diff --git a/docs/adr/0033-subfolder-scanning-and-folder-tree.md b/docs/adr/0033-subfolder-scanning-and-folder-tree.md
new file mode 100644
index 00000000..5c901831
--- /dev/null
+++ b/docs/adr/0033-subfolder-scanning-and-folder-tree.md
@@ -0,0 +1,33 @@
+---
+type: ADR
+id: "0033"
+title: "Subfolder scanning and folder tree navigation"
+status: active
+date: 2026-03-31
+---
+
+## Context
+
+Supersedes the scanning constraint in [ADR-0006](0006-flat-vault-structure.md) which limited vault indexing to root-level `.md` files plus protected folders (`attachments/`, `assets/`).
+
+Users with folder-based workflows (PARA, Zettelkasten with folders, project directories) could not see or filter notes by directory. The vault scanner silently ignored all subdirectory `.md` files, making Laputa unsuitable for vaults with any folder structure.
+
+## Decision
+
+**Extend the Rust vault scanner to index `.md` files in all visible subdirectories, and expose the vault's folder tree via a new `list_vault_folders` Tauri command so the sidebar can render a collapsible FOLDERS section.**
+
+Hidden directories (names starting with `.`, plus `.git` and `.laputa`) are excluded from both scanning and the folder tree.
+
+## Options considered
+
+- **Option A** (chosen): Scan all subdirectories with `walkdir`, expose separate `list_vault_folders` command — simple, no schema changes to VaultEntry, folder tree is lightweight and independent of the entry cache.
+- **Option B**: Add a `folder` field to VaultEntry and derive the tree on the frontend — couples folder metadata to the entry cache, complicates cache invalidation when folders are created/deleted without file changes.
+- **Option C**: Keep flat scanning, add a "virtual folders" feature that groups by path prefix from frontmatter — doesn't solve the core problem of missing notes in subdirectories.
+
+## Consequences
+
+- All `.md` files in the vault are now indexed regardless of depth — vaults with many non-note `.md` files (e.g. node_modules) will see spurious entries. Mitigation: hidden directories are already excluded; users can add a `.laputaignore` in the future if needed.
+- The git-based cache in `cache.rs` already uses `walkdir` for change detection, so this change aligns scanning with caching.
+- `SidebarSelection` gains a new `{ kind: 'folder'; path: string }` variant — all exhaustive switches on selection kind must handle it.
+- ADR-0006's "flat vault" principle is relaxed: notes can now live in subdirectories. Type definitions still live in `type/` at the root.
+- Re-evaluate if users request recursive folder filtering (currently only direct children are shown when a folder is selected).
diff --git a/docs/adr/README.md b/docs/adr/README.md
index d2bda2aa..549ed275 100644
--- a/docs/adr/README.md
+++ b/docs/adr/README.md
@@ -88,3 +88,4 @@ proposed → active → superseded
 | [0030](0030-rust-commands-module-split.md) | Rust commands/ module split by domain | active |
 | [0031](0031-full-app-for-note-windows.md) | Full App instance for secondary note windows | active |
 | [0032](0032-status-bar-for-git-actions.md) | Git actions (Changes, Pulse, Commit) in status bar, not sidebar | active |
+| [0033](0033-subfolder-scanning-and-folder-tree.md) | Subfolder scanning and folder tree navigation | active |
diff --git a/src/components/FolderTree.test.tsx b/src/components/FolderTree.test.tsx
new file mode 100644
index 00000000..434788d7
--- /dev/null
+++ b/src/components/FolderTree.test.tsx
@@ -0,0 +1,70 @@
+import { render, screen, fireEvent } from '@testing-library/react'
+import { describe, it, expect, vi } from 'vitest'
+import { FolderTree } from './FolderTree'
+import type { FolderNode, SidebarSelection } from '../types'
+
+const mockFolders: FolderNode[] = [
+  {
+    name: 'projects',
+    path: 'projects',
+    children: [
+      { name: 'laputa', path: 'projects/laputa', children: [] },
+      { name: 'portfolio', path: 'projects/portfolio', children: [] },
+    ],
+  },
+  { name: 'areas', path: 'areas', children: [] },
+  { name: 'journal', path: 'journal', children: [] },
+]
+
+const defaultSelection: SidebarSelection = { kind: 'filter', filter: 'all' }
+
+describe('FolderTree', () => {
+  it('renders nothing when folders is empty', () => {
+    const { container } = render(
+      <FolderTree folders={[]} selection={defaultSelection} onSelect={vi.fn()} />,
+    )
+    expect(container.firstChild).toBeNull()
+  })
+
+  it('renders FOLDERS header and top-level folders', () => {
+    render(<FolderTree folders={mockFolders} selection={defaultSelection} onSelect={vi.fn()} />)
+    expect(screen.getByText('FOLDERS')).toBeInTheDocument()
