diff --git a/client/modules/IDE/actions/files.js b/client/modules/IDE/actions/files.js
index e17e46c5..c8a656c8 100644
--- a/client/modules/IDE/actions/files.js
+++ b/client/modules/IDE/actions/files.js
@@ -160,7 +160,8 @@ export function deleteFile(id, parentId) {
         }
       };
       apiClient.delete(`/projects/${state.project.id}/files/${id}`, deleteConfig)
-        .then(() => {
+        .then((response) => {
+          dispatch(setProjectSavedTime(response.data.project.updatedAt));
           dispatch({
             type: ActionTypes.DELETE_FILE,
             id,
diff --git a/client/modules/IDE/components/FileNode.jsx b/client/modules/IDE/components/FileNode.jsx
index 57238cf8..e7869f26 100644
--- a/client/modules/IDE/components/FileNode.jsx
+++ b/client/modules/IDE/components/FileNode.jsx
@@ -10,6 +10,61 @@ import FolderRightIcon from '../../../images/triangle-arrow-right.svg';
 import FolderDownIcon from '../../../images/triangle-arrow-down.svg';
 import FileIcon from '../../../images/file.svg';
 
+function parseFileName(name) {
+  const nameArray = name.split('.');
+  if (nameArray.length > 1) {
+    const extension = `.${nameArray[nameArray.length - 1]}`;
+    const baseName = nameArray.slice(0, -1).join('');
+    const firstLetter = baseName[0];
+    const lastLetter = baseName[baseName.length - 1];
+    const middleText = baseName.slice(1, -1);
+    return {
+      baseName,
+      firstLetter,
+      lastLetter,
+      middleText,
+      extension
+    };
+  }
+  const firstLetter = name[0];
+  const lastLetter = name[name.length - 1];
+  const middleText = name.slice(1, -1);
+  return {
+    baseName: name,
+    firstLetter,
+    lastLetter,
+    middleText
+  };
+}
+
+function FileName({ name }) {
+  const {
+    baseName,
+    firstLetter,
+    lastLetter,
+    middleText,
+    extension
+  } = parseFileName(name);
+  return (
+    <span className="sidebar__file-item-name-text">
+      <span>{firstLetter}</span>
+      {baseName.length > 2 &&
+        <span className="sidebar__file-item-name--ellipsis">{middleText}</span>
+      }
+      {baseName.length > 1 &&
+        <span>{lastLetter}</span>
+      }
+      {extension &&
+        <span>{extension}</span>
+      }
+    </span>
+  );
+}
+
+FileName.propTypes = {
+  name: PropTypes.string.isRequired
+};
+
 export class FileNode extends React.Component {
   constructor(props) {
     super(props);
@@ -206,11 +261,12 @@ export class FileNode extends React.Component {
               </div>
             }
             <button
-              aria-label="Name"
+              aria-label={this.state.updatedName}
               className="sidebar__file-item-name"
               onClick={this.handleFileClick}
+              data-testid="file-name"
             >
-              {this.state.updatedName}
+              <FileName name={this.state.updatedName} />
             </button>
             <input
               data-testid="input"
diff --git a/client/modules/IDE/components/FileNode.test.jsx b/client/modules/IDE/components/FileNode.test.jsx
index cc913858..ddb8fec7 100644
--- a/client/modules/IDE/components/FileNode.test.jsx
+++ b/client/modules/IDE/components/FileNode.test.jsx
@@ -13,7 +13,7 @@ describe('<FileNode />', () => {
   };
 
   const expectFileNameToBe = async (expectedName) => {
-    const name = screen.getByLabelText(/Name/i);
+    const name = screen.getByTestId('file-name');
     await waitFor(() => within(name).queryByText(expectedName));
   };
 
diff --git a/client/modules/IDE/pages/IDEView.jsx b/client/modules/IDE/pages/IDEView.jsx
index 956fd974..4979eaee 100644
--- a/client/modules/IDE/pages/IDEView.jsx
+++ b/client/modules/IDE/pages/IDEView.jsx
@@ -301,7 +301,7 @@ class IDEView extends React.Component {
             onChange={size => this.setState({ sidebarSize: size })}
             onDragFinished={this._handleSidebarPaneOnDragFinished}
             allowResize={this.props.ide.sidebarIsExpanded}
-            minSize={20}
+            minSize={125}
           >
             <Sidebar
               files={this.props.files}
diff --git a/client/modules/IDE/reducers/files.js b/client/modules/IDE/reducers/files.js
index 7710074d..80557fb3 100644
--- a/client/modules/IDE/reducers/files.js
+++ b/client/modules/IDE/reducers/files.js
@@ -45,7 +45,7 @@ const initialState = () => {
       name: 'root',
       id: r,
       _id: r,
-      children: [a, b, c],
+      children: [b, a, c],
       fileType: 'folder',
       content: ''
     },
@@ -110,6 +110,32 @@ function deleteMany(state, ids) {
   return newState;
 }
 
