =>
+    selectAtom(hoveredParentFamily(treeId), (v) => v.index === index, Object.is),
+  (a, b) => a.treeId === b.treeId && a.index === b.index,
 );
 
-export const isItemHoveredFamily = atomFamily(
-  ({
-    treeId,
-    parentId,
-    index,
-  }: {
-    treeId: string;
-    parentId: string | null | undefined;
-    index: number | null;
-  }) =>
-    selectAtom(
-      hoveredParentFamily(treeId),
-      (v) => v.parentId === parentId && v.index === index,
-      Object.is,
-    ),
-  (a, b) => a.treeId === b.treeId && a.parentId === b.parentId && a.index === b.index,
+export const hoveredParentDepthFamily = atomFamily((treeId: string) =>
+  selectAtom(
+    hoveredParentFamily(treeId),
+    (s) => s.parentDepth,
+    (a, b) => Object.is(a, b) // prevents re-render unless the value changes
+  )
 );
 
-function kvKey(workspaceId: string | null) {
-  return ['sidebar_collapsed', workspaceId ?? 'n/a'];
-}
-
 export const collapsedFamily = atomFamily((workspaceId: string) => {
-  return atomWithKVStorage<Record<string, boolean>>(kvKey(workspaceId), {});
+  const key = ['sidebar_collapsed', workspaceId ?? 'n/a'];
+  return atomWithKVStorage<Record<string, boolean>>(key, {});
 });
 
 export const isCollapsedFamily = atomFamily(
-  ({ treeId, itemId }: { treeId: string; itemId: string }) =>
+  ({ treeId, itemId = 'n/a' }: { treeId: string; itemId: string | undefined }) =>
     atom(
       // --- getter ---
       (get) => !!get(collapsedFamily(treeId))[itemId],
diff --git a/src-web/components/core/tree/common.ts b/src-web/components/core/tree/common.ts
index 2f153c6a..d2056dda 100644
--- a/src-web/components/core/tree/common.ts
+++ b/src-web/components/core/tree/common.ts
@@ -2,10 +2,11 @@ import type { DragMoveEvent } from '@dnd-kit/core';
 import { jotaiStore } from '../../../lib/jotai';
 import { selectedIdsFamily } from './atoms';
 
-export interface TreeNode<T extends { id: string }> {
+export interface TreeNode<T extends { id: string } > {
   children?: TreeNode<T>[];
   item: T;
   parent: TreeNode<T> | null;
+  depth: number;
 }
 
 export interface SelectableTreeNode<T extends { id: string }> {
@@ -41,9 +42,10 @@ export function equalSubtree<T extends { id: string }>(
 }
 
 export function hasAncestor<T extends { id: string }>(node: TreeNode<T>, ancestorId: string) {
-  // Check parents recursively
   if (node.parent == null) return false;
   if (node.parent.item.id === ancestorId) return true;
+
+  // Check parents recursively
   return hasAncestor(node.parent, ancestorId);
 }
 
diff --git a/src-web/components/core/tree/useSelectableItems.ts b/src-web/components/core/tree/useSelectableItems.ts
new file mode 100644
index 00000000..87b82bf6
--- /dev/null
+++ b/src-web/components/core/tree/useSelectableItems.ts
@@ -0,0 +1,30 @@
+import { useMemo } from 'react';
+import type { SelectableTreeNode, TreeNode } from './common';
+
+export function useSelectableItems<T extends { id: string }>(root: TreeNode<T>) {
+  return useMemo(() => {
+    const selectableItems: SelectableTreeNode<T>[] = [];
+
+    // Put requests and folders into a tree structure
+    const next = (node: TreeNode<T>, depth: number = 0) => {
+      if (node.children == null) {
+        return;
+      }
+
+      // Recurse to children
+      let selectableIndex = 0;
+      for (const child of node.children) {
+        selectableItems.push({
+          node: child,
+          index: selectableIndex++,
+          depth,
+        });
+
+        next(child, depth + 1);
+      }
+    };
+
+    next(root);
+    return selectableItems;
+  }, [root]);
+}
diff --git a/src-web/hooks/useSidebarItemCollapsed.ts b/src-web/hooks/useSidebarItemCollapsed.ts
index ab7ba93e..89fec4c3 100644
--- a/src-web/hooks/useSidebarItemCollapsed.ts
+++ b/src-web/hooks/useSidebarItemCollapsed.ts
@@ -1,7 +1,5 @@
-import { atom, useAtomValue } from 'jotai';
-import { useCallback } from 'react';
+import { atom } from 'jotai';
 import { atomWithKVStorage } from '../lib/atoms/atomWithKVStorage';
-import { jotaiStore } from '../lib/jotai';
 import { activeWorkspaceIdAtom } from './useActiveWorkspace';
 
 function kvKey(workspaceId: string | null) {
@@ -12,18 +10,3 @@ export const sidebarCollapsedAtom = atom((get) => {
   const workspaceId = get(activeWorkspaceIdAtom);
   return atomWithKVStorage<Record<string, boolean>>(kvKey(workspaceId), {});
 });
-
-export function useSidebarItemCollapsed(itemId: string) {
-  const map = useAtomValue(useAtomValue(sidebarCollapsedAtom));
-  const isCollapsed = map[itemId] === true;
-
-  const toggle = useCallback(() => toggleSidebarItemCollapsed(itemId), [itemId]);
-
-  return [isCollapsed, toggle] as const;
-}
-
-export function toggleSidebarItemCollapsed(itemId: string) {
-  jotaiStore.set(jotaiStore.get(sidebarCollapsedAtom), (prev) => {
-    return { ...prev, [itemId]: !prev[itemId] };
-  });
-}