diff --git a/plugin/trino-hive/src/main/java/io/trino/plugin/hive/metastore/SemiTransactionalHiveMetastore.java b/plugin/trino-hive/src/main/java/io/trino/plugin/hive/metastore/SemiTransactionalHiveMetastore.java
index 3fd17b67ba4f..8643f52cc465 100644
--- a/plugin/trino-hive/src/main/java/io/trino/plugin/hive/metastore/SemiTransactionalHiveMetastore.java
+++ b/plugin/trino-hive/src/main/java/io/trino/plugin/hive/metastore/SemiTransactionalHiveMetastore.java
@@ -41,9 +41,11 @@
 import io.trino.plugin.hive.security.SqlStandardAccessControlMetadataMetastore;
 import io.trino.spi.TrinoException;
 import io.trino.spi.connector.ConnectorSession;
+import io.trino.spi.connector.SchemaNotFoundException;
 import io.trino.spi.connector.SchemaTableName;
 import io.trino.spi.connector.TableNotFoundException;
 import io.trino.spi.predicate.TupleDomain;
+import io.trino.spi.security.ConnectorIdentity;
 import io.trino.spi.security.PrincipalType;
 import io.trino.spi.security.RoleGrant;
 import io.trino.spi.statistics.ColumnStatisticType;
@@ -366,7 +368,38 @@ public synchronized void createDatabase(HiveIdentity identity, Database database
 
     public synchronized void dropDatabase(HiveIdentity identity, String schemaName)
     {
-        setExclusive((delegate, hdfsEnvironment) -> delegate.dropDatabase(identity, schemaName));
+        HdfsContext context = new HdfsContext(
+                identity.getUsername()
+                        .map(ConnectorIdentity::ofUser)
+                        .orElseThrow(() -> new IllegalStateException("username is null")));
+
+        Optional<Path> location = delegate.getDatabase(schemaName)
+                .orElseThrow(() -> new SchemaNotFoundException(schemaName))
+                .getLocation()
+                .map(Path::new);
+
+        setExclusive((delegate, hdfsEnvironment) -> {
+            delegate.dropDatabase(identity, schemaName);
+
+            location.ifPresent(path -> {
+                try {
+                    FileSystem fs = hdfsEnvironment.getFileSystem(context, path);
+                    // If no files in schema directory, delete it
+                    if (!fs.listFiles(path, false).hasNext()) {
+                        log.debug("Deleting location of dropped schema (%s)", path);
+                        fs.delete(path, true);
+                    }
+                    else {
+                        log.info("Skipped deleting schema location with external files (%s)", path);
+                    }
+                }
+                catch (IOException e) {
+                    throw new TrinoException(
+                            HIVE_FILESYSTEM_ERROR,
+                            format("Error checking or deleting schema directory '%s'", path), e);
+                }
+            });
+        });
     }
 
     public synchronized void renameDatabase(HiveIdentity identity, String source, String target)
diff --git a/plugin/trino-hive/src/main/java/io/trino/plugin/hive/metastore/file/FileHiveMetastore.java b/plugin/trino-hive/src/main/java/io/trino/plugin/hive/metastore/file/FileHiveMetastore.java
index 0352ad447883..8968dbe55115 100644
--- a/plugin/trino-hive/src/main/java/io/trino/plugin/hive/metastore/file/FileHiveMetastore.java
+++ b/plugin/trino-hive/src/main/java/io/trino/plugin/hive/metastore/file/FileHiveMetastore.java
@@ -214,7 +214,8 @@ public synchronized void dropDatabase(HiveIdentity identity, String databaseName
             throw new TrinoException(HIVE_METASTORE_ERROR, "Database " + databaseName + " is not empty");
         }
 
-        deleteMetadataDirectory(getDatabaseMetadataDirectory(databaseName));
+        // Only delete the metadata of the database, not any other files
+        deleteSchemaFile(DATABASE, getDatabaseMetadataDirectory(databaseName));
     }
 
