diff --git a/crates/bevy_asset/src/asset_server.rs b/crates/bevy_asset/src/asset_server.rs
index 07f896061da450..c7eea2916c0a88 100644
--- a/crates/bevy_asset/src/asset_server.rs
+++ b/crates/bevy_asset/src/asset_server.rs
@@ -422,7 +422,7 @@ impl AssetServer {
         }
 
         self.asset_io()
-            .watch_path_for_changes(asset_path.path())
+            .watch_path_for_changes(asset_path.path(), None)
             .unwrap();
         self.create_assets_in_load_context(&mut load_context);
         Ok(asset_path_id)
diff --git a/crates/bevy_asset/src/filesystem_watcher.rs b/crates/bevy_asset/src/filesystem_watcher.rs
index ace2500cd5b8ff..e91dc651457a39 100644
--- a/crates/bevy_asset/src/filesystem_watcher.rs
+++ b/crates/bevy_asset/src/filesystem_watcher.rs
@@ -1,6 +1,7 @@
+use bevy_utils::{default, HashMap, HashSet};
 use crossbeam_channel::Receiver;
-use notify::{Config, Event, RecommendedWatcher, RecursiveMode, Result, Watcher};
-use std::path::Path;
+use notify::{Event, RecommendedWatcher, RecursiveMode, Result, Watcher};
+use std::path::{Path, PathBuf};
 
 /// Watches for changes to files on the local filesystem.
 ///
@@ -9,6 +10,7 @@ use std::path::Path;
 pub struct FilesystemWatcher {
     pub watcher: RecommendedWatcher,
     pub receiver: Receiver<Result<Event>>,
+    pub path_map: HashMap<PathBuf, HashSet<PathBuf>>,
 }
 
 impl Default for FilesystemWatcher {
@@ -18,16 +20,25 @@ impl Default for FilesystemWatcher {
             move |res| {
                 sender.send(res).expect("Watch event send failure.");
             },
-            Config::default(),
+            default(),
         )
         .expect("Failed to create filesystem watcher.");
-        FilesystemWatcher { watcher, receiver }
+        FilesystemWatcher {
+            watcher,
+            receiver,
+            path_map: default(),
+        }
     }
 }
 
 impl FilesystemWatcher {
     /// Watch for changes recursively at the provided path.
-    pub fn watch<P: AsRef<Path>>(&mut self, path: P) -> Result<()> {
-        self.watcher.watch(path.as_ref(), RecursiveMode::Recursive)
+    pub fn watch<P: AsRef<Path>>(&mut self, to_watch: P, to_reload: PathBuf) -> Result<()> {
+        self.path_map
+            .entry(to_watch.as_ref().to_owned())
+            .or_default()
+            .insert(to_reload);
+        self.watcher
+            .watch(to_watch.as_ref(), RecursiveMode::Recursive)
     }
 }
diff --git a/crates/bevy_asset/src/io/android_asset_io.rs b/crates/bevy_asset/src/io/android_asset_io.rs
index 5bd583aee20920..bcd0adada700b9 100644
--- a/crates/bevy_asset/src/io/android_asset_io.rs
+++ b/crates/bevy_asset/src/io/android_asset_io.rs
@@ -51,7 +51,11 @@ impl AssetIo for AndroidAssetIo {
         Ok(Box::new(std::iter::empty::<PathBuf>()))
     }
 
-    fn watch_path_for_changes(&self, _path: &Path) -> Result<(), AssetIoError> {
+    fn watch_path_for_changes(
+        &self,
+        _to_watch: &Path,
+        _to_reload: Option<PathBuf>,
+    ) -> Result<(), AssetIoError> {
         Ok(())
     }
 
diff --git a/crates/bevy_asset/src/io/file_asset_io.rs b/crates/bevy_asset/src/io/file_asset_io.rs
index e4f9a57bba0cdc..93c6878c3147df 100644
--- a/crates/bevy_asset/src/io/file_asset_io.rs
+++ b/crates/bevy_asset/src/io/file_asset_io.rs
@@ -6,7 +6,7 @@ use anyhow::Result;
 use bevy_ecs::system::Res;
 use bevy_utils::BoxedFuture;
 #[cfg(feature = "filesystem_watcher")]
-use bevy_utils::HashSet;
+use bevy_utils::{default, HashSet};
 #[cfg(feature = "filesystem_watcher")]
 use crossbeam_channel::TryRecvError;
 use fs::File;
@@ -38,7 +38,7 @@ impl FileAssetIo {
     pub fn new<P: AsRef<Path>>(path: P, watch_for_changes: bool) -> Self {
         let file_asset_io = FileAssetIo {
             #[cfg(feature = "filesystem_watcher")]
-            filesystem_watcher: Default::default(),
+            filesystem_watcher: default(),
             root_path: Self::get_base_path().join(path.as_ref()),
         };
         if watch_for_changes {
@@ -122,15 +122,20 @@ impl AssetIo for FileAssetIo {
         )))
     }
 
