removed empty placeholder images for drag, removed redundant local sanitization helper

apps/sim/app/api/folders/[id]/route.ts

@@ -14,6 +14,7 @@ const updateFolderSchema = z.object({
   color: z.string().optional(),
   isExpanded: z.boolean().optional(),
   parentId: z.string().nullable().optional(),
+  sortOrder: z.number().int().min(0).optional(),
 })
 
 // PUT - Update a folder
@@ -38,7 +39,7 @@ export async function PUT(request: NextRequest, { params }: { params: Promise<{
       return NextResponse.json({ error: `Validation failed: ${errorMessages}` }, { status: 400 })
     }
 
-    const { name, color, isExpanded, parentId } = validationResult.data
+    const { name, color, isExpanded, parentId, sortOrder } = validationResult.data
 
     // Verify the folder exists
     const existingFolder = await db
@@ -81,12 +82,12 @@ export async function PUT(request: NextRequest, { params }: { params: Promise<{
       }
     }
 
-    // Update the folder
-    const updates: any = { updatedAt: new Date() }
+    const updates: Record<string, unknown> = { updatedAt: new Date() }
     if (name !== undefined) updates.name = name.trim()
     if (color !== undefined) updates.color = color
     if (isExpanded !== undefined) updates.isExpanded = isExpanded
     if (parentId !== undefined) updates.parentId = parentId || null
+    if (sortOrder !== undefined) updates.sortOrder = sortOrder
 
     const [updatedFolder] = await db
       .update(workflowFolder)

apps/sim/app/api/folders/reorder/route.ts

@@ -0,0 +1,91 @@
+import { db } from '@sim/db'
+import { workflowFolder } from '@sim/db/schema'
+import { createLogger } from '@sim/logger'
+import { eq, inArray } from 'drizzle-orm'
+import { type NextRequest, NextResponse } from 'next/server'
+import { z } from 'zod'
+import { getSession } from '@/lib/auth'
+import { generateRequestId } from '@/lib/core/utils/request'
+import { getUserEntityPermissions } from '@/lib/workspaces/permissions/utils'
+
+const logger = createLogger('FolderReorderAPI')
+
+const ReorderSchema = z.object({
+  workspaceId: z.string(),
+  updates: z.array(
+    z.object({
+      id: z.string(),
+      sortOrder: z.number().int().min(0),
+      parentId: z.string().nullable().optional(),
+    })
+  ),
+})
+
+export async function PUT(req: NextRequest) {
+  const requestId = generateRequestId()
+  const session = await getSession()
+
+  if (!session?.user?.id) {
+    logger.warn(`[${requestId}] Unauthorized folder reorder attempt`)
+    return NextResponse.json({ error: 'Unauthorized' }, { status: 401 })
+  }
+
+  try {
+    const body = await req.json()
+    const { workspaceId, updates } = ReorderSchema.parse(body)
+
+    const permission = await getUserEntityPermissions(session.user.id, 'workspace', workspaceId)
+    if (!permission || permission === 'read') {
+      logger.warn(
+        `[${requestId}] User ${session.user.id} lacks write permission for workspace ${workspaceId}`
+      )
+      return NextResponse.json({ error: 'Write access required' }, { status: 403 })
+    }
+
+    const folderIds = updates.map((u) => u.id)
+    const existingFolders = await db
+      .select({ id: workflowFolder.id, workspaceId: workflowFolder.workspaceId })
+      .from(workflowFolder)
+      .where(inArray(workflowFolder.id, folderIds))
+
+    const validIds = new Set(
+      existingFolders.filter((f) => f.workspaceId === workspaceId).map((f) => f.id)
+    )
+
+    const validUpdates = updates.filter((u) => validIds.has(u.id))
+
+    if (validUpdates.length === 0) {
+      return NextResponse.json({ error: 'No valid folders to update' }, { status: 400 })
+    }
+
+    await db.transaction(async (tx) => {
+      for (const update of validUpdates) {
+        const updateData: Record<string, unknown> = {
+          sortOrder: update.sortOrder,
+          updatedAt: new Date(),
+        }
+        if (update.parentId !== undefined) {
+          updateData.parentId = update.parentId
+        }
+        await tx.update(workflowFolder).set(updateData).where(eq(workflowFolder.id, update.id))
+      }
+    })
+
+    logger.info(
+      `[${requestId}] Reordered ${validUpdates.length} folders in workspace ${workspaceId}`
+    )
+
+    return NextResponse.json({ success: true, updated: validUpdates.length })
+  } catch (error) {
+    if (error instanceof z.ZodError) {
+      logger.warn(`[${requestId}] Invalid folder reorder data`, { errors: error.errors })
+      return NextResponse.json(
+        { error: 'Invalid request data', details: error.errors },
+        { status: 400 }
+      )
+    }
+
+    logger.error(`[${requestId}] Error reordering folders`, error)
+    return NextResponse.json({ error: 'Failed to reorder folders' }, { status: 500 })
+  }
+}

apps/sim/app/api/folders/route.ts

@@ -58,7 +58,7 @@ export async function POST(request: NextRequest) {
     }
 
     const body = await request.json()
-    const { name, workspaceId, parentId, color } = body
+    const { name, workspaceId, parentId, color, sortOrder: providedSortOrder } = body
 
     if (!name || !workspaceId) {
       return NextResponse.json({ error: 'Name and workspace ID are required' }, { status: 400 })
@@ -81,25 +81,26 @@ export async function POST(request: NextRequest) {
     // Generate a new ID
     const id = crypto.randomUUID()
 
-    // Use transaction to ensure sortOrder consistency
     const newFolder = await db.transaction(async (tx) => {
-      // Get the next sort order for the parent (or root level)
-      // Consider all folders in the workspace, not just those created by current user
-      const existingFolders = await tx
-        .select({ sortOrder: workflowFolder.sortOrder })
-        .from(workflowFolder)
-        .where(
-          and(
-            eq(workflowFolder.workspaceId, workspaceId),
-            parentId ? eq(workflowFolder.parentId, parentId) : isNull(workflowFolder.parentId)
+      let sortOrder: number
+      if (providedSortOrder !== undefined) {
+        sortOrder = providedSortOrder
+      } else {
+        const existingFolders = await tx
+          .select({ sortOrder: workflowFolder.sortOrder })
+          .from(workflowFolder)
+          .where(
+            and(
+              eq(workflowFolder.workspaceId, workspaceId),
+              parentId ? eq(workflowFolder.parentId, parentId) : isNull(workflowFolder.parentId)
+            )
           )
-        )
-        .orderBy(desc(workflowFolder.sortOrder))
-        .limit(1)
+          .orderBy(desc(workflowFolder.sortOrder))
+          .limit(1)
 
-      const nextSortOrder = existingFolders.length > 0 ? existingFolders[0].sortOrder + 1 : 0
+        sortOrder = existingFolders.length > 0 ? existingFolders[0].sortOrder + 1 : 0
+      }
 
-      // Insert the new folder within the same transaction
       const [folder] = await tx
         .insert(workflowFolder)
         .values({
@@ -109,7 +110,7 @@ export async function POST(request: NextRequest) {
           workspaceId,
           parentId: parentId || null,
           color: color || '#6B7280',
-          sortOrder: nextSortOrder,
+          sortOrder,
         })
         .returning()
 

apps/sim/app/api/workflows/[id]/route.ts

@@ -20,6 +20,7 @@ const UpdateWorkflowSchema = z.object({
   description: z.string().optional(),
   color: z.string().optional(),
   folderId: z.string().nullable().optional(),
+  sortOrder: z.number().int().min(0).optional(),
 })
 
 /**
@@ -438,12 +439,12 @@ export async function PUT(request: NextRequest, { params }: { params: Promise<{
       return NextResponse.json({ error: 'Access denied' }, { status: 403 })
     }
 
-    // Build update object
-    const updateData: any = { updatedAt: new Date() }
+    const updateData: Record<string, unknown> = { updatedAt: new Date() }
     if (updates.name !== undefined) updateData.name = updates.name
     if (updates.description !== undefined) updateData.description = updates.description
     if (updates.color !== undefined) updateData.color = updates.color
     if (updates.folderId !== undefined) updateData.folderId = updates.folderId
+    if (updates.sortOrder !== undefined) updateData.sortOrder = updates.sortOrder
 
     // Update the workflow
     const [updatedWorkflow] = await db

apps/sim/app/api/workflows/reorder/route.ts

@@ -0,0 +1,91 @@
+import { db } from '@sim/db'
+import { workflow } from '@sim/db/schema'
+import { createLogger } from '@sim/logger'
+import { eq, inArray } from 'drizzle-orm'
+import { type NextRequest, NextResponse } from 'next/server'
+import { z } from 'zod'
+import { getSession } from '@/lib/auth'
+import { generateRequestId } from '@/lib/core/utils/request'
+import { getUserEntityPermissions } from '@/lib/workspaces/permissions/utils'
+
+const logger = createLogger('WorkflowReorderAPI')
+
+const ReorderSchema = z.object({
+  workspaceId: z.string(),
+  updates: z.array(
+    z.object({
+      id: z.string(),
+      sortOrder: z.number().int().min(0),
+      folderId: z.string().nullable().optional(),
+    })
+  ),
+})
+
+export async function PUT(req: NextRequest) {
+  const requestId = generateRequestId()
+  const session = await getSession()
+
+  if (!session?.user?.id) {
+    logger.warn(`[${requestId}] Unauthorized reorder attempt`)
+    return NextResponse.json({ error: 'Unauthorized' }, { status: 401 })
+  }
+
+  try {
+    const body = await req.json()
+    const { workspaceId, updates } = ReorderSchema.parse(body)
+
+    const permission = await getUserEntityPermissions(session.user.id, 'workspace', workspaceId)
+    if (!permission || permission === 'read') {
+      logger.warn(
+        `[${requestId}] User ${session.user.id} lacks write permission for workspace ${workspaceId}`
+      )
+      return NextResponse.json({ error: 'Write access required' }, { status: 403 })
+    }
+
+    const workflowIds = updates.map((u) => u.id)
+    const existingWorkflows = await db
+      .select({ id: workflow.id, workspaceId: workflow.workspaceId })
+      .from(workflow)
+      .where(inArray(workflow.id, workflowIds))
+
+    const validIds = new Set(
+      existingWorkflows.filter((w) => w.workspaceId === workspaceId).map((w) => w.id)
+    )
+
+    const validUpdates = updates.filter((u) => validIds.has(u.id))
+
+    if (validUpdates.length === 0) {
+      return NextResponse.json({ error: 'No valid workflows to update' }, { status: 400 })
+    }
+
+    await db.transaction(async (tx) => {
+      for (const update of validUpdates) {
+        const updateData: Record<string, unknown> = {
+          sortOrder: update.sortOrder,
+          updatedAt: new Date(),
+        }
+        if (update.folderId !== undefined) {
+          updateData.folderId = update.folderId
+        }
+        await tx.update(workflow).set(updateData).where(eq(workflow.id, update.id))
+      }
+    })
+
+    logger.info(
+      `[${requestId}] Reordered ${validUpdates.length} workflows in workspace ${workspaceId}`
+    )
+
+    return NextResponse.json({ success: true, updated: validUpdates.length })
+  } catch (error) {
+    if (error instanceof z.ZodError) {
+      logger.warn(`[${requestId}] Invalid reorder data`, { errors: error.errors })
+      return NextResponse.json(
+        { error: 'Invalid request data', details: error.errors },
+        { status: 400 }
+      )
+    }
+
+    logger.error(`[${requestId}] Error reordering workflows`, error)
+    return NextResponse.json({ error: 'Failed to reorder workflows' }, { status: 500 })
+  }
+}

apps/sim/app/api/workflows/route.ts

@@ -1,7 +1,7 @@
 import { db } from '@sim/db'
 import { workflow } from '@sim/db/schema'
 import { createLogger } from '@sim/logger'
-import { eq } from 'drizzle-orm'
+import { and, eq, isNull, max } from 'drizzle-orm'
 import { type NextRequest, NextResponse } from 'next/server'
 import { z } from 'zod'
 import { getSession } from '@/lib/auth'
@@ -17,6 +17,7 @@ const CreateWorkflowSchema = z.object({
   color: z.string().optional().default('#3972F6'),
   workspaceId: z.string().optional(),
   folderId: z.string().nullable().optional(),
+  sortOrder: z.number().int().optional(),
 })
 
