46 files changed, 1026 insertions, 999 deletions

diff --git a/Cargo.lock b/Cargo.lock
index c91236fc6..f2069c55e 100644
--- a/Cargo.lock
+++ b/Cargo.lock
@@ -354,9 +354,9 @@ checksum = "5f2a4a2034423744d2cc7ca2068453168dcdb82c438419e639a26bd87839c674"
 
 [[package]]
 name = "fsevent"
-version = "0.4.0"
+version = "2.0.2"
 source = "registry+https://github.com/rust-lang/crates.io-index"
-checksum = "5ab7d1bd1bd33cc98b0889831b72da23c0aa4df9cec7e0702f46ecea04b35db6"
+checksum = "97f347202c95c98805c216f9e1df210e8ebaec9fdb2365700a43c10797a35e63"
 dependencies = [
  "bitflags",
  "fsevent-sys",
@@ -364,9 +364,9 @@ dependencies = [
 
 [[package]]
 name = "fsevent-sys"
-version = "2.0.1"
+version = "3.0.2"
 source = "registry+https://github.com/rust-lang/crates.io-index"
-checksum = "f41b048a94555da0f42f1d632e2e19510084fb8e303b0daa2816e733fb3644a0"
+checksum = "77a29c77f1ca394c3e73a9a5d24cfcabb734682d9634fc398f2204a63c994120"
 dependencies = [
  "libc",
 ]
@@ -483,9 +483,9 @@ dependencies = [
 
 [[package]]
 name = "inotify"
-version = "0.7.1"
+version = "0.8.3"
 source = "registry+https://github.com/rust-lang/crates.io-index"
-checksum = "4816c66d2c8ae673df83366c18341538f234a26d65a9ecea5c348b453ac1d02f"
+checksum = "46dd0a94b393c730779ccfd2a872b67b1eb67be3fc33082e733bdb38b5fde4d4"
 dependencies = [
  "bitflags",
  "inotify-sys",
@@ -766,11 +766,13 @@ dependencies = [
 
 [[package]]
 name = "notify"
-version = "4.0.15"
+version = "5.0.0-pre.3"
 source = "registry+https://github.com/rust-lang/crates.io-index"
-checksum = "80ae4a7688d1fab81c5bf19c64fc8db920be8d519ce6336ed4e7efe024724dbd"
+checksum = "77d03607cf88b4b160ba0e9ed425fff3cee3b55ac813f0c685b3a3772da37d0e"
 dependencies = [
+ "anymap",
  "bitflags",
+ "crossbeam-channel",
  "filetime",
  "fsevent",
  "fsevent-sys",
@@ -952,7 +954,9 @@ dependencies = [
  "relative-path",
  "rustc-hash",
  "salsa",
+ "stdx",
  "test_utils",
+ "vfs",
 ]
 
 [[package]]
@@ -1233,22 +1237,6 @@ dependencies = [
 ]
 
 [[package]]
-name = "ra_vfs"
-version = "0.6.1"
-source = "registry+https://github.com/rust-lang/crates.io-index"
-checksum = "cbf31a173fc77ec59c27cf39af6baa137b40f4dbd45a8b3eccb1b2e4cfc922c1"
-dependencies = [
- "crossbeam-channel",
- "jod-thread",
- "log",
- "notify",
- "parking_lot",
- "relative-path",
- "rustc-hash",
- "walkdir",
-]
-
-[[package]]
 name = "rand"
 version = "0.7.3"
 source = "registry+https://github.com/rust-lang/crates.io-index"
@@ -1405,7 +1393,6 @@ dependencies = [
  "ra_syntax",
  "ra_text_edit",
  "ra_tt",
- "ra_vfs",
  "rand",
  "rustc-hash",
  "serde",
@@ -1414,6 +1401,8 @@ dependencies = [
  "tempfile",
  "test_utils",
  "threadpool",
+ "vfs",
+ "vfs-notify",
  "winapi 0.3.8",
 ]
 
@@ -1764,11 +1753,22 @@ dependencies = [
 name = "vfs"
 version = "0.1.0"
 dependencies = [
+ "paths",
+ "rustc-hash",
+]
+
+[[package]]
+name = "vfs-notify"
+version = "0.1.0"
+dependencies = [
  "crossbeam-channel",
  "globset",
  "jod-thread",
+ "log",
+ "notify",
  "paths",
  "rustc-hash",
+ "vfs",
  "walkdir",
 ]
 
diff --git a/crates/paths/src/lib.rs b/crates/paths/src/lib.rs
index 32267f2e6..45b19c45a 100644
--- a/crates/paths/src/lib.rs
+++ b/crates/paths/src/lib.rs
@@ -2,7 +2,7 @@
 //! relative paths.
 use std::{
     convert::{TryFrom, TryInto},
-    io, ops,
+    ops,
     path::{Component, Path, PathBuf},
 };
 
@@ -46,9 +46,6 @@ impl TryFrom<&str> for AbsPathBuf {
 }
 
 impl AbsPathBuf {
-    pub fn canonicalized(path: &Path) -> io::Result<AbsPathBuf> {
-        path.canonicalize().map(|it| AbsPathBuf::try_from(it).unwrap())
-    }
     pub fn as_path(&self) -> &AbsPath {
         AbsPath::new_unchecked(self.0.as_path())
     }
diff --git a/crates/ra_assists/src/tests.rs b/crates/ra_assists/src/tests.rs
index 62dd3547f..55576813f 100644
--- a/crates/ra_assists/src/tests.rs
+++ b/crates/ra_assists/src/tests.rs
@@ -1,10 +1,8 @@
 mod generated;
 
-use std::sync::Arc;
-
 use hir::Semantics;
 use ra_db::{fixture::WithFixture, FileId, FileRange, SourceDatabaseExt};
-use ra_ide_db::{symbol_index::SymbolsDatabase, RootDatabase};
+use ra_ide_db::RootDatabase;
 use ra_syntax::TextRange;
 use test_utils::{
     assert_eq_text, extract_offset, extract_range, extract_range_or_offset, RangeOrOffset,
@@ -13,11 +11,7 @@ use test_utils::{
 use crate::{handlers::Handler, Assist, AssistConfig, AssistContext, Assists};
 
 pub(crate) fn with_single_file(text: &str) -> (RootDatabase, FileId) {
-    let (mut db, file_id) = RootDatabase::with_single_file(text);
-    // FIXME: ideally, this should be done by the above `RootDatabase::with_single_file`,
-    // but it looks like this might need specialization? :(
-    db.set_local_roots(Arc::new(vec![db.file_source_root(file_id)]));
-    (db, file_id)
+    RootDatabase::with_single_file(text)
 }
 
 pub(crate) fn check_assist(assist: Handler, ra_fixture_before: &str, ra_fixture_after: &str) {
@@ -72,8 +66,7 @@ enum ExpectedResult<'a> {
 
 fn check(handler: Handler, before: &str, expected: ExpectedResult) {
     let (text_without_caret, file_with_caret_id, range_or_offset, db) = if before.contains("//-") {
-        let (mut db, position) = RootDatabase::with_position(before);
-        db.set_local_roots(Arc::new(vec![db.file_source_root(position.file_id)]));
+        let (db, position) = RootDatabase::with_position(before);
         (
             db.file_text(position.file_id).as_ref().to_owned(),
             position.file_id,
diff --git a/crates/ra_db/Cargo.toml b/crates/ra_db/Cargo.toml
index 8ab409158..372fb242b 100644
--- a/crates/ra_db/Cargo.toml
+++ b/crates/ra_db/Cargo.toml
@@ -17,3 +17,5 @@ ra_cfg = { path = "../ra_cfg" }
 ra_prof = { path = "../ra_prof" }
 ra_tt = { path = "../ra_tt" }
 test_utils = { path = "../test_utils" }
+vfs = { path = "../vfs" }
+stdx = { path = "../stdx" }
diff --git a/crates/ra_db/src/fixture.rs b/crates/ra_db/src/fixture.rs
index af8fe11ec..f7d9118a9 100644
--- a/crates/ra_db/src/fixture.rs
+++ b/crates/ra_db/src/fixture.rs
@@ -57,17 +57,16 @@
 //! fn insert_source_code_here() {}
 //! "
 //! ```
-
-use std::str::FromStr;
-use std::sync::Arc;
+use std::{str::FromStr, sync::Arc};
 
 use ra_cfg::CfgOptions;
 use rustc_hash::FxHashMap;
 use test_utils::{extract_offset, parse_fixture, parse_single_fixture, FixtureMeta, CURSOR_MARKER};
+use vfs::{file_set::FileSet, VfsPath};
 
 use crate::{
-    input::CrateName, CrateGraph, CrateId, Edition, Env, FileId, FilePosition, RelativePathBuf,
-    SourceDatabaseExt, SourceRoot, SourceRootId,
+    input::CrateName, CrateGraph, CrateId, Edition, Env, FileId, FilePosition, SourceDatabaseExt,
+    SourceRoot, SourceRootId,
 };
 
 pub const WORKSPACE: SourceRootId = SourceRootId(0);
@@ -105,10 +104,10 @@ impl<DB: SourceDatabaseExt + Default + 'static> WithFixture for DB {}
 
 fn with_single_file(db: &mut dyn SourceDatabaseExt, ra_fixture: &str) -> FileId {
     let file_id = FileId(0);
-    let rel_path: RelativePathBuf = "/main.rs".into();
+    let mut file_set = vfs::file_set::FileSet::default();
+    file_set.insert(file_id, vfs::VfsPath::new_virtual_path("/main.rs".to_string()));
 
-    let mut source_root = SourceRoot::new_local();
-    source_root.insert_file(rel_path.clone(), file_id);
+    let source_root = SourceRoot::new_local(file_set);
 
     let fixture = parse_single_fixture(ra_fixture);
 
@@ -128,7 +127,6 @@ fn with_single_file(db: &mut dyn SourceDatabaseExt, ra_fixture: &str) -> FileId
             meta.cfg,
             meta.env,
             Default::default(),
-            Default::default(),
         );
         crate_graph
     } else {
@@ -140,13 +138,11 @@ fn with_single_file(db: &mut dyn SourceDatabaseExt, ra_fixture: &str) -> FileId
             CfgOptions::default(),
             Env::default(),
             Default::default(),
-            Default::default(),
         );
         crate_graph
     };
 
     db.set_file_text(file_id, Arc::new(ra_fixture.to_string()));
-    db.set_file_relative_path(file_id, rel_path);
     db.set_file_source_root(file_id, WORKSPACE);
     db.set_source_root(WORKSPACE, Arc::new(source_root));
     db.set_crate_graph(Arc::new(crate_graph));
@@ -162,7 +158,7 @@ fn with_files(db: &mut dyn SourceDatabaseExt, fixture: &str) -> Option<FilePosit
     let mut crate_deps = Vec::new();
     let mut default_crate_root: Option<FileId> = None;
 
-    let mut source_root = SourceRoot::new_local();
+    let mut file_set = FileSet::default();
     let mut source_root_id = WORKSPACE;
     let mut source_root_prefix = "/".to_string();
     let mut file_id = FileId(0);
@@ -172,8 +168,8 @@ fn with_files(db: &mut dyn SourceDatabaseExt, fixture: &str) -> Option<FilePosit
     for entry in fixture.iter() {
         let meta = match ParsedMeta::from(&entry.meta) {
             ParsedMeta::Root { path } => {
-                let source_root = std::mem::replace(&mut source_root, SourceRoot::new_local());
-                db.set_source_root(source_root_id, Arc::new(source_root));
+                let file_set = std::mem::replace(&mut file_set, FileSet::default());
+                db.set_source_root(source_root_id, Arc::new(SourceRoot::new_local(file_set)));
                 source_root_id.0 += 1;
                 source_root_prefix = path;
                 continue;
@@ -190,7 +186,6 @@ fn with_files(db: &mut dyn SourceDatabaseExt, fixture: &str) -> Option<FilePosit
                 meta.cfg,
                 meta.env,
                 Default::default(),
-                Default::default(),
             );
             let prev = crates.insert(krate.clone(), crate_id);
             assert!(prev.is_none());
@@ -212,9 +207,9 @@ fn with_files(db: &mut dyn SourceDatabaseExt, fixture: &str) -> Option<FilePosit
         };
 
         db.set_file_text(file_id, Arc::new(text));
-        db.set_file_relative_path(file_id, meta.path.clone().into());
         db.set_file_source_root(file_id, source_root_id);
-        source_root.insert_file(meta.path.into(), file_id);
+        let path = VfsPath::new_virtual_path(meta.path);
+        file_set.insert(file_id, path.into());
 
         file_id.0 += 1;
     }
@@ -228,7 +223,6 @@ fn with_files(db: &mut dyn SourceDatabaseExt, fixture: &str) -> Option<FilePosit
             CfgOptions::default(),
             Env::default(),
             Default::default(),
-            Default::default(),
         );
     } else {
         for (from, to) in crate_deps {
@@ -238,7 +232,7 @@ fn with_files(db: &mut dyn SourceDatabaseExt, fixture: &str) -> Option<FilePosit
         }
     }
 
-    db.set_source_root(source_root_id, Arc::new(source_root));
+    db.set_source_root(source_root_id, Arc::new(SourceRoot::new_local(file_set)));
     db.set_crate_graph(Arc::new(crate_graph));
 
     file_position
diff --git a/crates/ra_db/src/input.rs b/crates/ra_db/src/input.rs
index e6af99035..7f3660118 100644
--- a/crates/ra_db/src/input.rs
+++ b/crates/ra_db/src/input.rs
@@ -6,27 +6,15 @@
 //! actual IO. See `vfs` and `project_model` in the `rust-analyzer` crate for how
 //! actual IO is done and lowered to input.
 
-use std::{
-    fmt, ops,
-    path::{Path, PathBuf},
-    str::FromStr,
-    sync::Arc,
-};
+use std::{fmt, ops, str::FromStr, sync::Arc};
 
 use ra_cfg::CfgOptions;
 use ra_syntax::SmolStr;
 use ra_tt::TokenExpander;
 use rustc_hash::{FxHashMap, FxHashSet};
+use vfs::file_set::FileSet;
 
-use crate::{RelativePath, RelativePathBuf};
-
-/// `FileId` is an integer which uniquely identifies a file. File paths are
-/// messy and system-dependent, so most of the code should work directly with
-/// `FileId`, without inspecting the path. The mapping between `FileId` and path
-/// and `SourceRoot` is constant. A file rename is represented as a pair of
-/// deletion/creation.
-#[derive(Debug, Clone, Copy, PartialEq, Eq, PartialOrd, Ord, Hash)]
-pub struct FileId(pub u32);
+pub use vfs::FileId;
 
 /// Files are grouped into source roots. A source root is a directory on the
 /// file systems which is watched for changes. Typically it corresponds to a
@@ -45,27 +33,18 @@ pub struct SourceRoot {
     /// Libraries are considered mostly immutable, this assumption is used to
     /// optimize salsa's query structure
     pub is_library: bool,
-    files: FxHashMap<RelativePathBuf, FileId>,
+    pub(crate) file_set: FileSet,
 }
 
 impl SourceRoot {
-    pub fn new_local() -> SourceRoot {
-        SourceRoot { is_library: false, files: Default::default() }
-    }
-    pub fn new_library() -> SourceRoot {
-        SourceRoot { is_library: true, files: Default::default() }
-    }
-    pub fn insert_file(&mut self, path: RelativePathBuf, file_id: FileId) {
-        self.files.insert(path, file_id);
+    pub fn new_local(file_set: FileSet) -> SourceRoot {
+        SourceRoot { is_library: false, file_set }
     }
-    pub fn remove_file(&mut self, path: &RelativePath) {
-        self.files.remove(path);
+    pub fn new_library(file_set: FileSet) -> SourceRoot {
+        SourceRoot { is_library: true, file_set }
     }
-    pub fn walk(&self) -> impl Iterator<Item = FileId> + '_ {
-        self.files.values().copied()
-    }
-    pub fn file_by_relative_path(&self, path: &RelativePath) -> Option<FileId> {
-        self.files.get(path).copied()
+    pub fn iter(&self) -> impl Iterator<Item = FileId> + '_ {
+        self.file_set.iter()
     }
 }
 
@@ -141,7 +120,6 @@ pub struct CrateData {
     pub display_name: Option<CrateName>,
     pub cfg_options: CfgOptions,
     pub env: Env,
-    pub extern_source: ExternSource,
     pub dependencies: Vec<Dependency>,
     pub proc_macro: Vec<ProcMacro>,
 }
@@ -152,22 +130,11 @@ pub enum Edition {
     Edition2015,
 }
 
-#[derive(Debug, Clone, Copy, PartialEq, Eq, PartialOrd, Ord, Hash)]
-pub struct ExternSourceId(pub u32);
-
 #[derive(Default, Debug, Clone, PartialEq, Eq)]
 pub struct Env {
     entries: FxHashMap<String, String>,
 }
 
-// FIXME: Redesign vfs for solve the following limitation ?
-// Note: Some env variables (e.g. OUT_DIR) are located outside of the
-// crate. We store a map to allow remap it to ExternSourceId
-#[derive(Default, Debug, Clone, PartialEq, Eq)]
-pub struct ExternSource {
-    extern_paths: FxHashMap<PathBuf, ExternSourceId>,
-}
-
 #[derive(Debug, Clone, PartialEq, Eq)]
 pub struct Dependency {
     pub crate_id: CrateId,
@@ -182,7 +149,6 @@ impl CrateGraph {
         display_name: Option<CrateName>,
         cfg_options: CfgOptions,
         env: Env,
-        extern_source: ExternSource,
         proc_macro: Vec<(SmolStr, Arc<dyn ra_tt::TokenExpander>)>,
     ) -> CrateId {
         let proc_macro =
@@ -194,7 +160,6 @@ impl CrateGraph {
             display_name,
             cfg_options,
             env,
-            extern_source,
             proc_macro,
             dependencies: Vec::new(),
         };
@@ -334,20 +299,6 @@ impl Env {
     }
 }
 