+    expect(screen.getByText('projects')).toBeInTheDocument()
+    expect(screen.getByText('areas')).toBeInTheDocument()
+    expect(screen.getByText('journal')).toBeInTheDocument()
+  })
+
+  it('does not show children initially', () => {
+    render(<FolderTree folders={mockFolders} selection={defaultSelection} onSelect={vi.fn()} />)
+    expect(screen.queryByText('laputa')).not.toBeInTheDocument()
+  })
+
+  it('calls onSelect with folder kind when clicking a folder', () => {
+    const onSelect = vi.fn()
+    render(<FolderTree folders={mockFolders} selection={defaultSelection} onSelect={onSelect} />)
+    fireEvent.click(screen.getByText('projects'))
+    expect(onSelect).toHaveBeenCalledWith({ kind: 'folder', path: 'projects' })
+  })
+
+  it('expands children when clicking a folder with children', () => {
+    const onSelect = vi.fn()
+    render(<FolderTree folders={mockFolders} selection={defaultSelection} onSelect={onSelect} />)
+    fireEvent.click(screen.getByText('projects'))
+    expect(screen.getByText('laputa')).toBeInTheDocument()
+    expect(screen.getByText('portfolio')).toBeInTheDocument()
+  })
+
+  it('collapses section when clicking FOLDERS header', () => {
+    render(<FolderTree folders={mockFolders} selection={defaultSelection} onSelect={vi.fn()} />)
+    expect(screen.getByText('projects')).toBeInTheDocument()
+    fireEvent.click(screen.getByText('FOLDERS'))
+    expect(screen.queryByText('projects')).not.toBeInTheDocument()
+  })
+
+  it('highlights selected folder', () => {
+    const sel: SidebarSelection = { kind: 'folder', path: 'areas' }
+    render(<FolderTree folders={mockFolders} selection={sel} onSelect={vi.fn()} />)
+    const btn = screen.getByText('areas').closest('button')!
+    expect(btn.className).toContain('text-primary')
+  })
+})
diff --git a/src/utils/noteListHelpers.test.ts b/src/utils/noteListHelpers.test.ts
index 7733c969..2a22388d 100644
--- a/src/utils/noteListHelpers.test.ts
+++ b/src/utils/noteListHelpers.test.ts
@@ -1,5 +1,5 @@
 import { describe, it, expect, vi, afterEach } from 'vitest'
-import { formatSubtitle, formatSearchSubtitle, relativeDate, buildRelationshipGroups, getSortComparator, extractSortableProperties, getSortOptionLabel, getDefaultDirection, parseSortConfig, serializeSortConfig, buildValidLinkTargets, isInboxEntry, filterInboxEntries } from './noteListHelpers'
+import { formatSubtitle, formatSearchSubtitle, relativeDate, buildRelationshipGroups, getSortComparator, extractSortableProperties, getSortOptionLabel, getDefaultDirection, parseSortConfig, serializeSortConfig, buildValidLinkTargets, isInboxEntry, filterInboxEntries, filterEntries } from './noteListHelpers'
 import type { VaultEntry } from '../types'
 
 function makeEntry(overrides: Partial<VaultEntry> = {}): VaultEntry {
@@ -695,3 +695,42 @@ describe('filterInboxEntries', () => {
     expect(result).toEqual([])
   })
 })
+
+describe('filterEntries — folder selection', () => {
+  const entries = [
+    makeEntry({ path: '/vault/projects/laputa/note1.md', title: 'Note 1' }),
+    makeEntry({ path: '/vault/projects/laputa/note2.md', title: 'Note 2' }),
+    makeEntry({ path: '/vault/projects/portfolio/site.md', title: 'Site' }),
+    makeEntry({ path: '/vault/areas/health.md', title: 'Health' }),
+    makeEntry({ path: '/vault/root-note.md', title: 'Root' }),
+  ]
+
+  it('filters entries by folder path', () => {
+    const result = filterEntries(entries, { kind: 'folder', path: 'projects/laputa' })
+    expect(result.map(e => e.title)).toEqual(['Note 1', 'Note 2'])
+  })
+
+  it('does not include notes from sibling folders', () => {
+    const result = filterEntries(entries, { kind: 'folder', path: 'projects/laputa' })
+    expect(result.find(e => e.title === 'Site')).toBeUndefined()
+  })
+
+  it('filters by parent folder (non-recursive — direct children only)', () => {
+    const result = filterEntries(entries, { kind: 'folder', path: 'areas' })
+    expect(result.map(e => e.title)).toEqual(['Health'])
+  })
+
+  it('returns empty for root when entries are in subfolders', () => {
+    const result = filterEntries(entries, { kind: 'folder', path: 'nonexistent' })
+    expect(result).toEqual([])
+  })
+
+  it('excludes archived and trashed entries by default', () => {
+    const withArchived = [
+      ...entries,
+      makeEntry({ path: '/vault/projects/laputa/archived.md', title: 'Archived', archived: true }),
+    ]
+    const result = filterEntries(withArchived, { kind: 'folder', path: 'projects/laputa' })
+    expect(result.find(e => e.title === 'Archived')).toBeUndefined()
+  })
+})