diff --git a/src/components/Tree.svelte b/src/components/Tree.svelte
index c4c17684c..08435b20f 100644
--- a/src/components/Tree.svelte
+++ b/src/components/Tree.svelte
@@ -1,7 +1,15 @@
 <script lang="ts">
   import type { Tree } from "@bindings/source/Tree";
 
-  import { SvelteMap } from "svelte/reactivity";
+  import { untrack } from "svelte";
+  import { SvelteMap, SvelteSet } from "svelte/reactivity";
+
+  import type { FolderExpansion } from "@app/lib/fileTreeExpansion";
+  import {
+    isFolderExpanded,
+    openAncestors,
+    toggleFolder,
+  } from "@app/lib/fileTreeExpansion";
 
   import FileTreeFile from "@app/components/FileTreeFile.svelte";
   import FileTreeFolder from "@app/components/FileTreeFolder.svelte";
@@ -16,24 +24,23 @@
 
   const { currentPath, tree, fetchTree, onSelect }: Props = $props();
 
-  // Manual expand/collapse overrides, keyed by folder prefix. Held here
-  // rather than in FileTreeFolder so the state survives the virtualizer
-  // unmounting off-screen rows; without an override a folder is expanded
-  // when it contains the open file.
-  const expandedOverrides = new SvelteMap<string, boolean>();
+  // Held here rather than in FileTreeFolder so the state survives the
+  // virtualizer unmounting off-screen rows.
+  const expansion: FolderExpansion = {
+    opened: new SvelteSet(),
+    collapsedOnVisit: new SvelteMap(),
+  };
+  let visits = 0;
+  const location = $derived.by(() => ({ path: currentPath, visit: ++visits }));
   $effect(() => {
-    // Navigating to another file resets every folder to its default, the
-    // same behaviour the per-folder writable $derived had before the state
-    // was hoisted.
-    // eslint-disable-next-line @typescript-eslint/no-unused-expressions
-    currentPath;
-    expandedOverrides.clear();
+    const path = currentPath;
+    untrack(() => openAncestors(expansion, path));
   });
   function isExpanded(prefix: string): boolean {
-    return expandedOverrides.get(prefix) ?? currentPath.indexOf(prefix) === 0;
+    return isFolderExpanded(expansion, prefix, location);
   }
   function toggleExpanded(prefix: string) {
-    expandedOverrides.set(prefix, !isExpanded(prefix));
+    toggleFolder(expansion, prefix, location);
   }
 </script>
 
diff --git a/src/lib/fileTreeExpansion.ts b/src/lib/fileTreeExpansion.ts
new file mode 100644
index 000000000..ea5c6a5e9
--- /dev/null
+++ b/src/lib/fileTreeExpansion.ts
@@ -0,0 +1,52 @@
+// Expansion state of the file tree's folders, keyed by folder prefix
+// (`docs/`, `docs/guides/`). A folder stays open once it was opened by hand
+// or held the open file, until it is collapsed by hand. Folders containing
+// the open file are always expanded, unless collapsed since navigating to
+// that file. `visit` counts navigations, so that coming back to the same file
+// expands its folders again.
+export interface FolderExpansion {
+  opened: Set<string>;
+  collapsedOnVisit: Map<string, number>;
+}
+
+export interface Location {
+  path: string;
+  visit: number;
+}
+
+function ancestorPrefixes(path: string): string[] {
+  const prefixes: string[] = [];
+  for (let i = path.indexOf("/"); i !== -1; i = path.indexOf("/", i + 1)) {
+    prefixes.push(path.slice(0, i + 1));
+  }
+  return prefixes;
+}
+
+export function openAncestors(state: FolderExpansion, path: string) {
+  for (const prefix of ancestorPrefixes(path)) {
+    state.opened.add(prefix);
+  }
+}
+
+export function isFolderExpanded(
+  state: FolderExpansion,
+  prefix: string,
+  location: Location,
+): boolean {
+  if (state.collapsedOnVisit.get(prefix) === location.visit) return false;
+  return state.opened.has(prefix) || location.path.startsWith(prefix);
+}
+
+export function toggleFolder(
+  state: FolderExpansion,
+  prefix: string,
+  location: Location,
+) {
+  if (isFolderExpanded(state, prefix, location)) {
+    state.opened.delete(prefix);
+    state.collapsedOnVisit.set(prefix, location.visit);
+  } else {
+    state.opened.add(prefix);
+    state.collapsedOnVisit.delete(prefix);
+  }
+}
diff --git a/tests/e2e/repo/source.spec.ts b/tests/e2e/repo/source.spec.ts
index 26ebf1380..c23997b49 100644
--- a/tests/e2e/repo/source.spec.ts
+++ b/tests/e2e/repo/source.spec.ts
@@ -75,6 +75,30 @@ test("selecting a file keeps the open folder's entries rendered", async ({
   expect(await sibling?.evaluate(el => el.isConnected)).toBe(true);
 });
 