 // GET /api/workflows - Get workflows for user (optionally filtered by workspaceId)
@@ -89,7 +90,14 @@ export async function POST(req: NextRequest) {
 
   try {
     const body = await req.json()
-    const { name, description, color, workspaceId, folderId } = CreateWorkflowSchema.parse(body)
+    const {
+      name,
+      description,
+      color,
+      workspaceId,
+      folderId,
+      sortOrder: providedSortOrder,
+    } = CreateWorkflowSchema.parse(body)
 
     if (workspaceId) {
       const workspacePermission = await getUserEntityPermissions(
@@ -127,11 +135,28 @@ export async function POST(req: NextRequest) {
         // Silently fail
       })
 
+    let sortOrder: number
+    if (providedSortOrder !== undefined) {
+      sortOrder = providedSortOrder
+    } else {
+      const folderCondition = folderId ? eq(workflow.folderId, folderId) : isNull(workflow.folderId)
+      const [maxResult] = await db
+        .select({ maxOrder: max(workflow.sortOrder) })
+        .from(workflow)
+        .where(
+          workspaceId
+            ? and(eq(workflow.workspaceId, workspaceId), folderCondition)
+            : and(eq(workflow.userId, session.user.id), folderCondition)
+        )
+      sortOrder = (maxResult?.maxOrder ?? -1) + 1
+    }
+
     await db.insert(workflow).values({
       id: workflowId,
       userId: session.user.id,
       workspaceId: workspaceId || null,
       folderId: folderId || null,
+      sortOrder,
       name,
       description,
       color,
@@ -152,6 +177,7 @@ export async function POST(req: NextRequest) {
       color,
       workspaceId,
       folderId,
+      sortOrder,
       createdAt: now,
       updatedAt: now,
     })

apps/sim/app/api/workspaces/route.ts

@@ -13,6 +13,7 @@ const logger = createLogger('Workspaces')
 
 const createWorkspaceSchema = z.object({
   name: z.string().trim().min(1, 'Name is required'),
+  skipDefaultWorkflow: z.boolean().optional().default(false),
 })
 
 // Get all workspaces for the current user
@@ -63,9 +64,9 @@ export async function POST(req: Request) {
   }
 
   try {
-    const { name } = createWorkspaceSchema.parse(await req.json())
+    const { name, skipDefaultWorkflow } = createWorkspaceSchema.parse(await req.json())
 
-    const newWorkspace = await createWorkspace(session.user.id, name)
+    const newWorkspace = await createWorkspace(session.user.id, name, skipDefaultWorkflow)
 
     return NextResponse.json({ workspace: newWorkspace })
   } catch (error) {
@@ -80,7 +81,7 @@ async function createDefaultWorkspace(userId: string, userName?: string | null)
   return createWorkspace(userId, workspaceName)
 }
 
-async function createWorkspace(userId: string, name: string) {
+async function createWorkspace(userId: string, name: string, skipDefaultWorkflow = false) {
   const workspaceId = crypto.randomUUID()
   const workflowId = crypto.randomUUID()
   const now = new Date()
@@ -97,7 +98,6 @@ async function createWorkspace(userId: string, name: string) {
         updatedAt: now,
       })
 
-      // Create admin permissions for the workspace owner
       await tx.insert(permissions).values({
         id: crypto.randomUUID(),
         entityType: 'workspace' as const,
@@ -108,37 +108,41 @@ async function createWorkspace(userId: string, name: string) {
         updatedAt: now,
       })
 
-      // Create initial workflow for the workspace (empty canvas)
-      // Create the workflow
-      await tx.insert(workflow).values({
-        id: workflowId,
-        userId,
-        workspaceId,
-        folderId: null,
-        name: 'default-agent',
-        description: 'Your first workflow - start building here!',
-        color: '#3972F6',
-        lastSynced: now,
-        createdAt: now,
-        updatedAt: now,
-        isDeployed: false,
-        runCount: 0,
-        variables: {},
-      })
+      if (!skipDefaultWorkflow) {
+        await tx.insert(workflow).values({
+          id: workflowId,
+          userId,
+          workspaceId,
+          folderId: null,
+          name: 'default-agent',
+          description: 'Your first workflow - start building here!',
+          color: '#3972F6',
+          lastSynced: now,
+          createdAt: now,
+          updatedAt: now,
+          isDeployed: false,
+          runCount: 0,
+          variables: {},
+        })
+      }
 
       logger.info(
-        `Created workspace ${workspaceId} with initial workflow ${workflowId} for user ${userId}`
+        skipDefaultWorkflow
+          ? `Created workspace ${workspaceId} for user ${userId}`
+          : `Created workspace ${workspaceId} with initial workflow ${workflowId} for user ${userId}`
       )
     })
 
-    const { workflowState } = buildDefaultWorkflowArtifacts()
-    const seedResult = await saveWorkflowToNormalizedTables(workflowId, workflowState)
+    if (!skipDefaultWorkflow) {
+      const { workflowState } = buildDefaultWorkflowArtifacts()
+      const seedResult = await saveWorkflowToNormalizedTables(workflowId, workflowState)
 
-    if (!seedResult.success) {
-      throw new Error(seedResult.error || 'Failed to seed default workflow state')
+      if (!seedResult.success) {
+        throw new Error(seedResult.error || 'Failed to seed default workflow state')
+      }
     }
   } catch (error) {
-    logger.error(`Failed to create workspace ${workspaceId} with initial workflow:`, error)
+    logger.error(`Failed to create workspace ${workspaceId}:`, error)
     throw error
   }
 

apps/sim/app/workspace/[workspaceId]/w/components/sidebar/components/workflow-list/components/folder-item/folder-item.tsx

@@ -36,6 +36,8 @@ interface FolderItemProps {
     onDragEnter?: (e: React.DragEvent<HTMLElement>) => void
     onDragLeave?: (e: React.DragEvent<HTMLElement>) => void
   }
+  onDragStart?: () => void
+  onDragEnd?: () => void
 }
 
 /**
@@ -46,7 +48,13 @@ interface FolderItemProps {
  * @param props - Component props
  * @returns Folder item with drag and expand support
  */
-export function FolderItem({ folder, level, hoverHandlers }: FolderItemProps) {
+export function FolderItem({
+  folder,
+  level,
+  hoverHandlers,
+  onDragStart: onDragStartProp,
+  onDragEnd: onDragEndProp,
+}: FolderItemProps) {
   const params = useParams()
   const router = useRouter()
   const workspaceId = params.workspaceId as string
@@ -135,11 +143,6 @@ export function FolderItem({ folder, level, hoverHandlers }: FolderItemProps) {
     }
   }, [createFolderMutation, workspaceId, folder.id, expandFolder])
 
-  /**
-   * Drag start handler - sets folder data for drag operation
-   *
-   * @param e - React drag event
-   */
   const onDragStart = useCallback(
     (e: React.DragEvent) => {
       if (isEditing) {
@@ -149,14 +152,25 @@ export function FolderItem({ folder, level, hoverHandlers }: FolderItemProps) {
 
       e.dataTransfer.setData('folder-id', folder.id)
       e.dataTransfer.effectAllowed = 'move'
+      onDragStartProp?.()
     },
-    [folder.id]
+    [folder.id, onDragStartProp]
   )
 
-  const { isDragging, shouldPreventClickRef, handleDragStart, handleDragEnd } = useItemDrag({
+  const {
+    isDragging,
+    shouldPreventClickRef,
+    handleDragStart,
+    handleDragEnd: handleDragEndBase,
+  } = useItemDrag({
     onDragStart,
   })
 
+  const handleDragEnd = useCallback(() => {
+    handleDragEndBase()
+    onDragEndProp?.()
+  }, [handleDragEndBase, onDragEndProp])
+
   const {
     isOpen: isContextMenuOpen,
     position,

apps/sim/app/workspace/[workspaceId]/w/components/sidebar/components/workflow-list/components/workflow-item/workflow-item.tsx

@@ -29,6 +29,8 @@ interface WorkflowItemProps {
   active: boolean
   level: number
   onWorkflowClick: (workflowId: string, shiftKey: boolean, metaKey: boolean) => void
+  onDragStart?: () => void
+  onDragEnd?: () => void
 }
 
 /**
@@ -38,7 +40,14 @@ interface WorkflowItemProps {
  * @param props - Component props
  * @returns Workflow item with drag and selection support
  */
-export function WorkflowItem({ workflow, active, level, onWorkflowClick }: WorkflowItemProps) {
+export function WorkflowItem({
+  workflow,
+  active,
+  level,
+  onWorkflowClick,
+  onDragStart: onDragStartProp,
+  onDragEnd: onDragEndProp,
+}: WorkflowItemProps) {
   const params = useParams()
   const workspaceId = params.workspaceId as string
   const { selectedWorkflows } = useFolderStore()
@@ -104,30 +113,7 @@ export function WorkflowItem({ workflow, active, level, onWorkflowClick }: Workf
     [workflow.id, updateWorkflow]
   )
 
-  /**
-   * Drag start handler - handles workflow dragging with multi-selection support
-   *
-   * @param e - React drag event
-   */
-  const onDragStart = useCallback(
-    (e: React.DragEvent) => {
-      if (isEditing) {
-        e.preventDefault()
-        return
-      }
-
-      const workflowIds =
-        isSelected && selectedWorkflows.size > 1 ? Array.from(selectedWorkflows) : [workflow.id]
-
-      e.dataTransfer.setData('workflow-ids', JSON.stringify(workflowIds))
-      e.dataTransfer.effectAllowed = 'move'
-    },
-    [isSelected, selectedWorkflows, workflow.id]
-  )
-
-  const { isDragging, shouldPreventClickRef, handleDragStart, handleDragEnd } = useItemDrag({
-    onDragStart,
-  })
+  const isEditingRef = useRef(false)
 
   const {
     isOpen: isContextMenuOpen,
@@ -232,6 +218,43 @@ export function WorkflowItem({ workflow, active, level, onWorkflowClick }: Workf
     itemId: workflow.id,
   })
 
+  isEditingRef.current = isEditing
+
+  const onDragStart = useCallback(
+    (e: React.DragEvent) => {
+      if (isEditingRef.current) {
+        e.preventDefault()
+        return
+      }
+
+      const currentSelection = useFolderStore.getState().selectedWorkflows
+      const isCurrentlySelected = currentSelection.has(workflow.id)
+      const workflowIds =
+        isCurrentlySelected && currentSelection.size > 1
+          ? Array.from(currentSelection)
+          : [workflow.id]
+
+      e.dataTransfer.setData('workflow-ids', JSON.stringify(workflowIds))
+      e.dataTransfer.effectAllowed = 'move'
+      onDragStartProp?.()
+    },
+    [workflow.id, onDragStartProp]
+  )
+
+  const {
+    isDragging,
+    shouldPreventClickRef,
+    handleDragStart,
+    handleDragEnd: handleDragEndBase,
+  } = useItemDrag({
+    onDragStart,
+  })
+
+  const handleDragEnd = useCallback(() => {
+    handleDragEndBase()
+    onDragEndProp?.()
+  }, [handleDragEndBase, onDragEndProp])
+
   /**
    * Handle double-click on workflow name to enter rename mode
    */

apps/sim/app/workspace/[workspaceId]/w/components/sidebar/components/workflow-list/workflow-list.tsx

@@ -1,6 +1,6 @@
 'use client'
 