-impl ExternSource {
-    pub fn extern_path(&self, path: &Path) -> Option<(ExternSourceId, RelativePathBuf)> {
-        self.extern_paths.iter().find_map(|(root_path, id)| {
-            let rel_path = path.strip_prefix(root_path).ok()?;
-            let rel_path = RelativePathBuf::from_path(rel_path).ok()?;
-            Some((*id, rel_path))
-        })
-    }
-
-    pub fn set_extern_path(&mut self, root_path: &Path, root: ExternSourceId) {
-        self.extern_paths.insert(root_path.to_path_buf(), root);
-    }
-}
-
 #[derive(Debug)]
 pub struct ParseEditionError {
     invalid_input: String,
@@ -378,7 +329,6 @@ mod tests {
             CfgOptions::default(),
             Env::default(),
             Default::default(),
-            Default::default(),
         );
         let crate2 = graph.add_crate_root(
             FileId(2u32),
@@ -387,7 +337,6 @@ mod tests {
             CfgOptions::default(),
             Env::default(),
             Default::default(),
-            Default::default(),
         );
         let crate3 = graph.add_crate_root(
             FileId(3u32),
@@ -396,7 +345,6 @@ mod tests {
             CfgOptions::default(),
             Env::default(),
             Default::default(),
-            Default::default(),
         );
         assert!(graph.add_dep(crate1, CrateName::new("crate2").unwrap(), crate2).is_ok());
         assert!(graph.add_dep(crate2, CrateName::new("crate3").unwrap(), crate3).is_ok());
@@ -413,7 +361,6 @@ mod tests {
             CfgOptions::default(),
             Env::default(),
             Default::default(),
-            Default::default(),
         );
         let crate2 = graph.add_crate_root(
             FileId(2u32),
@@ -422,7 +369,6 @@ mod tests {
             CfgOptions::default(),
             Env::default(),
             Default::default(),
-            Default::default(),
         );
         assert!(graph.add_dep(crate1, CrateName::new("crate2").unwrap(), crate2).is_ok());
         assert!(graph.add_dep(crate2, CrateName::new("crate2").unwrap(), crate2).is_err());
@@ -438,7 +384,6 @@ mod tests {
             CfgOptions::default(),
             Env::default(),
             Default::default(),
-            Default::default(),
         );
         let crate2 = graph.add_crate_root(
             FileId(2u32),
@@ -447,7 +392,6 @@ mod tests {
             CfgOptions::default(),
             Env::default(),
             Default::default(),
-            Default::default(),
         );
         let crate3 = graph.add_crate_root(
             FileId(3u32),
@@ -456,7 +400,6 @@ mod tests {
             CfgOptions::default(),
             Env::default(),
             Default::default(),
-            Default::default(),
         );
         assert!(graph.add_dep(crate1, CrateName::new("crate2").unwrap(), crate2).is_ok());
         assert!(graph.add_dep(crate2, CrateName::new("crate3").unwrap(), crate3).is_ok());
@@ -472,7 +415,6 @@ mod tests {
             CfgOptions::default(),
             Env::default(),
             Default::default(),
-            Default::default(),
         );
         let crate2 = graph.add_crate_root(
             FileId(2u32),
@@ -481,7 +423,6 @@ mod tests {
             CfgOptions::default(),
             Env::default(),
             Default::default(),
-            Default::default(),
         );
         assert!(graph
             .add_dep(crate1, CrateName::normalize_dashes("crate-name-with-dashes"), crate2)
diff --git a/crates/ra_db/src/lib.rs b/crates/ra_db/src/lib.rs
index 80ddb6058..875290259 100644
--- a/crates/ra_db/src/lib.rs
+++ b/crates/ra_db/src/lib.rs
@@ -12,12 +12,13 @@ use rustc_hash::FxHashSet;
 pub use crate::{
     cancellation::Canceled,
     input::{
-        CrateData, CrateGraph, CrateId, CrateName, Dependency, Edition, Env, ExternSource,
-        ExternSourceId, FileId, ProcMacroId, SourceRoot, SourceRootId,
+        CrateData, CrateGraph, CrateId, CrateName, Dependency, Edition, Env, FileId, ProcMacroId,
+        SourceRoot, SourceRootId,
     },
 };
 pub use relative_path::{RelativePath, RelativePathBuf};
 pub use salsa;
+pub use vfs::{file_set::FileSet, AbsPathBuf, VfsPath};
 
 #[macro_export]
 macro_rules! impl_intern_key {
@@ -125,8 +126,6 @@ pub trait SourceDatabaseExt: SourceDatabase {
     #[salsa::input]
     fn file_text(&self, file_id: FileId) -> Arc<String>;
     /// Path to a file, relative to the root of its source root.
-    #[salsa::input]
-    fn file_relative_path(&self, file_id: FileId) -> RelativePathBuf;
     /// Source root of the file.
     #[salsa::input]
     fn file_source_root(&self, file_id: FileId) -> SourceRootId;
@@ -161,24 +160,9 @@ impl<T: SourceDatabaseExt> FileLoader for FileLoaderDelegate<&'_ T> {
     }
     fn resolve_path(&self, anchor: FileId, path: &str) -> Option<FileId> {
         // FIXME: this *somehow* should be platform agnostic...
-        if std::path::Path::new(path).is_absolute() {
-            let krate = *self.relevant_crates(anchor).iter().next()?;
-            let (extern_source_id, relative_file) =
-                self.0.crate_graph()[krate].extern_source.extern_path(path.as_ref())?;
-
-            let source_root = self.0.source_root(SourceRootId(extern_source_id.0));
-            source_root.file_by_relative_path(&relative_file)
-        } else {
-            let rel_path = {
-                let mut rel_path = self.0.file_relative_path(anchor);
-                assert!(rel_path.pop());
-                rel_path.push(path);
-                rel_path.normalize()
-            };
-            let source_root = self.0.file_source_root(anchor);
-            let source_root = self.0.source_root(source_root);
-            source_root.file_by_relative_path(&rel_path)
-        }
+        let source_root = self.0.file_source_root(anchor);
+        let source_root = self.0.source_root(source_root);
+        source_root.file_set.resolve_path(anchor, path)
     }
 
     fn relevant_crates(&self, file_id: FileId) -> Arc<FxHashSet<CrateId>> {
diff --git a/crates/ra_hir/src/has_source.rs b/crates/ra_hir/src/has_source.rs
index 63b8fd369..76c32fc17 100644
--- a/crates/ra_hir/src/has_source.rs
+++ b/crates/ra_hir/src/has_source.rs
@@ -2,7 +2,7 @@
 
 use either::Either;
 use hir_def::{
-    nameres::ModuleSource,
+    nameres::{ModuleOrigin, ModuleSource},
     src::{HasChildSource, HasSource as _},
     Lookup, VariantId,
 };
@@ -29,6 +29,14 @@ impl Module {
         def_map[self.id.local_id].definition_source(db.upcast())
     }
 
+    pub fn is_mod_rs(self, db: &dyn HirDatabase) -> bool {
+        let def_map = db.crate_def_map(self.id.krate);
+        match def_map[self.id.local_id].origin {
+            ModuleOrigin::File { is_mod_rs, .. } => is_mod_rs,
+            _ => false,
+        }
+    }
+
     /// Returns a node which declares this module, either a `mod foo;` or a `mod foo {}`.
     /// `None` for the crate root.
     pub fn declaration_source(self, db: &dyn HirDatabase) -> Option<InFile<ast::Module>> {
diff --git a/crates/ra_hir_def/src/nameres.rs b/crates/ra_hir_def/src/nameres.rs
index b8560fdc9..060273db4 100644
--- a/crates/ra_hir_def/src/nameres.rs
+++ b/crates/ra_hir_def/src/nameres.rs
@@ -104,6 +104,7 @@ pub enum ModuleOrigin {
     },
     /// Note that non-inline modules, by definition, live inside non-macro file.
     File {
+        is_mod_rs: bool,
         declaration: AstId<ast::Module>,
         definition: FileId,
     },
diff --git a/crates/ra_hir_def/src/nameres/collector.rs b/crates/ra_hir_def/src/nameres/collector.rs
index b8f6aac8f..cbce04315 100644
--- a/crates/ra_hir_def/src/nameres/collector.rs
+++ b/crates/ra_hir_def/src/nameres/collector.rs
@@ -777,11 +777,11 @@ impl ModCollector<'_, '_> {
                     name,
                     path_attr,
                 ) {
-                    Ok((file_id, mod_dir)) => {
+                    Ok((file_id, is_mod_rs, mod_dir)) => {
                         let module_id = self.push_child_module(
                             name.clone(),
                             ast_id,
-                            Some(file_id),
+                            Some((file_id, is_mod_rs)),
                             &visibility,
                         );
                         let raw_items = self.def_collector.db.raw_items(file_id.into());
@@ -814,7 +814,7 @@ impl ModCollector<'_, '_> {
         &mut self,
         name: Name,
         declaration: AstId<ast::Module>,
-        definition: Option<FileId>,
+        definition: Option<(FileId, bool)>,
         visibility: &crate::visibility::RawVisibility,
     ) -> LocalModuleId {
         let vis = self
@@ -827,7 +827,9 @@ impl ModCollector<'_, '_> {
         modules[res].parent = Some(self.module_id);
         modules[res].origin = match definition {
             None => ModuleOrigin::Inline { definition: declaration },
-            Some(definition) => ModuleOrigin::File { declaration, definition },
+            Some((definition, is_mod_rs)) => {
+                ModuleOrigin::File { declaration, definition, is_mod_rs }
+            }
         };
         for (name, mac) in modules[self.module_id].scope.collect_legacy_macros() {
             modules[res].scope.define_legacy_macro(name, mac)
diff --git a/crates/ra_hir_def/src/nameres/mod_resolution.rs b/crates/ra_hir_def/src/nameres/mod_resolution.rs
index 19fe0615a..39e9a6d97 100644
--- a/crates/ra_hir_def/src/nameres/mod_resolution.rs
+++ b/crates/ra_hir_def/src/nameres/mod_resolution.rs
@@ -44,7 +44,7 @@ impl ModDir {
         file_id: HirFileId,
         name: &Name,
         attr_path: Option<&SmolStr>,
-    ) -> Result<(FileId, ModDir), String> {
+    ) -> Result<(FileId, bool, ModDir), String> {
         let file_id = file_id.original_file(db.upcast());
 
         let mut candidate_files = Vec::new();
@@ -64,11 +64,12 @@ impl ModDir {
             if let Some(file_id) = db.resolve_path(file_id, candidate.as_str()) {
                 let mut root_non_dir_owner = false;
                 let mut mod_path = RelativePathBuf::new();
-                if !(candidate.ends_with("mod.rs") || attr_path.is_some()) {
+                let is_mod_rs = candidate.ends_with("mod.rs");
+                if !(is_mod_rs || attr_path.is_some()) {
                     root_non_dir_owner = true;
                     mod_path.push(&name.to_string());
                 }
-                return Ok((file_id, ModDir { path: mod_path, root_non_dir_owner }));
+                return Ok((file_id, is_mod_rs, ModDir { path: mod_path, root_non_dir_owner }));
             }
         }
         Err(candidate_files.remove(0))
diff --git a/crates/ra_ide/src/lib.rs b/crates/ra_ide/src/lib.rs
index 47823718f..ecac5134e 100644
--- a/crates/ra_ide/src/lib.rs
+++ b/crates/ra_ide/src/lib.rs
@@ -47,7 +47,7 @@ use std::sync::Arc;
 use ra_cfg::CfgOptions;
 use ra_db::{
     salsa::{self, ParallelDatabase},
-    CheckCanceled, Env, FileLoader, SourceDatabase,
+    CheckCanceled, Env, FileLoader, FileSet, SourceDatabase, VfsPath,
 };
 use ra_ide_db::{
     symbol_index::{self, FileSymbol},
@@ -78,7 +78,8 @@ pub use crate::{
 pub use hir::Documentation;
 pub use ra_assists::{Assist, AssistConfig, AssistId, ResolvedAssist};
 pub use ra_db::{
-    Canceled, CrateGraph, CrateId, Edition, FileId, FilePosition, FileRange, SourceRootId,
+    Canceled, CrateGraph, CrateId, Edition, FileId, FilePosition, FileRange, SourceRoot,
+    SourceRootId,
 };
 pub use ra_ide_db::{
     change::AnalysisChange,
@@ -212,11 +213,14 @@ impl Analysis {
     // `AnalysisHost` for creating a fully-featured analysis.
     pub fn from_single_file(text: String) -> (Analysis, FileId) {
         let mut host = AnalysisHost::default();
-        let source_root = SourceRootId(0);
+        let file_id = FileId(0);
+        let mut file_set = FileSet::default();
+        file_set.insert(file_id, VfsPath::new_virtual_path("/main.rs".to_string()));
+        let source_root = SourceRoot::new_local(file_set);
+
         let mut change = AnalysisChange::new();
-        change.add_root(source_root, true);
+        change.set_roots(vec![source_root]);
         let mut crate_graph = CrateGraph::default();
-        let file_id = FileId(0);
         // FIXME: cfg options
         // Default to enable test for single file.
         let mut cfg_options = CfgOptions::default();
@@ -228,9 +232,8 @@ impl Analysis {
             cfg_options,
             Env::default(),
             Default::default(),
-            Default::default(),
         );
-        change.add_file(source_root, file_id, "main.rs".into(), Arc::new(text));
+        change.change_file(file_id, Some(Arc::new(text)));
         change.set_crate_graph(crate_graph);
         host.apply_change(change);
         (host.analysis(), file_id)
diff --git a/crates/ra_ide/src/mock_analysis.rs b/crates/ra_ide/src/mock_analysis.rs
index 76910d09b..58fafecab 100644
--- a/crates/ra_ide/src/mock_analysis.rs
+++ b/crates/ra_ide/src/mock_analysis.rs
@@ -1,15 +1,12 @@
 //! FIXME: write short doc here
-
-use std::str::FromStr;
-use std::sync::Arc;
+use std::{str::FromStr, sync::Arc};
 
 use ra_cfg::CfgOptions;
-use ra_db::{CrateName, Env};
+use ra_db::{CrateName, Env, FileSet, SourceRoot, VfsPath};
 use test_utils::{extract_offset, extract_range, parse_fixture, FixtureEntry, CURSOR_MARKER};
 
 use crate::{
     Analysis, AnalysisChange, AnalysisHost, CrateGraph, Edition, FileId, FilePosition, FileRange,
-    SourceRootId,
 };
 
 #[derive(Debug)]
@@ -159,9 +156,8 @@ impl MockAnalysis {
     }
     pub fn analysis_host(self) -> AnalysisHost {
         let mut host = AnalysisHost::default();
-        let source_root = SourceRootId(0);
         let mut change = AnalysisChange::new();
-        change.add_root(source_root, true);
+        let mut file_set = FileSet::default();
         let mut crate_graph = CrateGraph::default();
         let mut root_crate = None;
         for (i, data) in self.files.into_iter().enumerate() {
@@ -179,7 +175,6 @@ impl MockAnalysis {
                     cfg_options,
                     env,
                     Default::default(),
-                    Default::default(),
                 ));
             } else if path.ends_with("/lib.rs") {
                 let base = &path[..path.len() - "/lib.rs".len()];
@@ -191,7 +186,6 @@ impl MockAnalysis {
                     cfg_options,
                     env,
                     Default::default(),
-                    Default::default(),
                 );
                 if let Some(root_crate) = root_crate {
                     crate_graph
@@ -199,9 +193,12 @@ impl MockAnalysis {
                         .unwrap();
                 }
             }
-            change.add_file(source_root, file_id, path.into(), Arc::new(data.content().to_owned()));
+            let path = VfsPath::new_virtual_path(path.to_string());
+            file_set.insert(file_id, path);
+            change.change_file(file_id, Some(Arc::new(data.content().to_owned())));
         }
         change.set_crate_graph(crate_graph);
+        change.set_roots(vec![SourceRoot::new_local(file_set)]);
         host.apply_change(change);
         host
     }
diff --git a/crates/ra_ide/src/parent_module.rs b/crates/ra_ide/src/parent_module.rs
index fa1535da5..bc7f65470 100644
--- a/crates/ra_ide/src/parent_module.rs
+++ b/crates/ra_ide/src/parent_module.rs
@@ -145,7 +145,6 @@ mod tests {
             CfgOptions::default(),
             Env::default(),
             Default::default(),
-            Default::default(),
         );
         let mut change = AnalysisChange::new();
         change.set_crate_graph(crate_graph);
diff --git a/crates/ra_ide/src/references/rename.rs b/crates/ra_ide/src/references/rename.rs
index 99c2581b7..6edf565b5 100644
--- a/crates/ra_ide/src/references/rename.rs
+++ b/crates/ra_ide/src/references/rename.rs
@@ -1,7 +1,7 @@
 //! FIXME: write short doc here
 
 use hir::{Module, ModuleDef, ModuleSource, Semantics};
-use ra_db::{RelativePathBuf, SourceDatabaseExt};
+use ra_db::SourceDatabaseExt;
 use ra_ide_db::{
     defs::{classify_name, classify_name_ref, Definition, NameClass, NameRefClass},
     RootDatabase,
@@ -109,9 +109,8 @@ fn rename_mod(
     let file_id = src.file_id.original_file(db);
     match src.value {
         ModuleSource::SourceFile(..) => {
-            let mod_path: RelativePathBuf = db.file_relative_path(file_id);
             // mod is defined in path/to/dir/mod.rs
-            let dst = if mod_path.file_stem() == Some("mod") {
+            let dst = if module.is_mod_rs(db) {
                 format!("../{}/mod.rs", new_name)
             } else {
                 format!("{}.rs", new_name)
diff --git a/crates/ra_ide/src/ssr.rs b/crates/ra_ide/src/ssr.rs
index 03f18c617..6cb96608b 100644
--- a/crates/ra_ide/src/ssr.rs
+++ b/crates/ra_ide/src/ssr.rs
@@ -41,7 +41,7 @@ pub fn parse_search_replace(
     match_finder.add_rule(rule);
     for &root in db.local_roots().iter() {
         let sr = db.source_root(root);
-        for file_id in sr.walk() {
+        for file_id in sr.iter() {
             if let Some(edit) = match_finder.edits_for_file(file_id) {
                 edits.push(SourceFileEdit { file_id, edit });
             }
diff --git a/crates/ra_ide_db/src/change.rs b/crates/ra_ide_db/src/change.rs
index 98993d571..a95f6c13c 100644
--- a/crates/ra_ide_db/src/change.rs
+++ b/crates/ra_ide_db/src/change.rs
@@ -9,26 +9,22 @@ use ra_db::{
     SourceRootId,
 };
 use ra_prof::{memory_usage, profile, Bytes};
-use rustc_hash::FxHashMap;
+use rustc_hash::FxHashSet;
 
 use crate::{symbol_index::SymbolsDatabase, RootDatabase};
 