-    fn watch_path_for_changes(&self, _path: &Path) -> Result<(), AssetIoError> {
+    fn watch_path_for_changes(
+        &self,
+        to_watch: &Path,
+        to_reload: Option<PathBuf>,
+    ) -> Result<(), AssetIoError> {
         #[cfg(feature = "filesystem_watcher")]
         {
-            let path = self.root_path.join(_path);
+            let to_reload = to_reload.unwrap_or_else(|| to_watch.to_owned());
+            let to_watch = self.root_path.join(to_watch);
             let mut watcher = self.filesystem_watcher.write();
             if let Some(ref mut watcher) = *watcher {
                 watcher
-                    .watch(&path)
-                    .map_err(|_error| AssetIoError::PathWatchError(path))?;
+                    .watch(&to_watch, to_reload)
+                    .map_err(|_error| AssetIoError::PathWatchError(to_watch))?;
             }
         }
 
@@ -140,7 +145,7 @@ impl AssetIo for FileAssetIo {
     fn watch_for_changes(&self) -> Result<(), AssetIoError> {
         #[cfg(feature = "filesystem_watcher")]
         {
-            *self.filesystem_watcher.write() = Some(FilesystemWatcher::default());
+            *self.filesystem_watcher.write() = Some(default());
         }
         #[cfg(not(feature = "filesystem_watcher"))]
         bevy_log::warn!("Watching for changes is not supported when the `filesystem_watcher` feature is disabled");
@@ -169,7 +174,6 @@ impl AssetIo for FileAssetIo {
     all(not(target_arch = "wasm32"), not(target_os = "android"))
 ))]
 pub fn filesystem_watcher_system(asset_server: Res<AssetServer>) {
-    let mut changed = HashSet::default();
     let asset_io =
         if let Some(asset_io) = asset_server.server.asset_io.downcast_ref::<FileAssetIo>() {
             asset_io
@@ -178,6 +182,7 @@ pub fn filesystem_watcher_system(asset_server: Res<AssetServer>) {
         };
     let watcher = asset_io.filesystem_watcher.read();
     if let Some(ref watcher) = *watcher {
+        let mut changed = HashSet::<&PathBuf>::default();
         loop {
             let event = match watcher.receiver.try_recv() {
                 Ok(result) => result.unwrap(),
@@ -191,12 +196,14 @@ pub fn filesystem_watcher_system(asset_server: Res<AssetServer>) {
             } = event
             {
                 for path in &paths {
-                    if !changed.contains(path) {
-                        let relative_path = path.strip_prefix(&asset_io.root_path).unwrap();
-                        let _ = asset_server.load_untracked(relative_path.into(), true);
+                    let Some(set) = watcher.path_map.get(path) else {continue};
+                    for to_reload in set {
+                        if !changed.contains(to_reload) {
+                            changed.insert(to_reload);
+                            let _ = asset_server.load_untracked(to_reload.as_path().into(), true);
+                        }
                     }
                 }
-                changed.extend(paths);
             }
         }
     }
diff --git a/crates/bevy_asset/src/io/mod.rs b/crates/bevy_asset/src/io/mod.rs
index 7efbd7ca8882fa..67ea2ff8e4f914 100644
--- a/crates/bevy_asset/src/io/mod.rs
+++ b/crates/bevy_asset/src/io/mod.rs
@@ -66,7 +66,19 @@ pub trait AssetIo: Downcast + Send + Sync + 'static {
     fn get_metadata(&self, path: &Path) -> Result<Metadata, AssetIoError>;
 