+function sortedChildrenId(state, children) {
+  const childrenArray = state.filter(file => children.includes(file.id));
+  childrenArray.sort((a, b) => (a.name > b.name ? 1 : -1));
+  return childrenArray.map(child => child.id);
+}
+
+function updateParent(state, action) {
+  return state.map((file) => {
+    if (file.id === action.parentId) {
+      const newFile = Object.assign({}, file);
+      newFile.children = [...newFile.children, action.id];
+      return newFile;
+    }
+    return file;
+  });
+}
+
+function renameFile(state, action) {
+  return state.map((file) => {
+    if (file.id !== action.id) {
+      return file;
+    }
+    return Object.assign({}, file, { name: action.name });
+  });
+}
+
 const files = (state, action) => {
   if (state === undefined) {
     state = initialState(); // eslint-disable-line
@@ -138,15 +164,8 @@ const files = (state, action) => {
       return initialState();
     case ActionTypes.CREATE_FILE: // eslint-disable-line
     {
-      const newState = state.map((file) => {
-        if (file.id === action.parentId) {
-          const newFile = Object.assign({}, file);
-          newFile.children = [...newFile.children, action.id];
-          return newFile;
-        }
-        return file;
-      });
-      return [...newState,
+      const newState = [
+        ...updateParent(state, action),
         {
           name: action.name,
           id: action.id,
@@ -156,15 +175,23 @@ const files = (state, action) => {
           children: action.children,
           fileType: action.fileType || 'file'
         }];
+      return newState.map((file) => {
+        if (file.id === action.parentId) {
+          file.children = sortedChildrenId(newState, file.children);
+        }
+        return file;
+      });
     }
     case ActionTypes.UPDATE_FILE_NAME:
-      return state.map((file) => {
-        if (file.id !== action.id) {
-          return file;
+    {
+      const newState = renameFile(state, action);
+      return newState.map((file) => {
+        if (file.children.includes(action.id)) {
+          file.children = sortedChildrenId(newState, file.children);
         }
-
-        return Object.assign({}, file, { name: action.name });
+        return file;
       });
+    }
     case ActionTypes.DELETE_FILE:
     {
       const newState = deleteMany(state, [action.id, ...getAllDescendantIds(state, action.id)]);
@@ -200,7 +227,10 @@ const files = (state, action) => {
         return file;
       });
     default:
-      return state;
+      return state.map((file) => {
+        file.children = sortedChildrenId(state, file.children);
+        return file;
+      });
   }
 };
 
diff --git a/client/styles/components/_sidebar.scss b/client/styles/components/_sidebar.scss
index ffafc439..761bda91 100644
--- a/client/styles/components/_sidebar.scss
+++ b/client/styles/components/_sidebar.scss
@@ -110,8 +110,28 @@
   }
 }
 
+.sidebar__file-item-name--ellipsis {
+  overflow-x: hidden;
+  white-space: nowrap;
+  text-overflow: ellipsis;
+  min-width: #{15 / $base-font-size}rem;
+}
+
+.sidebar__file-item-name-text {
+  display: flex;
+  width: 100%;
+  overflow: hidden;
+  min-width: #{50 / $base-font-size}rem;
+  white-space: nowrap;
+  text-align: left;
+}
+
 .sidebar__file-item-name {
   padding: #{4 / $base-font-size}rem 0;
+  padding-right: #{25 / $base-font-size}rem;
+  font-family: Inconsolata, monospace;
+  font-size: #{14 / $base-font-size}rem;
+  overflow: hidden;
   .sidebar__file-item--editing & {
     display: none;
   }
@@ -174,6 +194,8 @@
   padding: 0;
   border: 0;
   width: calc(100% - #{63 / $base-font-size}rem);
+  font-family: Inconsolata, monospace;
+  font-size: #{14 / $base-font-size}rem;
   .sidebar__file-item--editing & {
     display: inline-block;
   }
@@ -254,9 +276,6 @@
       fill: getThemifyVariable('secondary-text-color');
     }
   }
-  & svg {
-    height: #{10 / $base-font-size}rem;
-  }
   background-color: transparent;
   border: none;
 }
diff --git a/server/controllers/file.controller.js b/server/controllers/file.controller.js
index 4ccb6db2..542a40fd 100644
--- a/server/controllers/file.controller.js
+++ b/server/controllers/file.controller.js
@@ -103,8 +103,8 @@ export function deleteFile(req, res) {
     const idsToDelete = getAllDescendantIds(project.files, req.params.file_id);
     deleteMany(project.files, [req.params.file_id, ...idsToDelete]);
     project.files = deleteChild(project.files, req.query.parentId, req.params.file_id);
-    project.save((innerErr) => {
-      res.json(project.files);
+    project.save((innerErr, savedProject) => {
+      res.json({ project: savedProject });
     });
   });
 }