 #[derive(Default)]
 pub struct AnalysisChange {
-    new_roots: Vec<(SourceRootId, bool)>,
-    roots_changed: FxHashMap<SourceRootId, RootChange>,
-    files_changed: Vec<(FileId, Arc<String>)>,
+    roots: Option<Vec<SourceRoot>>,
+    files_changed: Vec<(FileId, Option<Arc<String>>)>,
     crate_graph: Option<CrateGraph>,
 }
 
 impl fmt::Debug for AnalysisChange {
     fn fmt(&self, fmt: &mut fmt::Formatter) -> fmt::Result {
         let mut d = fmt.debug_struct("AnalysisChange");
-        if !self.new_roots.is_empty() {
-            d.field("new_roots", &self.new_roots);
-        }
-        if !self.roots_changed.is_empty() {
-            d.field("roots_changed", &self.roots_changed);
+        if let Some(roots) = &self.roots {
+            d.field("roots", roots);
         }
         if !self.files_changed.is_empty() {
             d.field("files_changed", &self.files_changed.len());
@@ -45,30 +41,14 @@ impl AnalysisChange {
         AnalysisChange::default()
     }
 
-    pub fn add_root(&mut self, root_id: SourceRootId, is_local: bool) {
-        self.new_roots.push((root_id, is_local));
-    }
-
-    pub fn add_file(
-        &mut self,
-        root_id: SourceRootId,
-        file_id: FileId,
-        path: RelativePathBuf,
-        text: Arc<String>,
-    ) {
-        let file = AddFile { file_id, path, text };
-        self.roots_changed.entry(root_id).or_default().added.push(file);
+    pub fn set_roots(&mut self, roots: Vec<SourceRoot>) {
+        self.roots = Some(roots);
     }
 
-    pub fn change_file(&mut self, file_id: FileId, new_text: Arc<String>) {
+    pub fn change_file(&mut self, file_id: FileId, new_text: Option<Arc<String>>) {
         self.files_changed.push((file_id, new_text))
     }
 
-    pub fn remove_file(&mut self, root_id: SourceRootId, file_id: FileId, path: RelativePathBuf) {
-        let file = RemoveFile { file_id, path };
-        self.roots_changed.entry(root_id).or_default().removed.push(file);
-    }
-
     pub fn set_crate_graph(&mut self, graph: CrateGraph) {
         self.crate_graph = Some(graph);
     }
@@ -114,31 +94,32 @@ impl RootDatabase {
         let _p = profile("RootDatabase::apply_change");
         self.request_cancellation();
         log::info!("apply_change {:?}", change);
-        if !change.new_roots.is_empty() {
-            let mut local_roots = Vec::clone(&self.local_roots());
-            let mut libraries = Vec::clone(&self.library_roots());
-            for (root_id, is_local) in change.new_roots {
-                let root =
-                    if is_local { SourceRoot::new_local() } else { SourceRoot::new_library() };
+        if let Some(roots) = change.roots {
+            let mut local_roots = FxHashSet::default();
+            let mut library_roots = FxHashSet::default();
+            for (idx, root) in roots.into_iter().enumerate() {
+                let root_id = SourceRootId(idx as u32);
                 let durability = durability(&root);
-                self.set_source_root_with_durability(root_id, Arc::new(root), durability);
-                if is_local {
-                    local_roots.push(root_id);
+                if root.is_library {
+                    library_roots.insert(root_id);
                 } else {
-                    libraries.push(root_id)
+                    local_roots.insert(root_id);
+                }
+                for file_id in root.iter() {
+                    self.set_file_source_root_with_durability(file_id, root_id, durability);
                 }
+                self.set_source_root_with_durability(root_id, Arc::new(root), durability);
             }
             self.set_local_roots_with_durability(Arc::new(local_roots), Durability::HIGH);
-            self.set_library_roots_with_durability(Arc::new(libraries), Durability::HIGH);
+            self.set_library_roots_with_durability(Arc::new(library_roots), Durability::HIGH);
         }
 
-        for (root_id, root_change) in change.roots_changed {
-            self.apply_root_change(root_id, root_change);
-        }
         for (file_id, text) in change.files_changed {
             let source_root_id = self.file_source_root(file_id);
             let source_root = self.source_root(source_root_id);
             let durability = durability(&source_root);
+            // XXX: can't actually remove the file, just reset the text
+            let text = text.unwrap_or_default();
             self.set_file_text_with_durability(file_id, text, durability)
         }
         if let Some(crate_graph) = change.crate_graph {
@@ -146,26 +127,6 @@ impl RootDatabase {
         }
     }
 
-    fn apply_root_change(&mut self, root_id: SourceRootId, root_change: RootChange) {
-        let mut source_root = SourceRoot::clone(&self.source_root(root_id));
-        let durability = durability(&source_root);
-        for add_file in root_change.added {
-            self.set_file_text_with_durability(add_file.file_id, add_file.text, durability);
-            self.set_file_relative_path_with_durability(
-                add_file.file_id,
-                add_file.path.clone(),
-                durability,
-            );
-            self.set_file_source_root_with_durability(add_file.file_id, root_id, durability);
-            source_root.insert_file(add_file.path, add_file.file_id);
-        }
-        for remove_file in root_change.removed {
-            self.set_file_text_with_durability(remove_file.file_id, Default::default(), durability);
-            source_root.remove_file(&remove_file.path);
-        }
-        self.set_source_root_with_durability(root_id, Arc::new(source_root), durability);
-    }
-
     pub fn maybe_collect_garbage(&mut self) {
         if cfg!(feature = "wasm") {
             return;
diff --git a/crates/ra_ide_db/src/search.rs b/crates/ra_ide_db/src/search.rs
index 335a1ad03..44d5c35e6 100644
--- a/crates/ra_ide_db/src/search.rs
+++ b/crates/ra_ide_db/src/search.rs
@@ -157,14 +157,14 @@ impl Definition {
         if let Some(Visibility::Public) = vis {
             let source_root_id = db.file_source_root(file_id);
             let source_root = db.source_root(source_root_id);
-            let mut res = source_root.walk().map(|id| (id, None)).collect::<FxHashMap<_, _>>();
+            let mut res = source_root.iter().map(|id| (id, None)).collect::<FxHashMap<_, _>>();
 
             let krate = module.krate();
             for rev_dep in krate.reverse_dependencies(db) {
                 let root_file = rev_dep.root_file(db);
                 let source_root_id = db.file_source_root(root_file);
                 let source_root = db.source_root(source_root_id);
-                res.extend(source_root.walk().map(|id| (id, None)));
+                res.extend(source_root.iter().map(|id| (id, None)));
             }
             return SearchScope::new(res);
         }
diff --git a/crates/ra_ide_db/src/symbol_index.rs b/crates/ra_ide_db/src/symbol_index.rs
index 25c99813f..6929055b2 100644
--- a/crates/ra_ide_db/src/symbol_index.rs
+++ b/crates/ra_ide_db/src/symbol_index.rs
@@ -42,7 +42,7 @@ use ra_syntax::{
     SyntaxNode, SyntaxNodePtr, TextRange, WalkEvent,
 };
 use rayon::prelude::*;
-use rustc_hash::FxHashMap;
+use rustc_hash::{FxHashMap, FxHashSet};
 
 use crate::RootDatabase;
 
@@ -93,11 +93,11 @@ pub trait SymbolsDatabase: hir::db::HirDatabase + SourceDatabaseExt + ParallelDa
     /// The set of "local" (that is, from the current workspace) roots.
     /// Files in local roots are assumed to change frequently.
     #[salsa::input]
-    fn local_roots(&self) -> Arc<Vec<SourceRootId>>;
+    fn local_roots(&self) -> Arc<FxHashSet<SourceRootId>>;
     /// The set of roots for crates.io libraries.
     /// Files in libraries are assumed to never change.
     #[salsa::input]
-    fn library_roots(&self) -> Arc<Vec<SourceRootId>>;
+    fn library_roots(&self) -> Arc<FxHashSet<SourceRootId>>;
 }
 
 fn library_symbols(
@@ -111,7 +111,7 @@ fn library_symbols(
         .map(|&root_id| {
             let root = db.source_root(root_id);
             let files = root
-                .walk()
+                .iter()
                 .map(|it| (it, SourceDatabaseExt::file_text(db, it)))
                 .collect::<Vec<_>>();
             let symbol_index = SymbolIndex::for_files(
@@ -175,7 +175,7 @@ pub fn world_symbols(db: &RootDatabase, query: Query) -> Vec<FileSymbol> {
         let mut files = Vec::new();
         for &root in db.local_roots().iter() {
             let sr = db.source_root(root);
-            files.extend(sr.walk())
+            files.extend(sr.iter())
         }
 
         let snap = Snap(db.snapshot());
diff --git a/crates/ra_project_model/src/lib.rs b/crates/ra_project_model/src/lib.rs
index 9541362f5..fe3e81689 100644
--- a/crates/ra_project_model/src/lib.rs
+++ b/crates/ra_project_model/src/lib.rs
@@ -13,7 +13,7 @@ use std::{
 
 use anyhow::{bail, Context, Result};
 use ra_cfg::CfgOptions;
-use ra_db::{CrateGraph, CrateName, Edition, Env, ExternSource, ExternSourceId, FileId};
+use ra_db::{CrateGraph, CrateName, Edition, Env, FileId};
 use rustc_hash::{FxHashMap, FxHashSet};
 use serde_json::from_reader;
 
@@ -246,7 +246,6 @@ impl ProjectWorkspace {
     pub fn to_crate_graph(
         &self,
         target: Option<&str>,
-        extern_source_roots: &FxHashMap<PathBuf, ExternSourceId>,
         proc_macro_client: &ProcMacroClient,
         load: &mut dyn FnMut(&Path) -> Option<FileId>,
     ) -> CrateGraph {
@@ -280,15 +279,11 @@ impl ProjectWorkspace {
                         };
 
                         let mut env = Env::default();
-                        let mut extern_source = ExternSource::default();
                         if let Some(out_dir) = &krate.out_dir {
                             // NOTE: cargo and rustc seem to hide non-UTF-8 strings from env! and option_env!()
                             if let Some(out_dir) = out_dir.to_str().map(|s| s.to_owned()) {
                                 env.set("OUT_DIR", out_dir);
                             }
-                            if let Some(&extern_source_id) = extern_source_roots.get(out_dir) {
-                                extern_source.set_extern_path(&out_dir, extern_source_id);
-                            }
                         }
                         let proc_macro = krate
                             .proc_macro_dylib_path
@@ -304,7 +299,6 @@ impl ProjectWorkspace {
                                 None,
                                 cfg_options,
                                 env,
-                                extern_source,
                                 proc_macro.unwrap_or_default(),
                             ),
                         ))
@@ -341,7 +335,6 @@ impl ProjectWorkspace {
                         let file_id = load(&sysroot[krate].root)?;
 
                         let env = Env::default();
-                        let extern_source = ExternSource::default();
                         let proc_macro = vec![];
                         let crate_name = CrateName::new(&sysroot[krate].name)
                             .expect("Sysroot crate names should not contain dashes");
@@ -352,7 +345,6 @@ impl ProjectWorkspace {
                             Some(crate_name),
                             cfg_options.clone(),
                             env,
-                            extern_source,
                             proc_macro,
                         );
                         Some((krate, crate_id))
@@ -409,15 +401,11 @@ impl ProjectWorkspace {
                                 opts
                             };
                             let mut env = Env::default();
-                            let mut extern_source = ExternSource::default();
                             if let Some(out_dir) = &cargo[pkg].out_dir {
                                 // NOTE: cargo and rustc seem to hide non-UTF-8 strings from env! and option_env!()
                                 if let Some(out_dir) = out_dir.to_str().map(|s| s.to_owned()) {
                                     env.set("OUT_DIR", out_dir);
                                 }
-                                if let Some(&extern_source_id) = extern_source_roots.get(out_dir) {
-                                    extern_source.set_extern_path(&out_dir, extern_source_id);
-                                }
                             }
                             let proc_macro = cargo[pkg]
                                 .proc_macro_dylib_path
@@ -431,7 +419,6 @@ impl ProjectWorkspace {
                                 Some(CrateName::normalize_dashes(&cargo[pkg].name)),
                                 cfg_options,
                                 env,
-                                extern_source,
                                 proc_macro.clone(),
                             );
                             if cargo[tgt].kind == TargetKind::Lib {
diff --git a/crates/rust-analyzer/Cargo.toml b/crates/rust-analyzer/Cargo.toml
index f289a02f6..68d04f3e3 100644
--- a/crates/rust-analyzer/Cargo.toml
+++ b/crates/rust-analyzer/Cargo.toml
@@ -38,7 +38,8 @@ ra_prof = { path = "../ra_prof" }
 ra_project_model = { path = "../ra_project_model" }
 ra_syntax = { path = "../ra_syntax" }
 ra_text_edit = { path = "../ra_text_edit" }
-ra_vfs = "0.6.0"
+vfs = { path = "../vfs" }
+vfs-notify = { path = "../vfs-notify" }
 ra_cfg = { path = "../ra_cfg"}
 
 # This should only be used in CLI
diff --git a/crates/rust-analyzer/src/cargo_target_spec.rs b/crates/rust-analyzer/src/cargo_target_spec.rs
index 5c22dce0d..65f90c83c 100644
--- a/crates/rust-analyzer/src/cargo_target_spec.rs
+++ b/crates/rust-analyzer/src/cargo_target_spec.rs
@@ -1,5 +1,7 @@
 //! See `CargoTargetSpec`
 
+use std::path::PathBuf;
+
 use ra_cfg::CfgExpr;
 use ra_ide::{FileId, RunnableKind, TestId};
 use ra_project_model::{self, TargetKind};
@@ -12,6 +14,7 @@ use crate::{global_state::GlobalStateSnapshot, Result};
 /// build/test/run the target.
 #[derive(Clone)]
 pub(crate) struct CargoTargetSpec {
+    pub(crate) workspace_root: PathBuf,
     pub(crate) package: String,
     pub(crate) target: String,
     pub(crate) target_kind: TargetKind,
@@ -101,6 +104,7 @@ impl CargoTargetSpec {
             None => return Ok(None),
         };
         let res = CargoTargetSpec {
+            workspace_root: cargo_ws.workspace_root().to_path_buf(),
             package: cargo_ws.package_flag(&cargo_ws[cargo_ws[target].package]),
             target: cargo_ws[target].name.clone(),
             target_kind: cargo_ws[target].kind,
diff --git a/crates/rust-analyzer/src/cli/analysis_bench.rs b/crates/rust-analyzer/src/cli/analysis_bench.rs
index b20efe98d..4fe99ff68 100644
--- a/crates/rust-analyzer/src/cli/analysis_bench.rs
+++ b/crates/rust-analyzer/src/cli/analysis_bench.rs
@@ -1,6 +1,7 @@
 //! Benchmark operations like highlighting or goto definition.
 
 use std::{
+    convert::TryFrom,
     path::{Path, PathBuf},
     str::FromStr,
     sync::Arc,
@@ -10,7 +11,7 @@ use std::{
 use anyhow::{format_err, Result};
 use ra_db::{
     salsa::{Database, Durability},
-    FileId, SourceDatabaseExt,
+    AbsPathBuf, FileId,
 };
 use ra_ide::{Analysis, AnalysisChange, AnalysisHost, CompletionConfig, FilePosition, LineCol};
 
