diff --git a/apps/desktop/src/renderer/screens/main/components/WorkspaceView/RightSidebar/FilesView/hooks/useFileTree.ts b/apps/desktop/src/renderer/screens/main/components/WorkspaceView/RightSidebar/FilesView/hooks/useFileTree.ts
index b168736c915..92c44ca3f9a 100644
--- a/apps/desktop/src/renderer/screens/main/components/WorkspaceView/RightSidebar/FilesView/hooks/useFileTree.ts
+++ b/apps/desktop/src/renderer/screens/main/components/WorkspaceView/RightSidebar/FilesView/hooks/useFileTree.ts
@@ -56,6 +56,12 @@ export function useFileTree({
 		}));
 	}, [rootEntries]);
 
+	// Clear children cache when showHiddenFiles changes to ensure nested
+	// hidden files/folders are properly shown or hidden
+	useEffect(() => {
+		setChildrenCache({});
+	}, [showHiddenFiles]);
+
 	const buildTree = useCallback(
 		(nodes: FileTreeNode[]): FileTreeNode[] => {
 			return nodes.map((node) => {
diff --git a/bun.lock b/bun.lock
index 3a40ee374a4..e31e41669df 100644
--- a/bun.lock
+++ b/bun.lock
@@ -131,7 +131,7 @@
     },
     "apps/desktop": {
       "name": "@superset/desktop",
-      "version": "0.0.67",
+      "version": "0.0.68",
       "dependencies": {
         "@better-auth/stripe": "1.4.17",
         "@dnd-kit/core": "^6.3.1",