diff --git a/src/file/watcher.go b/src/file/watcher.go
index a96d3c69..d2516852 100644
--- a/src/file/watcher.go
+++ b/src/file/watcher.go
@@ -122,16 +122,14 @@ func (w *Watcher) watchFsEvents() {
 }
 
 func (w *Watcher) onEvent(event watcher.Event) bool {
-	if event.IsDir() {
-		if isEventType(event.Op, watcher.Create) {
-			w.fsWatcher.Add(event.Path)
-		}
-		return false
-	}
 	events := map[string]Event{}
-	for _, event := range w.translateEvent(event) {
-		events[event.Path] = event
+	for _, e := range w.translateEvent(event) {
+		events[e.Path] = e
 	}
+	if len(events) == 0 {
+		return false
+	}
+
 	drainTimer := time.NewTimer(drainTimeout)
 	defer drainTimer.Stop()
 	for {
@@ -164,7 +162,11 @@ func (w *Watcher) updateChecksum(e Event) {
 
 func (w *Watcher) translateEvent(event watcher.Event) []Event {
 	oldPath, currentPath := w.parsePath(event.OldPath), w.parsePath(event.Path)
-	if isEventType(event.Op, watcher.Rename, watcher.Move) {
+	if event.IsDir() {
+		if isEventType(event.Op, watcher.Create) {
+			w.fsWatcher.Add(event.Path)
+		}
+	} else if isEventType(event.Op, watcher.Rename, watcher.Move) {
 		return []Event{{Op: Remove, Path: oldPath}, {Op: Update, Path: currentPath, LastKnownChecksum: w.checksums[currentPath]}}
 	} else if isEventType(event.Op, watcher.Remove) {
 		return []Event{{Op: Remove, Path: currentPath}}
diff --git a/src/file/watcher_test.go b/src/file/watcher_test.go
index 423517b2..70be9ab6 100644
--- a/src/file/watcher_test.go
+++ b/src/file/watcher_test.go
@@ -166,6 +166,43 @@ func TestFileWatcher_OnEvent(t *testing.T) {
 	}
 }
 
+func TestFileWatcher_translateEvent(t *testing.T) {
+	testcases := []struct {
+		filename, oldname string
+		op                watcher.Op
+		expectedOp        OptSlice
+	}{
+		{expectedOp: OptSlice{Update}, filename: "_testdata/project/templates/template.liquid", op: watcher.Write},
+		{expectedOp: OptSlice{Update}, filename: "_testdata/project/templates/customers/test.liquid", op: watcher.Create},
+		{expectedOp: OptSlice{}, filename: "_testdata/project/config", op: watcher.Create},
+		{expectedOp: OptSlice{Remove}, filename: "_testdata/project/templates/customers/test.liquid", op: watcher.Remove},
+		{expectedOp: OptSlice{Remove, Update}, filename: "_testdata/project/assets/application.js.liquid", oldname: "_testdata/project/assets/application.js", op: watcher.Rename},
+		{expectedOp: OptSlice{Remove, Update}, filename: "_testdata/project/assets/application.js.liquid", oldname: "_testdata/project/assets/application.js", op: watcher.Move},
+	}
+
+	for _, testcase := range testcases {
+		info, _ := os.Stat(testcase.filename)
+		evt := watcher.Event{
+			Op:       testcase.op,
+			Path:     testcase.filename,
+			OldPath:  testcase.oldname,
+			FileInfo: info,
+		}
+
+		w := createTestWatcher(t)
+		events := w.translateEvent(evt)
+		assert.Equal(t, len(testcase.expectedOp), len(events))
+		recievedEvents := OptSlice{}
+		for _, e := range events {
+			recievedEvents = append(recievedEvents, e.Op)
+		}
+		sort.Sort(testcase.expectedOp)
+		sort.Sort(recievedEvents)
+		assert.Equal(t, testcase.expectedOp, recievedEvents)
+		w.Stop()
+	}
+}
+
 func TestFileWatcher_debouncing(t *testing.T) {
 	w := createTestWatcher(t)
 	w.Events = make(chan Event, 10)