@@ -53,8 +54,7 @@ pub fn analysis_bench(
 
     let start = Instant::now();
     eprint!("loading: ");
-    let (mut host, roots) = load_cargo(path, load_output_dirs, with_proc_macro)?;
-    let db = host.raw_database();
+    let (mut host, vfs) = load_cargo(path, load_output_dirs, with_proc_macro)?;
     eprintln!("{:?}\n", start.elapsed());
 
     let file_id = {
@@ -62,22 +62,9 @@ pub fn analysis_bench(
             BenchWhat::Highlight { path } => path,
             BenchWhat::Complete(pos) | BenchWhat::GotoDef(pos) => &pos.path,
         };
-        let path = std::env::current_dir()?.join(path).canonicalize()?;
-        roots
-            .iter()
-            .find_map(|(source_root_id, project_root)| {
-                if project_root.is_member() {
-                    for file_id in db.source_root(*source_root_id).walk() {
-                        let rel_path = db.file_relative_path(file_id);
-                        let abs_path = rel_path.to_path(project_root.path());
-                        if abs_path == path {
-                            return Some(file_id);
-                        }
-                    }
-                }
-                None
-            })
-            .ok_or_else(|| format_err!("Can't find {}", path.display()))?
+        let path = AbsPathBuf::try_from(path.clone()).unwrap();
+        let path = path.into();
+        vfs.file_id(&path).ok_or_else(|| format_err!("Can't find {}", path))?
     };
 
     match &what {
@@ -149,7 +136,7 @@ fn do_work<F: Fn(&Analysis) -> T, T>(host: &mut AnalysisHost, file_id: FileId, w
             let mut text = host.analysis().file_text(file_id).unwrap().to_string();
             text.push_str("\n/* Hello world */\n");
             let mut change = AnalysisChange::new();
-            change.change_file(file_id, Arc::new(text));
+            change.change_file(file_id, Some(Arc::new(text)));
             host.apply_change(change);
         }
         work(&host.analysis());
diff --git a/crates/rust-analyzer/src/cli/analysis_stats.rs b/crates/rust-analyzer/src/cli/analysis_stats.rs
index 72183da15..90868760b 100644
--- a/crates/rust-analyzer/src/cli/analysis_stats.rs
+++ b/crates/rust-analyzer/src/cli/analysis_stats.rs
@@ -28,26 +28,14 @@ pub fn analysis_stats(
     with_proc_macro: bool,
 ) -> Result<()> {
     let db_load_time = Instant::now();
-    let (mut host, roots) = load_cargo(path, load_output_dirs, with_proc_macro)?;
+    let (mut host, vfs) = load_cargo(path, load_output_dirs, with_proc_macro)?;
     let db = host.raw_database();
-    println!("Database loaded, {} roots, {:?}", roots.len(), db_load_time.elapsed());
+    println!("Database loaded {:?}", db_load_time.elapsed());
     let analysis_time = Instant::now();
     let mut num_crates = 0;
     let mut visited_modules = HashSet::new();
     let mut visit_queue = Vec::new();
 
-    let members =
-        roots
-            .into_iter()
-            .filter_map(|(source_root_id, project_root)| {
-                if with_deps || project_root.is_member() {
-                    Some(source_root_id)
-                } else {
-                    None
-                }
-            })
-            .collect::<HashSet<_>>();
-
     let mut krates = Crate::all(db);
     if randomize {
         krates.shuffle(&mut thread_rng());
@@ -55,7 +43,10 @@ pub fn analysis_stats(
     for krate in krates {
         let module = krate.root_module(db).expect("crate without root module");
         let file_id = module.definition_source(db).file_id;
-        if members.contains(&db.file_source_root(file_id.original_file(db))) {
+        let file_id = file_id.original_file(db);
+        let source_root = db.file_source_root(file_id);
+        let source_root = db.source_root(source_root);
+        if !source_root.is_library || with_deps {
             num_crates += 1;
             visit_queue.push(module);
         }
@@ -128,7 +119,7 @@ pub fn analysis_stats(
         if verbosity.is_verbose() {
             let src = f.source(db);
             let original_file = src.file_id.original_file(db);
-            let path = db.file_relative_path(original_file);
+            let path = vfs.file_path(original_file);
             let syntax_range = src.value.syntax().text_range();
             format_to!(msg, " ({:?} {:?})", path, syntax_range);
         }
@@ -196,7 +187,7 @@ pub fn analysis_stats(
                         let root = db.parse_or_expand(src.file_id).unwrap();
                         let node = src.map(|e| e.to_node(&root).syntax().clone());
                         let original_range = original_range(db, node.as_ref());
-                        let path = db.file_relative_path(original_range.file_id);
+                        let path = vfs.file_path(original_range.file_id);
                         let line_index =
                             host.analysis().file_line_index(original_range.file_id).unwrap();
                         let text_range = original_range.range;
diff --git a/crates/rust-analyzer/src/cli/diagnostics.rs b/crates/rust-analyzer/src/cli/diagnostics.rs
index 60daefa3e..82b3a8a53 100644
--- a/crates/rust-analyzer/src/cli/diagnostics.rs
+++ b/crates/rust-analyzer/src/cli/diagnostics.rs
@@ -2,68 +2,57 @@
 //! code if any errors are found.
 
 use anyhow::anyhow;
+use hir::Crate;
 use ra_db::SourceDatabaseExt;
 use ra_ide::Severity;
 use std::{collections::HashSet, path::Path};
 
 use crate::cli::{load_cargo::load_cargo, Result};
-use hir::Semantics;
 
 pub fn diagnostics(
     path: &Path,
     load_output_dirs: bool,
     with_proc_macro: bool,
-    all: bool,
+    _all: bool,
 ) -> Result<()> {
-    let (host, roots) = load_cargo(path, load_output_dirs, with_proc_macro)?;
+    let (host, _vfs) = load_cargo(path, load_output_dirs, with_proc_macro)?;
     let db = host.raw_database();
     let analysis = host.analysis();
-    let semantics = Semantics::new(db);
-    let members = roots
-        .into_iter()
-        .filter_map(|(source_root_id, project_root)| {
-            // filter out dependencies
-            if project_root.is_member() {
-                Some(source_root_id)
-            } else {
-                None
-            }
-        })
-        .collect::<HashSet<_>>();
 
     let mut found_error = false;
     let mut visited_files = HashSet::new();
-    for source_root_id in members {
-        for file_id in db.source_root(source_root_id).walk() {
-            // Filter out files which are not actually modules (unless `--all` flag is
-            // passed). In the rust-analyzer repository this filters out the parser test files.
-            if semantics.to_module_def(file_id).is_some() || all {
-                if !visited_files.contains(&file_id) {
-                    let crate_name = if let Some(module) = semantics.to_module_def(file_id) {
-                        if let Some(name) = module.krate().display_name(db) {
-                            format!("{}", name)
-                        } else {
-                            String::from("unknown")
-                        }
-                    } else {
-                        String::from("unknown")
-                    };
-                    println!(
-                        "processing crate: {}, module: {}",
-                        crate_name,
-                        db.file_relative_path(file_id)
-                    );
-                    for diagnostic in analysis.diagnostics(file_id).unwrap() {
-                        if matches!(diagnostic.severity, Severity::Error) {
-                            found_error = true;
-                        }
 
-                        println!("{:?}", diagnostic);
-                    }
+    let mut work = Vec::new();
+    let krates = Crate::all(db);
+    for krate in krates {
+        let module = krate.root_module(db).expect("crate without root module");
+        let file_id = module.definition_source(db).file_id;
+        let file_id = file_id.original_file(db);
+        let source_root = db.file_source_root(file_id);
+        let source_root = db.source_root(source_root);
+        if !source_root.is_library {
+            work.push(module);
+        }
+    }
 
-                    visited_files.insert(file_id);
+    for module in work {
+        let file_id = module.definition_source(db).file_id.original_file(db);
+        if !visited_files.contains(&file_id) {
+            let crate_name = if let Some(name) = module.krate().display_name(db) {
+                format!("{}", name)
+            } else {
+                String::from("unknown")
+            };
+            println!("processing crate: {}, module: {}", crate_name, _vfs.file_path(file_id));
+            for diagnostic in analysis.diagnostics(file_id).unwrap() {
+                if matches!(diagnostic.severity, Severity::Error) {
+                    found_error = true;
                 }
+
+                println!("{:?}", diagnostic);
             }
+
+            visited_files.insert(file_id);
         }
     }
 
diff --git a/crates/rust-analyzer/src/cli/load_cargo.rs b/crates/rust-analyzer/src/cli/load_cargo.rs
index 97367d7c6..00bbbaf40 100644
--- a/crates/rust-analyzer/src/cli/load_cargo.rs
+++ b/crates/rust-analyzer/src/cli/load_cargo.rs
@@ -1,32 +1,21 @@
 //! Loads a Cargo project into a static instance of analysis, without support
 //! for incorporating changes.
-
-use std::path::{Path, PathBuf};
+use std::{convert::TryFrom, path::Path, sync::Arc};
 
 use anyhow::Result;
 use crossbeam_channel::{unbounded, Receiver};
-use ra_db::{ExternSourceId, FileId, SourceRootId};
+use ra_db::{AbsPathBuf, CrateGraph};
 use ra_ide::{AnalysisChange, AnalysisHost};
-use ra_project_model::{
-    CargoConfig, PackageRoot, ProcMacroClient, ProjectManifest, ProjectWorkspace,
-};
-use ra_vfs::{RootEntry, Vfs, VfsChange, VfsTask, Watch};
-use rustc_hash::{FxHashMap, FxHashSet};
-
-use crate::vfs_glob::RustPackageFilterBuilder;
+use ra_project_model::{CargoConfig, ProcMacroClient, ProjectManifest, ProjectWorkspace};
+use vfs::loader::Handle;
 
-fn vfs_file_to_id(f: ra_vfs::VfsFile) -> FileId {
-    FileId(f.0)
-}
-fn vfs_root_to_id(r: ra_vfs::VfsRoot) -> SourceRootId {
-    SourceRootId(r.0)
-}
+use crate::global_state::{ProjectFolders, SourceRootConfig};
 
 pub fn load_cargo(
     root: &Path,
     load_out_dirs_from_check: bool,
     with_proc_macro: bool,
-) -> Result<(AnalysisHost, FxHashMap<SourceRootId, PackageRoot>)> {
+) -> Result<(AnalysisHost, vfs::Vfs)> {
     let root = std::env::current_dir()?.join(root);
     let root = ProjectManifest::discover_single(&root)?;
     let ws = ProjectWorkspace::load(
@@ -35,123 +24,74 @@ pub fn load_cargo(
         true,
     )?;
 
-    let mut extern_dirs = FxHashSet::default();
-
     let (sender, receiver) = unbounded();
-    let sender = Box::new(move |t| sender.send(t).unwrap());
-
-    let mut roots = Vec::new();
-    let project_roots = ws.to_roots();
-    for root in &project_roots {
-        roots.push(RootEntry::new(
-            root.path().to_owned(),
-            RustPackageFilterBuilder::default().set_member(root.is_member()).into_vfs_filter(),
-        ));
-
-        if let Some(out_dir) = root.out_dir() {
-            extern_dirs.insert(out_dir.to_path_buf());
-            roots.push(RootEntry::new(
-                out_dir.to_owned(),
-                RustPackageFilterBuilder::default().set_member(root.is_member()).into_vfs_filter(),
-            ))
-        }
-    }
-
-    let (mut vfs, roots) = Vfs::new(roots, sender, Watch(false));
-
-    let source_roots = roots
-        .into_iter()
-        .map(|vfs_root| {
-            let source_root_id = vfs_root_to_id(vfs_root);
-            let project_root = project_roots
-                .iter()
-                .find(|it| it.path() == vfs.root2path(vfs_root))
-                .unwrap()
-                .clone();
-            (source_root_id, project_root)
-        })
-        .collect::<FxHashMap<_, _>>();
+    let mut vfs = vfs::Vfs::default();
+    let mut loader = {
+        let loader =
+            vfs_notify::LoaderHandle::spawn(Box::new(move |msg| sender.send(msg).unwrap()));
+        Box::new(loader)
+    };
 
-    let proc_macro_client = if !with_proc_macro {
-        ProcMacroClient::dummy()
-    } else {
+    let proc_macro_client = if with_proc_macro {
         let path = std::env::current_exe()?;
         ProcMacroClient::extern_process(path, &["proc-macro"]).unwrap()
+    } else {
+        ProcMacroClient::dummy()
     };
-    let host = load(&source_roots, ws, &mut vfs, receiver, extern_dirs, &proc_macro_client);
-    Ok((host, source_roots))
+
+    let crate_graph = ws.to_crate_graph(None, &proc_macro_client, &mut |path: &Path| {
+        let path = AbsPathBuf::try_from(path.to_path_buf()).unwrap();
+        let contents = loader.load_sync(&path);
+        let path = vfs::VfsPath::from(path);
+        vfs.set_file_contents(path.clone(), contents);
+        vfs.file_id(&path)
+    });
+
+    let project_folders = ProjectFolders::new(&[ws]);
+    loader.set_config(vfs::loader::Config { load: project_folders.load, watch: vec![] });
+
+    log::debug!("crate graph: {:?}", crate_graph);
+    let host = load(crate_graph, project_folders.source_root_config, &mut vfs, &receiver);
+    Ok((host, vfs))
 }
 
 pub(crate) fn load(
-    source_roots: &FxHashMap<SourceRootId, PackageRoot>,
-    ws: ProjectWorkspace,
-    vfs: &mut Vfs,
-    receiver: Receiver<VfsTask>,
-    extern_dirs: FxHashSet<PathBuf>,
-    proc_macro_client: &ProcMacroClient,
+    crate_graph: CrateGraph,
+    source_root_config: SourceRootConfig,
+    vfs: &mut vfs::Vfs,
+    receiver: &Receiver<vfs::loader::Message>,
 ) -> AnalysisHost {
     let lru_cap = std::env::var("RA_LRU_CAP").ok().and_then(|it| it.parse::<usize>().ok());
     let mut host = AnalysisHost::new(lru_cap);
     let mut analysis_change = AnalysisChange::new();
 
     // wait until Vfs has loaded all roots
-    let mut roots_loaded = FxHashSet::default();
-    let mut extern_source_roots = FxHashMap::default();
     for task in receiver {
-        vfs.handle_task(task);
-        let mut done = false;
-        for change in vfs.commit_changes() {
-            match change {
-                VfsChange::AddRoot { root, files } => {
-                    let source_root_id = vfs_root_to_id(root);
-                    let is_local = source_roots[&source_root_id].is_member();
-                    log::debug!(
-                        "loaded source root {:?} with path {:?}",
-                        source_root_id,
-                        vfs.root2path(root)
-                    );
-                    analysis_change.add_root(source_root_id, is_local);
-
-                    let vfs_root_path = vfs.root2path(root);
-                    if extern_dirs.contains(&vfs_root_path) {
-                        extern_source_roots.insert(vfs_root_path, ExternSourceId(root.0));
-                    }
-
-                    let mut file_map = FxHashMap::default();
-                    for (vfs_file, path, text) in files {
-                        let file_id = vfs_file_to_id(vfs_file);
-                        analysis_change.add_file(source_root_id, file_id, path.clone(), text);
-                        file_map.insert(path, file_id);
-                    }
-                    roots_loaded.insert(source_root_id);
-                    if roots_loaded.len() == vfs.n_roots() {
-                        done = true;
-                    }
-                }
-                VfsChange::AddFile { root, file, path, text } => {
-                    let source_root_id = vfs_root_to_id(root);
-                    let file_id = vfs_file_to_id(file);
-                    analysis_change.add_file(source_root_id, file_id, path, text);
+        match task {
+            vfs::loader::Message::Progress { n_entries_done, n_entries_total } => {
+                if n_entries_done == n_entries_total {
+                    break;
                 }
-                VfsChange::RemoveFile { .. } | VfsChange::ChangeFile { .. } => {
-                    // We just need the first scan, so just ignore these
+            }
+            vfs::loader::Message::Loaded { files } => {
+                for (path, contents) in files {
+                    vfs.set_file_contents(path.into(), contents)
                 }
             }
         }
-        if done {
-            break;
+    }
+    let changes = vfs.take_changes();
+    for file in changes {
+        if file.exists() {
+            let contents = vfs.file_contents(file.file_id).to_vec();
+            if let Ok(text) = String::from_utf8(contents) {
+                analysis_change.change_file(file.file_id, Some(Arc::new(text)))
+            }
         }
     }
+    let source_roots = source_root_config.partition(&vfs);
+    analysis_change.set_roots(source_roots);
 
-    let crate_graph =
-        ws.to_crate_graph(None, &extern_source_roots, proc_macro_client, &mut |path: &Path| {
-            // Some path from metadata will be non canonicalized, e.g. /foo/../bar/lib.rs
-            let path = path.canonicalize().ok()?;
-            let vfs_file = vfs.load(&path);
-            log::debug!("vfs file {:?} -> {:?}", path, vfs_file);
-            vfs_file.map(vfs_file_to_id)
-        });
-    log::debug!("crate graph: {:?}", crate_graph);
     analysis_change.set_crate_graph(crate_graph);
 
     host.apply_change(analysis_change);
@@ -167,7 +107,7 @@ mod tests {
     #[test]
     fn test_loading_rust_analyzer() {
         let path = Path::new(env!("CARGO_MANIFEST_DIR")).parent().unwrap().parent().unwrap();
-        let (host, _roots) = load_cargo(path, false, false).unwrap();
+        let (host, _vfs) = load_cargo(path, false, false).unwrap();
         let n_crates = Crate::all(host.raw_database()).len();
         // RA has quite a few crates, but the exact count doesn't matter
         assert!(n_crates > 20);
diff --git a/crates/rust-analyzer/src/from_proto.rs b/crates/rust-analyzer/src/from_proto.rs
index 40f856e6e..40d440c67 100644
--- a/crates/rust-analyzer/src/from_proto.rs
+++ b/crates/rust-analyzer/src/from_proto.rs
@@ -1,10 +1,22 @@
 //! Conversion lsp_types types to rust-analyzer specific ones.
+use std::convert::TryFrom;
+
 use ra_db::{FileId, FilePosition, FileRange};
 use ra_ide::{LineCol, LineIndex};
 use ra_syntax::{TextRange, TextSize};
+use vfs::AbsPathBuf;
 
 use crate::{global_state::GlobalStateSnapshot, Result};
 
+pub(crate) fn abs_path(url: &lsp_types::Url) -> Result<AbsPathBuf> {
+    let path = url.to_file_path().map_err(|()| "url is not a file")?;
+    Ok(AbsPathBuf::try_from(path).unwrap())
+}
+
+pub(crate) fn vfs_path(url: &lsp_types::Url) -> Result<vfs::VfsPath> {
+    abs_path(url).map(vfs::VfsPath::from)
+}
+
 pub(crate) fn offset(line_index: &LineIndex, position: lsp_types::Position) -> TextSize {
     let line_col = LineCol { line: position.line as u32, col_utf16: position.character as u32 };
     line_index.offset(line_col)
diff --git a/crates/rust-analyzer/src/global_state.rs b/crates/rust-analyzer/src/global_state.rs
index d04ef4c61..e2ddb7933 100644
--- a/crates/rust-analyzer/src/global_state.rs
+++ b/crates/rust-analyzer/src/global_state.rs
@@ -3,30 +3,28 @@
 //!
 //! Each tick provides an immutable snapshot of the state as `WorldSnapshot`.
 
