diff --git a/XML/Fold.tmPreferences b/XML/Fold.tmPreferences
new file mode 100644
index 0000000000..8d31a539a5
--- /dev/null
+++ b/XML/Fold.tmPreferences
@@ -0,0 +1,108 @@
+<?xml version="1.0" encoding="UTF-8"?>
+<plist version="1.0">
+<dict>
+    <key>scope</key>
+    <string>text.xml, text.xml.dtd, text.xml.xsl</string>
+    <key>settings</key>
+    <dict>
+        <key>indentationFoldingEnabled</key>
+        <true/>
+        <key>foldScopes</key>
+        <array>
+            <dict>
+                <!-- Comments -->
+                <key>begin</key>
+                <string>comment.block punctuation.definition.comment.begin</string>
+                <key>end</key>
+                <string>comment.block punctuation.definition.comment.end</string>
+                <key>excludeTrailingNewlines</key>
+                <false/>
+            </dict>
+            <dict>
+                <!-- Strings -->
+                <key>begin</key>
+                <string>punctuation.definition.string.begin</string>
+                <key>end</key>
+                <string>punctuation.definition.string.end</string>
+                <key>excludeTrailingNewlines</key>
+                <false/>
+            </dict>
+            <dict>
+                <!-- Brackets -->
+                <key>begin</key>
+                <string>punctuation.section.brackets.begin</string>
+                <key>end</key>
+                <string>punctuation.section.brackets.end</string>
+                <key>excludeTrailingNewlines</key>
+                <false/>
+            </dict>
+            <dict>
+                <!-- Groups -->
+                <key>begin</key>
+                <string>punctuation.section.group.begin</string>
+                <key>end</key>
+                <string>punctuation.section.group.end</string>
+                <key>excludeTrailingNewlines</key>
+                <false/>
+            </dict>
+            <dict>
+                <!-- CDATA -->
+                <key>begin</key>
+                <string>meta.tag.sgml.cdata punctuation.definition.tag.begin.content</string>
+                <key>end</key>
+                <string>meta.tag.sgml.cdata punctuation.definition.tag</string>
+                <key>excludeTrailingNewlines</key>
+                <false/>
+            </dict>
+            <dict>
+                <!-- DTD tag attributes -->
+                <key>begin</key>
+                <string>meta.tag.sgml keyword.declaration</string>
+                <key>end</key>
+                <string>meta.tag.sgml punctuation.definition.tag</string>
+                <key>excludeTrailingNewlines</key>
+                <false/>
+            </dict>
+            <dict>
+                <!--
+                XML preprocessor tag attributes
+
+                Preprocessor tags are always self-closing. Thus trailing newlines are
+                included to avoid closing punctuation to keep on a single line when folded.
+                -->
+                <key>begin</key>
+                <string>meta.tag.preprocessor entity.name.tag</string>
+                <key>end</key>
+                <string>meta.tag.preprocessor punctuation.definition.tag</string>
+                <key>excludeTrailingNewlines</key>
+                <false/>
+            </dict>
+            <dict>
+                <!--
+                XML tag attributes
+
+                Exclude trailing newlines, so attributes and child tags
+                can always be folded/unfolded via fold buttons individually.
+
+                Note: Works only if closing punctuation is already on a separate line.
+                -->
+                <key>begin</key>
+                <string>meta.tag entity.name.tag</string>
+                <key>end</key>
+                <string>meta.tag punctuation.definition.tag</string>
+                <key>excludeTrailingNewlines</key>
+                <true/>
+            </dict>
+            <dict>
+                <!-- Content between XML opening and closing tags -->
+                <key>begin</key>
+                <string>meta.tag punctuation.definition.tag.end.opening</string>
+                <key>end</key>
+                <string>meta.tag punctuation.definition.tag.begin.closing</string>
+                <key>excludeTrailingNewlines</key>
+                <false/>
+            </dict>
+        </array>
+    </dict>
+</dict>
+</plist>
diff --git a/XML/XML.sublime-syntax b/XML/XML.sublime-syntax
index 2bbd86fb0c..f36d09917a 100644
--- a/XML/XML.sublime-syntax
+++ b/XML/XML.sublime-syntax
@@ -156,11 +156,15 @@ contexts:
 ###[ CDATA ]##################################################################
 
   cdata:
+    # Notes:
+    #
+    # `content` sub-scope is used for folding.
+    # Changing it might cause folding to break!
     - match: (<!\[)(CDATA)(\[)
       captures:
         1: punctuation.definition.tag.begin.xml
         2: keyword.declaration.cdata.xml
-        3: punctuation.definition.tag.begin.xml
+        3: punctuation.definition.tag.begin.content.xml
       push: cdata-content
 
   cdata-content:
@@ -552,10 +556,15 @@ contexts:
 ###[ XML TAGS ]###############################################################
 
   tag:
+    # Notes:
+    #
+    # `opening`, `closing` and `self-closing` sub-scopes are used for folding.
+    # Changing them might cause folding to break!
+
     # end-tag without attribute support
     - match: (</){{qualified_tag_name}}
       captures:
-        1: punctuation.definition.tag.begin.xml
+        1: punctuation.definition.tag.begin.closing.xml
         2: entity.name.tag.namespace.xml
         3: invalid.illegal.bad-tag-name.xml
         4: entity.name.tag.xml punctuation.separator.namespace.xml
@@ -565,7 +574,7 @@ contexts:
     # opening maybe self-closing tag with optional attributes
     - match: (<){{qualified_tag_name}}
       captures:
-        1: punctuation.definition.tag.begin.xml
+        1: punctuation.definition.tag.begin.opening.xml
         2: entity.name.tag.namespace.xml
         3: invalid.illegal.bad-tag-name.xml
         4: entity.name.tag.xml punctuation.separator.namespace.xml
@@ -575,8 +584,11 @@ contexts:
 
   begin-tag-content:
     - meta_scope: meta.tag.xml
-    - match: /?>
-      scope: punctuation.definition.tag.end.xml
+    - match: />
+      scope: punctuation.definition.tag.end.self-closing.xml
+      pop: 1
+    - match: '>'
+      scope: punctuation.definition.tag.end.opening.xml
       pop: 1
     - match: \?>
       scope: invalid.illegal.bad-tag-end.xml
@@ -587,7 +599,7 @@ contexts:
   end-tag-content:
     - meta_scope: meta.tag.xml
     - match: '>'
-      scope: punctuation.definition.tag.end.xml
+      scope: punctuation.definition.tag.end.closing.xml
       pop: 1
     - include: tag-end-missing-pop
     - match: '[/\?]>'