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If you're working on a large project with many chapters and many files, it can be useful to create nested folders to keep things organized. To create nested folders on Overleaf, there is a simple trick you can use: if you create a folder called foo/bar, with a forward slash, then this creates a subfolder. This may show up as a single folder with the name "foo/bar" initially, but when files are added to it, the folder hierarchy will re-display correctly. Alternatively, you can also first add/upload a file (e.g. "file.txt"), and then rename it foo/bar/file.txt.