diff --git a/lua/snacks/explorer/tree.lua b/lua/snacks/explorer/tree.lua
index 850c2ae10..6954167cb 100644
--- a/lua/snacks/explorer/tree.lua
+++ b/lua/snacks/explorer/tree.lua
@@ -1,6 +1,7 @@
 ---@class snacks.picker.explorer.Node
 ---@field path string
 ---@field name string
+---@field display_name? string compacted chain name (e.g. "src/main/java/com/example")
 ---@field hidden? boolean
 ---@field status? string merged git status
 ---@field dir_status? string git status of the directory
@@ -14,6 +15,7 @@
 ---@field utime? number
 ---@field children table<string, snacks.picker.explorer.Node>
 ---@field severity? number
+---@field _compact? {parent: snacks.picker.explorer.Node, display_name: string} transient compact-chain metadata
 
 ---@class snacks.picker.explorer.Filter
 ---@field hidden? boolean show hidden files
@@ -174,15 +176,41 @@ function Tree:refresh(path)
   end, { all = true })
 end
 
+---@param node snacks.picker.explorer.Node start of the chain (a directory)
+---@param filter fun(node: snacks.picker.explorer.Node):boolean
+---@return snacks.picker.explorer.Node deepest, string[] segments
+function Tree:compact_chain(node, filter)
+  local segments = { node.name }
+  local cur = node
+  while cur.dir do
+    if not cur.expanded then
+      self:expand(cur)
+    end
+    local single ---@type snacks.picker.explorer.Node?
+    local count = 0
+    for _, c in pairs(cur.children) do
+      if filter(c) then
+        count = count + 1
+        single = c
+        if count > 1 then
+          break
+        end
+      end
+    end
+    if count == 1 and single.dir then
+      cur = single
+      segments[#segments + 1] = cur.name
+    else
+      break
+    end
+  end
+  return cur, segments
+end
+
 ---@param node snacks.picker.explorer.Node
 ---@param fn fun(node: snacks.picker.explorer.Node):boolean? return `false` to not process children, `true` to abort
----@param opts? {all?: boolean}
-function Tree:walk(node, fn, opts)
-  local abort = false ---@type boolean?
-  abort = fn(node)
-  if abort ~= nil then
-    return abort
-  end
+---@param opts? {all?: boolean, compact?: boolean, filter?: fun(node: snacks.picker.explorer.Node):boolean}
+function Tree:walk_children(node, fn, opts)
   local children = vim.tbl_values(node.children) ---@type snacks.picker.explorer.Node[]
   table.sort(children, function(a, b)
     if a.dir ~= b.dir then
@@ -192,11 +220,35 @@ function Tree:walk(node, fn, opts)
   end)
   for c, child in ipairs(children) do
     child.last = c == #children
-    abort = false
-    if child.dir and (child.open or (opts and opts.all)) then
-      abort = self:walk(child, fn, opts)
+    local abort = false
+    if opts and opts.compact and opts.filter and child.dir then
+      if opts.filter(child) then
+        local deepest, segments = self:compact_chain(child, opts.filter)
+        if #segments >= 2 then
+          deepest.last = child.last
+          deepest._compact = { parent = node, display_name = table.concat(segments, "/") }
+          abort = fn(deepest)
+          if abort == nil and deepest.dir and (deepest.open or (opts and opts.all)) then
+            abort = self:walk_children(deepest, fn, opts)
+          end
+        else
+          child._compact = nil
+          if child.dir and (child.open or (opts and opts.all)) then
+            abort = self:walk(child, fn, opts)
+          else
+            abort = fn(child)
+          end
+        end
+      else
+        -- filtered out: skip, but mirror the normal "don't process children" behavior
+        child._compact = nil
+      end
     else
-      abort = fn(child)
+      if child.dir and (child.open or (opts and opts.all)) then
+        abort = self:walk(child, fn, opts)
+      else
+        abort = fn(child)
+      end
     end
     if abort then
       return true
@@ -205,6 +257,17 @@ function Tree:walk(node, fn, opts)
   return false
 end
 
+---@param node snacks.picker.explorer.Node
+---@param fn fun(node: snacks.picker.explorer.Node):boolean? return `false` to not process children, `true` to abort
+---@param opts? {all?: boolean, compact?: boolean, filter?: fun(node: snacks.picker.explorer.Node):boolean}
+function Tree:walk(node, fn, opts)
+  local abort = fn(node)
+  if abort ~= nil then
+    return abort
+  end
+  return self:walk_children(node, fn, opts)
+end
+
 ---@param filter snacks.picker.explorer.Filter
 function Tree:filter(filter)
   local exclude = filter.exclude and #filter.exclude > 0 and Snacks.picker.util.globber(filter.exclude)
@@ -246,7 +309,7 @@ function Tree:get(cwd, cb, opts)
       self:expand(n)
     end
     cb(n)
-  end)
+  end, { all = opts.all, expand = opts.expand, compact = opts.compact, filter = filter })
 end
 
