diff --git a/src/extensions/tree-view/spec/tree-view-spec.coffee b/src/extensions/tree-view/spec/tree-view-spec.coffee
index f63f7c950..299636013 100644
--- a/src/extensions/tree-view/spec/tree-view-spec.coffee
+++ b/src/extensions/tree-view/spec/tree-view-spec.coffee
@@ -850,3 +850,21 @@ describe "TreeView", ->
 
         waitsFor "directory view contens to refresh", ->
           treeView.root.entries.find('.entry').length == entriesCountBefore
+
+  describe "ignored files", ->
+    [ignoreFile] = []
+
+    beforeEach ->
+      ignoreFile = fs.join(require.resolve('fixtures/tree-view'), '.gitignore')
+      fs.write(ignoreFile, 'tree-view.js')
+      project.setHideIgnoredFiles(false)
+
+    afterEach ->
+      fs.remove(ignoreFile) if fs.exists(ignoreFile)
+
+    it "toggles display of ignored path when setting is toggled", ->
+      expect(treeView.find('.file:contains(tree-view.js)').length).toBe 1
+      rootView.trigger 'window:toggle-ignored-files'
+      expect(treeView.find('.file:contains(tree-view.js)').length).toBe 0
+      rootView.trigger 'window:toggle-ignored-files'
+      expect(treeView.find('.file:contains(tree-view.js)').length).toBe 1
diff --git a/src/extensions/tree-view/src/directory-view.coffee b/src/extensions/tree-view/src/directory-view.coffee
index d68c42602..2e09e7857 100644
--- a/src/extensions/tree-view/src/directory-view.coffee
+++ b/src/extensions/tree-view/src/directory-view.coffee
@@ -15,8 +15,9 @@ class DirectoryView extends View
   directory: null
   entries: null
   header: null
+  project: null
 
-  initialize: ({@directory, isExpanded} = {}) ->
+  initialize: ({@directory, isExpanded, @project} = {}) ->
     @expand() if isExpanded
     @disclosureArrow.on 'click', => @toggleExpansion()
     @directoryName.addClass('ignored') if new Git(@directory.getPath()).isPathIgnored(@directory.getPath())
@@ -24,13 +25,17 @@ class DirectoryView extends View
   getPath: ->
     @directory.path
 
+  isPathIgnored: (path) ->
+    @project.hideIgnoredFiles and @project.repo?.isPathIgnored(path)
+
   buildEntries: ->
     @unwatchDescendantEntries()
     @entries?.remove()
     @entries = $$ -> @ol class: 'entries'
     for entry in @directory.getEntries()
+      continue if @isPathIgnored(entry.path)
       if entry instanceof Directory
-        @entries.append(new DirectoryView(directory: entry, isExpanded: false))
+        @entries.append(new DirectoryView(directory: entry, isExpanded: false, project: @project))
       else
         @entries.append(new FileView(entry))
     @append(@entries)
diff --git a/src/extensions/tree-view/src/tree-view.coffee b/src/extensions/tree-view/src/tree-view.coffee
index eb8c55720..c5d762650 100644
--- a/src/extensions/tree-view/src/tree-view.coffee
+++ b/src/extensions/tree-view/src/tree-view.coffee
@@ -29,7 +29,7 @@ class TreeView extends ScrollView
   @content: (rootView) ->
     @div class: 'tree-view tool-panel', tabindex: -1, =>
       if rootView.project.getRootDirectory()
-        @subview 'root', new DirectoryView(directory: rootView.project.getRootDirectory(), isExpanded: true)
+        @subview 'root', new DirectoryView(directory: rootView.project.getRootDirectory(), isExpanded: true, project: rootView.project)
 
   @deserialize: (state, rootView) ->
     treeView = new TreeView(rootView)
@@ -66,6 +66,7 @@ class TreeView extends ScrollView
     @rootView.command 'tree-view:toggle', => @toggle()
     @rootView.command 'tree-view:reveal-active-file', => @revealActiveFile()
     @rootView.on 'active-editor-path-change', => @selectActiveFile()
+    @rootView.on 'window:toggle-ignored-files', => @updateRoot()
     @rootView.project.on 'path-change', => @updateRoot()
 
     @selectEntry(@root) if @root
@@ -122,7 +123,7 @@ class TreeView extends ScrollView
   updateRoot: ->
     @root?.remove()
     if @rootView.project.getRootDirectory()
-      @root = new DirectoryView(directory: @rootView.project.getRootDirectory(), isExpanded: true)
+      @root = new DirectoryView(directory: @rootView.project.getRootDirectory(), isExpanded: true, project: @rootView.project)
       @append(@root)
     else
       @root = null