diff --git a/platform/lang-impl/src/com/intellij/ide/scopeView/ScopeViewTreeModel.java b/platform/lang-impl/src/com/intellij/ide/scopeView/ScopeViewTreeModel.java
index 7a62ec14a277..f957c4471c23 100644
--- a/platform/lang-impl/src/com/intellij/ide/scopeView/ScopeViewTreeModel.java
+++ b/platform/lang-impl/src/com/intellij/ide/scopeView/ScopeViewTreeModel.java
@@ -74,6 +74,7 @@ import java.util.function.BiFunction;
 import java.util.stream.Collectors;
 
 import static com.intellij.ide.projectView.impl.ProjectRootsUtil.findSourceFolder;
+import static com.intellij.ide.projectView.impl.ShowModulesAction.hasModules;
 import static com.intellij.openapi.roots.ui.configuration.SourceRootPresentation.getSourceRootIcon;
 import static com.intellij.openapi.util.io.FileUtil.getLocationRelativeToUserHome;
 import static com.intellij.openapi.vfs.VfsUtilCore.VFS_SEPARATOR_CHAR;
@@ -215,6 +216,7 @@ public final class ScopeViewTreeModel extends BaseTreeModel<AbstractTreeNode> im
     model.onValidThread(() -> {
       root.childrenValid = false;
       LOG.debug("whole structure changed");
+      model.setShowModules(hasModules() && root.getSettings().isShowModules());
       treeStructureChanged(null, null, null);
       if (onDone != null) onDone.run();
     });
@@ -534,13 +536,7 @@ public final class ScopeViewTreeModel extends BaseTreeModel<AbstractTreeNode> im
       model.getChildren(model.getRoot()).forEach(child -> newRoots.put(child, mapper.apply(this, child)));
       roots = newRoots;
       if (newRoots.isEmpty()) return emptyList();
-      ModuleManager manager = getModuleManager(getProject());
-      if (manager == null) return emptyList();
-      boolean hidden = !getSettings().isShowModules();
-      if (!hidden && manager.getModules().length <= 1) hidden = true;
-      boolean flatten = hidden || getSettings().isFlattenModules();
-      if (!flatten && !manager.hasModuleGroups() && !Registry.is("project.qualified.module.names")) flatten = true;
-      return new Group(newRoots.values(), hidden, flatten).createChildren(this, old);
+      return new Group(newRoots.values(), getSettings().isFlattenModules() || !hasModuleGroups(getProject())).createChildren(this, old);
     }
 
     @NotNull
@@ -666,13 +662,21 @@ public final class ScopeViewTreeModel extends BaseTreeModel<AbstractTreeNode> im
 
     @Override
     protected void update(PresentationData presentation) {
+      VirtualFile file = getVirtualFile();
       String title = getTitle();
-      presentation.setPresentableText(title != null ? title : toString());
+      SimpleTextAttributes attributes = SimpleTextAttributes.REGULAR_ATTRIBUTES;
+      if (node.getRootID() instanceof VirtualFile) {
+        ProjectFileIndex index = getProjectFileIndex(getProject());
+        if (index != null && file.equals(index.getContentRootForFile(file))) {
+          attributes = SimpleTextAttributes.REGULAR_BOLD_ATTRIBUTES;
+        }
+      }
+      presentation.addText(title != null ? title : toString(), attributes);
       Icon icon = getIcon();
-      if (icon == null && getVirtualFile().isValid()) {
-        icon = getVirtualFile().isDirectory()
+      if (icon == null && file.isValid()) {
+        icon = file.isDirectory()
                ? getFolderIcon(node, null)
-               : getVirtualFile().getFileType().getIcon();
+               : file.getFileType().getIcon();
       }
       presentation.setIcon(icon);
       decorate(presentation);
@@ -956,38 +960,33 @@ public final class ScopeViewTreeModel extends BaseTreeModel<AbstractTreeNode> im
       id = module;
     }
 
