diff --git a/packages/core/src/browser/common-frontend-contribution.ts b/packages/core/src/browser/common-frontend-contribution.ts
index 0772465578dc3..59b91ba310b48 100644
--- a/packages/core/src/browser/common-frontend-contribution.ts
+++ b/packages/core/src/browser/common-frontend-contribution.ts
@@ -1090,7 +1090,7 @@ export class CommonFrontendContribution implements FrontendApplicationContributi
             // if not yet contributed by Monaco, check runtime css variables to learn.
             // TODO: Following are not yet supported/no respective elements in theia:
             // list.focusBackground, list.focusForeground, list.inactiveFocusBackground, list.filterMatchBorder,
-            // list.dropBackground, listFilterWidget.outline, listFilterWidget.noMatchesOutline, tree.indentGuidesStroke
+            // list.dropBackground, listFilterWidget.outline, listFilterWidget.noMatchesOutline
             // list.invalidItemForeground,
             // list.warningForeground, list.errorForeground => tree node needs an respective class
             { id: 'list.activeSelectionBackground', defaults: { dark: '#094771', light: '#0074E8' }, description: 'List/Tree background color for the selected item when the list/tree is active. An active list/tree has keyboard focus, an inactive does not.' },
@@ -1100,6 +1100,7 @@ export class CommonFrontendContribution implements FrontendApplicationContributi
             { id: 'list.hoverBackground', defaults: { dark: '#2A2D2E', light: '#F0F0F0' }, description: 'List/Tree background when hovering over items using the mouse.' },
             { id: 'list.hoverForeground', description: 'List/Tree foreground when hovering over items using the mouse.' },
             { id: 'list.filterMatchBackground', defaults: { dark: 'editor.findMatchHighlightBackground', light: 'editor.findMatchHighlightBackground' }, description: 'Background color of the filtered match.' },
+            { id: 'tree.inactiveIndentGuidesStroke', defaults: { dark: Color.transparent('tree.indentGuidesStroke', 0.4), light: Color.transparent('tree.indentGuidesStroke', 0.4), hc: Color.transparent('tree.indentGuidesStroke', 0.4) }, description: 'Tree stroke color for the inactive indentation guides.' },
 
             // Editor Group & Tabs colors should be aligned with https://code.visualstudio.com/api/references/theme-color#editor-groups-tabs
             {
diff --git a/packages/core/src/browser/core-preferences.ts b/packages/core/src/browser/core-preferences.ts
index 0bbbda9d654b3..e4dcd5ae3eeed 100644
--- a/packages/core/src/browser/core-preferences.ts
+++ b/packages/core/src/browser/core-preferences.ts
@@ -72,6 +72,12 @@ export const corePreferenceSchema: PreferenceSchema = {
             'scope': 'language-overridable',
             'enumDescriptions': Object.keys(SUPPORTED_ENCODINGS).map(key => SUPPORTED_ENCODINGS[key].labelLong),
             'included': Object.keys(SUPPORTED_ENCODINGS).length > 1
+        },
+        'workbench.tree.renderIndentGuides': {
+            type: 'string',
+            enum: ['onHover', 'none', 'always'],
+            default: 'onHover',
+            description: 'Controls whether the tree should render indent guides.'
         }
     }
 };
@@ -85,6 +91,7 @@ export interface CoreConfiguration {
     'workbench.iconTheme'?: string | null;
     'workbench.silentNotifications': boolean;
     'files.encoding': string
+    'workbench.tree.renderIndentGuides': 'onHover' | 'none' | 'always';
 }
 
 export const CorePreferences = Symbol('CorePreferences');
diff --git a/packages/core/src/browser/style/tree.css b/packages/core/src/browser/style/tree.css
index cf40dd2f687eb..b17c617a16c58 100644
--- a/packages/core/src/browser/style/tree.css
+++ b/packages/core/src/browser/style/tree.css
@@ -139,3 +139,16 @@
 .theia-tree-element-node {
     width: 100%
 }
+
+.theia-tree-node-indent {
+    position: absolute;
+    height: var(--theia-content-line-height);
+    border-right: var(--theia-border-width) solid transparent;
+}
+.theia-tree-node-indent.always,
+.theia-TreeContainer:hover .theia-tree-node-indent.hover {
+    border-color: var(--theia-tree-inactiveIndentGuidesStroke);
+}
+.theia-tree-node-indent.active {
+    border-color: var(--theia-tree-indentGuidesStroke);
+}
diff --git a/packages/core/src/browser/tree/tree-widget.tsx b/packages/core/src/browser/tree/tree-widget.tsx
index cfaec1187ac83..00f4a77e268a5 100644
--- a/packages/core/src/browser/tree/tree-widget.tsx
+++ b/packages/core/src/browser/tree/tree-widget.tsx
@@ -38,6 +38,7 @@ import { ElementExt } from '@phosphor/domutils';
 import { TreeWidgetSelection } from './tree-widget-selection';
 import { MaybePromise } from '../../common/types';
 import { LabelProvider } from '../label-provider';
+import { CorePreferences } from '../core-preferences';
 
 const debounce = require('lodash.debounce');
 