-use std::{
-    path::{Path, PathBuf},
-    sync::Arc,
-};
+use std::{convert::TryFrom, path::Path, sync::Arc};
 
 use crossbeam_channel::{unbounded, Receiver};
 use lsp_types::Url;
 use parking_lot::RwLock;
+use ra_db::{CrateId, SourceRoot, VfsPath};
 use ra_flycheck::{Flycheck, FlycheckConfig};
-use ra_ide::{Analysis, AnalysisChange, AnalysisHost, CrateGraph, FileId, SourceRootId};
+use ra_ide::{Analysis, AnalysisChange, AnalysisHost, CrateGraph, FileId};
 use ra_project_model::{CargoWorkspace, ProcMacroClient, ProjectWorkspace, Target};
-use ra_vfs::{LineEndings, RootEntry, Vfs, VfsChange, VfsFile, VfsTask, Watch};
 use stdx::format_to;
+use vfs::{file_set::FileSetConfig, loader::Handle, AbsPathBuf};
 
 use crate::{
     config::{Config, FilesWatcher},
     diagnostics::{CheckFixes, DiagnosticCollection},
+    from_proto,
+    line_endings::LineEndings,
     main_loop::request_metrics::{LatestRequests, RequestMetrics},
     to_proto::url_from_abs_path,
-    vfs_glob::{Glob, RustPackageFilterBuilder},
-    LspError, Result,
+    Result,
 };
-use ra_db::{CrateId, ExternSourceId};
-use rustc_hash::{FxHashMap, FxHashSet};
+use rustc_hash::FxHashMap;
 
 fn create_flycheck(workspaces: &[ProjectWorkspace], config: &FlycheckConfig) -> Option<Flycheck> {
     // FIXME: Figure out the multi-workspace situation
@@ -50,15 +48,16 @@ fn create_flycheck(workspaces: &[ProjectWorkspace], config: &FlycheckConfig) ->
 #[derive(Debug)]
 pub struct GlobalState {
     pub config: Config,
-    pub local_roots: Vec<PathBuf>,
     pub workspaces: Arc<Vec<ProjectWorkspace>>,
     pub analysis_host: AnalysisHost,
-    pub vfs: Arc<RwLock<Vfs>>,
-    pub task_receiver: Receiver<VfsTask>,
+    pub loader: Box<dyn vfs::loader::Handle>,
+    pub task_receiver: Receiver<vfs::loader::Message>,
     pub flycheck: Option<Flycheck>,
     pub diagnostics: DiagnosticCollection,
     pub proc_macro_client: ProcMacroClient,
+    pub(crate) vfs: Arc<RwLock<(vfs::Vfs, FxHashMap<FileId, LineEndings>)>>,
     pub(crate) latest_requests: Arc<RwLock<LatestRequests>>,
+    source_root_config: SourceRootConfig,
 }
 
 /// An immutable snapshot of the world's state at a point in time.
@@ -68,62 +67,21 @@ pub struct GlobalStateSnapshot {
     pub analysis: Analysis,
     pub check_fixes: CheckFixes,
     pub(crate) latest_requests: Arc<RwLock<LatestRequests>>,
-    vfs: Arc<RwLock<Vfs>>,
+    vfs: Arc<RwLock<(vfs::Vfs, FxHashMap<FileId, LineEndings>)>>,
 }
 
 impl GlobalState {
     pub fn new(
         workspaces: Vec<ProjectWorkspace>,
         lru_capacity: Option<usize>,
-        exclude_globs: &[Glob],
         config: Config,
     ) -> GlobalState {
         let mut change = AnalysisChange::new();
 
-        let mut extern_dirs: FxHashSet<PathBuf> = FxHashSet::default();
-
-        let mut local_roots = Vec::new();
-        let roots: Vec<_> = {
-            let create_filter = |is_member| {
-                RustPackageFilterBuilder::default()
-                    .set_member(is_member)
-                    .exclude(exclude_globs.iter().cloned())
-                    .into_vfs_filter()
-            };
-            let mut roots = Vec::new();
-            for root in workspaces.iter().flat_map(ProjectWorkspace::to_roots) {
-                let path = root.path().to_owned();
-                if root.is_member() {
-                    local_roots.push(path.clone());
-                }
-                roots.push(RootEntry::new(path, create_filter(root.is_member())));
-                if let Some(out_dir) = root.out_dir() {
-                    extern_dirs.insert(out_dir.to_path_buf());
-                    roots.push(RootEntry::new(
-                        out_dir.to_path_buf(),
-                        create_filter(root.is_member()),
-                    ))
-                }
-            }
-            roots
-        };
-
-        let (task_sender, task_receiver) = unbounded();
-        let task_sender = Box::new(move |t| task_sender.send(t).unwrap());
-        let watch = Watch(matches!(config.files.watcher, FilesWatcher::Notify));
-        let (mut vfs, vfs_roots) = Vfs::new(roots, task_sender, watch);
+        let project_folders = ProjectFolders::new(&workspaces);
 
-        let mut extern_source_roots = FxHashMap::default();
-        for r in vfs_roots {
-            let vfs_root_path = vfs.root2path(r);
-            let is_local = local_roots.iter().any(|it| vfs_root_path.starts_with(it));
-            change.add_root(SourceRootId(r.0), is_local);
-
-            // FIXME: add path2root in vfs to simpily this logic
-            if extern_dirs.contains(&vfs_root_path) {
-                extern_source_roots.insert(vfs_root_path, ExternSourceId(r.0));
-            }
-        }
+        let (task_sender, task_receiver) = unbounded::<vfs::loader::Message>();
+        let mut vfs = vfs::Vfs::default();
 
         let proc_macro_client = match &config.proc_macro_srv {
             None => ProcMacroClient::dummy(),
@@ -140,18 +98,30 @@ impl GlobalState {
             },
         };
 
+        let mut loader = {
+            let loader = vfs_notify::LoaderHandle::spawn(Box::new(move |msg| {
+                task_sender.send(msg).unwrap()
+            }));
+            Box::new(loader)
+        };
+        let watch = match config.files.watcher {
+            FilesWatcher::Client => vec![],
+            FilesWatcher::Notify => project_folders.watch,
+        };
+        loader.set_config(vfs::loader::Config { load: project_folders.load, watch });
+
         // Create crate graph from all the workspaces
         let mut crate_graph = CrateGraph::default();
         let mut load = |path: &Path| {
-            // Some path from metadata will be non canonicalized, e.g. /foo/../bar/lib.rs
-            let path = path.canonicalize().ok()?;
-            let vfs_file = vfs.load(&path);
-            vfs_file.map(|f| FileId(f.0))
+            let path = AbsPathBuf::try_from(path.to_path_buf()).ok()?;
+            let contents = loader.load_sync(&path);
+            let path = vfs::VfsPath::from(path);
+            vfs.set_file_contents(path.clone(), contents);
+            vfs.file_id(&path)
         };
         for ws in workspaces.iter() {
             crate_graph.extend(ws.to_crate_graph(
                 config.cargo.target.as_deref(),
-                &extern_source_roots,
                 &proc_macro_client,
                 &mut load,
             ));
@@ -162,18 +132,21 @@ impl GlobalState {
 
         let mut analysis_host = AnalysisHost::new(lru_capacity);
         analysis_host.apply_change(change);
-        GlobalState {
+        let mut res = GlobalState {
             config,
-            local_roots,
             workspaces: Arc::new(workspaces),
             analysis_host,
-            vfs: Arc::new(RwLock::new(vfs)),
+            loader,
+            vfs: Arc::new(RwLock::new((vfs, FxHashMap::default()))),
             task_receiver,
             latest_requests: Default::default(),
             flycheck,
             diagnostics: Default::default(),
             proc_macro_client,
-        }
+            source_root_config: project_folders.source_root_config,
+        };
+        res.process_changes();
+        res
     }
 
     pub fn update_configuration(&mut self, config: Config) {
@@ -186,33 +159,40 @@ impl GlobalState {
         self.config = config;
     }
 
-    /// Returns a vec of libraries
-    /// FIXME: better API here
-    pub fn process_changes(&mut self, roots_scanned: &mut usize) -> bool {
-        let changes = self.vfs.write().commit_changes();
-        if changes.is_empty() {
-            return false;
-        }
-        let mut change = AnalysisChange::new();
-        for c in changes {
-            match c {
-                VfsChange::AddRoot { root, files } => {
-                    *roots_scanned += 1;
-                    for (file, path, text) in files {
-                        change.add_file(SourceRootId(root.0), FileId(file.0), path, text);
+    pub fn process_changes(&mut self) -> bool {
+        let change = {
+            let mut change = AnalysisChange::new();
+            let (vfs, line_endings_map) = &mut *self.vfs.write();
+            let changed_files = vfs.take_changes();
+            if changed_files.is_empty() {
+                return false;
+            }
+
+            let fs_op = changed_files.iter().any(|it| it.is_created_or_deleted());
+            if fs_op {
+                let roots = self.source_root_config.partition(&vfs);
+                change.set_roots(roots)
+            }
+
+            for file in changed_files {
+                let text = if file.exists() {
+                    let bytes = vfs.file_contents(file.file_id).to_vec();
+                    match String::from_utf8(bytes).ok() {
+                        Some(text) => {
+                            let (text, line_endings) = LineEndings::normalize(text);
+                            line_endings_map.insert(file.file_id, line_endings);
+                            Some(Arc::new(text))
+                        }
+                        None => None,
                     }
-                }
-                VfsChange::AddFile { root, file, path, text } => {
-                    change.add_file(SourceRootId(root.0), FileId(file.0), path, text);
-                }
-                VfsChange::RemoveFile { root, file, path } => {
-                    change.remove_file(SourceRootId(root.0), FileId(file.0), path)
-                }
-                VfsChange::ChangeFile { file, text } => {
-                    change.change_file(FileId(file.0), text);
-                }
+                } else {
+                    None
+                };
+                change.change_file(file.file_id, text);
             }
-        }
+            change
+        };
+
         self.analysis_host.apply_change(change);
         true
     }
@@ -242,35 +222,31 @@ impl GlobalState {
 }
 
 impl GlobalStateSnapshot {
-    pub fn analysis(&self) -> &Analysis {
+    pub(crate) fn analysis(&self) -> &Analysis {
         &self.analysis
     }
 
-    pub fn url_to_file_id(&self, url: &Url) -> Result<FileId> {
-        let path = url.to_file_path().map_err(|()| format!("invalid uri: {}", url))?;
-        let file = self.vfs.read().path2file(&path).ok_or_else(|| {
-            // Show warning as this file is outside current workspace
-            // FIXME: just handle such files, and remove `LspError::UNKNOWN_FILE`.
-            LspError {
-                code: LspError::UNKNOWN_FILE,
-                message: "Rust file outside current workspace is not supported yet.".to_string(),
-            }
-        })?;
-        Ok(FileId(file.0))
+    pub(crate) fn url_to_file_id(&self, url: &Url) -> Result<FileId> {
+        let path = from_proto::abs_path(url)?;
+        let path = path.into();
+        let res =
+            self.vfs.read().0.file_id(&path).ok_or_else(|| format!("file not found: {}", path))?;
+        Ok(res)
     }
 
-    pub fn file_id_to_url(&self, id: FileId) -> Url {
-        file_id_to_url(&self.vfs.read(), id)
+    pub(crate) fn file_id_to_url(&self, id: FileId) -> Url {
+        file_id_to_url(&self.vfs.read().0, id)
     }
 
-    pub fn file_line_endings(&self, id: FileId) -> LineEndings {
-        self.vfs.read().file_line_endings(VfsFile(id.0))
+    pub(crate) fn file_line_endings(&self, id: FileId) -> LineEndings {
+        self.vfs.read().1[&id]
     }
 
     pub fn anchored_path(&self, file_id: FileId, path: &str) -> Url {
-        let mut base = self.vfs.read().file2path(VfsFile(file_id.0));
+        let mut base = self.vfs.read().0.file_path(file_id);
         base.pop();
         let path = base.join(path);
+        let path = path.as_path().unwrap();
         url_from_abs_path(&path)
     }
 
@@ -279,7 +255,8 @@ impl GlobalStateSnapshot {
         crate_id: CrateId,
     ) -> Option<(&CargoWorkspace, Target)> {
         let file_id = self.analysis().crate_root(crate_id).ok()?;
-        let path = self.vfs.read().file2path(VfsFile(file_id.0));
+        let path = self.vfs.read().0.file_path(file_id);
+        let path = path.as_path()?;
         self.workspaces.iter().find_map(|ws| match ws {
             ProjectWorkspace::Cargo { cargo, .. } => {
                 cargo.target_by_root(&path).map(|it| (cargo, it))
@@ -307,14 +284,86 @@ impl GlobalStateSnapshot {
         );
         buf
     }
+}
+
+pub(crate) fn file_id_to_url(vfs: &vfs::Vfs, id: FileId) -> Url {
+    let path = vfs.file_path(id);
+    let path = path.as_path().unwrap();
+    url_from_abs_path(&path)
+}
+
+#[derive(Default)]
+pub(crate) struct ProjectFolders {
+    pub(crate) load: Vec<vfs::loader::Entry>,
+    pub(crate) watch: Vec<usize>,
+    pub(crate) source_root_config: SourceRootConfig,
+}
+
+impl ProjectFolders {
+    pub(crate) fn new(workspaces: &[ProjectWorkspace]) -> ProjectFolders {
+        let mut res = ProjectFolders::default();
+        let mut fsc = FileSetConfig::builder();
+        let mut local_filesets = vec![];
+
+        for root in workspaces.iter().flat_map(|it| it.to_roots()) {
+            let path = root.path().to_owned();
+
+            let mut file_set_roots: Vec<VfsPath> = vec![];
+
+            let path = AbsPathBuf::try_from(path).unwrap();
+            let entry = if root.is_member() {
+                vfs::loader::Entry::local_cargo_package(path.clone())
+            } else {
+                vfs::loader::Entry::cargo_package_dependency(path.clone())
+            };
+            res.load.push(entry);
+            if root.is_member() {
+                res.watch.push(res.load.len() - 1);
+            }
+
+            if let Some(out_dir) = root.out_dir() {
+                let out_dir = AbsPathBuf::try_from(out_dir.to_path_buf()).unwrap();
+                res.load.push(vfs::loader::Entry::rs_files_recursively(out_dir.clone()));
+                if root.is_member() {
+                    res.watch.push(res.load.len() - 1);
+                }
+                file_set_roots.push(out_dir.into());
+            }
+            file_set_roots.push(path.into());
+
+            if root.is_member() {
+                local_filesets.push(fsc.len());
+            }
+            fsc.add_file_set(file_set_roots)
+        }
+
+        let fsc = fsc.build();
+        res.source_root_config = SourceRootConfig { fsc, local_filesets };
 
-    pub fn workspace_root_for(&self, file_id: FileId) -> Option<&Path> {
-        let path = self.vfs.read().file2path(VfsFile(file_id.0));
-        self.workspaces.iter().find_map(|ws| ws.workspace_root_for(&path))
+        res
     }
 }
 
-pub(crate) fn file_id_to_url(vfs: &Vfs, id: FileId) -> Url {
-    let path = vfs.file2path(VfsFile(id.0));
-    url_from_abs_path(&path)
+#[derive(Default, Debug)]
+pub(crate) struct SourceRootConfig {
+    pub(crate) fsc: FileSetConfig,
+    pub(crate) local_filesets: Vec<usize>,
+}
+
+impl SourceRootConfig {
+    pub fn partition(&self, vfs: &vfs::Vfs) -> Vec<SourceRoot> {
+        self.fsc
+            .partition(vfs)
+            .into_iter()
+            .enumerate()
+            .map(|(idx, file_set)| {
+                let is_local = self.local_filesets.contains(&idx);
+                if is_local {
+                    SourceRoot::new_local(file_set)
+                } else {
+                    SourceRoot::new_library(file_set)
+                }
+            })
+            .collect()
+    }
 }
diff --git a/crates/rust-analyzer/src/lib.rs b/crates/rust-analyzer/src/lib.rs
index 64e70955f..b38067079 100644
--- a/crates/rust-analyzer/src/lib.rs
+++ b/crates/rust-analyzer/src/lib.rs
@@ -17,7 +17,6 @@ macro_rules! eprintln {
     ($($tt:tt)*) => { stdx::eprintln!($($tt)*) };
 }
 