-import { useCallback, useEffect, useMemo } from 'react'
+import { memo, useCallback, useEffect, useMemo } from 'react'
 import clsx from 'clsx'
 import { useParams, usePathname } from 'next/navigation'
 import { FolderItem } from '@/app/workspace/[workspaceId]/w/components/sidebar/components/workflow-list/components/folder-item/folder-item'
@@ -14,9 +14,6 @@ import { useFolderStore } from '@/stores/folders/store'
 import type { FolderTreeNode } from '@/stores/folders/types'
 import type { WorkflowMetadata } from '@/stores/workflows/registry/types'
 
-/**
- * Constants for tree layout and styling
- */
 const TREE_SPACING = {
   INDENT_PER_LEVEL: 20,
 } as const
@@ -29,12 +26,24 @@ interface WorkflowListProps {
   scrollContainerRef: React.RefObject<HTMLDivElement | null>
 }
 
-/**
- * WorkflowList component displays workflows organized by folders with drag-and-drop support.
- *
- * @param props - Component props
- * @returns Workflow list with folders and drag-drop support
- */
+const DropIndicatorLine = memo(function DropIndicatorLine({
+  show,
+  level = 0,
+}: {
+  show: boolean
+  level?: number
+}) {
+  if (!show) return null
+  return (
+    <div
+      className='pointer-events-none absolute right-0 left-0 z-20 flex items-center'
+      style={{ paddingLeft: `${level * TREE_SPACING.INDENT_PER_LEVEL}px` }}
+    >
+      <div className='h-[2px] flex-1 rounded-full bg-[#33b4ff]/70' />
+    </div>
+  )
+})
+
 export function WorkflowList({
   regularWorkflows,
   isLoading = false,
@@ -48,20 +57,21 @@ export function WorkflowList({
   const workflowId = params.workflowId as string
 
   const { isLoading: foldersLoading } = useFolders(workspaceId)
-
   const { getFolderTree, expandedFolders, getFolderPath, setExpanded } = useFolderStore()
 
   const {
-    dropTargetId,
+    dropIndicator,
     isDragging,
     setScrollContainer,
+    createWorkflowDragHandlers,
     createFolderDragHandlers,
-    createItemDragHandlers,
-    createRootDragHandlers,
-    createFolderHeaderHoverHandlers,
+    createEmptyFolderDropZone,
+    createFolderContentDropZone,
+    createRootDropZone,
+    handleDragStart,
+    handleDragEnd,
   } = useDragDrop()
 
-  // Set scroll container when ref changes
   useEffect(() => {
     if (scrollContainerRef.current) {
       setScrollContainer(scrollContainerRef.current)
@@ -76,23 +86,22 @@ export function WorkflowList({
     return activeWorkflow?.folderId || null
   }, [workflowId, regularWorkflows, isLoading, foldersLoading])
 
-  const workflowsByFolder = useMemo(
-    () =>
-      regularWorkflows.reduce(
-        (acc, workflow) => {
-          const folderId = workflow.folderId || 'root'
-          if (!acc[folderId]) acc[folderId] = []
-          acc[folderId].push(workflow)
-          return acc
-        },
-        {} as Record<string, WorkflowMetadata[]>
-      ),
-    [regularWorkflows]
-  )
+  const workflowsByFolder = useMemo(() => {
+    const grouped = regularWorkflows.reduce(
+      (acc, workflow) => {
+        const folderId = workflow.folderId || 'root'
+        if (!acc[folderId]) acc[folderId] = []
+        acc[folderId].push(workflow)
+        return acc
+      },
+      {} as Record<string, WorkflowMetadata[]>
+    )
+    for (const folderId of Object.keys(grouped)) {
+      grouped[folderId].sort((a, b) => a.sortOrder - b.sortOrder)
+    }
+    return grouped
+  }, [regularWorkflows])
 
-  /**
-   * Build a flat list of all workflow IDs in display order for range selection
-   */
   const orderedWorkflowIds = useMemo(() => {
     const ids: string[] = []
 
@@ -106,12 +115,10 @@ export function WorkflowList({
       }
     }
 
-    // Collect from folders first
     for (const folder of folderTree) {
       collectWorkflowIds(folder)
     }
 
-    // Then collect root workflows
     const rootWorkflows = workflowsByFolder.root || []
     for (const workflow of rootWorkflows) {
       ids.push(workflow.id)
@@ -120,30 +127,24 @@ export function WorkflowList({
     return ids
   }, [folderTree, workflowsByFolder])
 
-  // Workflow selection hook - uses active workflow ID as anchor for range selection
   const { handleWorkflowClick } = useWorkflowSelection({
     workflowIds: orderedWorkflowIds,
     activeWorkflowId: workflowId,
   })
 
   const isWorkflowActive = useCallback(
-    (workflowId: string) => pathname === `/workspace/${workspaceId}/w/${workflowId}`,
+    (wfId: string) => pathname === `/workspace/${workspaceId}/w/${wfId}`,
     [pathname, workspaceId]
   )
 
-  /**
-   * Auto-expand folders and select active workflow.
-   */
   useEffect(() => {
     if (!workflowId || isLoading || foldersLoading) return
 
-    // Expand folder path to reveal workflow
     if (activeWorkflowFolderId) {
       const folderPath = getFolderPath(activeWorkflowFolderId)
       folderPath.forEach((folder) => setExpanded(folder.id, true))
     }
 
-    // Select workflow if not already selected
     const { selectedWorkflows, selectOnly } = useFolderStore.getState()
     if (!selectedWorkflows.has(workflowId)) {
       selectOnly(workflowId)
@@ -151,23 +152,40 @@ export function WorkflowList({
   }, [workflowId, activeWorkflowFolderId, isLoading, foldersLoading, getFolderPath, setExpanded])
 
   const renderWorkflowItem = useCallback(
-    (workflow: WorkflowMetadata, level: number, parentFolderId: string | null = null) => (
-      <div key={workflow.id} className='relative' {...createItemDragHandlers(parentFolderId)}>
-        <div
-          style={{
-            paddingLeft: `${level * TREE_SPACING.INDENT_PER_LEVEL}px`,
-          }}
-        >
-          <WorkflowItem
-            workflow={workflow}
-            active={isWorkflowActive(workflow.id)}
-            level={level}
-            onWorkflowClick={handleWorkflowClick}
-          />
+    (workflow: WorkflowMetadata, level: number, folderId: string | null = null) => {
+      const showBefore =
+        dropIndicator?.targetId === workflow.id && dropIndicator?.position === 'before'
+      const showAfter =
+        dropIndicator?.targetId === workflow.id && dropIndicator?.position === 'after'
+
+      return (
+        <div key={workflow.id} className='relative'>
+          <DropIndicatorLine show={showBefore} level={level} />
+          <div
+            style={{ paddingLeft: `${level * TREE_SPACING.INDENT_PER_LEVEL}px` }}
+            {...createWorkflowDragHandlers(workflow.id, folderId)}
+          >
+            <WorkflowItem
+              workflow={workflow}
+              active={isWorkflowActive(workflow.id)}
+              level={level}
+              onWorkflowClick={handleWorkflowClick}
+              onDragStart={() => handleDragStart('workflow', folderId)}
+              onDragEnd={handleDragEnd}
+            />
+          </div>
+          <DropIndicatorLine show={showAfter} level={level} />
         </div>
-      </div>
-    ),
-    [isWorkflowActive, createItemDragHandlers, handleWorkflowClick]
+      )
+    },
+    [
+      dropIndicator,
+      isWorkflowActive,
+      createWorkflowDragHandlers,
+      handleWorkflowClick,
+      handleDragStart,
+      handleDragEnd,
+    ]
   )
 
   const renderFolderSection = useCallback(
@@ -179,45 +197,75 @@ export function WorkflowList({
       const workflowsInFolder = workflowsByFolder[folder.id] || []
       const isExpanded = expandedFolders.has(folder.id)
       const hasChildren = workflowsInFolder.length > 0 || folder.children.length > 0
-      const isDropTarget = dropTargetId === folder.id
+
+      const showBefore =
+        dropIndicator?.targetId === folder.id && dropIndicator?.position === 'before'
+      const showAfter = dropIndicator?.targetId === folder.id && dropIndicator?.position === 'after'
+      const showInside =
+        dropIndicator?.targetId === folder.id && dropIndicator?.position === 'inside'
+
+      const childItems: Array<{
+        type: 'folder' | 'workflow'
+        id: string
+        sortOrder: number
+        data: FolderTreeNode | WorkflowMetadata
+      }> = []
+      for (const childFolder of folder.children) {
+        childItems.push({
+          type: 'folder',
+          id: childFolder.id,
+          sortOrder: childFolder.sortOrder,
+          data: childFolder,
+        })
+      }
+      for (const workflow of workflowsInFolder) {
+        childItems.push({
+          type: 'workflow',
+          id: workflow.id,
+          sortOrder: workflow.sortOrder,
+          data: workflow,
+        })
+      }
+      childItems.sort((a, b) => a.sortOrder - b.sortOrder)
 
       return (
-        <div key={folder.id} className='relative' {...createFolderDragHandlers(folder.id)}>
-          {/* Drop target highlight overlay - always rendered for stable DOM */}
+        <div key={folder.id} className='relative'>
+          <DropIndicatorLine show={showBefore} level={level} />
+          {/* Drop target highlight overlay - covers entire folder section */}
           <div
             className={clsx(
               'pointer-events-none absolute inset-0 z-10 rounded-[4px] transition-opacity duration-75',
-              isDropTarget && isDragging ? 'bg-gray-400/20 opacity-100' : 'opacity-0'
+              showInside && isDragging ? 'bg-[#33b4ff1a] opacity-100' : 'opacity-0'
             )}
           />
-
           <div
             style={{ paddingLeft: `${level * TREE_SPACING.INDENT_PER_LEVEL}px` }}
-            {...createItemDragHandlers(folder.id)}
+            {...createFolderDragHandlers(folder.id, parentFolderId)}
           >
             <FolderItem
               folder={folder}
               level={level}
-              hoverHandlers={createFolderHeaderHoverHandlers(folder.id)}
+              onDragStart={() => handleDragStart('folder', parentFolderId)}
+              onDragEnd={handleDragEnd}
             />
           </div>
+          <DropIndicatorLine show={showAfter} level={level} />
 
-          {isExpanded && hasChildren && (
-            <div className='relative' {...createItemDragHandlers(folder.id)}>
-              {/* Vertical line - positioned to align under folder chevron */}
+          {isExpanded && (hasChildren || isDragging) && (
+            <div className='relative' {...createFolderContentDropZone(folder.id)}>
               <div
                 className='pointer-events-none absolute top-0 bottom-0 w-px bg-[var(--border)]'
                 style={{ left: `${level * TREE_SPACING.INDENT_PER_LEVEL + 12}px` }}
               />
               <div className='mt-[2px] space-y-[2px] pl-[2px]'>
-                {workflowsInFolder.map((workflow: WorkflowMetadata) =>
-                  renderWorkflowItem(workflow, level + 1, folder.id)
+                {childItems.map((item) =>
+                  item.type === 'folder'
+                    ? renderFolderSection(item.data as FolderTreeNode, level + 1, folder.id)
+                    : renderWorkflowItem(item.data as WorkflowMetadata, level + 1, folder.id)
+                )}
+                {!hasChildren && isDragging && (
+                  <div className='h-[24px]' {...createEmptyFolderDropZone(folder.id)} />
                 )}
-                {folder.children.map((childFolder) => (
-                  <div key={childFolder.id} className='relative'>
-                    {renderFolderSection(childFolder, level + 1, folder.id)}
-                  </div>
-                ))}
               </div>
             </div>
           )}
@@ -227,29 +275,47 @@ export function WorkflowList({
     [
       workflowsByFolder,
       expandedFolders,
-      dropTargetId,
+      dropIndicator,
       isDragging,
       createFolderDragHandlers,
-      createItemDragHandlers,
-      createFolderHeaderHoverHandlers,
+      createEmptyFolderDropZone,
+      createFolderContentDropZone,
+      handleDragStart,
+      handleDragEnd,
       renderWorkflowItem,
     ]
   )
 