@@ -52,6 +53,7 @@ export const TREE_NODE_SEGMENT_GROW_CLASS = 'theia-TreeNodeSegmentGrow';
 export const EXPANDABLE_TREE_NODE_CLASS = 'theia-ExpandableTreeNode';
 export const COMPOSITE_TREE_NODE_CLASS = 'theia-CompositeTreeNode';
 export const TREE_NODE_CAPTION_CLASS = 'theia-TreeNodeCaption';
+export const TREE_NODE_INDENT_GUIDE_CLASS = 'theia-tree-node-indent';
 
 export const TreeProps = Symbol('TreeProps');
 
@@ -162,6 +164,9 @@ export class TreeWidget extends ReactWidget implements StatefulWidget {
     @inject(LabelProvider)
     protected readonly labelProvider: LabelProvider;
 
+    @inject(CorePreferences)
+    protected readonly corePreferences: CorePreferences;
+
     protected shouldScrollToRow = true;
 
     constructor(
@@ -251,6 +256,11 @@ export class TreeWidget extends ReactWidget implements StatefulWidget {
                 })
             ]);
         }
+        this.toDispose.push(this.corePreferences.onPreferenceChanged(preference => {
+            if (preference.preferenceName === 'workbench.tree.renderIndentGuides') {
+                this.update();
+            }
+        }));
     }
 
     /**
@@ -478,7 +488,10 @@ export class TreeWidget extends ReactWidget implements StatefulWidget {
      * Actually render the node row.
      */
     protected doRenderNodeRow({ index, node, depth }: TreeWidget.NodeRow): React.ReactNode {
-        return this.renderNode(node, { depth });
+        return <React.Fragment>
+            {this.renderIndent(node, { depth })}
+            {this.renderNode(node, { depth })}
+        </React.Fragment>;
     }
 
     /**
@@ -776,6 +789,55 @@ export class TreeWidget extends ReactWidget implements StatefulWidget {
         return iconClass.concat(additionalClasses).join(' ');
     }
 
+    /**
+     * Render indent for the file tree based on the depth
+     * @param node the tree node.
+     * @param depth the depth of the tree node.
+     */
+    protected renderIndent(node: TreeNode, props: NodeProps): React.ReactNode {
+        const renderIndentGuides = this.corePreferences['workbench.tree.renderIndentGuides'];
+        if (renderIndentGuides === 'none') {
+            return undefined;
+        }
+
+        const indentDivs: React.ReactNode[] = [];
+        let current: TreeNode | undefined = node;
+        let depth = props.depth;
+        while (current && depth) {
+            const classNames: string[] = [TREE_NODE_INDENT_GUIDE_CLASS];
+            if (this.needsActiveIndentGuideline(current)) {
+                classNames.push('active');
+            } else {
+                classNames.push(renderIndentGuides === 'onHover' ? 'hover' : 'always');
+            }
+            const paddingLeft = this.props.leftPadding * depth;
+            indentDivs.unshift(<div key={depth} className={classNames.join(' ')} style={{
+                paddingLeft: `${paddingLeft}px`
+            }} />);
+            current = current.parent;
+            depth--;
+        }
+        return indentDivs;
+    }
+
+    protected needsActiveIndentGuideline(node: TreeNode): boolean {
+        const parent = node.parent;
+        if (!parent || !this.isExpandable(parent)) {
+            return false;
+        }
+        if (SelectableTreeNode.isSelected(parent)) {
+            return true;
+        }
+        if (parent.expanded) {
+            for (const sibling of parent.children) {
+                if (SelectableTreeNode.isSelected(sibling) && !(this.isExpandable(sibling) && sibling.expanded)) {
+                    return true;
+                }
+            }
+        }
+        return false;
+    }
+
     /**
      * Render the node given the tree node and node properties.
      * @param node the tree node.