diff --git a/fsmonitor.c b/fsmonitor.c
index 3105dc3..64deeda 100644
--- a/fsmonitor.c
+++ b/fsmonitor.c
@@ -190,13 +190,34 @@ int fsmonitor_is_trivial_response(const struct strbuf *query_result)
 	return is_trivial;
 }
 
-static void fsmonitor_refresh_callback(struct index_state *istate, const char *name)
+static void fsmonitor_refresh_callback(struct index_state *istate, char *name)
 {
-	int pos = index_name_pos(istate, name, strlen(name));
+	int i, len = strlen(name);
+	if (name[len - 1] == '/') {
 
-	if (pos >= 0) {
-		struct cache_entry *ce = istate->cache[pos];
-		ce->ce_flags &= ~CE_FSMONITOR_VALID;
+		/*
+		 * TODO We should binary search to find the first path with
+		 * TODO this directory prefix.  Then linearly update entries
+		 * TODO while the prefix matches.  Taking care to search without
+		 * TODO the trailing slash -- because '/' sorts after a few
+		 * TODO interesting special chars, like '.' and ' '.
+		 */
+
+		/* Mark all entries for the folder invalid */
+		for (i = 0; i < istate->cache_nr; i++) {
+			if (istate->cache[i]->ce_flags & CE_FSMONITOR_VALID &&
+			    starts_with(istate->cache[i]->name, name))
+				istate->cache[i]->ce_flags &= ~CE_FSMONITOR_VALID;
+		}
+		/* Need to remove the / from the path for the untracked cache */
+		name[len - 1] = '\0';
+	} else {
+		int pos = index_name_pos(istate, name, strlen(name));
+
+		if (pos >= 0) {
+			struct cache_entry *ce = istate->cache[pos];
+			ce->ce_flags &= ~CE_FSMONITOR_VALID;
+		}
 	}
 
 	/*