-  const handleRootDragEvents = createRootDragHandlers()
+  const rootDropZoneHandlers = createRootDropZone()
   const rootWorkflows = workflowsByFolder.root || []
-  const isRootDropTarget = dropTargetId === 'root'
-  const hasRootWorkflows = rootWorkflows.length > 0
-  const hasFolders = folderTree.length > 0
 
-  /**
-   * Handle click on empty space to revert to active workflow selection
-   */
+  const rootItems = useMemo(() => {
+    const items: Array<{
+      type: 'folder' | 'workflow'
+      id: string
+      sortOrder: number
+      data: FolderTreeNode | WorkflowMetadata
+    }> = []
+    for (const folder of folderTree) {
+      items.push({ type: 'folder', id: folder.id, sortOrder: folder.sortOrder, data: folder })
+    }
+    for (const workflow of rootWorkflows) {
+      items.push({
+        type: 'workflow',
+        id: workflow.id,
+        sortOrder: workflow.sortOrder,
+        data: workflow,
+      })
+    }
+    return items.sort((a, b) => a.sortOrder - b.sortOrder)
+  }, [folderTree, rootWorkflows])
+
+  const hasRootItems = rootItems.length > 0
+  const showRootInside = dropIndicator?.targetId === 'root' && dropIndicator?.position === 'inside'
+
   const handleContainerClick = useCallback(
     (e: React.MouseEvent<HTMLDivElement>) => {
-      // Only handle clicks directly on the container (empty space)
       if (e.target !== e.currentTarget) return
-
       const { selectOnly, clearSelection } = useFolderStore.getState()
       workflowId ? selectOnly(workflowId) : clearSelection()
     },
@@ -258,36 +324,23 @@ export function WorkflowList({
 
   return (
     <div className='flex min-h-full flex-col pb-[8px]' onClick={handleContainerClick}>
-      {/* Folders Section */}
-      {hasFolders && (
-        <div className='mb-[2px] space-y-[2px]'>
-          {folderTree.map((folder) => renderFolderSection(folder, 0))}
-        </div>
-      )}
-
-      {/* Root Workflows Section - Expands to fill remaining space */}
       <div
-        className={clsx('relative flex-1', !hasRootWorkflows && 'min-h-[26px]')}
-        {...handleRootDragEvents}
+        className={clsx('relative flex-1 rounded-[4px]', !hasRootItems && 'min-h-[26px]')}
+        {...rootDropZoneHandlers}
       >
-        {/* Root drop target highlight overlay - always rendered for stable DOM */}
+        {/* Root drop target highlight overlay */}
         <div
           className={clsx(
             'pointer-events-none absolute inset-0 z-10 rounded-[4px] transition-opacity duration-75',
-            isRootDropTarget && isDragging ? 'bg-gray-400/20 opacity-100' : 'opacity-0'
+            showRootInside && isDragging ? 'bg-[#33b4ff1a] opacity-100' : 'opacity-0'
           )}
         />
-
         <div className='space-y-[2px]'>
-          {rootWorkflows.map((workflow: WorkflowMetadata) => (
-            <WorkflowItem
-              key={workflow.id}
-              workflow={workflow}
-              active={isWorkflowActive(workflow.id)}
-              level={0}
-              onWorkflowClick={handleWorkflowClick}
-            />
-          ))}
+          {rootItems.map((item) =>
+            item.type === 'folder'
+              ? renderFolderSection(item.data as FolderTreeNode, 0, null)
+              : renderWorkflowItem(item.data as WorkflowMetadata, 0, null)
+          )}
         </div>
       </div>
 

apps/sim/app/workspace/[workspaceId]/w/components/sidebar/hooks/index.ts

@@ -1,6 +1,6 @@
 export { useAutoScroll } from './use-auto-scroll'
 export { useContextMenu } from './use-context-menu'
-export { useDragDrop } from './use-drag-drop'
+export { type DropIndicator, useDragDrop } from './use-drag-drop'
 export { useFolderExpand } from './use-folder-expand'
 export { useFolderOperations } from './use-folder-operations'
 export { useItemDrag } from './use-item-drag'

apps/sim/app/workspace/[workspaceId]/w/components/sidebar/hooks/use-drag-drop.ts

@@ -1,47 +1,40 @@
 import { useCallback, useEffect, useRef, useState } from 'react'
 import { createLogger } from '@sim/logger'
 import { useParams } from 'next/navigation'
-import { useUpdateFolder } from '@/hooks/queries/folders'
+import { useReorderFolders } from '@/hooks/queries/folders'
+import { useReorderWorkflows } from '@/hooks/queries/workflows'
 import { useFolderStore } from '@/stores/folders/store'
 import { useWorkflowRegistry } from '@/stores/workflows/registry/store'
 
 const logger = createLogger('WorkflowList:DragDrop')
 
-/**
- * Constants for auto-scroll behavior
- */
-const SCROLL_THRESHOLD = 60 // Distance from edge to trigger scroll
-const SCROLL_SPEED = 8 // Pixels per frame
+const SCROLL_THRESHOLD = 60
+const SCROLL_SPEED = 8
+const HOVER_EXPAND_DELAY = 400
 
-/**
- * Constants for folder auto-expand on hover during drag
- */
-const HOVER_EXPAND_DELAY = 400 // Milliseconds to wait before expanding folder
+export interface DropIndicator {
+  targetId: string
+  position: 'before' | 'after' | 'inside'
+  folderId: string | null
+}
 
-/**
- * Custom hook for handling drag and drop operations for workflows and folders.
- * Includes auto-scrolling, drop target highlighting, and hover-to-expand.
- *
- * @returns Drag and drop state and event handlers
- */
 export function useDragDrop() {
-  const [dropTargetId, setDropTargetId] = useState<string | null>(null)
+  const [dropIndicator, setDropIndicator] = useState<DropIndicator | null>(null)
   const [isDragging, setIsDragging] = useState(false)
   const [hoverFolderId, setHoverFolderId] = useState<string | null>(null)
   const scrollContainerRef = useRef<HTMLDivElement | null>(null)
   const scrollIntervalRef = useRef<number | null>(null)
   const hoverExpandTimerRef = useRef<number | null>(null)
   const lastDragYRef = useRef<number>(0)
+  const draggedTypeRef = useRef<'workflow' | 'folder' | null>(null)
+  const draggedSourceFolderRef = useRef<string | null>(null)
 
   const params = useParams()
   const workspaceId = params.workspaceId as string | undefined
-  const updateFolderMutation = useUpdateFolder()
+  const reorderWorkflowsMutation = useReorderWorkflows()
+  const reorderFoldersMutation = useReorderFolders()
   const { setExpanded, expandedFolders } = useFolderStore()
-  const { updateWorkflow } = useWorkflowRegistry()
 
-  /**
-   * Auto-scroll handler - scrolls container when dragging near edges
-   */
   const handleAutoScroll = useCallback(() => {
     if (!scrollContainerRef.current || !isDragging) return
 
@@ -49,22 +42,17 @@ export function useDragDrop() {
     const rect = container.getBoundingClientRect()
     const mouseY = lastDragYRef.current
 
-    // Only scroll if mouse is within container bounds
     if (mouseY < rect.top || mouseY > rect.bottom) return
 
-    // Calculate distance from top and bottom edges
     const distanceFromTop = mouseY - rect.top
     const distanceFromBottom = rect.bottom - mouseY
 
     let scrollDelta = 0
 
-    // Scroll up if near top and not at scroll top
     if (distanceFromTop < SCROLL_THRESHOLD && container.scrollTop > 0) {
       const intensity = Math.max(0, Math.min(1, 1 - distanceFromTop / SCROLL_THRESHOLD))
       scrollDelta = -SCROLL_SPEED * intensity
-    }
-    // Scroll down if near bottom and not at scroll bottom
-    else if (distanceFromBottom < SCROLL_THRESHOLD) {
+    } else if (distanceFromBottom < SCROLL_THRESHOLD) {
       const maxScroll = container.scrollHeight - container.clientHeight
       if (container.scrollTop < maxScroll) {
         const intensity = Math.max(0, Math.min(1, 1 - distanceFromBottom / SCROLL_THRESHOLD))
@@ -77,12 +65,9 @@ export function useDragDrop() {
     }
   }, [isDragging])
 
-  /**
-   * Start auto-scroll animation loop
-   */
   useEffect(() => {
     if (isDragging) {
-      scrollIntervalRef.current = window.setInterval(handleAutoScroll, 10) // ~100fps for smoother response
+      scrollIntervalRef.current = window.setInterval(handleAutoScroll, 10)
     } else {
       if (scrollIntervalRef.current) {
         clearInterval(scrollIntervalRef.current)
@@ -97,30 +82,17 @@ export function useDragDrop() {
     }
   }, [isDragging, handleAutoScroll])
 
-  /**
-   * Handle hover folder changes - start/clear expand timer
-   */
   useEffect(() => {
-    // Clear existing timer when hover folder changes
     if (hoverExpandTimerRef.current) {
       clearTimeout(hoverExpandTimerRef.current)
       hoverExpandTimerRef.current = null
     }
 
-    // Don't start timer if not dragging or no folder is hovered
-    if (!isDragging || !hoverFolderId) {
-      return
-    }
+    if (!isDragging || !hoverFolderId) return
+    if (expandedFolders.has(hoverFolderId)) return
 
-    // Don't expand if folder is already expanded
-    if (expandedFolders.has(hoverFolderId)) {
-      return
-    }
-
-    // Start timer to expand folder after delay
     hoverExpandTimerRef.current = window.setTimeout(() => {
       setExpanded(hoverFolderId, true)
-      logger.info(`Auto-expanded folder ${hoverFolderId} during drag`)
     }, HOVER_EXPAND_DELAY)
 
     return () => {
@@ -131,249 +103,471 @@ export function useDragDrop() {
     }
   }, [hoverFolderId, isDragging, expandedFolders, setExpanded])
 
-  /**
-   * Cleanup hover state when dragging stops
-   */
   useEffect(() => {
     if (!isDragging) {
       setHoverFolderId(null)
+      setDropIndicator(null)
+      draggedTypeRef.current = null
     }
   }, [isDragging])
 
-  /**
-   * Moves one or more workflows to a target folder
-   *
-   * @param workflowIds - Array of workflow IDs to move
-   * @param targetFolderId - Target folder ID or null for root
-   */
-  const handleWorkflowDrop = useCallback(
-    async (workflowIds: string[], targetFolderId: string | null) => {
-      if (!workflowIds.length) {
-        logger.warn('No workflows to move')
-        return
-      }
-
-      try {
-        await Promise.all(
-          workflowIds.map((workflowId) => updateWorkflow(workflowId, { folderId: targetFolderId }))
-        )
-        logger.info(`Moved ${workflowIds.length} workflow(s)`)
-      } catch (error) {
-        logger.error('Failed to move workflows:', error)
-      }
+  const calculateDropPosition = useCallback(
+    (e: React.DragEvent, element: HTMLElement): 'before' | 'after' => {
+      const rect = element.getBoundingClientRect()
+      const midY = rect.top + rect.height / 2
+      return e.clientY < midY ? 'before' : 'after'
     },
-    [updateWorkflow]
+    []
   )
 
