diff --git a/gadget-code/frontend/src/components/FileTree.tsx b/gadget-code/frontend/src/components/FileTree.tsx
index 5c2905a..d1ead08 100644
--- a/gadget-code/frontend/src/components/FileTree.tsx
+++ b/gadget-code/frontend/src/components/FileTree.tsx
@@ -134,40 +134,32 @@ export default function FileTree({ workspaceMode, onFileSelect }: FileTreeProps)
     }
   }, [onFileSelect]);
 
-  // Build tree structure from flat entries
-  const buildTree = useCallback((entries: FileTreeEntry[], depth: number = 0) => {
-    const nodes: JSX.Element[] = [];
+  // Build visible nodes list based on expanded state
+  const buildVisibleNodes = useCallback(() => {
+    const visibleNodes: Array<{ entry: FileTreeEntry; depth: number }> = [];
     
-    for (const entry of entries) {
-      const isExpanded = state.expandedPaths.has(entry.path);
-      const isLoading = state.loadingPaths.has(entry.path);
-      const error = state.errors.get(entry.path);
-      const hasChildren = entry.type === 'directory';
-
-      // Render the node
-      nodes.push(
-        <FileTreeNode
-          key={entry.path}
-          entry={entry}
-          depth={depth}
-          isExpanded={isExpanded}
-          isLoading={isLoading}
-          hasChildren={hasChildren}
-          error={error}
-          onToggle={toggleExpand}
-          onSelect={handleFileSelect}
-        />
-      );
-
-      // If directory is expanded, render children immediately after
-      if (hasChildren && isExpanded && state.directoryCache.has(entry.path)) {
-        const children = buildTree(state.directoryCache.get(entry.path)!, depth + 1);
-        nodes.push(...children);
+    const processNode = (entry: FileTreeEntry, depth: number) => {
+      visibleNodes.push({ entry, depth });
+      
+      // If this is an expanded directory with cached children, process them
+      if (entry.type === 'directory' && 
+          state.expandedPaths.has(entry.path) && 
+          state.directoryCache.has(entry.path)) {
+        const children = state.directoryCache.get(entry.path)!;
+        for (const child of children) {
+          processNode(child, depth + 1);
+        }
       }
+    };
+    
+    // Process root entries
+    const rootEntries = state.directoryCache.get('') || [];
+    for (const entry of rootEntries) {
+      processNode(entry, 0);
     }
     
-    return nodes;
-  }, [state.expandedPaths, state.loadingPaths, state.errors, state.directoryCache, toggleExpand, handleFileSelect]);
+    return visibleNodes;
+  }, [state.expandedPaths, state.directoryCache]);
 
   const rootEntries = state.directoryCache.get('') || [];
   const rootError = state.errors.get('');
@@ -200,7 +192,26 @@ export default function FileTree({ workspaceMode, onFileSelect }: FileTreeProps)
       )}
 
       <div className="space-y-0.5">
-        {buildTree(rootEntries)}
+        {buildVisibleNodes().map(({ entry, depth }) => {
+          const isExpanded = state.expandedPaths.has(entry.path);
+          const isLoading = state.loadingPaths.has(entry.path);
+          const error = state.errors.get(entry.path);
+          const hasChildren = entry.type === 'directory';
+
+          return (
+            <FileTreeNode
+              key={entry.path}
+              entry={entry}
+              depth={depth}
+              isExpanded={isExpanded}
+              isLoading={isLoading}
+              hasChildren={hasChildren}
+              error={error}
+              onToggle={toggleExpand}
+              onSelect={handleFileSelect}
+            />
+          );
+        })}
       </div>
     </div>
   );