-mod vfs_glob;
 mod caps;
 mod cargo_target_spec;
 mod to_proto;
@@ -29,6 +28,7 @@ pub mod config;
 mod global_state;
 mod diagnostics;
 mod semantic_tokens;
+mod line_endings;
 
 use serde::de::DeserializeOwned;
 
diff --git a/crates/rust-analyzer/src/line_endings.rs b/crates/rust-analyzer/src/line_endings.rs
new file mode 100644
index 000000000..7e6db954e
--- /dev/null
+++ b/crates/rust-analyzer/src/line_endings.rs
@@ -0,0 +1,64 @@
+//! We maintain invariant that all internal strings use `\n` as line separator.
+//! This module does line ending conversion and detection (so that we can
+//! convert back to `\r\n` on the way out).
+
+#[derive(Debug, Clone, Copy, PartialEq, Eq, PartialOrd, Ord, Hash)]
+pub(crate) enum LineEndings {
+    Unix,
+    Dos,
+}
+
+impl LineEndings {
+    /// Replaces `\r\n` with `\n` in-place in `src`.
+    pub(crate) fn normalize(src: String) -> (String, LineEndings) {
+        if !src.as_bytes().contains(&b'\r') {
+            return (src, LineEndings::Unix);
+        }
+
+        // We replace `\r\n` with `\n` in-place, which doesn't break utf-8 encoding.
+        // While we *can* call `as_mut_vec` and do surgery on the live string
+        // directly, let's rather steal the contents of `src`. This makes the code
+        // safe even if a panic occurs.
+
+        let mut buf = src.into_bytes();
+        let mut gap_len = 0;
+        let mut tail = buf.as_mut_slice();
+        loop {
+            let idx = match find_crlf(&tail[gap_len..]) {
+                None => tail.len(),
+                Some(idx) => idx + gap_len,
+            };
+            tail.copy_within(gap_len..idx, 0);
+            tail = &mut tail[idx - gap_len..];
+            if tail.len() == gap_len {
+                break;
+            }
+            gap_len += 1;
+        }
+
+        // Account for removed `\r`.
+        // After `set_len`, `buf` is guaranteed to contain utf-8 again.
+        let new_len = buf.len() - gap_len;
+        let src = unsafe {
+            buf.set_len(new_len);
+            String::from_utf8_unchecked(buf)
+        };
+        return (src, LineEndings::Dos);
+
+        fn find_crlf(src: &[u8]) -> Option<usize> {
+            let mut search_idx = 0;
+            while let Some(idx) = find_cr(&src[search_idx..]) {
+                if src[search_idx..].get(idx + 1) != Some(&b'\n') {
+                    search_idx += idx + 1;
+                    continue;
+                }
+                return Some(search_idx + idx);
+            }
+            None
+        }
+
+        fn find_cr(src: &[u8]) -> Option<usize> {
+            src.iter().enumerate().find_map(|(idx, &b)| if b == b'\r' { Some(idx) } else { None })
+        }
+    }
+}
diff --git a/crates/rust-analyzer/src/main_loop.rs b/crates/rust-analyzer/src/main_loop.rs
index 674b1323b..b9d296856 100644
--- a/crates/rust-analyzer/src/main_loop.rs
+++ b/crates/rust-analyzer/src/main_loop.rs
@@ -2,11 +2,9 @@
 //! requests/replies and notifications back to the client.
 
 mod handlers;
-mod subscriptions;
 pub(crate) mod request_metrics;
 
 use std::{
-    borrow::Cow,
     env,
     error::Error,
     fmt,
@@ -20,16 +18,12 @@ use crossbeam_channel::{never, select, unbounded, RecvError, Sender};
 use lsp_server::{
     Connection, ErrorCode, Message, Notification, ReqQueue, Request, RequestId, Response,
 };
-use lsp_types::{
-    request::Request as _, DidChangeTextDocumentParams, NumberOrString,
-    TextDocumentContentChangeEvent, WorkDoneProgress, WorkDoneProgressBegin,
-    WorkDoneProgressCreateParams, WorkDoneProgressEnd, WorkDoneProgressReport,
-};
-use ra_flycheck::{CheckTask, Status};
+use lsp_types::{request::Request as _, NumberOrString, TextDocumentContentChangeEvent};
+use ra_flycheck::CheckTask;
 use ra_ide::{Canceled, FileId, LineIndex};
 use ra_prof::profile;
 use ra_project_model::{PackageRoot, ProjectWorkspace};
-use ra_vfs::VfsTask;
+use rustc_hash::FxHashSet;
 use serde::{de::DeserializeOwned, Serialize};
 use threadpool::ThreadPool;
 
@@ -39,9 +33,10 @@ use crate::{
     from_proto,
     global_state::{file_id_to_url, GlobalState, GlobalStateSnapshot},
     lsp_ext,
-    main_loop::{request_metrics::RequestMetrics, subscriptions::Subscriptions},
+    main_loop::request_metrics::RequestMetrics,
     Result,
 };
+use ra_db::VfsPath;
 
 #[derive(Debug)]
 pub struct LspError {
@@ -128,13 +123,6 @@ pub fn main_loop(config: Config, connection: Connection) -> Result<()> {
                 .collect::<Vec<_>>()
         };
 
-        let globs = config
-            .files
-            .exclude
-            .iter()
-            .map(|glob| crate::vfs_glob::Glob::new(glob))
-            .collect::<std::result::Result<Vec<_>, _>>()?;
-
         if let FilesWatcher::Client = config.files.watcher {
             let registration_options = lsp_types::DidChangeWatchedFilesRegistrationOptions {
                 watchers: workspaces
@@ -159,11 +147,9 @@ pub fn main_loop(config: Config, connection: Connection) -> Result<()> {
             connection.sender.send(request.into()).unwrap();
         }
 
-        GlobalState::new(workspaces, config.lru_capacity, &globs, config)
+        GlobalState::new(workspaces, config.lru_capacity, config)
     };
 
-    loop_state.roots_total = global_state.vfs.read().n_roots();
-
     let pool = ThreadPool::default();
     let (task_sender, task_receiver) = unbounded::<Task>();
 
@@ -192,7 +178,9 @@ pub fn main_loop(config: Config, connection: Connection) -> Result<()> {
                     break;
                 };
             }
+            assert!(!global_state.vfs.read().0.has_changes());
             loop_turn(&pool, &task_sender, &connection, &mut global_state, &mut loop_state, event)?;
+            assert!(!global_state.vfs.read().0.has_changes());
         }
     }
     global_state.analysis_host.request_cancellation();
@@ -222,7 +210,7 @@ enum Task {
 enum Event {
     Msg(Message),
     Task(Task),
-    Vfs(VfsTask),
+    Vfs(vfs::loader::Message),
     CheckWatcher(CheckTask),
 }
 
@@ -270,11 +258,20 @@ type Incoming = lsp_server::Incoming<(&'static str, Instant)>;
 #[derive(Default)]
 struct LoopState {
     req_queue: ReqQueue<(&'static str, Instant), ReqHandler>,
-    subscriptions: Subscriptions,
-    workspace_loaded: bool,
-    roots_progress_reported: Option<usize>,
-    roots_scanned: usize,
-    roots_total: usize,
+    mem_docs: FxHashSet<VfsPath>,
+    status: Status,
+}
+
+#[derive(Eq, PartialEq)]
+enum Status {
+    Loading,
+    Ready,
+}
+
+impl Default for Status {
+    fn default() -> Self {
+        Status::Loading
+    }
 }
 
 fn loop_turn(
@@ -295,14 +292,36 @@ fn loop_turn(
         log::info!("queued count = {}", queue_count);
     }
 
+    let mut became_ready = false;
     match event {
         Event::Task(task) => {
             on_task(task, &connection.sender, &mut loop_state.req_queue.incoming, global_state);
             global_state.maybe_collect_garbage();
         }
-        Event::Vfs(task) => {
-            global_state.vfs.write().handle_task(task);
-        }
+        Event::Vfs(task) => match task {
+            vfs::loader::Message::Loaded { files } => {
+                let vfs = &mut global_state.vfs.write().0;
+                for (path, contents) in files {
+                    let path = VfsPath::from(path);
+                    if !loop_state.mem_docs.contains(&path) {
+                        vfs.set_file_contents(path, contents)
+                    }
+                }
+            }
+            vfs::loader::Message::Progress { n_entries_total, n_entries_done } => {
+                if n_entries_done == n_entries_done {
+                    loop_state.status = Status::Ready;
+                    became_ready = true;
+                }
+                report_progress(
+                    loop_state,
+                    &connection.sender,
+                    n_entries_done,
+                    n_entries_total,
+                    "roots scanned",
+                )
+            }
+        },
         Event::CheckWatcher(task) => on_check_task(task, global_state, task_sender)?,
         Event::Msg(msg) => match msg {
             Message::Request(req) => on_request(
@@ -324,32 +343,29 @@ fn loop_turn(
         },
     };
 
-    let mut state_changed = global_state.process_changes(&mut loop_state.roots_scanned);
+    let state_changed = global_state.process_changes();
 
-    let show_progress =
-        !loop_state.workspace_loaded && global_state.config.client_caps.work_done_progress;
-
-    if !loop_state.workspace_loaded && loop_state.roots_scanned == loop_state.roots_total {
-        state_changed = true;
-        loop_state.workspace_loaded = true;
+    if became_ready {
         if let Some(flycheck) = &global_state.flycheck {
             flycheck.update();
         }
     }
 
-    if show_progress {
-        send_startup_progress(&connection.sender, loop_state);
-    }
+    if loop_state.status == Status::Ready && (state_changed || became_ready) {
+        let subscriptions = loop_state
+            .mem_docs
+            .iter()
+            .map(|path| global_state.vfs.read().0.file_id(&path).unwrap())
+            .collect::<Vec<_>>();
 
-    if state_changed && loop_state.workspace_loaded {
         update_file_notifications_on_threadpool(
             pool,
             global_state.snapshot(),
             task_sender.clone(),
-            loop_state.subscriptions.subscriptions(),
+            subscriptions.clone(),
         );
         pool.execute({
-            let subs = loop_state.subscriptions.subscriptions();
+            let subs = subscriptions;
             let snap = global_state.snapshot();
             move || snap.analysis().prime_caches(subs).unwrap_or_else(|_: Canceled| ())
         });
@@ -465,7 +481,7 @@ fn on_request(
 
 fn on_notification(
     msg_sender: &Sender<Message>,
-    state: &mut GlobalState,
+    global_state: &mut GlobalState,
     loop_state: &mut LoopState,
     not: Notification,
 ) -> Result<()> {
@@ -484,12 +500,15 @@ fn on_notification(
     };
     let not = match notification_cast::<lsp_types::notification::DidOpenTextDocument>(not) {
         Ok(params) => {
-            let uri = params.text_document.uri;
-            let path = uri.to_file_path().map_err(|()| format!("invalid uri: {}", uri))?;
-            if let Some(file_id) =
-                state.vfs.write().add_file_overlay(&path, params.text_document.text)
-            {
-                loop_state.subscriptions.add_sub(FileId(file_id.0));
+            if let Ok(path) = from_proto::vfs_path(&params.text_document.uri) {
+                if !loop_state.mem_docs.insert(path.clone()) {
+                    log::error!("duplicate DidOpenTextDocument: {}", path)
+                }
+                global_state
+                    .vfs
+                    .write()
+                    .0
+                    .set_file_contents(path, Some(params.text_document.text.into_bytes()));
             }
             return Ok(());
         }
@@ -497,23 +516,13 @@ fn on_notification(
     };
     let not = match notification_cast::<lsp_types::notification::DidChangeTextDocument>(not) {
         Ok(params) => {
-            let DidChangeTextDocumentParams { text_document, content_changes } = params;
-            let world = state.snapshot();
-            let file_id = from_proto::file_id(&world, &text_document.uri)?;
-            let line_index = world.analysis().file_line_index(file_id)?;
-            let uri = text_document.uri;
-            let path = uri.to_file_path().map_err(|()| format!("invalid uri: {}", uri))?;
-            state.vfs.write().change_file_overlay(&path, |old_text| {
-                apply_document_changes(old_text, Cow::Borrowed(&line_index), content_changes);
-            });
-            return Ok(());
-        }
-        Err(not) => not,
-    };
-    let not = match notification_cast::<lsp_types::notification::DidSaveTextDocument>(not) {
-        Ok(_params) => {
-            if let Some(flycheck) = &state.flycheck {
-                flycheck.update();
+            if let Ok(path) = from_proto::vfs_path(&params.text_document.uri) {
+                assert!(loop_state.mem_docs.contains(&path));
+                let vfs = &mut global_state.vfs.write().0;
+                let file_id = vfs.file_id(&path).unwrap();
+                let mut text = String::from_utf8(vfs.file_contents(file_id).to_vec()).unwrap();
+                apply_document_changes(&mut text, params.content_changes);
+                vfs.set_file_contents(path, Some(text.into_bytes()))
             }
             return Ok(());
         }
@@ -521,19 +530,34 @@ fn on_notification(
     };
     let not = match notification_cast::<lsp_types::notification::DidCloseTextDocument>(not) {
         Ok(params) => {
-            let uri = params.text_document.uri;
-            let path = uri.to_file_path().map_err(|()| format!("invalid uri: {}", uri))?;
-            if let Some(file_id) = state.vfs.write().remove_file_overlay(path.as_path()) {
-                loop_state.subscriptions.remove_sub(FileId(file_id.0));
+            if let Ok(path) = from_proto::vfs_path(&params.text_document.uri) {
+                if !loop_state.mem_docs.remove(&path) {
+                    log::error!("orphan DidCloseTextDocument: {}", path)
+                }
+                if let Some(path) = path.as_path() {
+                    global_state.loader.invalidate(path.to_path_buf());
+                }
             }
-            let params =
-                lsp_types::PublishDiagnosticsParams { uri, diagnostics: Vec::new(), version: None };
+            let params = lsp_types::PublishDiagnosticsParams {
+                uri: params.text_document.uri,
+                diagnostics: Vec::new(),
+                version: None,
+            };
             let not = notification_new::<lsp_types::notification::PublishDiagnostics>(params);
             msg_sender.send(not.into()).unwrap();
             return Ok(());
         }
         Err(not) => not,
     };
+    let not = match notification_cast::<lsp_types::notification::DidSaveTextDocument>(not) {
+        Ok(_params) => {
+            if let Some(flycheck) = &global_state.flycheck {
+                flycheck.update();
+            }
+            return Ok(());
+        }
+        Err(not) => not,
+    };
     let not = match notification_cast::<lsp_types::notification::DidChangeConfiguration>(not) {
         Ok(_) => {
             // As stated in https://github.com/microsoft/language-server-protocol/issues/676,
@@ -575,11 +599,10 @@ fn on_notification(
     };
     let not = match notification_cast::<lsp_types::notification::DidChangeWatchedFiles>(not) {
         Ok(params) => {
-            let mut vfs = state.vfs.write();
             for change in params.changes {
-                let uri = change.uri;
-                let path = uri.to_file_path().map_err(|()| format!("invalid uri: {}", uri))?;
-                vfs.notify_changed(path)
+                if let Ok(path) = from_proto::abs_path(&change.uri) {
+                    global_state.loader.invalidate(path)
+                }
             }
             return Ok(());
         }
@@ -594,9 +617,9 @@ fn on_notification(
 
 fn apply_document_changes(
     old_text: &mut String,
-    mut line_index: Cow<'_, LineIndex>,
     content_changes: Vec<TextDocumentContentChangeEvent>,
 ) {
+    let mut line_index = LineIndex::new(old_text);
     // The changes we got must be applied sequentially, but can cross lines so we
     // have to keep our line index updated.
     // Some clients (e.g. Code) sort the ranges in reverse. As an optimization, we
@@ -621,7 +644,7 @@ fn apply_document_changes(
         match change.range {
             Some(range) => {
                 if !index_valid.covers(range.end.line) {
-                    line_index = Cow::Owned(LineIndex::new(&old_text));
+                    line_index = LineIndex::new(&old_text);
                 }
                 index_valid = IndexValid::UpToLineExclusive(range.start.line);
                 let range = from_proto::text_range(&line_index, range);
@@ -652,18 +675,11 @@ fn on_check_task(
                 &workspace_root,
             );
             for diag in diagnostics {
-                let path = diag
-                    .location
-                    .uri
-                    .to_file_path()
-                    .map_err(|()| format!("invalid uri: {}", diag.location.uri))?;
-                let file_id = match global_state.vfs.read().path2file(&path) {
+                let path = from_proto::vfs_path(&diag.location.uri)?;
+                let file_id = match global_state.vfs.read().0.file_id(&path) {
                     Some(file) => FileId(file.0),
                     None => {
-                        log::error!(
-                            "File with cargo diagnostic not found in VFS: {}",
-                            path.display()
-                        );
+                        log::error!("File with cargo diagnostic not found in VFS: {}", path);
                         return Ok(());
                     }
                 };
@@ -679,7 +695,7 @@ fn on_check_task(
         CheckTask::Status(status) => {
             if global_state.config.client_caps.work_done_progress {
                 let progress = match status {
-                    Status::Being => {
+                    ra_flycheck::Status::Being => {
                         lsp_types::WorkDoneProgress::Begin(lsp_types::WorkDoneProgressBegin {
                             title: "Running `cargo check`".to_string(),
                             cancellable: Some(false),
@@ -687,14 +703,14 @@ fn on_check_task(
                             percentage: None,
                         })
                     }
-                    Status::Progress(target) => {
+                    ra_flycheck::Status::Progress(target) => {
                         lsp_types::WorkDoneProgress::Report(lsp_types::WorkDoneProgressReport {
                             cancellable: Some(false),
                             message: Some(target),
                             percentage: None,
                         })
                     }
-                    Status::End => {
+                    ra_flycheck::Status::End => {
                         lsp_types::WorkDoneProgress::End(lsp_types::WorkDoneProgressEnd {
                             message: None,
                         })
@@ -720,7 +736,7 @@ fn on_diagnostic_task(task: DiagnosticTask, msg_sender: &Sender<Message>, state:
     let subscriptions = state.diagnostics.handle_task(task);
 
     for file_id in subscriptions {
-        let url = file_id_to_url(&state.vfs.read(), file_id);
+        let url = file_id_to_url(&state.vfs.read().0, file_id);
         let diagnostics = state.diagnostics.diagnostics_for(file_id).cloned().collect();
         let params = lsp_types::PublishDiagnosticsParams { uri: url, diagnostics, version: None };
         let not = notification_new::<lsp_types::notification::PublishDiagnostics>(params);
@@ -728,57 +744,46 @@ fn on_diagnostic_task(task: DiagnosticTask, msg_sender: &Sender<Message>, state:
     }
 }
 