-    Group(@NotNull Collection<RootNode> nodes, boolean hidden, boolean flatten) {
+    Group(@NotNull Collection<RootNode> nodes, boolean flatten) {
       id = null;
       if (!nodes.isEmpty()) {
-        if (hidden) {
-          roots.addAll(nodes);
-        }
-        else {
-          HashMap<Module, Group> map = new HashMap<>();
-          nodes.forEach(node -> {
-            Object id = node.node.getRootID();
-            if (id instanceof Module) {
-              Module module = (Module)id;
-              Group group = map.get(module);
-              if (group == null) {
-                group = new Group(module);
-                map.put(module, group);
-              }
-              group.roots.add(node);
+        HashMap<Module, Group> map = new HashMap<>();
+        nodes.forEach(node -> {
+          Object id = node.node.getRootID();
+          if (id instanceof Module) {
+            Module module = (Module)id;
+            Group group = map.get(module);
+            if (group == null) {
+              group = new Group(module);
+              map.put(module, group);
             }
-            else {
-              roots.add(node);
-            }
-          });
-          if (flatten) {
-            groups.putAll(map);
+            group.roots.add(node);
           }
           else {
-            map.forEach((module, group) -> {
-              List<String> path = getModuleNameAsList(module, Registry.is("project.qualified.module.names"));
-              group.roots.forEach(node -> add(node, path, 0));
-            });
+            roots.add(node);
           }
+        });
+        if (flatten) {
+          groups.putAll(map);
+        }
+        else {
+          map.forEach((module, group) -> {
+            List<String> path = getModuleNameAsList(module, Registry.is("project.qualified.module.names"));
+            group.roots.forEach(node -> add(node, path, 0));
+          });
         }
       }
     }
@@ -1149,6 +1148,7 @@ public final class ScopeViewTreeModel extends BaseTreeModel<AbstractTreeNode> im
     return index == null ? null : index.getModuleForFile(file);
   }
 
+  @Nullable
   private static String getPackageName(@Nullable PsiElement element) {
     if (element instanceof PsiDirectory && element.isValid()) {
       PsiDirectoryFactory factory = PsiDirectoryFactory.getInstance(element.getProject());
@@ -1160,6 +1160,12 @@ public final class ScopeViewTreeModel extends BaseTreeModel<AbstractTreeNode> im
     return null;
   }
 
+  private static boolean hasModuleGroups(@Nullable Project project) {
+    if (Registry.is("project.qualified.module.names")) return true;
+    ModuleManager manager = getModuleManager(project);
+    return manager != null && manager.hasModuleGroups();
+  }
+
   @NotNull
   private static List<String> getModuleNameAsList(@NotNull Module module, boolean split) {
     String name = module.getName();
diff --git a/platform/platform-impl/src/com/intellij/ui/tree/project/ProjectFileListener.java b/platform/platform-impl/src/com/intellij/ui/tree/project/ProjectFileListener.java
index 72011d16460d..82d410a36c08 100644
--- a/platform/platform-impl/src/com/intellij/ui/tree/project/ProjectFileListener.java
+++ b/platform/platform-impl/src/com/intellij/ui/tree/project/ProjectFileListener.java
@@ -125,10 +125,13 @@ public abstract class ProjectFileListener {
   @Nullable
   public static AreaInstance findArea(@NotNull VirtualFile file, @Nullable Project project) {
     if (project == null || project.isDisposed()) return null;
-    Module module = ProjectFileIndex.getInstance(project).getModuleForFile(file);
+    Module module = ProjectFileIndex.getInstance(project).getModuleForFile(file, false);
     if (module != null) return module.isDisposed() ? null : module;
     VirtualFile ancestor = project.getBaseDir();
     // file does not belong to any content root, but it is located under the project directory
-    return ancestor == null || !isAncestor(ancestor, file, false) ? null : project;
+    if (ancestor == null || !isAncestor(ancestor, file, false)) return null;
+    PsiManager manager = PsiManager.getInstance(project);
+    PsiElement element = file.isDirectory() ? manager.findDirectory(file) : manager.findFile(file);
+    return element == null ? null : project; // ensure that the corresponding file can be shown
   }
 }
diff --git a/platform/platform-impl/src/com/intellij/ui/tree/project/ProjectFileTreeModel.java b/platform/platform-impl/src/com/intellij/ui/tree/project/ProjectFileTreeModel.java
index 91cf81901ad5..5c75f5a48c2d 100644
--- a/platform/platform-impl/src/com/intellij/ui/tree/project/ProjectFileTreeModel.java
+++ b/platform/platform-impl/src/com/intellij/ui/tree/project/ProjectFileTreeModel.java
@@ -6,12 +6,12 @@ import com.intellij.openapi.module.Module;
 import com.intellij.openapi.module.ModuleManager;
 import com.intellij.openapi.project.Project;
 import com.intellij.openapi.roots.ModuleRootManager;
-import com.intellij.openapi.roots.ProjectFileIndex;
 import com.intellij.openapi.vfs.VFileProperty;
 import com.intellij.openapi.vfs.VfsUtilCore;
 import com.intellij.openapi.vfs.VirtualFile;
 import com.intellij.openapi.vfs.VirtualFileFilter;
 import com.intellij.ui.tree.BaseTreeModel;
+import com.intellij.ui.tree.TreeCollector;
 import com.intellij.util.SmartList;
 import com.intellij.util.ThreeState;
 import com.intellij.util.concurrency.Invoker;
@@ -30,6 +30,7 @@ import java.util.function.Predicate;
 