     /// Tells the asset I/O to watch for changes recursively at the provided path.
-    fn watch_path_for_changes(&self, path: &Path) -> Result<(), AssetIoError>;
+    ///
+    /// No-op if `watch_for_changes` hasn't been called yet.
+    /// Otherwise triggers a reload each time `to_watch` changes.
+    /// In most cases the asset found at the watched path should be changed,
+    /// but when an asset depends on data at another path, the asset's path
+    /// is provided in `to_reload`.
+    /// Note that there may be a many-to-many correspondence between
+    /// `to_watch` and `to_reload` paths.
+    fn watch_path_for_changes(
+        &self,
+        to_watch: &Path,
+        to_reload: Option<PathBuf>,
+    ) -> Result<(), AssetIoError>;
 
     /// Enables change tracking in this asset I/O.
     fn watch_for_changes(&self) -> Result<(), AssetIoError>;
diff --git a/crates/bevy_asset/src/io/wasm_asset_io.rs b/crates/bevy_asset/src/io/wasm_asset_io.rs
index 1cf8d3b2715ea9..ce70fe295ae2bd 100644
--- a/crates/bevy_asset/src/io/wasm_asset_io.rs
+++ b/crates/bevy_asset/src/io/wasm_asset_io.rs
@@ -56,7 +56,11 @@ impl AssetIo for WasmAssetIo {
         Ok(Box::new(std::iter::empty::<PathBuf>()))
     }
 
-    fn watch_path_for_changes(&self, _path: &Path) -> Result<(), AssetIoError> {
+    fn watch_path_for_changes(
+        &self,
+        _to_watch: &Path,
+        _to_reload: Option<PathBuf>,
+    ) -> Result<(), AssetIoError> {
         Ok(())
     }
 
diff --git a/crates/bevy_asset/src/loader.rs b/crates/bevy_asset/src/loader.rs
index 931efacb4c42a8..2b76edadf84346 100644
--- a/crates/bevy_asset/src/loader.rs
+++ b/crates/bevy_asset/src/loader.rs
@@ -174,6 +174,8 @@ impl<'a> LoadContext<'a> {
     /// Reads the contents of the file at the specified path through the [`AssetIo`] associated
     /// with this context.
     pub async fn read_asset_bytes<P: AsRef<Path>>(&self, path: P) -> Result<Vec<u8>, AssetIoError> {
+        self.asset_io
+            .watch_path_for_changes(path.as_ref(), Some(self.path.to_owned()))?;
         self.asset_io.load_path(path.as_ref()).await
     }
 
diff --git a/examples/asset/custom_asset_io.rs b/examples/asset/custom_asset_io.rs
index e8f369effa9cdf..773046507e6c11 100644
--- a/examples/asset/custom_asset_io.rs
+++ b/examples/asset/custom_asset_io.rs
@@ -18,7 +18,7 @@ struct CustomAssetIo(Box<dyn AssetIo>);
 
 impl AssetIo for CustomAssetIo {
     fn load_path<'a>(&'a self, path: &'a Path) -> BoxedFuture<'a, Result<Vec<u8>, AssetIoError>> {
-        info!("load_path({:?})", path);
+        info!("load_path({path:?})");
         self.0.load_path(path)
     }
 
@@ -26,13 +26,17 @@ impl AssetIo for CustomAssetIo {
         &self,
         path: &Path,
     ) -> Result<Box<dyn Iterator<Item = PathBuf>>, AssetIoError> {
-        info!("read_directory({:?})", path);
+        info!("read_directory({path:?})");
         self.0.read_directory(path)
     }
 
-    fn watch_path_for_changes(&self, path: &Path) -> Result<(), AssetIoError> {
-        info!("watch_path_for_changes({:?})", path);
-        self.0.watch_path_for_changes(path)
+    fn watch_path_for_changes(
+        &self,
+        to_watch: &Path,
+        to_reload: Option<PathBuf>,
+    ) -> Result<(), AssetIoError> {
+        info!("watch_path_for_changes({to_watch:?}, {to_reload:?})");
+        self.0.watch_path_for_changes(to_watch, to_reload)
     }
 
     fn watch_for_changes(&self) -> Result<(), AssetIoError> {
@@ -41,7 +45,7 @@ impl AssetIo for CustomAssetIo {
     }
 
     fn get_metadata(&self, path: &Path) -> Result<Metadata, AssetIoError> {
-        info!("get_metadata({:?})", path);
+        info!("get_metadata({path:?})");
         self.0.get_metadata(path)
     }
 }