-  /**
-   * Moves a folder to a new parent folder, with validation
-   *
-   * @param draggedFolderId - ID of the folder being moved
-   * @param targetFolderId - Target folder ID or null for root
-   */
-  const handleFolderMove = useCallback(
-    async (draggedFolderId: string, targetFolderId: string | null) => {
-      if (!draggedFolderId) {
-        logger.warn('No folder to move')
-        return
+  const calculateFolderDropPosition = useCallback(
+    (e: React.DragEvent, element: HTMLElement): 'before' | 'inside' | 'after' => {
+      const rect = element.getBoundingClientRect()
+      const relativeY = e.clientY - rect.top
+      const height = rect.height
+      // Top 25% = before, middle 50% = inside, bottom 25% = after
+      if (relativeY < height * 0.25) return 'before'
+      if (relativeY > height * 0.75) return 'after'
+      return 'inside'
+    },
+    []
+  )
+
+  type SiblingItem = { type: 'folder' | 'workflow'; id: string; sortOrder: number }
+
+  const getDestinationFolderId = useCallback((indicator: DropIndicator): string | null => {
+    return indicator.position === 'inside'
+      ? indicator.targetId === 'root'
+        ? null
+        : indicator.targetId
+      : indicator.folderId
+  }, [])
+
+  const calculateInsertIndex = useCallback(
+    (remaining: SiblingItem[], indicator: DropIndicator): number => {
+      return indicator.position === 'inside'
+        ? remaining.length
+        : remaining.findIndex((item) => item.id === indicator.targetId) +
+            (indicator.position === 'after' ? 1 : 0)
+    },
+    []
+  )
+
+  const buildAndSubmitUpdates = useCallback(
+    async (newOrder: SiblingItem[], destinationFolderId: string | null) => {
+      const indexed = newOrder.map((item, i) => ({ ...item, sortOrder: i }))
+
+      const folderUpdates = indexed
+        .filter((item) => item.type === 'folder')
+        .map((item) => ({ id: item.id, sortOrder: item.sortOrder, parentId: destinationFolderId }))
+
+      const workflowUpdates = indexed
+        .filter((item) => item.type === 'workflow')
+        .map((item) => ({ id: item.id, sortOrder: item.sortOrder, folderId: destinationFolderId }))
+
+      await Promise.all(
+        [
+          folderUpdates.length > 0 &&
+            reorderFoldersMutation.mutateAsync({
+              workspaceId: workspaceId!,
+              updates: folderUpdates,
+            }),
+          workflowUpdates.length > 0 &&
+            reorderWorkflowsMutation.mutateAsync({
+              workspaceId: workspaceId!,
+              updates: workflowUpdates,
+            }),
+        ].filter(Boolean)
+      )
+    },
+    [workspaceId, reorderFoldersMutation, reorderWorkflowsMutation]
+  )
+
+  const isLeavingElement = useCallback((e: React.DragEvent<HTMLElement>): boolean => {
+    const relatedTarget = e.relatedTarget as HTMLElement | null
+    const currentTarget = e.currentTarget as HTMLElement
+    return !relatedTarget || !currentTarget.contains(relatedTarget)
+  }, [])
+
+  const initDragOver = useCallback((e: React.DragEvent<HTMLElement>, stopPropagation = true) => {
+    e.preventDefault()
+    if (stopPropagation) e.stopPropagation()
+    lastDragYRef.current = e.clientY
+    setIsDragging(true)
+  }, [])
+
+  const getSiblingItems = useCallback((folderId: string | null): SiblingItem[] => {
+    const currentFolders = useFolderStore.getState().folders
+    const currentWorkflows = useWorkflowRegistry.getState().workflows
+    return [
+      ...Object.values(currentFolders)
+        .filter((f) => f.parentId === folderId)
+        .map((f) => ({ type: 'folder' as const, id: f.id, sortOrder: f.sortOrder })),
+      ...Object.values(currentWorkflows)
+        .filter((w) => w.folderId === folderId)
+        .map((w) => ({ type: 'workflow' as const, id: w.id, sortOrder: w.sortOrder })),
+    ].sort((a, b) => a.sortOrder - b.sortOrder)
+  }, [])
+
+  const setNormalizedDropIndicator = useCallback(
+    (indicator: DropIndicator | null) => {
+      setDropIndicator((prev) => {
+        let next: DropIndicator | null = indicator
+
+        if (indicator && indicator.position === 'after' && indicator.targetId !== 'root') {
+          const siblings = getSiblingItems(indicator.folderId)
+          const currentIdx = siblings.findIndex((s) => s.id === indicator.targetId)
+          const nextSibling = siblings[currentIdx + 1]
+          if (nextSibling) {
+            next = {
+              targetId: nextSibling.id,
+              position: 'before',
+              folderId: indicator.folderId,
+            }
+          }
+        }
+
+        if (
+          prev?.targetId === next?.targetId &&
+          prev?.position === next?.position &&
+          prev?.folderId === next?.folderId
+        ) {
+          return prev
+        }
+
+        return next
+      })
+    },
+    [getSiblingItems]
+  )
+
+  const isNoOpMove = useCallback(
+    (
+      indicator: DropIndicator,
+      draggedIds: string[],
+      draggedType: 'folder' | 'workflow',
+      destinationFolderId: string | null,
+      currentFolderId: string | null | undefined
+    ): boolean => {
+      if (indicator.position !== 'inside' && draggedIds.includes(indicator.targetId)) {
+        return true
       }
+      if (currentFolderId !== destinationFolderId) {
+        return false
+      }
+      const siblingItems = getSiblingItems(destinationFolderId)
+      const remaining = siblingItems.filter(
+        (item) => !(item.type === draggedType && draggedIds.includes(item.id))
+      )
+      const insertAt = calculateInsertIndex(remaining, indicator)
+      const originalIdx = siblingItems.findIndex(
+        (item) => item.type === draggedType && item.id === draggedIds[0]
+      )
+      return insertAt === originalIdx
+    },
+    [getSiblingItems, calculateInsertIndex]
+  )
+
+  const handleWorkflowDrop = useCallback(
+    async (workflowIds: string[], indicator: DropIndicator) => {
+      if (!workflowIds.length || !workspaceId) return
 
       try {
-        const folderStore = useFolderStore.getState()
-        const draggedFolderPath = folderStore.getFolderPath(draggedFolderId)
+        const destinationFolderId = getDestinationFolderId(indicator)
+        const currentWorkflows = useWorkflowRegistry.getState().workflows
+        const firstWorkflow = currentWorkflows[workflowIds[0]]
 
-        // Prevent moving folder into its own descendant
         if (
-          targetFolderId &&
-          draggedFolderPath.some((ancestor) => ancestor.id === targetFolderId)
+          isNoOpMove(
+            indicator,
+            workflowIds,
+            'workflow',
+            destinationFolderId,
+            firstWorkflow?.folderId
+          )
         ) {
-          logger.info('Cannot move folder into its own descendant')
           return
         }
 
-        // Prevent moving folder into itself
-        if (draggedFolderId === targetFolderId) {
+        const siblingItems = getSiblingItems(destinationFolderId)
+        const movingSet = new Set(workflowIds)
+        const remaining = siblingItems.filter(
+          (item) => !(item.type === 'workflow' && movingSet.has(item.id))
+        )
+        const moving = workflowIds
+          .map((id) => ({
+            type: 'workflow' as const,
+            id,
+            sortOrder: currentWorkflows[id]?.sortOrder ?? 0,
+          }))
+          .sort((a, b) => a.sortOrder - b.sortOrder)
+
+        const insertAt = calculateInsertIndex(remaining, indicator)
+
+        const newOrder: SiblingItem[] = [
+          ...remaining.slice(0, insertAt),
+          ...moving,
+          ...remaining.slice(insertAt),
+        ]
+
+        await buildAndSubmitUpdates(newOrder, destinationFolderId)
+      } catch (error) {
+        logger.error('Failed to reorder workflows:', error)
+      }
+    },
+    [
+      getDestinationFolderId,
+      getSiblingItems,
+      calculateInsertIndex,
+      isNoOpMove,
+      buildAndSubmitUpdates,
+    ]
+  )
+
+  const handleFolderDrop = useCallback(
+    async (draggedFolderId: string, indicator: DropIndicator) => {
+      if (!draggedFolderId || !workspaceId) return
+
+      try {
+        const folderStore = useFolderStore.getState()
+        const currentFolders = folderStore.folders
+
+        const targetParentId = getDestinationFolderId(indicator)
+
+        if (draggedFolderId === targetParentId) {
           logger.info('Cannot move folder into itself')
           return
         }
 
-        if (!workspaceId) {
-          logger.warn('No workspaceId available for folder move')
+        if (targetParentId) {
+          const targetPath = folderStore.getFolderPath(targetParentId)
+          if (targetPath.some((f) => f.id === draggedFolderId)) {
+            logger.info('Cannot move folder into its own descendant')
+            return
+          }
+        }
+
+        const draggedFolder = currentFolders[draggedFolderId]
+        if (
+          isNoOpMove(
+            indicator,
+            [draggedFolderId],
+            'folder',
+            targetParentId,
+            draggedFolder?.parentId
+          )
+        ) {
           return
         }
-        await updateFolderMutation.mutateAsync({
-          workspaceId,
-          id: draggedFolderId,
-          updates: { parentId: targetFolderId },
-        })
-        logger.info(`Moved folder to ${targetFolderId ? `folder ${targetFolderId}` : 'root'}`)
+
+        const siblingItems = getSiblingItems(targetParentId)
+        const remaining = siblingItems.filter(
+          (item) => !(item.type === 'folder' && item.id === draggedFolderId)
+        )
+
+        const insertAt = calculateInsertIndex(remaining, indicator)
+
+        const newOrder: SiblingItem[] = [
+          ...remaining.slice(0, insertAt),
+          { type: 'folder', id: draggedFolderId, sortOrder: 0 },
+          ...remaining.slice(insertAt),
+        ]
+
+        await buildAndSubmitUpdates(newOrder, targetParentId)
       } catch (error) {
-        logger.error('Failed to move folder:', error)
+        logger.error('Failed to reorder folder:', error)
       }
     },
-    [updateFolderMutation, workspaceId]
+    [
+      workspaceId,
+      getDestinationFolderId,
+      getSiblingItems,
+      calculateInsertIndex,
+      isNoOpMove,
+      buildAndSubmitUpdates,
+    ]
   )
 
-  /**
-   * Handles drop events for both workflows and folders
-   *
-   * @param e - React drag event
-   * @param targetFolderId - Target folder ID or null for root
-   */
-  const handleFolderDrop = useCallback(
-    async (e: React.DragEvent, targetFolderId: string | null) => {
+  const handleDrop = useCallback(
+    async (e: React.DragEvent) => {
       e.preventDefault()
       e.stopPropagation()
-      setDropTargetId(null)
+
+      const indicator = dropIndicator
+      setDropIndicator(null)
       setIsDragging(false)
 
+      if (!indicator) return
+
       try {
-        // Check if dropping workflows
         const workflowIdsData = e.dataTransfer.getData('workflow-ids')
         if (workflowIdsData) {
           const workflowIds = JSON.parse(workflowIdsData) as string[]
-          await handleWorkflowDrop(workflowIds, targetFolderId)
+          await handleWorkflowDrop(workflowIds, indicator)
           return
         }
 
-        // Check if dropping a folder
         const folderIdData = e.dataTransfer.getData('folder-id')
-        if (folderIdData && targetFolderId !== folderIdData) {
-          await handleFolderMove(folderIdData, targetFolderId)
+        if (folderIdData) {
+          await handleFolderDrop(folderIdData, indicator)
         }
       } catch (error) {
         logger.error('Failed to handle drop:', error)
       }
     },
-    [handleWorkflowDrop, handleFolderMove]
+    [dropIndicator, handleWorkflowDrop, handleFolderDrop]
   )
 