+test("folders stay open when selecting a file elsewhere", async ({
+  page,
+  peer,
+}) => {
+  const { rid } = await createNestedDocsRepo(peer);
+  await page.goto(`/repos/${rid}/home`);
+
+  await page.getByText("guides", { exact: true }).click();
+  await page.getByText("setup.md", { exact: true }).click();
+  await expect(page.getByText("Install it first.")).toBeVisible();
+
+  await page.getByText("api", { exact: true }).click();
+  await page.getByText("index.md", { exact: true }).click();
+  await expect(page.getByText("The API reference.")).toBeVisible();
+  await expect(page.getByText("usage.md", { exact: true })).toBeVisible();
+
+  await page.getByText("guides", { exact: true }).click();
+  await expect(page.getByText("usage.md", { exact: true })).toBeHidden();
+  await page.getByText("README.md", { exact: true }).click();
+  await expect(page.getByText("Welcome to the docs.")).toBeVisible();
+  await expect(page.getByText("usage.md", { exact: true })).toBeHidden();
+  await expect(page.getByText("index.md", { exact: true })).toBeVisible();
+});
+
 test("commits are listed and open with their changes", async ({
   page,
   peer,
diff --git a/tests/unit/fileTreeExpansion.test.ts b/tests/unit/fileTreeExpansion.test.ts
new file mode 100644
index 000000000..93befd1ea
--- /dev/null
+++ b/tests/unit/fileTreeExpansion.test.ts
@@ -0,0 +1,95 @@
+import { expect, test } from "vitest";
+
+import type { FolderExpansion, Location } from "@app/lib/fileTreeExpansion";
+import {
+  isFolderExpanded,
+  openAncestors,
+  toggleFolder,
+} from "@app/lib/fileTreeExpansion";
+
+function create(): FolderExpansion {
+  return { opened: new Set(), collapsedOnVisit: new Map() };
+}
+
+let visits = 0;
+function navigate(state: FolderExpansion, path: string): Location {
+  openAncestors(state, path);
+  return { path, visit: ++visits };
+}
+
+test("folders containing the open file are expanded", () => {
+  const state = create();
+  const location = { path: "docs/guides/setup.md", visit: 0 };
+
+  expect(isFolderExpanded(state, "docs/", location)).toBe(true);
+  expect(isFolderExpanded(state, "docs/guides/", location)).toBe(true);
+  expect(isFolderExpanded(state, "src/", location)).toBe(false);
+});
+
+test("only the open file's own ancestors are expanded", () => {
+  const state = create();
+  const location = navigate(state, "src/doc/readme.md");
+
+  expect(isFolderExpanded(state, "doc/", location)).toBe(false);
+  expect(isFolderExpanded(state, "src/do/", location)).toBe(false);
+});
+
+test("a file at the root opens no folders", () => {
+  const state = create();
+  navigate(state, "README.md");
+
+  expect(state.opened.size).toBe(0);
+});
+
+test("folders stay open after navigating to a file elsewhere", () => {
+  const state = create();
+  navigate(state, "docs/guides/setup.md");
+  const location = navigate(state, "src/main.ts");
+
+  expect(isFolderExpanded(state, "docs/", location)).toBe(true);
+  expect(isFolderExpanded(state, "docs/guides/", location)).toBe(true);
+});
+
+test("a folder opened by hand stays open after navigating", () => {
+  const state = create();
+  toggleFolder(state, "src/", navigate(state, "README.md"));
+  const location = navigate(state, "docs/setup.md");
+
+  expect(isFolderExpanded(state, "src/", location)).toBe(true);
+});
+
+test("a folder collapsed by hand stays closed after navigating elsewhere", () => {
+  const state = create();
+  toggleFolder(state, "docs/", navigate(state, "docs/setup.md"));
+  const location = navigate(state, "src/main.ts");
+
+  expect(isFolderExpanded(state, "docs/", location)).toBe(false);
+});
+
+test("the open file's folder can be collapsed and expanded again", () => {
+  const state = create();
+  const location = navigate(state, "docs/setup.md");
+
+  toggleFolder(state, "docs/", location);
+  expect(isFolderExpanded(state, "docs/", location)).toBe(false);
+
+  toggleFolder(state, "docs/", location);
+  expect(isFolderExpanded(state, "docs/", location)).toBe(true);
+});
+
+test("navigating into a collapsed folder expands it", () => {
+  const state = create();
+  toggleFolder(state, "docs/", navigate(state, "docs/setup.md"));
+  const location = navigate(state, "docs/usage.md");
+
+  expect(isFolderExpanded(state, "docs/", location)).toBe(true);
+});
+
+test("navigating back to the file a folder was collapsed on expands it", () => {
+  const state = create();
+  toggleFolder(state, "docs/", navigate(state, "docs/setup.md"));
+  navigate(state, "src/main.ts");
+  const location = navigate(state, "docs/setup.md");
+
+  expect(isFolderExpanded(state, "docs/", location)).toBe(true);
+});