diff --git a/lua/codediff/ui/explorer/refresh.lua b/lua/codediff/ui/explorer/refresh.lua
index 8b099e1..e660f97 100644
--- a/lua/codediff/ui/explorer/refresh.lua
+++ b/lua/codediff/ui/explorer/refresh.lua
@@ -126,6 +126,70 @@ function M.setup_auto_refresh(explorer, tabpage)
   return cleanup
 end
 
+-- Collect collapsed state from tree (groups and directories that user manually collapsed)
+local function collect_collapsed_state(tree)
+  local collapsed = {}
+
+  local function collect_from_node(node)
+    if not node.data then
+      return
+    end
+    local node_type = node.data.type
+    if node_type == "group" or node_type == "directory" then
+      -- Use path for directories, name for groups as unique key
+      local key = node.data.path or node.data.name
+      if key and not node:is_expanded() then
+        collapsed[key] = true
+      end
+      -- Recurse into children
+      if node:has_children() then
+        for _, child_id in ipairs(node:get_child_ids()) do
+          local child = tree:get_node(child_id)
+          if child then
+            collect_from_node(child)
+          end
+        end
+      end
+    end
+  end
+
+  local root_nodes = tree:get_nodes()
+  for _, node in ipairs(root_nodes) do
+    collect_from_node(node)
+  end
+
+  return collapsed
+end
+
+-- Restore collapsed state after tree rebuild
+local function restore_collapsed_state(tree, collapsed, root_nodes)
+  local function restore_node(node)
+    if not node.data then
+      return
+    end
+    local node_type = node.data.type
+    if node_type == "group" or node_type == "directory" then
+      local key = node.data.path or node.data.name
+      if key and collapsed[key] then
+        node:collapse()
+      end
+      -- Recurse into children
+      if node:has_children() then
+        for _, child_id in ipairs(node:get_child_ids()) do
+          local child = tree:get_node(child_id)
+          if child then
+            restore_node(child)
+          end
+        end
+      end
+    end
+  end
+
+  for _, node in ipairs(root_nodes) do
+    restore_node(node)
+  end
+end
+
 -- Refresh explorer with updated git status
 function M.refresh(explorer)
   local git = require("codediff.core.git")
@@ -144,6 +208,9 @@ function M.refresh(explorer)
   local current_node = explorer.tree:get_node()
   local current_path = current_node and current_node.data and current_node.data.path
 
+  -- Collect collapsed state before async operation
+  local collapsed_state = collect_collapsed_state(explorer.tree)
+
   local function process_result(err, status_result)
     vim.schedule(function()
       if err then
@@ -182,6 +249,9 @@ function M.refresh(explorer)
         end
       end
 
+      -- Restore user's collapsed state (must be after expand_all_dirs)
+      restore_collapsed_state(explorer.tree, collapsed_state, root_nodes)
+
       explorer.tree:render()
 
       -- Update status result for file selection logic