-  /**
-   * Creates drag event handlers for a specific folder section
-   * These handlers are attached to the entire folder section container
-   *
-   * @param folderId - Folder ID to create handlers for
-   * @returns Object containing drag event handlers
-   */
-  const createFolderDragHandlers = useCallback(
-    (folderId: string) => ({
-      onDragEnter: (e: React.DragEvent<HTMLElement>) => {
-        e.preventDefault()
-        setIsDragging(true)
-      },
+  const createWorkflowDragHandlers = useCallback(
+    (workflowId: string, folderId: string | null) => ({
       onDragOver: (e: React.DragEvent<HTMLElement>) => {
-        e.preventDefault()
-        lastDragYRef.current = e.clientY
-        setDropTargetId(folderId)
-        setIsDragging(true)
-      },
-      onDragLeave: (e: React.DragEvent<HTMLElement>) => {
-        e.preventDefault()
-        const relatedTarget = e.relatedTarget as HTMLElement | null
-        const currentTarget = e.currentTarget as HTMLElement
-        // Only clear if we're leaving the folder section completely
-        if (!relatedTarget || !currentTarget.contains(relatedTarget)) {
-          setDropTargetId(null)
+        initDragOver(e)
+        const isSameFolder = draggedSourceFolderRef.current === folderId
+        if (isSameFolder) {
+          const position = calculateDropPosition(e, e.currentTarget)
+          setNormalizedDropIndicator({ targetId: workflowId, position, folderId })
+        } else {
+          setNormalizedDropIndicator({
+            targetId: folderId || 'root',
+            position: 'inside',
+            folderId: null,
+          })
         }
       },
-      onDrop: (e: React.DragEvent<HTMLElement>) => handleFolderDrop(e, folderId),
+      onDrop: handleDrop,
     }),
-    [handleFolderDrop]
+    [initDragOver, calculateDropPosition, setNormalizedDropIndicator, handleDrop]
   )
 
-  /**
-   * Creates drag event handlers for items (workflows/folders) that belong to a parent folder
-   * When dragging over an item, highlights the parent folder section
-   *
-   * @param parentFolderId - Parent folder ID or null for root
-   * @returns Object containing drag event handlers
-   */
-  const createItemDragHandlers = useCallback(
-    (parentFolderId: string | null) => ({
+  const createFolderDragHandlers = useCallback(
+    (folderId: string, parentFolderId: string | null) => ({
+      onDragOver: (e: React.DragEvent<HTMLElement>) => {
+        initDragOver(e)
+        if (draggedTypeRef.current === 'folder') {
+          const isSameParent = draggedSourceFolderRef.current === parentFolderId
+          if (isSameParent) {
+            const position = calculateDropPosition(e, e.currentTarget)
+            setNormalizedDropIndicator({ targetId: folderId, position, folderId: parentFolderId })
+          } else {
+            setNormalizedDropIndicator({
+              targetId: folderId,
+              position: 'inside',
+              folderId: parentFolderId,
+            })
+            setHoverFolderId(folderId)
+          }
+        } else {
+          // Workflow being dragged over a folder
+          const isSameParent = draggedSourceFolderRef.current === parentFolderId
+          if (isSameParent) {
+            // Same level - use three zones: top=before, middle=inside, bottom=after
+            const position = calculateFolderDropPosition(e, e.currentTarget)
+            setNormalizedDropIndicator({ targetId: folderId, position, folderId: parentFolderId })
+            if (position === 'inside') {
+              setHoverFolderId(folderId)
+            } else {
+              setHoverFolderId(null)
+            }
+          } else {
+            // Different container - drop into folder
+            setNormalizedDropIndicator({
+              targetId: folderId,
+              position: 'inside',
+              folderId: parentFolderId,
+            })
+            setHoverFolderId(folderId)
+          }
+        }
+      },
+      onDragLeave: (e: React.DragEvent<HTMLElement>) => {
+        if (isLeavingElement(e)) setHoverFolderId(null)
+      },
+      onDrop: handleDrop,
+    }),
+    [
+      initDragOver,
+      calculateDropPosition,
+      calculateFolderDropPosition,
+      setNormalizedDropIndicator,
+      isLeavingElement,
+      handleDrop,
+    ]
+  )
+
+  const createEmptyFolderDropZone = useCallback(
+    (folderId: string) => ({
+      onDragOver: (e: React.DragEvent<HTMLElement>) => {
+        initDragOver(e)
+        setNormalizedDropIndicator({ targetId: folderId, position: 'inside', folderId })
+      },
+      onDrop: handleDrop,
+    }),
+    [initDragOver, setNormalizedDropIndicator, handleDrop]
+  )
+
+  const createFolderContentDropZone = useCallback(
+    (folderId: string) => ({
       onDragOver: (e: React.DragEvent<HTMLElement>) => {
         e.preventDefault()
         e.stopPropagation()
         lastDragYRef.current = e.clientY
-        setDropTargetId(parentFolderId || 'root')
         setIsDragging(true)
+        if (e.target === e.currentTarget && draggedSourceFolderRef.current !== folderId) {
+          setNormalizedDropIndicator({ targetId: folderId, position: 'inside', folderId: null })
+        }
       },
+      onDrop: handleDrop,
     }),
+    [setNormalizedDropIndicator, handleDrop]
+  )
+
+  const createRootDropZone = useCallback(
+    () => ({
+      onDragOver: (e: React.DragEvent<HTMLElement>) => {
+        initDragOver(e, false)
+        if (e.target === e.currentTarget) {
+          setNormalizedDropIndicator({ targetId: 'root', position: 'inside', folderId: null })
+        }
+      },
+      onDragLeave: (e: React.DragEvent<HTMLElement>) => {
+        if (isLeavingElement(e)) setNormalizedDropIndicator(null)
+      },
+      onDrop: handleDrop,
+    }),
+    [initDragOver, setNormalizedDropIndicator, isLeavingElement, handleDrop]
+  )
+
+  const handleDragStart = useCallback(
+    (type: 'workflow' | 'folder', sourceFolderId: string | null) => {
+      draggedTypeRef.current = type
+      draggedSourceFolderRef.current = sourceFolderId
+      setIsDragging(true)
+    },
     []
   )
 
-  /**
-   * Creates drag event handlers for the root drop zone
-   *
-   * @returns Object containing drag event handlers for root
-   */
-  const createRootDragHandlers = useCallback(
-    () => ({
-      onDragEnter: (e: React.DragEvent<HTMLElement>) => {
-        e.preventDefault()
-        setIsDragging(true)
-      },
-      onDragOver: (e: React.DragEvent<HTMLElement>) => {
-        e.preventDefault()
-        lastDragYRef.current = e.clientY
-        setDropTargetId('root')
-        setIsDragging(true)
-      },
-      onDragLeave: (e: React.DragEvent<HTMLElement>) => {
-        e.preventDefault()
-        const relatedTarget = e.relatedTarget as HTMLElement | null
-        const currentTarget = e.currentTarget as HTMLElement
-        // Only clear if we're leaving the root completely
-        if (!relatedTarget || !currentTarget.contains(relatedTarget)) {
-          setDropTargetId(null)
-        }
-      },
-      onDrop: (e: React.DragEvent<HTMLElement>) => handleFolderDrop(e, null),
-    }),
-    [handleFolderDrop]
-  )
+  const handleDragEnd = useCallback(() => {
+    setIsDragging(false)
+    setDropIndicator(null)
+    draggedTypeRef.current = null
+    draggedSourceFolderRef.current = null
+    setHoverFolderId(null)
+  }, [])
 
-  /**
-   * Creates drag event handlers for folder header (the clickable part)
-   * These handlers trigger folder expansion on hover during drag
-   *
-   * @param folderId - Folder ID to handle hover for
-   * @returns Object containing drag event handlers for folder header
-   */
-  const createFolderHeaderHoverHandlers = useCallback(
-    (folderId: string) => ({
-      onDragEnter: (e: React.DragEvent<HTMLElement>) => {
-        if (isDragging) {
-          setHoverFolderId(folderId)
-        }
-      },
-      onDragLeave: (e: React.DragEvent<HTMLElement>) => {
-        const relatedTarget = e.relatedTarget as HTMLElement | null
-        const currentTarget = e.currentTarget as HTMLElement
-        // Only clear if we're leaving the folder header completely
-        if (!relatedTarget || !currentTarget.contains(relatedTarget)) {
-          setHoverFolderId(null)
-        }
-      },
-    }),
-    [isDragging]
-  )
-
-  /**
-   * Set the scroll container ref for auto-scrolling
-   *
-   * @param element - Scrollable container element
-   */
   const setScrollContainer = useCallback((element: HTMLDivElement | null) => {
     scrollContainerRef.current = element
   }, [])
 
   return {
-    dropTargetId,
+    dropIndicator,
     isDragging,
     setScrollContainer,
+    createWorkflowDragHandlers,
     createFolderDragHandlers,
-    createItemDragHandlers,
-    createRootDragHandlers,
-    createFolderHeaderHoverHandlers,
+    createEmptyFolderDropZone,
+    createFolderContentDropZone,
+    createRootDropZone,
+    handleDragStart,
+    handleDragEnd,
   }
 }

apps/sim/app/workspace/[workspaceId]/w/hooks/use-export-workspace.ts

@@ -64,6 +64,7 @@ export function useExportWorkspace({ onSuccess }: UseExportWorkspaceProps = {})
             id: folder.id,
             name: folder.name,
             parentId: folder.parentId,
+            sortOrder: folder.sortOrder,
           })
         )
 

apps/sim/app/workspace/[workspaceId]/w/hooks/use-import-workflow.ts

@@ -7,6 +7,7 @@ import {
   extractWorkflowsFromFiles,
   extractWorkflowsFromZip,
   parseWorkflowJson,
+  sanitizePathSegment,
 } from '@/lib/workflows/operations/import-export'
 import { folderKeys, useCreateFolder } from '@/hooks/queries/folders'
 import { useCreateWorkflow, workflowKeys } from '@/hooks/queries/workflows'
@@ -40,7 +41,7 @@ export function useImportWorkflow({ workspaceId }: UseImportWorkflowProps) {
    * Import a single workflow
    */
   const importSingleWorkflow = useCallback(
-    async (content: string, filename: string, folderId?: string) => {
+    async (content: string, filename: string, folderId?: string, sortOrder?: number) => {
       const { data: workflowData, errors: parseErrors } = parseWorkflowJson(content)
 
       if (!workflowData || parseErrors.length > 0) {
@@ -60,6 +61,7 @@ export function useImportWorkflow({ workspaceId }: UseImportWorkflowProps) {
         description: workflowData.metadata?.description || 'Imported from JSON',
         workspaceId,
         folderId: folderId || undefined,
+        sortOrder,
       })
       const newWorkflowId = result.id
 
@@ -140,6 +142,55 @@ export function useImportWorkflow({ workspaceId }: UseImportWorkflowProps) {
           })
           const folderMap = new Map<string, string>()
 
+          if (metadata?.folders && metadata.folders.length > 0) {
+            type ExportedFolder = {
+              id: string
+              name: string
+              parentId: string | null
+              sortOrder?: number
+            }
+            const foldersById = new Map<string, ExportedFolder>(
+              metadata.folders.map((f) => [f.id, f])
+            )
+            const oldIdToNewId = new Map<string, string>()
+
+            const buildPath = (folderId: string): string => {
+              const pathParts: string[] = []
+              let currentId: string | null = folderId
+              while (currentId && foldersById.has(currentId)) {
+                const folder: ExportedFolder = foldersById.get(currentId)!
+                pathParts.unshift(sanitizePathSegment(folder.name))
+                currentId = folder.parentId
+              }
+              return pathParts.join('/')
+            }
+
+            const createFolderRecursive = async (folder: ExportedFolder): Promise<string> => {
+              if (oldIdToNewId.has(folder.id)) {
+                return oldIdToNewId.get(folder.id)!
+              }
+
+              let parentId = importFolder.id
+              if (folder.parentId && foldersById.has(folder.parentId)) {
+                parentId = await createFolderRecursive(foldersById.get(folder.parentId)!)
+              }
+
+              const newFolder = await createFolderMutation.mutateAsync({
+                name: folder.name,
+                workspaceId,
+                parentId,
+                sortOrder: folder.sortOrder,
+              })
+              oldIdToNewId.set(folder.id, newFolder.id)
+              folderMap.set(buildPath(folder.id), newFolder.id)
+              return newFolder.id
+            }
+
+            for (const folder of metadata.folders) {
+              await createFolderRecursive(folder)
+            }
+          }
+
           for (const workflow of extractedWorkflows) {
             try {
               let targetFolderId = importFolder.id
@@ -147,15 +198,17 @@ export function useImportWorkflow({ workspaceId }: UseImportWorkflowProps) {
               if (workflow.folderPath.length > 0) {
                 const folderPathKey = workflow.folderPath.join('/')
 