 ---@param cwd string
diff --git a/lua/snacks/picker/config/sources.lua b/lua/snacks/picker/config/sources.lua
index ece49592c..6b82ac21c 100644
--- a/lua/snacks/picker/config/sources.lua
+++ b/lua/snacks/picker/config/sources.lua
@@ -39,6 +39,7 @@ M.buffers = {
 ---@class snacks.picker.explorer.Config: snacks.picker.files.Config|{}
 ---@field follow_file? boolean follow the file from the current buffer
 ---@field tree? boolean show the file tree (default: true)
+---@field compact_folders? boolean collapse single-child directory chains into one row (default: false)
 ---@field git_status? boolean show git status (default: true)
 ---@field git_status_open? boolean show recursive git status for open directories
 ---@field git_untracked? boolean needed to show untracked git status
@@ -52,6 +53,7 @@ M.explorer = {
   sort = { fields = { "sort" } },
   supports_live = true,
   tree = true,
+  compact_folders = false,
   watch = true,
   diagnostics = true,
   diagnostics_open = false,
diff --git a/lua/snacks/picker/format.lua b/lua/snacks/picker/format.lua
index 63a56a0df..961169f8b 100644
--- a/lua/snacks/picker/format.lua
+++ b/lua/snacks/picker/format.lua
@@ -87,9 +87,20 @@ function M.filename(item, picker)
   local dir_hl = "SnacksPickerDir"
 
   if picker.opts.formatters.file.filename_only then
-    path = vim.fn.fnamemodify(item.file, ":t")
+    path = item.display_name or vim.fn.fnamemodify(item.file, ":t")
     path = path == "" and item.file or path
-    ret[#ret + 1] = { path, base_hl, field = "file" }
+    if item.display_name then
+      -- render a compacted directory chain, dimming the path separators
+      local parts = vim.split(path, "/", { plain = true })
+      for i, p in ipairs(parts) do
+        if i > 1 then
+          ret[#ret + 1] = { "/", dir_hl, field = "file" }
+        end
+        ret[#ret + 1] = { p, base_hl, field = "file" }
+      end
+    else
+      ret[#ret + 1] = { path, base_hl, field = "file" }
+    end
   else
     ret[#ret + 1] = {
       "",
diff --git a/lua/snacks/picker/source/explorer.lua b/lua/snacks/picker/source/explorer.lua
index 7679ce749..7032f1f01 100644
--- a/lua/snacks/picker/source/explorer.lua
+++ b/lua/snacks/picker/source/explorer.lua
@@ -19,6 +19,7 @@ local uv = vim.uv or vim.loop
 ---@field sort? string
 ---@field internal? boolean internal parent directories not part of fd output
 ---@field status? string
+---@field display_name? string compacted chain name (e.g. "src/main/java/com/example")
 
 local function norm(path)
   return svim.fs.normalize(path)
@@ -230,7 +231,9 @@ function M.explorer(opts, ctx)
     local top = Tree:find(ctx.filter.cwd)
     local last = {} ---@type table<snacks.picker.explorer.Node, snacks.picker.explorer.Item>
     Tree:get(ctx.filter.cwd, function(node)
-      local parent = node.parent and items[node.parent.path] or nil
+      local compact = node._compact
+      local parent_node = compact and compact.parent or node.parent
+      local parent = parent_node and items[parent_node.path] or nil
       local status = node.status
       if not status and parent and parent.dir_status then
         status = parent.dir_status
@@ -242,6 +245,7 @@ function M.explorer(opts, ctx)
         dir_status = node.dir_status or parent and parent.dir_status,
         text = node.path,
         parent = parent,
+        display_name = compact and compact.display_name or nil,
         hidden = node.hidden,
         ignored = node.ignored,
         status = (not node.dir or not node.open or opts.git_status_open) and status or nil,
@@ -249,17 +253,23 @@ function M.explorer(opts, ctx)
         type = node.type,
         severity = (not node.dir or not node.open or opts.diagnostics_open) and node.severity or nil,
       }
-      if last[node.parent] then
-        last[node.parent].last = false
+      if last[parent_node] then
+        last[parent_node].last = false
       end
-      last[node.parent] = item
+      last[parent_node] = item
       if top == node then
         item.hidden = false
         item.ignored = false
       end
       items[node.path] = item
       cb(item)
-    end, { hidden = opts.hidden, ignored = opts.ignored, exclude = opts.exclude, include = opts.include })
+    end, {
+      hidden = opts.hidden,
+      ignored = opts.ignored,
+      exclude = opts.exclude,
+      include = opts.include,
+      compact = opts.compact_folders,
+    })
   end
 end