diff --git a/src/components/workspace/FileTree.tsx b/src/components/workspace/FileTree.tsx
index 658c5c8..7ff6fa6 100644
--- a/src/components/workspace/FileTree.tsx
+++ b/src/components/workspace/FileTree.tsx
@@ -1,4 +1,4 @@
-import { useState, useCallback } from 'react'
+import { useState, useCallback, useEffect } from 'react'
 import { ChevronRight, ChevronDown, Folder, FolderOpen, FileText } from 'lucide-react'
 import { motion, AnimatePresence } from 'framer-motion'
 import type { DirectoryEntry } from '~/lib/workspace-fs'
@@ -33,12 +33,18 @@ function FileTreeItem({ entry, selectedPath, onSelect, onLoadDirectory, level }:
   const [expanded, setExpanded] = useState(false)
   const [children, setChildren] = useState<DirectoryEntry[]>([])
   const [loading, setLoading] = useState(false)
+
+  // Reset children when entry path changes (e.g., on refresh)
+  useEffect(() => {
+    setChildren([])
+    setExpanded(false)
+  }, [entry.path])
   const isSelected = selectedPath === entry.path
   const isDirectory = entry.type === 'directory'
   const paddingLeft = level * 16 + 8
 
   const loadChildren = useCallback(async () => {
-    if (!isDirectory || children.length > 0 || !onLoadDirectory) return
+    if (!isDirectory || !onLoadDirectory) return
     setLoading(true)
     try {
       const entries = await onLoadDirectory(entry.path)
@@ -48,7 +54,7 @@ function FileTreeItem({ entry, selectedPath, onSelect, onLoadDirectory, level }:
     } finally {
       setLoading(false)
     }
-  }, [entry.path, isDirectory, children.length, onLoadDirectory])
+  }, [entry.path, isDirectory, onLoadDirectory])
 
   const handleToggle = useCallback(
     async (e: React.MouseEvent) => {
diff --git a/src/routes/workspace/index.tsx b/src/routes/workspace/index.tsx
index e06f715..9f77f4c 100644
--- a/src/routes/workspace/index.tsx
+++ b/src/routes/workspace/index.tsx
@@ -235,15 +235,74 @@ function WorkspacePage() {
   const handleRefresh = useCallback(async () => {
     if (!workspacePath || !pathValid) return
 
-    // Clear cache and reload
-    setPathCache(new Map())
-    await loadDirectory(workspacePath)
+    // Store current selection before clearing cache
+    const currentSelectedPath = selectedPath
 
-    // Reload selected file if any
-    if (selectedPath) {
-      await loadFile(selectedPath)
+    // Clear cache first, then reload
+    // Use a callback to ensure cache is cleared before loading
+    setPathCache(new Map())
+
+    // Small delay to ensure React has processed the state update
+    // before we try to load the directory
+    await new Promise(resolve => setTimeout(resolve, 0))
+
+    // Reload root directory - this will repopulate the file tree
+    // Force reload by bypassing cache check
+    setLoading(true)
+    try {
+      const result = await trpc.workspace.listDirectory.query({
+        workspaceRoot: workspacePath,
+        path: workspacePath,
+      })
+
+      if (result.error) {
+        throw new Error(result.error)
+      }
+
+      // Update cache with fresh data
+      setPathCache(new Map([[workspacePath, result.entries]]))
+    } catch (error) {
+      console.error('Failed to load directory:', error)
+    } finally {
+      setLoading(false)
     }
-  }, [workspacePath, pathValid, selectedPath])
+
+    // Reload selected file if any (with error handling for deleted files)
+    if (currentSelectedPath) {
+      try {
+        const result = await trpc.workspace.readFile.query({
+          workspaceRoot: workspacePath,
+          path: currentSelectedPath,
+        })
+
+        if (result.error) {
+          // File no longer exists - clear selection gracefully
+          setSelectedPath(null)
+          setSelectedFileContent('')
+          setSelectedFileName('')
+          setSelectedFileSize(undefined)
+          setSelectedFileModified(undefined)
+          setFileError(result.error)
+        } else {
+          setSelectedFileContent(result.content)
+          setSelectedFileName(result.name)
+          // Get file metadata from the parent directory entry if available
+          const parentDir = pathCache.get(getParentDirPath(currentSelectedPath) || workspacePath)
+          const fileEntry = parentDir?.find(e => e.path === currentSelectedPath)
+          setSelectedFileSize(fileEntry?.size)
+          setSelectedFileModified(fileEntry?.modifiedAt)
+        }
+      } catch (error) {
+        // File no longer exists - clear selection gracefully
+        setSelectedPath(null)
+        setSelectedFileContent('')
+        setSelectedFileName('')
+        setSelectedFileSize(undefined)
+        setSelectedFileModified(undefined)
+        setFileError(error instanceof Error ? error.message : 'Failed to read file')
+      }
+    }
+  }, [workspacePath, pathValid, selectedPath, loadFile])
 
   const handleKeyDown = (e: React.KeyboardEvent) => {
     if (e.key === 'Enter') {