-                if (!folderMap.has(folderPathKey)) {
+                if (folderMap.has(folderPathKey)) {
+                  targetFolderId = folderMap.get(folderPathKey)!
+                } else {
                   let parentId = importFolder.id
-
                   for (let i = 0; i < workflow.folderPath.length; i++) {
                     const pathSegment = workflow.folderPath.slice(0, i + 1).join('/')
+                    const folderNameForSegment = workflow.folderPath[i]
 
                     if (!folderMap.has(pathSegment)) {
                       const subFolder = await createFolderMutation.mutateAsync({
-                        name: workflow.folderPath[i],
+                        name: folderNameForSegment,
                         workspaceId,
                         parentId,
                       })
@@ -165,15 +218,15 @@ export function useImportWorkflow({ workspaceId }: UseImportWorkflowProps) {
                       parentId = folderMap.get(pathSegment)!
                     }
                   }
+                  targetFolderId = folderMap.get(folderPathKey)!
                 }
-
-                targetFolderId = folderMap.get(folderPathKey)!
               }
 
               const workflowId = await importSingleWorkflow(
                 workflow.content,
                 workflow.name,
-                targetFolderId
+                targetFolderId,
+                workflow.sortOrder
               )
               if (workflowId) importedWorkflowIds.push(workflowId)
             } catch (error) {

apps/sim/app/workspace/[workspaceId]/w/hooks/use-import-workspace.ts

@@ -5,6 +5,7 @@ import {
   extractWorkflowName,
   extractWorkflowsFromZip,
   parseWorkflowJson,
+  sanitizePathSegment,
 } from '@/lib/workflows/operations/import-export'
 import { useCreateFolder } from '@/hooks/queries/folders'
 import { useWorkflowDiffStore } from '@/stores/workflow-diff/store'
@@ -59,7 +60,7 @@ export function useImportWorkspace({ onSuccess }: UseImportWorkspaceProps = {})
         const createResponse = await fetch('/api/workspaces', {
           method: 'POST',
           headers: { 'Content-Type': 'application/json' },
-          body: JSON.stringify({ name: workspaceName }),
+          body: JSON.stringify({ name: workspaceName, skipDefaultWorkflow: true }),
         })
 
         if (!createResponse.ok) {
@@ -71,6 +72,55 @@ export function useImportWorkspace({ onSuccess }: UseImportWorkspaceProps = {})
 
         const folderMap = new Map<string, string>()
 
+        if (metadata?.folders && metadata.folders.length > 0) {
+          type ExportedFolder = {
+            id: string
+            name: string
+            parentId: string | null
+            sortOrder?: number
+          }
+          const foldersById = new Map<string, ExportedFolder>(
+            metadata.folders.map((f) => [f.id, f])
+          )
+          const oldIdToNewId = new Map<string, string>()
+
+          const buildPath = (folderId: string): string => {
+            const pathParts: string[] = []
+            let currentId: string | null = folderId
+            while (currentId && foldersById.has(currentId)) {
+              const folder: ExportedFolder = foldersById.get(currentId)!
+              pathParts.unshift(sanitizePathSegment(folder.name))
+              currentId = folder.parentId
+            }
+            return pathParts.join('/')
+          }
+
+          const createFolderRecursive = async (folder: ExportedFolder): Promise<string> => {
+            if (oldIdToNewId.has(folder.id)) {
+              return oldIdToNewId.get(folder.id)!
+            }
+
+            let parentId: string | undefined
+            if (folder.parentId && foldersById.has(folder.parentId)) {
+              parentId = await createFolderRecursive(foldersById.get(folder.parentId)!)
+            }
+
+            const newFolder = await createFolderMutation.mutateAsync({
+              name: folder.name,
+              workspaceId: newWorkspace.id,
+              parentId,
+              sortOrder: folder.sortOrder,
+            })
+            oldIdToNewId.set(folder.id, newFolder.id)
+            folderMap.set(buildPath(folder.id), newFolder.id)
+            return newFolder.id
+          }
+
+          for (const folder of metadata.folders) {
+            await createFolderRecursive(folder)
+          }
+        }
+
         for (const workflow of extractedWorkflows) {
           try {
             const { data: workflowData, errors: parseErrors } = parseWorkflowJson(workflow.content)
@@ -84,9 +134,10 @@ export function useImportWorkspace({ onSuccess }: UseImportWorkspaceProps = {})
             if (workflow.folderPath.length > 0) {
               const folderPathKey = workflow.folderPath.join('/')
 
-              if (!folderMap.has(folderPathKey)) {
-                let parentId: string | null = null
-
+              if (folderMap.has(folderPathKey)) {
+                targetFolderId = folderMap.get(folderPathKey)!
+              } else {
+                let parentId: string | undefined
                 for (let i = 0; i < workflow.folderPath.length; i++) {
                   const pathSegment = workflow.folderPath.slice(0, i + 1).join('/')
 
@@ -94,7 +145,7 @@ export function useImportWorkspace({ onSuccess }: UseImportWorkspaceProps = {})
                     const subFolder = await createFolderMutation.mutateAsync({
                       name: workflow.folderPath[i],
                       workspaceId: newWorkspace.id,
-                      parentId: parentId || undefined,
+                      parentId,
                     })
                     folderMap.set(pathSegment, subFolder.id)
                     parentId = subFolder.id
@@ -102,9 +153,8 @@ export function useImportWorkspace({ onSuccess }: UseImportWorkspaceProps = {})
                     parentId = folderMap.get(pathSegment)!
                   }
                 }
+                targetFolderId = folderMap.get(folderPathKey) || null
               }
-
-              targetFolderId = folderMap.get(folderPathKey) || null
             }
 
             const workflowName = extractWorkflowName(workflow.content, workflow.name)

apps/sim/hooks/queries/folders.ts

@@ -68,6 +68,7 @@ interface CreateFolderVariables {
   name: string
   parentId?: string
   color?: string
+  sortOrder?: number
 }
 
 interface UpdateFolderVariables {
@@ -160,18 +161,20 @@ export function useCreateFolder() {
       parentId: variables.parentId || null,
       color: variables.color || '#808080',
       isExpanded: false,
-      sortOrder: getNextSortOrder(previousFolders, variables.workspaceId, variables.parentId),
+      sortOrder:
+        variables.sortOrder ??
+        getNextSortOrder(previousFolders, variables.workspaceId, variables.parentId),
       createdAt: new Date(),
       updatedAt: new Date(),
     })
   )
 
   return useMutation({
-    mutationFn: async ({ workspaceId, ...payload }: CreateFolderVariables) => {
+    mutationFn: async ({ workspaceId, sortOrder, ...payload }: CreateFolderVariables) => {
       const response = await fetch('/api/folders', {
         method: 'POST',
         headers: { 'Content-Type': 'application/json' },
-        body: JSON.stringify({ ...payload, workspaceId }),
+        body: JSON.stringify({ ...payload, workspaceId, sortOrder }),
       })
 
       if (!response.ok) {
@@ -285,9 +288,66 @@ export function useDuplicateFolderMutation() {
     },
     ...handlers,
     onSettled: (_data, _error, variables) => {
-      // Invalidate both folders and workflows (duplicated folder may contain workflows)
       queryClient.invalidateQueries({ queryKey: folderKeys.list(variables.workspaceId) })
       queryClient.invalidateQueries({ queryKey: workflowKeys.list(variables.workspaceId) })
     },
   })
 }
+
+interface ReorderFoldersVariables {
+  workspaceId: string
+  updates: Array<{
+    id: string
+    sortOrder: number
+    parentId?: string | null
+  }>
+}
+
+export function useReorderFolders() {
+  const queryClient = useQueryClient()
+
+  return useMutation({
+    mutationFn: async (variables: ReorderFoldersVariables): Promise<void> => {
+      const response = await fetch('/api/folders/reorder', {
+        method: 'PUT',
+        headers: { 'Content-Type': 'application/json' },
+        body: JSON.stringify(variables),
+      })
+
+      if (!response.ok) {
+        const error = await response.json().catch(() => ({}))
+        throw new Error(error.error || 'Failed to reorder folders')
+      }
+    },
+    onMutate: async (variables) => {
+      await queryClient.cancelQueries({ queryKey: folderKeys.list(variables.workspaceId) })
+
+      const snapshot = { ...useFolderStore.getState().folders }
+
+      useFolderStore.setState((state) => {
+        const updated = { ...state.folders }
+        for (const update of variables.updates) {
+          if (updated[update.id]) {
+            updated[update.id] = {
+              ...updated[update.id],
+              sortOrder: update.sortOrder,
+              parentId:
+                update.parentId !== undefined ? update.parentId : updated[update.id].parentId,
+            }
+          }
+        }
+        return { folders: updated }
+      })
+
+      return { snapshot }
+    },
+    onError: (_error, _variables, context) => {
+      if (context?.snapshot) {
+        useFolderStore.setState({ folders: context.snapshot })
+      }
+    },
+    onSettled: (_data, _error, variables) => {
+      queryClient.invalidateQueries({ queryKey: folderKeys.list(variables.workspaceId) })
+    },
+  })
+}

apps/sim/hooks/queries/workflows.ts

@@ -32,6 +32,7 @@ function mapWorkflow(workflow: any): WorkflowMetadata {
     color: workflow.color,
     workspaceId: workflow.workspaceId,
     folderId: workflow.folderId,
+    sortOrder: workflow.sortOrder ?? 0,
     createdAt: new Date(workflow.createdAt),
     lastModified: new Date(workflow.updatedAt || workflow.createdAt),
   }
@@ -91,6 +92,7 @@ interface CreateWorkflowVariables {
   description?: string
   color?: string
   folderId?: string | null
+  sortOrder?: number
 }
 
 interface CreateWorkflowResult {
@@ -100,6 +102,7 @@ interface CreateWorkflowResult {
   color: string
   workspaceId: string
   folderId?: string | null
+  sortOrder: number
 }
 
 interface DuplicateWorkflowVariables {
@@ -118,6 +121,7 @@ interface DuplicateWorkflowResult {
   color: string
   workspaceId: string
   folderId?: string | null
+  sortOrder: number
   blocksCount: number
   edgesCount: number
   subflowsCount: number
@@ -161,6 +165,7 @@ function createWorkflowMutationHandlers<TVariables extends { workspaceId: string
               color: data.color,
               workspaceId: data.workspaceId,
               folderId: data.folderId,
+              sortOrder: 'sortOrder' in data ? data.sortOrder : 0,
             },
           },
           error: null,
@@ -179,21 +184,36 @@ export function useCreateWorkflow() {
   const handlers = createWorkflowMutationHandlers<CreateWorkflowVariables>(
     queryClient,
     'CreateWorkflow',
-    (variables, tempId) => ({
-      id: tempId,
-      name: variables.name || generateCreativeWorkflowName(),
-      lastModified: new Date(),
-      createdAt: new Date(),
-      description: variables.description || 'New workflow',
-      color: variables.color || getNextWorkflowColor(),
-      workspaceId: variables.workspaceId,
-      folderId: variables.folderId || null,
-    })
+    (variables, tempId) => {
+      let sortOrder: number
+      if (variables.sortOrder !== undefined) {
+        sortOrder = variables.sortOrder
+      } else {
+        const currentWorkflows = useWorkflowRegistry.getState().workflows
+        const targetFolderId = variables.folderId || null
+        const workflowsInFolder = Object.values(currentWorkflows).filter(
+          (w) => w.folderId === targetFolderId
+        )
+        sortOrder = workflowsInFolder.reduce((max, w) => Math.max(max, w.sortOrder ?? 0), -1) + 1
+      }
+
+      return {
+        id: tempId,
+        name: variables.name || generateCreativeWorkflowName(),
+        lastModified: new Date(),
+        createdAt: new Date(),
+        description: variables.description || 'New workflow',
+        color: variables.color || getNextWorkflowColor(),
+        workspaceId: variables.workspaceId,
+        folderId: variables.folderId || null,
+        sortOrder,
+      }
+    }
   )
 
   return useMutation({
     mutationFn: async (variables: CreateWorkflowVariables): Promise<CreateWorkflowResult> => {
-      const { workspaceId, name, description, color, folderId } = variables
+      const { workspaceId, name, description, color, folderId, sortOrder } = variables
 
       logger.info(`Creating new workflow in workspace: ${workspaceId}`)
 