     @Override
diff --git a/plugin/trino-hive/src/main/java/io/trino/plugin/hive/metastore/thrift/ThriftHiveMetastore.java b/plugin/trino-hive/src/main/java/io/trino/plugin/hive/metastore/thrift/ThriftHiveMetastore.java
index a607c248a9ea..826068115216 100644
--- a/plugin/trino-hive/src/main/java/io/trino/plugin/hive/metastore/thrift/ThriftHiveMetastore.java
+++ b/plugin/trino-hive/src/main/java/io/trino/plugin/hive/metastore/thrift/ThriftHiveMetastore.java
@@ -1017,7 +1017,7 @@ public void dropDatabase(HiveIdentity identity, String databaseName)
                     .stopOnIllegalExceptions()
                     .run("dropDatabase", stats.getDropDatabase().wrap(() -> {
                         try (ThriftMetastoreClient client = createMetastoreClient(identity)) {
-                            client.dropDatabase(databaseName, true, false);
+                            client.dropDatabase(databaseName, false, false);
                         }
                         return null;
                     }));
diff --git a/testing/trino-product-tests/src/main/java/io/trino/tests/product/hive/TestCreateDropSchema.java b/testing/trino-product-tests/src/main/java/io/trino/tests/product/hive/TestCreateDropSchema.java
index c1f94d260054..cdf6ef0c0a81 100644
--- a/testing/trino-product-tests/src/main/java/io/trino/tests/product/hive/TestCreateDropSchema.java
+++ b/testing/trino-product-tests/src/main/java/io/trino/tests/product/hive/TestCreateDropSchema.java
@@ -17,14 +17,17 @@
 import com.google.inject.name.Named;
 import io.trino.tempto.ProductTest;
 import io.trino.tempto.hadoop.hdfs.HdfsClient;
+import io.trino.tempto.query.QueryExecutionException;
 import org.testng.annotations.Test;
 
 import static io.trino.tempto.assertions.QueryAssert.assertQueryFailure;
 import static io.trino.tempto.query.QueryExecutor.query;
+import static io.trino.tests.product.hive.util.TemporaryHiveTable.randomTableSuffix;
 import static io.trino.tests.product.utils.QueryExecutors.onHive;
 import static io.trino.tests.product.utils.QueryExecutors.onTrino;
-import static org.testng.Assert.assertFalse;
-import static org.testng.Assert.assertTrue;
+import static java.lang.String.format;
+import static org.assertj.core.api.Assertions.assertThat;
+import static org.assertj.core.api.Assertions.fail;
 
 public class TestCreateDropSchema
         extends ProductTest
@@ -39,18 +42,159 @@ public class TestCreateDropSchema
     @Test
     public void testCreateDropSchema()
     {
-        onHive().executeQuery("DROP DATABASE IF EXISTS test_drop_schema CASCADE");
+        String schemaName = "test_drop_schema";
+        String schemaDir = warehouseDirectory + "/test_drop_schema.db";
 
-        onTrino().executeQuery("CREATE SCHEMA test_drop_schema");
-        assertTrue(hdfsClient.exist(warehouseDirectory + "/test_drop_schema.db"));
+        ensureSchemaDoesNotExist(schemaName);
+
+        assertQuerySucceeds("CREATE SCHEMA test_drop_schema");
+        assertThat(hdfsClient.exist(schemaDir))
+                .as("Check if expected schema directory exists after creating schema")
+                .isTrue();
 
         onTrino().executeQuery("CREATE TABLE test_drop_schema.test_drop (col1 int)");
+
         assertQueryFailure(() -> query("DROP SCHEMA test_drop_schema"))
                 .hasMessageContaining("line 1:1: Cannot drop non-empty schema 'test_drop_schema'");
 
         onTrino().executeQuery("DROP TABLE test_drop_schema.test_drop");
 
