diff --git a/.gitignore b/.gitignore
index 88cf2e9..e605e1e 100644
--- a/.gitignore
+++ b/.gitignore
@@ -39,3 +39,7 @@ pkg
 #
 # For vim:
 *.swp
+#
+# For IDEA:
+.idea/
+*.iml
diff --git a/lib/homesick.rb b/lib/homesick.rb
index 17d67f7..cf7f5bf 100644
--- a/lib/homesick.rb
+++ b/lib/homesick.rb
@@ -148,22 +148,49 @@ class Homesick < Thor
   desc "track FILE CASTLE", "add a file to a castle"
   def track(file, castle)
     castle = Pathname.new(castle)
-    file = Pathname.new(file)
+    file = Pathname.new(file.chomp('/'))
     check_castle_existance(castle, 'track')
 
     absolute_path = file.expand_path
-    castle_path = castle_dir(castle)
-    mv absolute_path, castle_path
+    relative_dir = absolute_path.relative_path_from(home_dir).dirname
+    castle_path = Pathname.new(castle_dir(castle)).join(relative_dir)
+
+    unless castle_path.exist?
+      FileUtils.mkdir_p castle_path
+    end
+
+    # Are we already tracking this or anything inside it?
+    target = Pathname.new(castle_path.join(file.basename))
+    if target.exist?
+      if absolute_path.directory?
+        move_dir_contents(target, absolute_path)
+        absolute_path.rmtree
+        manifest_remove(castle, relative_dir + file.basename)
+
+      elsif more_recent? absolute_path, target
+        target.delete
+        mv absolute_path, castle_path
+      else
+        shell.say_status(:track, "#{target} already exists, and is more recent than #{file}. Run 'homesick SYMLINK CASTLE' to create symlinks.", :blue) unless options[:quiet]
+      end
+    else
+      mv absolute_path, castle_path
+    end
 
     inside home_dir do
-      absolute_path = castle_dir(castle) + file.basename
-      home_path = home_dir + file
+      absolute_path = castle_path + file.basename
+      home_path = home_dir + relative_dir + file.basename
       ln_s absolute_path, home_path
     end
 
     inside castle_path do
       git_add absolute_path
     end
+
+    # are we tracking something nested? Add the parent dir to the manifest
+    unless relative_dir.eql?(Pathname.new('.'))
+      manifest_add(castle, relative_dir)
+    end
   end
 
   desc "list", "List cloned castles"
@@ -255,4 +282,54 @@ class Homesick < Thor
       git_push
     end
   end
+
+  def manifest(castle)
+    Pathname.new(repos_dir.join(castle, '.manifest'))
+  end
+
+  def manifest_add(castle, path)
+    manifest_path = manifest(castle)
+    File.open(manifest_path, 'a+') do |manifest|
+      manifest.puts path unless manifest.readlines.inject(false) { |memo, line| line.eql?("#{path.to_s}\n") || memo }
+    end
+
+    inside castle_dir(castle) do
+      git_add manifest_path
+    end
+  end
+
+  def manifest_remove(castle, path)
+    manifest_file = manifest(castle)
+    if manifest_file.exist?
+      lines = IO.readlines(manifest_file).delete_if { |line| line == "#{path}\n" }
+      File.open(manifest_file, 'w') { |manfile| manfile.puts lines }
+    end
+
+    inside castle_dir(castle) do
+      git_add manifest_file
+    end
+  end
+
+  def move_dir_contents(target, dir_path)
+    child_files = dir_path.children
+    child_files.each do |child|
+
+      target_path = target.join(child.basename)
+      if target_path.exist?
+        if more_recent?(child, target_path) && target.file?
+          target_path.delete
+          mv child, target
+        end
+        next
+      end
+
+      mv child, target
+    end
+  end
+
+  def more_recent?(first, second)
+    first_p = Pathname.new(first)
+    second_p = Pathname.new(second)
+    first_p.mtime > second_p.mtime && !first_p.symlink?
+  end
 end
diff --git a/spec/homesick_spec.rb b/spec/homesick_spec.rb
index 90132ed..acecdcb 100644
--- a/spec/homesick_spec.rb
+++ b/spec/homesick_spec.rb
@@ -197,5 +197,70 @@ describe "homesick" do
 
       some_rc_file.readlink.should == tracked_file
     end
+
+    it 'should track a file in nested folder structure' do
+      castle = given_castle('castle_repo')
+
+      some_nested_file = home.file('some/nested/file.txt')
+      homesick.track(some_nested_file.to_s, 'castle_repo')
+
+      tracked_file = castle.join('some/nested/file.txt')
+      tracked_file.should exist
+      some_nested_file.readlink.should == tracked_file
+    end
+
+    it 'should track a nested directory' do
+      castle = given_castle('castle_repo')
+
+      some_nested_dir = home.directory('some/nested/directory/')
+      homesick.track(some_nested_dir.to_s, 'castle_repo')
+
+      tracked_file = castle.join('some/nested/directory/')
+      tracked_file.should exist
+      File.realdirpath(some_nested_dir).should == File.realdirpath(tracked_file)
+    end
+
+    describe "manifest" do
+
+      it 'should add the nested files parent to the manifest' do
+        castle = given_castle('castle_repo')
+
+        some_nested_file = home.file('some/nested/file.txt')
+        homesick.track(some_nested_file.to_s, 'castle_repo')
+
+        manifest = Pathname.new(castle.parent.join('.manifest'))
+        File.open(manifest, 'r') do |f|
+          f.readline.should == "some/nested\n"
+        end
+      end
+
+      it 'should NOT add anything if the files parent is already listed' do
+        castle = given_castle('castle_repo')
+
+        some_nested_file = home.file('some/nested/file.txt')
+        other_nested_file = home.file('some/nested/other.txt')
+        homesick.track(some_nested_file.to_s, 'castle_repo')
+        homesick.track(other_nested_file.to_s, 'castle_repo')
+
+        manifest = Pathname.new(castle.parent.join('.manifest'))
+        File.open(manifest, 'r') do |f|
+          f.readlines.size.should == 1
+        end
+      end
+
+      it 'should remove the parent of a tracked file from the manifest if the parent itself is tracked' do
+        castle = given_castle('castle_repo')
+
+        some_nested_file = home.file('some/nested/file.txt')
+        nested_parent = home.directory('some/nested/')
+        homesick.track(some_nested_file.to_s, 'castle_repo')
+        homesick.track(nested_parent.to_s, 'castle_repo')
+
+        manifest = Pathname.new(castle.parent.join('.manifest'))
+        File.open(manifest, 'r') do |f|
+          f.each_line { |line| line.should_not == "some/nested\n" }
+        end
+      end
+    end
   end
 end