diff --git a/platform/platform-impl/src/com/intellij/openapi/vfs/newvfs/persistent/RefreshWorker.java b/platform/platform-impl/src/com/intellij/openapi/vfs/newvfs/persistent/RefreshWorker.java
index 42495b57f2c0..5cb9149e4997 100644
--- a/platform/platform-impl/src/com/intellij/openapi/vfs/newvfs/persistent/RefreshWorker.java
+++ b/platform/platform-impl/src/com/intellij/openapi/vfs/newvfs/persistent/RefreshWorker.java
@@ -228,7 +228,9 @@ public class RefreshWorker {
         }
       }
 
-      file.markClean();
+      if (myIsRecursive || !file.isDirectory()) {
+        file.markClean();
+      }
     }
   }
 
diff --git a/platform/platform-tests/testSrc/com/intellij/openapi/vfs/local/FileWatcherTest.java b/platform/platform-tests/testSrc/com/intellij/openapi/vfs/local/FileWatcherTest.java
index 4dc17f00dfad..19d9beb1959e 100644
--- a/platform/platform-tests/testSrc/com/intellij/openapi/vfs/local/FileWatcherTest.java
+++ b/platform/platform-tests/testSrc/com/intellij/openapi/vfs/local/FileWatcherTest.java
@@ -674,6 +674,12 @@ public class FileWatcherTest extends PlatformLangTestCase {
     }
   }
 
+  public void testPartialRefresh() throws Exception {
+    // tests the same scenario with an active file watcher: this affects
+    File top = createTestDir("top");
+    LocalFileSystemTest.doTestPartialRefresh(top);
+  }
+
 
   @NotNull
   private LocalFileSystem.WatchRequest watch(File watchFile) {
diff --git a/platform/platform-tests/testSrc/com/intellij/openapi/vfs/local/LocalFileSystemTest.java b/platform/platform-tests/testSrc/com/intellij/openapi/vfs/local/LocalFileSystemTest.java
index 7ee40baacf3f..ca6b5ae32ff3 100644
--- a/platform/platform-tests/testSrc/com/intellij/openapi/vfs/local/LocalFileSystemTest.java
+++ b/platform/platform-tests/testSrc/com/intellij/openapi/vfs/local/LocalFileSystemTest.java
@@ -437,4 +437,40 @@ public class LocalFileSystemTest extends PlatformLangTestCase {
     assertTrue(sourceFile.isValid());
     assertEquals(newName, sourceFile.getName());
   }
+
+  public void testPartialRefresh() throws Exception {
+    File top = createTempDirectory(false);
+    doTestPartialRefresh(top);
+  }
+
+  public static void doTestPartialRefresh(File top) throws IOException {
+    File sub = IoTestUtil.createTestDir(top, "sub");
+    File file = IoTestUtil.createTestFile(top, "sub.txt");
+    LocalFileSystem lfs = LocalFileSystem.getInstance();
+    NewVirtualFile topDir = (NewVirtualFile)lfs.refreshAndFindFileByIoFile(top);
+    assertNotNull(topDir);
+    NewVirtualFile subDir = (NewVirtualFile)lfs.refreshAndFindFileByIoFile(sub);
+    assertNotNull(subDir);
+    NewVirtualFile subFile = (NewVirtualFile)lfs.refreshAndFindFileByIoFile(file);
+    assertNotNull(subFile);
+    topDir.refresh(false, true);
+    assertFalse(topDir.isDirty());
+    assertFalse(subDir.isDirty());
+    assertFalse(subFile.isDirty());
+
+    subFile.markDirty();
+    subDir.markDirty();
+    assertTrue(topDir.isDirty());
+    assertTrue(subFile.isDirty());
+    assertTrue(subDir.isDirty());
+
+    topDir.refresh(false, false);
+    assertFalse(subFile.isDirty());
+    assertTrue(subDir.isDirty());  // should stay unvisited after non-recursive refresh
+
+    topDir.refresh(false, true);
+    assertFalse(topDir.isDirty());
+    assertFalse(subFile.isDirty());
+    assertFalse(subDir.isDirty());
+  }
 }