-fn send_startup_progress(sender: &Sender<Message>, loop_state: &mut LoopState) {
-    let total: usize = loop_state.roots_total;
-    let prev = loop_state.roots_progress_reported;
-    let progress = loop_state.roots_scanned;
-    loop_state.roots_progress_reported = Some(progress);
-
-    match (prev, loop_state.workspace_loaded) {
-        (None, false) => {
-            let request = loop_state.req_queue.outgoing.register(
-                lsp_types::request::WorkDoneProgressCreate::METHOD.to_string(),
-                WorkDoneProgressCreateParams {
-                    token: lsp_types::ProgressToken::String("rustAnalyzer/startup".into()),
-                },
-                DO_NOTHING,
-            );
-            sender.send(request.into()).unwrap();
-            send_startup_progress_notif(
-                sender,
-                WorkDoneProgress::Begin(WorkDoneProgressBegin {
-                    title: "rust-analyzer".into(),
-                    cancellable: None,
-                    message: Some(format!("{}/{} packages", progress, total)),
-                    percentage: Some(100.0 * progress as f64 / total as f64),
-                }),
-            );
-        }
-        (Some(prev), false) if progress != prev => send_startup_progress_notif(
-            sender,
-            WorkDoneProgress::Report(WorkDoneProgressReport {
-                cancellable: None,
-                message: Some(format!("{}/{} packages", progress, total)),
-                percentage: Some(100.0 * progress as f64 / total as f64),
-            }),
-        ),
-        (_, true) => send_startup_progress_notif(
-            sender,
-            WorkDoneProgress::End(WorkDoneProgressEnd {
-                message: Some(format!("rust-analyzer loaded, {} packages", progress)),
-            }),
-        ),
-        _ => {}
-    }
+fn report_progress(
+    loop_state: &mut LoopState,
+    sender: &Sender<Message>,
+    done: usize,
+    total: usize,
+    message: &str,
+) {
+    let token = lsp_types::ProgressToken::String(format!("rustAnalyzer/{}", message));
+    let message = Some(format!("{}/{} {}", done, total, message));
+    let percentage = Some(100.0 * done as f64 / total.max(1) as f64);
+    let work_done_progress = if done == 0 {
+        let work_done_progress_create = loop_state.req_queue.outgoing.register(
+            lsp_types::request::WorkDoneProgressCreate::METHOD.to_string(),
+            lsp_types::WorkDoneProgressCreateParams { token: token.clone() },
+            DO_NOTHING,
+        );
+        sender.send(work_done_progress_create.into()).unwrap();
 
-    fn send_startup_progress_notif(sender: &Sender<Message>, work_done_progress: WorkDoneProgress) {
-        let notif =
-            notification_new::<lsp_types::notification::Progress>(lsp_types::ProgressParams {
-                token: lsp_types::ProgressToken::String("rustAnalyzer/startup".into()),
-                value: lsp_types::ProgressParamsValue::WorkDone(work_done_progress),
-            });
-        sender.send(notif.into()).unwrap();
-    }
+        lsp_types::WorkDoneProgress::Begin(lsp_types::WorkDoneProgressBegin {
+            title: "rust-analyzer".into(),
+            cancellable: None,
+            message,
+            percentage,
+        })
+    } else if done < total {
+        lsp_types::WorkDoneProgress::Report(lsp_types::WorkDoneProgressReport {
+            cancellable: None,
+            message,
+            percentage,
+        })
+    } else {
+        assert!(done == total);
+        lsp_types::WorkDoneProgress::End(lsp_types::WorkDoneProgressEnd { message })
+    };
+    let notification =
+        notification_new::<lsp_types::notification::Progress>(lsp_types::ProgressParams {
+            token,
+            value: lsp_types::ProgressParamsValue::WorkDone(work_done_progress),
+        });
+    sender.send(notification.into()).unwrap();
 }
 
 struct PoolDispatcher<'a> {
@@ -976,18 +981,12 @@ where
 
 #[cfg(test)]
 mod tests {
-    use std::borrow::Cow;
-
     use lsp_types::{Position, Range, TextDocumentContentChangeEvent};
-    use ra_ide::LineIndex;
 
-    #[test]
-    fn apply_document_changes() {
-        fn run(text: &mut String, changes: Vec<TextDocumentContentChangeEvent>) {
-            let line_index = Cow::Owned(LineIndex::new(&text));
-            super::apply_document_changes(text, line_index, changes);
-        }
+    use super::*;
 
+    #[test]
+    fn test_apply_document_changes() {
         macro_rules! c {
             [$($sl:expr, $sc:expr; $el:expr, $ec:expr => $text:expr),+] => {
                 vec![$(TextDocumentContentChangeEvent {
@@ -1002,9 +1001,9 @@ mod tests {
         }
 
         let mut text = String::new();
-        run(&mut text, vec![]);
+        apply_document_changes(&mut text, vec![]);
         assert_eq!(text, "");
-        run(
+        apply_document_changes(
             &mut text,
             vec![TextDocumentContentChangeEvent {
                 range: None,
@@ -1013,36 +1012,39 @@ mod tests {
             }],
         );
         assert_eq!(text, "the");
-        run(&mut text, c![0, 3; 0, 3 => " quick"]);
+        apply_document_changes(&mut text, c![0, 3; 0, 3 => " quick"]);
         assert_eq!(text, "the quick");
-        run(&mut text, c![0, 0; 0, 4 => "", 0, 5; 0, 5 => " foxes"]);
+        apply_document_changes(&mut text, c![0, 0; 0, 4 => "", 0, 5; 0, 5 => " foxes"]);
         assert_eq!(text, "quick foxes");
-        run(&mut text, c![0, 11; 0, 11 => "\ndream"]);
+        apply_document_changes(&mut text, c![0, 11; 0, 11 => "\ndream"]);
         assert_eq!(text, "quick foxes\ndream");
-        run(&mut text, c![1, 0; 1, 0 => "have "]);
+        apply_document_changes(&mut text, c![1, 0; 1, 0 => "have "]);
         assert_eq!(text, "quick foxes\nhave dream");
-        run(&mut text, c![0, 0; 0, 0 => "the ", 1, 4; 1, 4 => " quiet", 1, 16; 1, 16 => "s\n"]);
+        apply_document_changes(
+            &mut text,
+            c![0, 0; 0, 0 => "the ", 1, 4; 1, 4 => " quiet", 1, 16; 1, 16 => "s\n"],
+        );
         assert_eq!(text, "the quick foxes\nhave quiet dreams\n");
-        run(&mut text, c![0, 15; 0, 15 => "\n", 2, 17; 2, 17 => "\n"]);
+        apply_document_changes(&mut text, c![0, 15; 0, 15 => "\n", 2, 17; 2, 17 => "\n"]);
         assert_eq!(text, "the quick foxes\n\nhave quiet dreams\n\n");
-        run(
+        apply_document_changes(
             &mut text,
             c![1, 0; 1, 0 => "DREAM", 2, 0; 2, 0 => "they ", 3, 0; 3, 0 => "DON'T THEY?"],
         );
         assert_eq!(text, "the quick foxes\nDREAM\nthey have quiet dreams\nDON'T THEY?\n");
-        run(&mut text, c![0, 10; 1, 5 => "", 2, 0; 2, 12 => ""]);
+        apply_document_changes(&mut text, c![0, 10; 1, 5 => "", 2, 0; 2, 12 => ""]);
         assert_eq!(text, "the quick \nthey have quiet dreams\n");
 
         text = String::from("❤️");
-        run(&mut text, c![0, 0; 0, 0 => "a"]);
+        apply_document_changes(&mut text, c![0, 0; 0, 0 => "a"]);
         assert_eq!(text, "a❤️");
 
         text = String::from("a\nb");
-        run(&mut text, c![0, 1; 1, 0 => "\nțc", 0, 1; 1, 1 => "d"]);
+        apply_document_changes(&mut text, c![0, 1; 1, 0 => "\nțc", 0, 1; 1, 1 => "d"]);
         assert_eq!(text, "adcb");
 
         text = String::from("a\nb");
-        run(&mut text, c![0, 1; 1, 0 => "ț\nc", 0, 2; 0, 2 => "c"]);
+        apply_document_changes(&mut text, c![0, 1; 1, 0 => "ț\nc", 0, 2; 0, 2 => "c"]);
         assert_eq!(text, "ațc\ncb");
     }
 }
diff --git a/crates/rust-analyzer/src/main_loop/handlers.rs b/crates/rust-analyzer/src/main_loop/handlers.rs
index 2d7e649d2..a44959abe 100644
--- a/crates/rust-analyzer/src/main_loop/handlers.rs
+++ b/crates/rust-analyzer/src/main_loop/handlers.rs
@@ -396,7 +396,6 @@ pub fn handle_runnables(
     let line_index = snap.analysis().file_line_index(file_id)?;
     let offset = params.position.map(|it| from_proto::offset(&line_index, it));
     let mut res = Vec::new();
-    let workspace_root = snap.workspace_root_for(file_id);
     let cargo_spec = CargoTargetSpec::for_file(&snap, file_id)?;
     for runnable in snap.analysis().runnables(file_id)? {
         if let Some(offset) = offset {
@@ -420,7 +419,7 @@ pub fn handle_runnables(
                     location: None,
                     kind: lsp_ext::RunnableKind::Cargo,
                     args: lsp_ext::CargoRunnable {
-                        workspace_root: workspace_root.map(|root| root.to_owned()),
+                        workspace_root: Some(spec.workspace_root.clone()),
                         cargo_args: vec![
                             cmd.to_string(),
                             "--package".to_string(),
@@ -437,7 +436,7 @@ pub fn handle_runnables(
                 location: None,
                 kind: lsp_ext::RunnableKind::Cargo,
                 args: lsp_ext::CargoRunnable {
-                    workspace_root: workspace_root.map(|root| root.to_owned()),
+                    workspace_root: None,
                     cargo_args: vec!["check".to_string(), "--workspace".to_string()],
                     executable_args: Vec::new(),
                 },
diff --git a/crates/rust-analyzer/src/main_loop/subscriptions.rs b/crates/rust-analyzer/src/main_loop/subscriptions.rs
deleted file mode 100644
index 2c76418be..000000000
--- a/crates/rust-analyzer/src/main_loop/subscriptions.rs
+++ /dev/null
@@ -1,22 +0,0 @@
-//! Keeps track of file subscriptions -- the set of currently opened files for
-//! which we want to publish diagnostics, syntax highlighting, etc.
-
-use ra_ide::FileId;
-use rustc_hash::FxHashSet;
-
-#[derive(Default, Debug)]
-pub(crate) struct Subscriptions {
-    subs: FxHashSet<FileId>,
-}
-
-impl Subscriptions {
-    pub(crate) fn add_sub(&mut self, file_id: FileId) {
-        self.subs.insert(file_id);
-    }
-    pub(crate) fn remove_sub(&mut self, file_id: FileId) {
-        self.subs.remove(&file_id);
-    }
-    pub(crate) fn subscriptions(&self) -> Vec<FileId> {
-        self.subs.iter().copied().collect()
-    }
-}
diff --git a/crates/rust-analyzer/src/to_proto.rs b/crates/rust-analyzer/src/to_proto.rs
index ec153097e..7b45b169d 100644
--- a/crates/rust-analyzer/src/to_proto.rs
+++ b/crates/rust-analyzer/src/to_proto.rs
@@ -10,11 +10,10 @@ use ra_ide::{
     ResolvedAssist, Runnable, Severity, SourceChange, SourceFileEdit, TextEdit,
 };
 use ra_syntax::{SyntaxKind, TextRange, TextSize};
-use ra_vfs::LineEndings;
 
 use crate::{
-    cargo_target_spec::CargoTargetSpec, global_state::GlobalStateSnapshot, lsp_ext,
-    semantic_tokens, Result,
+    cargo_target_spec::CargoTargetSpec, global_state::GlobalStateSnapshot,
+    line_endings::LineEndings, lsp_ext, semantic_tokens, Result,
 };
 
 pub(crate) fn position(line_index: &LineIndex, offset: TextSize) -> lsp_types::Position {
@@ -650,6 +649,7 @@ pub(crate) fn runnable(
     runnable: Runnable,
 ) -> Result<lsp_ext::Runnable> {
     let spec = CargoTargetSpec::for_file(snap, file_id)?;
+    let workspace_root = spec.as_ref().map(|it| it.workspace_root.clone());
     let target = spec.as_ref().map(|s| s.target.clone());
     let (cargo_args, executable_args) =
         CargoTargetSpec::runnable_args(spec, &runnable.kind, &runnable.cfg_exprs)?;
@@ -661,7 +661,7 @@ pub(crate) fn runnable(
         location: Some(location),
         kind: lsp_ext::RunnableKind::Cargo,
         args: lsp_ext::CargoRunnable {
-            workspace_root: snap.workspace_root_for(file_id).map(|root| root.to_owned()),
+            workspace_root: workspace_root,
             cargo_args,
             executable_args,
         },
diff --git a/crates/rust-analyzer/src/vfs_glob.rs b/crates/rust-analyzer/src/vfs_glob.rs
deleted file mode 100644
index ff37a7008..000000000
--- a/crates/rust-analyzer/src/vfs_glob.rs
+++ /dev/null
@@ -1,98 +0,0 @@
-//! Exclusion rules for vfs.
-//!
-//! By default, we include only `.rs` files, and skip some know offenders like
-//! `/target` or `/node_modules` altogether.
-//!
-//! It's also possible to add custom exclusion globs.
-
-use globset::{GlobSet, GlobSetBuilder};
-use ra_vfs::{Filter, RelativePath};
-
-pub use globset::{Glob, GlobBuilder};
-
-const ALWAYS_IGNORED: &[&str] = &["target/**", "**/node_modules/**", "**/.git/**"];
-const IGNORED_FOR_NON_MEMBERS: &[&str] = &["examples/**", "tests/**", "benches/**"];
-
-pub struct RustPackageFilterBuilder {
-    is_member: bool,
-    exclude: GlobSetBuilder,
-}
-
-impl Default for RustPackageFilterBuilder {
-    fn default() -> RustPackageFilterBuilder {
-        RustPackageFilterBuilder { is_member: false, exclude: GlobSetBuilder::new() }
-    }
-}
-
-impl RustPackageFilterBuilder {
-    pub fn set_member(mut self, is_member: bool) -> RustPackageFilterBuilder {
-        self.is_member = is_member;
-        self
-    }
-
-    pub fn exclude(mut self, globs: impl IntoIterator<Item = Glob>) -> RustPackageFilterBuilder {
-        for glob in globs.into_iter() {
-            self.exclude.add(glob);
-        }
-        self
-    }
-
-    pub fn into_vfs_filter(self) -> Box<dyn Filter> {
-        let RustPackageFilterBuilder { is_member, mut exclude } = self;
-        for &glob in ALWAYS_IGNORED {
-            exclude.add(Glob::new(glob).unwrap());
-        }
-        if !is_member {
-            for &glob in IGNORED_FOR_NON_MEMBERS {
-                exclude.add(Glob::new(glob).unwrap());
-            }
-        }
-        Box::new(RustPackageFilter { exclude: exclude.build().unwrap() })
-    }
-}
-
-struct RustPackageFilter {
-    exclude: GlobSet,
-}
-
-impl Filter for RustPackageFilter {
-    fn include_dir(&self, dir_path: &RelativePath) -> bool {
-        !self.exclude.is_match(dir_path.as_str())
-    }
-
-    fn include_file(&self, file_path: &RelativePath) -> bool {
-        file_path.extension() == Some("rs")
-    }
-}
-
-#[test]
-fn test_globs() {
-    let filter = RustPackageFilterBuilder::default().set_member(true).into_vfs_filter();
-
-    assert!(filter.include_dir(RelativePath::new("src/tests")));
-    assert!(filter.include_dir(RelativePath::new("src/target")));
-    assert!(filter.include_dir(RelativePath::new("tests")));
-    assert!(filter.include_dir(RelativePath::new("benches")));
-
-    assert!(!filter.include_dir(RelativePath::new("target")));
-    assert!(!filter.include_dir(RelativePath::new("src/foo/.git")));
-    assert!(!filter.include_dir(RelativePath::new("foo/node_modules")));
-
-    let filter = RustPackageFilterBuilder::default().set_member(false).into_vfs_filter();
-
-    assert!(filter.include_dir(RelativePath::new("src/tests")));
-    assert!(filter.include_dir(RelativePath::new("src/target")));
-
-    assert!(!filter.include_dir(RelativePath::new("target")));
-    assert!(!filter.include_dir(RelativePath::new("src/foo/.git")));
-    assert!(!filter.include_dir(RelativePath::new("foo/node_modules")));
-    assert!(!filter.include_dir(RelativePath::new("tests")));
-    assert!(!filter.include_dir(RelativePath::new("benches")));
-
-    let filter = RustPackageFilterBuilder::default()
-        .set_member(true)
-        .exclude(std::iter::once(Glob::new("src/llvm-project/**").unwrap()))
-        .into_vfs_filter();
-
-    assert!(!filter.include_dir(RelativePath::new("src/llvm-project/clang")));
-}
diff --git a/crates/rust-analyzer/tests/heavy_tests/main.rs b/crates/rust-analyzer/tests/heavy_tests/main.rs
index 48ce831af..e0de377b4 100644
--- a/crates/rust-analyzer/tests/heavy_tests/main.rs
+++ b/crates/rust-analyzer/tests/heavy_tests/main.rs
@@ -52,7 +52,7 @@ use std::collections::Spam;
         partial_result_params: PartialResultParams::default(),
         work_done_progress_params: WorkDoneProgressParams::default(),
     });
-    assert!(format!("{}", res).contains("HashMap"));
+    assert!(res.to_string().contains("HashMap"));
     eprintln!("completion took {:?}", completion_start.elapsed());
 }
 