 import static com.intellij.openapi.vfs.VfsUtilCore.isAncestor;
 import static com.intellij.ui.tree.TreePathUtil.pathToCustomNode;
+import static com.intellij.ui.tree.project.ProjectFileListener.findArea;
 import static java.util.Collections.emptyList;
 
 public final class ProjectFileTreeModel extends BaseTreeModel<ProjectFileNode> implements InvokerSupplier {
@@ -120,10 +121,6 @@ public final class ProjectFileTreeModel extends BaseTreeModel<ProjectFileNode> i
     return visible;
   }
 
-  private static boolean isExpectedModule(@Nullable Module module, @NotNull VirtualFile file, @NotNull Project project) {
-    return file.isValid() && !project.isDisposed() && module == ProjectFileIndex.getInstance(project).getModuleForFile(file);
-  }
-
   @NotNull
   private static Module[] getModules(@NotNull Project project) {
     ModuleManager manager = ModuleManager.getInstance(project);
@@ -145,6 +142,15 @@ public final class ProjectFileTreeModel extends BaseTreeModel<ProjectFileNode> i
     });
   }
 
+  public void setShowModules(boolean showModules) {
+    onValidThread(() -> {
+      if (root.showModules == showModules) return;
+      root.showModules = showModules;
+      root.valid = false; // need to reload content roots
+      pathChanged(null);
+    });
+  }
+
   private void pathChanged(@Nullable TreePath path) {
     onValidThread(() -> treeStructureChanged(path, null, null));
   }
@@ -211,6 +217,7 @@ public final class ProjectFileTreeModel extends BaseTreeModel<ProjectFileNode> i
 
   private static class ProjectNode extends Node<RootNode> {
     volatile VirtualFileFilter filter;
+    volatile boolean showModules;
     final Project project;
 
     ProjectNode(@NotNull Project project) {
@@ -227,15 +234,27 @@ public final class ProjectFileTreeModel extends BaseTreeModel<ProjectFileNode> i
     List<RootNode> getChildren(@NotNull List<RootNode> oldList) {
       List<RootNode> list = new SmartList<>();
       Mapper<RootNode> mapper = new Mapper<>(oldList, RootNode::new);
+      TreeCollector<VirtualFile> collector = showModules ? null : TreeCollector.createFileRootsCollector();
       VirtualFile ancestor = project.getBaseDir();
-      if (ancestor != null && isExpectedModule(null, ancestor, project)) {
-        list.add(mapper.apply(ancestor, project));
+      if (ancestor != null && project == findArea(ancestor, project)) {
+        if (collector != null) {
+          collector.add(ancestor);
+        }
+        else {
+          list.add(mapper.apply(ancestor, project));
+        }
       }
       for (Module module: getModules(project)) {
         for (VirtualFile file: getContentRoots(module)) {
-          list.add(mapper.apply(file, module));
+          if (collector != null) {
+            collector.add(file);
+          }
+          else {
+            list.add(mapper.apply(file, module));
+          }
         }
       }
+      if (collector != null) collector.get().forEach(file -> list.add(mapper.apply(file, file)));
       // invalidate all changed file nodes without notifications
       list.forEach(node -> node.invalidateNow(null));
       return list;
@@ -276,6 +295,9 @@ public final class ProjectFileTreeModel extends BaseTreeModel<ProjectFileNode> i
       VirtualFile file = getVirtualFile();
       if (!file.isValid()) return emptyList();
 
+      ProjectNode parent = findParent(ProjectNode.class);
+      if (parent == null) return emptyList();
+
       visibility = ThreeState.UNSURE;
 
       VirtualFile[] children = file.getChildren();
@@ -288,20 +310,10 @@ public final class ProjectFileTreeModel extends BaseTreeModel<ProjectFileNode> i
           continue; // ignore invalid symlink
         }
         Object id = getRootID();
-        if (id instanceof VirtualFile) {
+        AreaInstance area = findArea(child, parent.project);
+        if (area != null && (id instanceof VirtualFile || area.equals(id))) {
           list.add(mapper.apply(child, id));
         }
-        else if (id instanceof Project) {
-          if (isExpectedModule(null, child, (Project)id)) {
-            list.add(mapper.apply(child, id));
-          }
-        }
-        else if (id instanceof Module) {
-          Module module = (Module)id;
-          if (!module.isDisposed() && isExpectedModule(module, child, module.getProject())) {
-            list.add(mapper.apply(child, id));
-          }
-        }
       }
       return list;
     }