-        onTrino().executeQuery("DROP SCHEMA test_drop_schema");
-        assertFalse(hdfsClient.exist(warehouseDirectory + "/test_drop_schema.db"));
+        assertQuerySucceeds("DROP SCHEMA test_drop_schema");
+        assertThat(hdfsClient.exist(schemaDir))
+                .as("Check if schema directory exists after dropping schema")
+                .isFalse();
+    }
+
+    @Test
+    public void testDropSchemaWithEmptyLocation()
+    {
+        String schemaName = schemaName("schema_with_empty_location");
+        String schemaDir = warehouseDirectory + "/schema-with-empty-location/";
+
+        createSchema(schemaName, schemaDir);
+        assertFileExists(schemaDir, true, "schema directory exists after create schema");
+        assertQuerySucceeds("DROP SCHEMA " + schemaName);
+        assertFileExists(schemaDir, false, "schema directory exists after drop schema");
+    }
+
+    @Test
+    public void testDropSchemaFilesWithoutLocation()
+    {
+        String schemaName = schemaName("schema_without_location");
+        String schemaDir = format("%s/%s.db/", warehouseDirectory, schemaName);
+
+        createSchema(schemaName);
+        assertFileExists(schemaDir, true, "schema directory exists after create schema");
+        assertQuerySucceeds("DROP SCHEMA " + schemaName);
+        assertFileExists(schemaDir, false, "schema directory exists after drop schema");
+    }
+
+    @Test
+    public void testDropSchemaFilesWithNonemptyLocation()
+    {
+        String schemaName = schemaName("schema_with_nonempty_location");
+        String schemaDir = warehouseDirectory + "/schema-with-nonempty-location/";
+
+        // Create file in schema directory before creating schema
+        String externalFile = schemaDir + "external-file";
+        hdfsClient.createDirectory(schemaDir);
+        hdfsClient.saveFile(externalFile, "");
+
+        createSchema(schemaName, schemaDir);
+        assertFileExists(schemaDir, true, "schema directory exists after create schema");
+        assertQuerySucceeds("DROP SCHEMA " + schemaName);
+        assertFileExists(schemaDir, true, "schema directory exists after drop schema");
+
+        assertFileExists(externalFile, true, "external file exists after drop schema");
+
+        hdfsClient.delete(externalFile);
+    }
+
+    // Tests create/drop schema transactions with default schema location
+    @Test
+    public void testDropSchemaFilesTransactions()
+    {
+        String schemaName = schemaName("schema_directory_transactions");
+        String schemaDir = format("%s/%s.db/", warehouseDirectory, schemaName);
+
+        createSchema(schemaName);
+        assertFileExists(schemaDir, true, "schema directory exists after create schema");
+
+        onTrino().executeQuery("START TRANSACTION");
+        assertQuerySucceeds("DROP SCHEMA " + schemaName);
+        assertQuerySucceeds("ROLLBACK");
+        assertFileExists(schemaDir, true, "schema directory exists after rollback");
+
+        // Sanity check: schema is still working
+        onTrino().executeQuery(format("CREATE TABLE %s.test_table (i integer)", schemaName));
+        onTrino().executeQuery(format("DROP TABLE %s.test_table", schemaName));
+
+        onTrino().executeQuery("START TRANSACTION");
+        assertQuerySucceeds("DROP SCHEMA " + schemaName);
+        assertQuerySucceeds("COMMIT");
+        assertFileExists(schemaDir, false, "schema directory exists after drop schema");
+    }
+
+    @Test
+    public void testDropSchemaFilesTransactionsWithExternalFiles()
+    {
+        String schemaName = schemaName("schema_transactions_with_external_files");
+        String schemaDir = warehouseDirectory + "/schema-transactions-with-external-files/";
+
+        // Create file in schema directory before creating schema
+        String externalFile = schemaDir + "external-file";
+        hdfsClient.createDirectory(schemaDir);
+        hdfsClient.saveFile(externalFile, "");
+
+        createSchema(schemaName, schemaDir);
+
+        onTrino().executeQuery("START TRANSACTION");
+        assertQuerySucceeds("DROP SCHEMA " + schemaName);
+        assertQuerySucceeds("ROLLBACK");
+        assertFileExists(externalFile, true, "external file exists after rolling back drop schema");
+
+        // Sanity check: schema is still working
+        onTrino().executeQuery(format("CREATE TABLE %s.test_table (i integer)", schemaName));
+        onTrino().executeQuery(format("DROP TABLE %s.test_table", schemaName));
+
+        onTrino().executeQuery("START TRANSACTION");
+        assertQuerySucceeds("DROP SCHEMA " + schemaName);
+        assertQuerySucceeds("COMMIT");
+        assertFileExists(externalFile, true, "schema directory exists after committing drop schema");
+    }
+
+    private void assertFileExists(String path, boolean exists, String description)
+    {
+        assertThat(hdfsClient.exist(path)).as("%s (%s)", description, path).isEqualTo(exists);
+    }
+
+    private static void assertQuerySucceeds(String query)
+    {
+        try {
+            onTrino().executeQuery(query);
+        }
+        catch (QueryExecutionException e) {
+            fail(format("Expected query to succeed: %s", query), e.getCause());
+        }
+    }
+
+    private void createSchema(String name)
+    {
+        onTrino().executeQuery(format("CREATE SCHEMA %s", name));
+    }
+
+    private void createSchema(String name, String location)
+    {
+        onTrino().executeQuery(format("CREATE SCHEMA %s WITH (location = '%s')", name, location));
+    }
+
+    private static String schemaName(String name)
+    {
+        return format("%s_%s", name, randomTableSuffix());
+    }
+
+    private static void ensureSchemaDoesNotExist(String schemaName)
+    {
+        onHive().executeQuery(format("DROP DATABASE IF EXISTS %s CASCADE", schemaName));
     }
 }