@@ -206,6 +226,7 @@ export function useCreateWorkflow() {
           color: color || getNextWorkflowColor(),
           workspaceId,
           folderId: folderId || null,
+          sortOrder,
         }),
       })
 
@@ -243,13 +264,13 @@ export function useCreateWorkflow() {
         color: createdWorkflow.color,
         workspaceId,
         folderId: createdWorkflow.folderId,
+        sortOrder: createdWorkflow.sortOrder ?? 0,
       }
     },
     ...handlers,
     onSuccess: (data, variables, context) => {
       handlers.onSuccess(data, variables, context)
 
-      // Initialize subblock values for new workflow
       const { subBlockValues } = buildDefaultWorkflowArtifacts()
       useSubBlockStore.setState((state) => ({
         workflowValues: {
@@ -267,16 +288,26 @@ export function useDuplicateWorkflowMutation() {
   const handlers = createWorkflowMutationHandlers<DuplicateWorkflowVariables>(
     queryClient,
     'DuplicateWorkflow',
-    (variables, tempId) => ({
-      id: tempId,
-      name: variables.name,
-      lastModified: new Date(),
-      createdAt: new Date(),
-      description: variables.description,
-      color: variables.color,
-      workspaceId: variables.workspaceId,
-      folderId: variables.folderId || null,
-    })
+    (variables, tempId) => {
+      const currentWorkflows = useWorkflowRegistry.getState().workflows
+      const targetFolderId = variables.folderId || null
+      const workflowsInFolder = Object.values(currentWorkflows).filter(
+        (w) => w.folderId === targetFolderId
+      )
+      const maxSortOrder = workflowsInFolder.reduce((max, w) => Math.max(max, w.sortOrder ?? 0), -1)
+
+      return {
+        id: tempId,
+        name: variables.name,
+        lastModified: new Date(),
+        createdAt: new Date(),
+        description: variables.description,
+        color: variables.color,
+        workspaceId: variables.workspaceId,
+        folderId: targetFolderId,
+        sortOrder: maxSortOrder + 1,
+      }
+    }
   )
 
   return useMutation({
@@ -317,6 +348,7 @@ export function useDuplicateWorkflowMutation() {
         color: duplicatedWorkflow.color || color,
         workspaceId,
         folderId: duplicatedWorkflow.folderId ?? folderId,
+        sortOrder: duplicatedWorkflow.sortOrder ?? 0,
         blocksCount: duplicatedWorkflow.blocksCount || 0,
         edgesCount: duplicatedWorkflow.edgesCount || 0,
         subflowsCount: duplicatedWorkflow.subflowsCount || 0,
@@ -398,3 +430,61 @@ export function useRevertToVersion() {
     },
   })
 }
+
+interface ReorderWorkflowsVariables {
+  workspaceId: string
+  updates: Array<{
+    id: string
+    sortOrder: number
+    folderId?: string | null
+  }>
+}
+
+export function useReorderWorkflows() {
+  const queryClient = useQueryClient()
+
+  return useMutation({
+    mutationFn: async (variables: ReorderWorkflowsVariables): Promise<void> => {
+      const response = await fetch('/api/workflows/reorder', {
+        method: 'PUT',
+        headers: { 'Content-Type': 'application/json' },
+        body: JSON.stringify(variables),
+      })
+
+      if (!response.ok) {
+        const error = await response.json().catch(() => ({}))
+        throw new Error(error.error || 'Failed to reorder workflows')
+      }
+    },
+    onMutate: async (variables) => {
+      await queryClient.cancelQueries({ queryKey: workflowKeys.list(variables.workspaceId) })
+
+      const snapshot = { ...useWorkflowRegistry.getState().workflows }
+
+      useWorkflowRegistry.setState((state) => {
+        const updated = { ...state.workflows }
+        for (const update of variables.updates) {
+          if (updated[update.id]) {
+            updated[update.id] = {
+              ...updated[update.id],
+              sortOrder: update.sortOrder,
+              folderId:
+                update.folderId !== undefined ? update.folderId : updated[update.id].folderId,
+            }
+          }
+        }
+        return { workflows: updated }
+      })
+
+      return { snapshot }
+    },
+    onError: (_error, _variables, context) => {
+      if (context?.snapshot) {
+        useWorkflowRegistry.setState({ workflows: context.snapshot })
+      }
+    },
+    onSettled: (_data, _error, variables) => {
+      queryClient.invalidateQueries({ queryKey: workflowKeys.list(variables.workspaceId) })
+    },
+  })
+}

apps/sim/lib/workflows/operations/import-export.ts

@@ -16,6 +16,7 @@ export interface WorkflowExportData {
     description?: string
     color?: string
     folderId?: string | null
+    sortOrder?: number
   }
   state: WorkflowState
   variables?: Record<string, Variable>
@@ -25,6 +26,7 @@ export interface FolderExportData {
   id: string
   name: string
   parentId: string | null
+  sortOrder?: number
 }
 
 export interface WorkspaceExportStructure {
@@ -186,7 +188,12 @@ export async function exportWorkspaceToZip(
       name: workspaceName,
       exportedAt: new Date().toISOString(),
     },
-    folders: folders.map((f) => ({ id: f.id, name: f.name, parentId: f.parentId })),
+    folders: folders.map((f) => ({
+      id: f.id,
+      name: f.name,
+      parentId: f.parentId,
+      sortOrder: f.sortOrder,
+    })),
   }
 
   zip.file('_workspace.json', JSON.stringify(metadata, null, 2))
@@ -199,6 +206,7 @@ export async function exportWorkspaceToZip(
           name: workflow.workflow.name,
           description: workflow.workflow.description,
           color: workflow.workflow.color,
+          sortOrder: workflow.workflow.sortOrder,
           exportedAt: new Date().toISOString(),
         },
         variables: workflow.variables,
@@ -279,11 +287,27 @@ export interface ImportedWorkflow {
   content: string
   name: string
   folderPath: string[]
+  sortOrder?: number
 }
 
 export interface WorkspaceImportMetadata {
   workspaceName: string
   exportedAt?: string
+  folders?: Array<{
+    id: string
+    name: string
+    parentId: string | null
+    sortOrder?: number
+  }>
+}
+
+function extractSortOrder(content: string): number | undefined {
+  try {
+    const parsed = JSON.parse(content)
+    return parsed.state?.metadata?.sortOrder ?? parsed.metadata?.sortOrder
+  } catch {
+    return undefined
+  }
 }
 
 export async function extractWorkflowsFromZip(
@@ -303,6 +327,7 @@ export async function extractWorkflowsFromZip(
         metadata = {
           workspaceName: parsed.workspace?.name || 'Imported Workspace',
           exportedAt: parsed.workspace?.exportedAt,
+          folders: parsed.folders,
         }
       } catch (error) {
         logger.error('Failed to parse workspace metadata:', error)
@@ -321,6 +346,7 @@ export async function extractWorkflowsFromZip(
         content,
         name: filename,
         folderPath: pathParts,
+        sortOrder: extractSortOrder(content),
       })
     } catch (error) {
       logger.error(`Failed to extract ${path}:`, error)
@@ -338,10 +364,12 @@ export async function extractWorkflowsFromFiles(files: File[]): Promise<Imported
 
     try {
       const content = await file.text()
+
       workflows.push({
         content,
         name: file.name,
         folderPath: [],
+        sortOrder: extractSortOrder(content),
       })
     } catch (error) {
       logger.error(`Failed to read ${file.name}:`, error)

apps/sim/lib/workflows/sanitization/json-sanitizer.ts

@@ -53,6 +53,8 @@ export interface ExportWorkflowState {
     metadata?: {
       name?: string
       description?: string
+      color?: string
+      sortOrder?: number
       exportedAt?: string
     }
     variables?: Array<{

apps/sim/stores/workflows/registry/store.ts

@@ -476,7 +476,6 @@ export const useWorkflowRegistry = create<WorkflowRegistry>()(
         // Use the server-generated ID
         const id = duplicatedWorkflow.id
 
-        // Generate new workflow metadata using the server-generated ID
         const newWorkflow: WorkflowMetadata = {
           id,
           name: `${sourceWorkflow.name} (Copy)`,
@@ -484,8 +483,9 @@ export const useWorkflowRegistry = create<WorkflowRegistry>()(
           createdAt: new Date(),
           description: sourceWorkflow.description,
           color: getNextWorkflowColor(),
-          workspaceId, // Include the workspaceId in the new workflow
-          folderId: sourceWorkflow.folderId, // Include the folderId from source workflow
+          workspaceId,
+          folderId: sourceWorkflow.folderId,
+          sortOrder: duplicatedWorkflow.sortOrder ?? 0,
         }
 
         // Get the current workflow state to copy from

apps/sim/stores/workflows/registry/types.ts

@@ -26,6 +26,7 @@ export interface WorkflowMetadata {
   color: string
   workspaceId?: string
   folderId?: string | null
+  sortOrder: number
 }
 
 export type HydrationPhase =

bun.lock

@@ -1,6 +1,5 @@
 {
   "lockfileVersion": 1,
-  "configVersion": 0,
   "workspaces": {
     "": {
       "name": "simstudio",

packages/db/migrations/0141_daffy_marten_broadcloak.sql

@@ -0,0 +1,2 @@
+ALTER TABLE "workflow" ADD COLUMN "sort_order" integer DEFAULT 0 NOT NULL;--> statement-breakpoint
+CREATE INDEX "workflow_folder_sort_idx" ON "workflow" USING btree ("folder_id","sort_order");

packages/db/migrations/meta/_journal.json

@@ -981,6 +981,13 @@
       "when": 1768366574848,
       "tag": "0140_fuzzy_the_twelve",
       "breakpoints": true
+    },
+    {
+      "idx": 141,
+      "version": "7",
+      "when": 1768421319400,
+      "tag": "0141_daffy_marten_broadcloak",
+      "breakpoints": true
     }
   ]
 }

packages/db/schema.ts

@@ -149,6 +149,7 @@ export const workflow = pgTable(
       .references(() => user.id, { onDelete: 'cascade' }),
     workspaceId: text('workspace_id').references(() => workspace.id, { onDelete: 'cascade' }),
     folderId: text('folder_id').references(() => workflowFolder.id, { onDelete: 'set null' }),
+    sortOrder: integer('sort_order').notNull().default(0),
     name: text('name').notNull(),
     description: text('description'),
     color: text('color').notNull().default('#3972F6'),
@@ -165,6 +166,7 @@ export const workflow = pgTable(
     userIdIdx: index('workflow_user_id_idx').on(table.userId),
     workspaceIdIdx: index('workflow_workspace_id_idx').on(table.workspaceId),
     userWorkspaceIdx: index('workflow_user_workspace_idx').on(table.userId, table.workspaceId),
+    folderSortIdx: index('workflow_folder_sort_idx').on(table.folderId, table.sortOrder),
   })
 )