diff --git a/crates/rust-analyzer/tests/heavy_tests/support.rs b/crates/rust-analyzer/tests/heavy_tests/support.rs
index f58790ded..bb8585355 100644
--- a/crates/rust-analyzer/tests/heavy_tests/support.rs
+++ b/crates/rust-analyzer/tests/heavy_tests/support.rs
@@ -212,7 +212,7 @@ impl Server {
                     ProgressParams {
                         token: lsp_types::ProgressToken::String(ref token),
                         value: ProgressParamsValue::WorkDone(WorkDoneProgress::End(_)),
-                    } if token == "rustAnalyzer/startup" => true,
+                    } if token == "rustAnalyzer/roots scanned" => true,
                     _ => false,
                 }
             }
diff --git a/crates/vfs-notify/Cargo.toml b/crates/vfs-notify/Cargo.toml
new file mode 100644
index 000000000..4737a52a7
--- /dev/null
+++ b/crates/vfs-notify/Cargo.toml
@@ -0,0 +1,17 @@
+[package]
+name = "vfs-notify"
+version = "0.1.0"
+authors = ["rust-analyzer developers"]
+edition = "2018"
+
+[dependencies]
+log = "0.4.8"
+rustc-hash = "1.0"
+jod-thread = "0.1.0"
+walkdir = "2.3.1"
+globset = "0.4.5"
+crossbeam-channel = "0.4.0"
+notify = "5.0.0-pre.3"
+
+vfs = { path = "../vfs" }
+paths = { path = "../paths" }
diff --git a/crates/vfs-notify/src/include.rs b/crates/vfs-notify/src/include.rs
new file mode 100644
index 000000000..7378766f5
--- /dev/null
+++ b/crates/vfs-notify/src/include.rs
@@ -0,0 +1,43 @@
+//! See `Include`.
+
+use std::convert::TryFrom;
+
+use globset::{Glob, GlobSet, GlobSetBuilder};
+use paths::{RelPath, RelPathBuf};
+
+/// `Include` is the opposite of .gitignore.
+///
+/// It describes the set of files inside some directory.
+///
+/// The current implementation is very limited, it allows white-listing file
+/// globs and black-listing directories.
+#[derive(Debug, Clone)]
+pub(crate) struct Include {
+    include_files: GlobSet,
+    exclude_dirs: Vec<RelPathBuf>,
+}
+
+impl Include {
+    pub(crate) fn new(include: Vec<String>) -> Include {
+        let mut include_files = GlobSetBuilder::new();
+        let mut exclude_dirs = Vec::new();
+
+        for glob in include {
+            if glob.starts_with("!/") {
+                if let Ok(path) = RelPathBuf::try_from(&glob["!/".len()..]) {
+                    exclude_dirs.push(path)
+                }
+            } else {
+                include_files.add(Glob::new(&glob).unwrap());
+            }
+        }
+        let include_files = include_files.build().unwrap();
+        Include { include_files, exclude_dirs }
+    }
+    pub(crate) fn include_file(&self, path: &RelPath) -> bool {
+        self.include_files.is_match(path)
+    }
+    pub(crate) fn exclude_dir(&self, path: &RelPath) -> bool {
+        self.exclude_dirs.iter().any(|excluded| path.starts_with(excluded))
+    }
+}
diff --git a/crates/vfs-notify/src/lib.rs b/crates/vfs-notify/src/lib.rs
new file mode 100644
index 000000000..baee6ddc8
--- /dev/null
+++ b/crates/vfs-notify/src/lib.rs
@@ -0,0 +1,247 @@
+//! An implementation of `loader::Handle`, based on `walkdir` and `notify`.
+//!
+//! The file watching bits here are untested and quite probably buggy. For this
+//! reason, by default we don't watch files and rely on editor's file watching
+//! capabilities.
+//!
+//! Hopefully, one day a reliable file watching/walking crate appears on
+//! crates.io, and we can reduce this to trivial glue code.
+mod include;
+
+use std::convert::{TryFrom, TryInto};
+
+use crossbeam_channel::{select, unbounded, Receiver};
+use notify::{RecommendedWatcher, RecursiveMode, Watcher};
+use paths::{AbsPath, AbsPathBuf};
+use rustc_hash::FxHashSet;
+use vfs::loader;
+use walkdir::WalkDir;
+
+use crate::include::Include;
+
+#[derive(Debug)]
+pub struct LoaderHandle {
+    // Relative order of fields below is significant.
+    sender: crossbeam_channel::Sender<Message>,
+    _thread: jod_thread::JoinHandle,
+}
+
+#[derive(Debug)]
+enum Message {
+    Config(loader::Config),
+    Invalidate(AbsPathBuf),
+}
+
+impl loader::Handle for LoaderHandle {
+    fn spawn(sender: loader::Sender) -> LoaderHandle {
+        let actor = LoaderActor::new(sender);
+        let (sender, receiver) = unbounded::<Message>();
+        let thread = jod_thread::spawn(move || actor.run(receiver));
+        LoaderHandle { sender, _thread: thread }
+    }
+    fn set_config(&mut self, config: loader::Config) {
+        self.sender.send(Message::Config(config)).unwrap()
+    }
+    fn invalidate(&mut self, path: AbsPathBuf) {
+        self.sender.send(Message::Invalidate(path)).unwrap();
+    }
+    fn load_sync(&mut self, path: &AbsPathBuf) -> Option<Vec<u8>> {
+        read(path)
+    }
+}
+
+type NotifyEvent = notify::Result<notify::Event>;
+
+struct LoaderActor {
+    config: Vec<(AbsPathBuf, Include, bool)>,
+    watched_paths: FxHashSet<AbsPathBuf>,
+    sender: loader::Sender,
+    // Drop order of fields bellow is significant,
+    watcher: Option<RecommendedWatcher>,
+    watcher_receiver: Receiver<NotifyEvent>,
+}
+
+#[derive(Debug)]
+enum Event {
+    Message(Message),
+    NotifyEvent(NotifyEvent),
+}
+
+impl LoaderActor {
+    fn new(sender: loader::Sender) -> LoaderActor {
+        let (watcher_sender, watcher_receiver) = unbounded();
+        let watcher = log_notify_error(Watcher::new_immediate(move |event| {
+            watcher_sender.send(event).unwrap()
+        }));
+
+        LoaderActor {
+            watcher,
+            watcher_receiver,
+            watched_paths: FxHashSet::default(),
+            sender,
+            config: Vec::new(),
+        }
+    }
+
+    fn run(mut self, receiver: Receiver<Message>) {
+        while let Some(event) = self.next_event(&receiver) {
+            log::debug!("vfs-notify event: {:?}", event);
+            match event {
+                Event::Message(msg) => match msg {
+                    Message::Config(config) => {
+                        let n_entries_total = config.load.len();
+                        self.send(loader::Message::Progress { n_entries_total, n_entries_done: 0 });
+
+                        self.unwatch_all();
+                        self.config.clear();
+
+                        for (i, entry) in config.load.into_iter().enumerate() {
+                            let watch = config.watch.contains(&i);
+                            let files = self.load_entry(entry, watch);
+                            self.send(loader::Message::Loaded { files });
+                            self.send(loader::Message::Progress {
+                                n_entries_total,
+                                n_entries_done: i + 1,
+                            });
+                        }
+                        self.config.sort_by(|x, y| x.0.cmp(&y.0));
+                    }
+                    Message::Invalidate(path) => {
+                        let contents = read(path.as_path());
+                        let files = vec![(path, contents)];
+                        self.send(loader::Message::Loaded { files });
+                    }
+                },
+                Event::NotifyEvent(event) => {
+                    if let Some(event) = log_notify_error(event) {
+                        let files = event
+                            .paths
+                            .into_iter()
+                            .map(|path| AbsPathBuf::try_from(path).unwrap())
+                            .filter_map(|path| {
+                                let is_dir = path.is_dir();
+                                let is_file = path.is_file();
+
+                                let config_idx =
+                                    match self.config.binary_search_by(|it| it.0.cmp(&path)) {
+                                        Ok(it) => it,
+                                        Err(it) => it.saturating_sub(1),
+                                    };
+                                let include = self.config.get(config_idx).and_then(|it| {
+                                    let rel_path = path.strip_prefix(&it.0)?;
+                                    Some((rel_path, &it.1))
+                                });
+
+                                if let Some((rel_path, include)) = include {
+                                    if is_dir && include.exclude_dir(&rel_path)
+                                        || is_file && !include.include_file(&rel_path)
+                                    {
+                                        return None;
+                                    }
+                                }
+
+                                if is_dir {
+                                    self.watch(path);
+                                    return None;
+                                }
+                                if !is_file {
+                                    return None;
+                                }
+                                let contents = read(&path);
+                                Some((path, contents))
+                            })
+                            .collect();
+                        self.send(loader::Message::Loaded { files })
+                    }
+                }
+            }
+        }
+    }
+    fn next_event(&self, receiver: &Receiver<Message>) -> Option<Event> {
+        select! {
+            recv(receiver) -> it => it.ok().map(Event::Message),
+            recv(&self.watcher_receiver) -> it => Some(Event::NotifyEvent(it.unwrap())),
+        }
+    }
+    fn load_entry(
+        &mut self,
+        entry: loader::Entry,
+        watch: bool,
+    ) -> Vec<(AbsPathBuf, Option<Vec<u8>>)> {
+        match entry {
+            loader::Entry::Files(files) => files
+                .into_iter()
+                .map(|file| {
+                    if watch {
+                        self.watch(file.clone())
+                    }
+                    let contents = read(file.as_path());
+                    (file, contents)
+                })
+                .collect::<Vec<_>>(),
+            loader::Entry::Directory { path, include } => {
+                let include = Include::new(include);
+                self.config.push((path.clone(), include.clone(), watch));
+
+                let files = WalkDir::new(&path)
+                    .into_iter()
+                    .filter_entry(|entry| {
+                        let abs_path: &AbsPath = entry.path().try_into().unwrap();
+                        match abs_path.strip_prefix(&path) {
+                            Some(rel_path) => {
+                                !(entry.file_type().is_dir() && include.exclude_dir(rel_path))
+                            }
+                            None => false,
+                        }
+                    })
+                    .filter_map(|entry| entry.ok())
+                    .filter_map(|entry| {
+                        let is_dir = entry.file_type().is_dir();
+                        let is_file = entry.file_type().is_file();
+                        let abs_path = AbsPathBuf::try_from(entry.into_path()).unwrap();
+                        if is_dir {
+                            self.watch(abs_path.clone());
+                        }
+                        let rel_path = abs_path.strip_prefix(&path)?;
+                        if is_file && include.include_file(&rel_path) {
+                            Some(abs_path)
+                        } else {
+                            None
+                        }
+                    });
+
+                files
+                    .map(|file| {
+                        let contents = read(file.as_path());
+                        (file, contents)
+                    })
+                    .collect()
+            }
+        }
+    }
+
+    fn watch(&mut self, path: AbsPathBuf) {
+        if let Some(watcher) = &mut self.watcher {
+            log_notify_error(watcher.watch(&path, RecursiveMode::NonRecursive));
+            self.watched_paths.insert(path);
+        }
+    }
+    fn unwatch_all(&mut self) {
+        if let Some(watcher) = &mut self.watcher {
+            for path in self.watched_paths.drain() {
+                log_notify_error(watcher.unwatch(path));
+            }
+        }
+    }
+    fn send(&mut self, msg: loader::Message) {
+        (self.sender)(msg)
+    }
+}
+
+fn read(path: &AbsPath) -> Option<Vec<u8>> {
+    std::fs::read(path).ok()
+}
+
+fn log_notify_error<T>(res: notify::Result<T>) -> Option<T> {
+    res.map_err(|err| log::warn!("notify error: {}", err)).ok()
+}
diff --git a/crates/vfs/Cargo.toml b/crates/vfs/Cargo.toml
index c03e6363b..263069002 100644
--- a/crates/vfs/Cargo.toml
+++ b/crates/vfs/Cargo.toml
@@ -6,9 +6,5 @@ edition = "2018"
 
 [dependencies]
 rustc-hash = "1.0"
-jod-thread = "0.1.0"
-walkdir = "2.3.1"
-globset = "0.4.5"
-crossbeam-channel = "0.4.0"
 
 paths = { path = "../paths" }
diff --git a/crates/vfs/src/file_set.rs b/crates/vfs/src/file_set.rs
index 724606a3d..0173f7464 100644
--- a/crates/vfs/src/file_set.rs
+++ b/crates/vfs/src/file_set.rs
@@ -4,7 +4,6 @@
 //! the default `FileSet`.
 use std::{fmt, iter};
 
-use paths::AbsPathBuf;
 use rustc_hash::FxHashMap;
 
 use crate::{FileId, Vfs, VfsPath};
@@ -41,7 +40,7 @@ impl fmt::Debug for FileSet {
 #[derive(Debug)]
 pub struct FileSetConfig {
     n_file_sets: usize,
-    roots: Vec<(AbsPathBuf, usize)>,
+    roots: Vec<(VfsPath, usize)>,
 }
 
 impl Default for FileSetConfig {
@@ -66,11 +65,7 @@ impl FileSetConfig {
         self.n_file_sets
     }
     fn classify(&self, path: &VfsPath) -> usize {
-        let path = match path.as_path() {
-            Some(it) => it,
-            None => return self.len() - 1,
-        };
-        let idx = match self.roots.binary_search_by(|(p, _)| p.as_path().cmp(path)) {
+        let idx = match self.roots.binary_search_by(|(p, _)| p.cmp(path)) {
             Ok(it) => it,
             Err(it) => it.saturating_sub(1),
         };
@@ -83,7 +78,7 @@ impl FileSetConfig {
 }
 
 pub struct FileSetConfigBuilder {
-    roots: Vec<Vec<AbsPathBuf>>,
+    roots: Vec<Vec<VfsPath>>,
 }
 
 impl Default for FileSetConfigBuilder {
@@ -96,12 +91,12 @@ impl FileSetConfigBuilder {
     pub fn len(&self) -> usize {
         self.roots.len()
     }
-    pub fn add_file_set(&mut self, roots: Vec<AbsPathBuf>) {
+    pub fn add_file_set(&mut self, roots: Vec<VfsPath>) {
         self.roots.push(roots)
     }
     pub fn build(self) -> FileSetConfig {
         let n_file_sets = self.roots.len() + 1;
-        let mut roots: Vec<(AbsPathBuf, usize)> = self
+        let mut roots: Vec<(VfsPath, usize)> = self
             .roots
             .into_iter()
             .enumerate()
diff --git a/crates/vfs/src/lib.rs b/crates/vfs/src/lib.rs
index 055219b0c..024e58018 100644
--- a/crates/vfs/src/lib.rs
+++ b/crates/vfs/src/lib.rs
@@ -38,7 +38,6 @@ mod vfs_path;
 mod path_interner;
 pub mod file_set;
 pub mod loader;
-pub mod walkdir_loader;
 
 use std::{fmt, mem};
 
diff --git a/crates/vfs/src/loader.rs b/crates/vfs/src/loader.rs
index 5a0ca68f3..a216b5f13 100644
--- a/crates/vfs/src/loader.rs
+++ b/crates/vfs/src/loader.rs
@@ -3,19 +3,20 @@ use std::fmt;
 
 use paths::AbsPathBuf;
 
+#[derive(Debug)]
 pub enum Entry {
     Files(Vec<AbsPathBuf>),
-    Directory { path: AbsPathBuf, globs: Vec<String> },
+    Directory { path: AbsPathBuf, include: Vec<String> },
 }
 
+#[derive(Debug)]
 pub struct Config {
     pub load: Vec<Entry>,
     pub watch: Vec<usize>,
 }
 
 pub enum Message {
-    DidSwitchConfig { n_entries: usize },
-    DidLoadAllEntries,
+    Progress { n_entries_total: usize, n_entries_done: usize },
     Loaded { files: Vec<(AbsPathBuf, Option<Vec<u8>>)> },
 }
 
@@ -32,15 +33,15 @@ pub trait Handle: fmt::Debug {
 
 impl Entry {
     pub fn rs_files_recursively(base: AbsPathBuf) -> Entry {
-        Entry::Directory { path: base, globs: globs(&["*.rs"]) }
+        Entry::Directory { path: base, include: globs(&["*.rs", "!/.git/"]) }
     }
     pub fn local_cargo_package(base: AbsPathBuf) -> Entry {
-        Entry::Directory { path: base, globs: globs(&["*.rs", "!/target/"]) }
+        Entry::Directory { path: base, include: globs(&["*.rs", "!/target/", "!/.git/"]) }
     }
     pub fn cargo_package_dependency(base: AbsPathBuf) -> Entry {
         Entry::Directory {
             path: base,
-            globs: globs(&["*.rs", "!/tests/", "!/examples/", "!/benches/"]),
+            include: globs(&["*.rs", "!/tests/", "!/examples/", "!/benches/", "!/.git/"]),
         }
     }
 }
@@ -55,10 +56,11 @@ impl fmt::Debug for Message {
             Message::Loaded { files } => {
                 f.debug_struct("Loaded").field("n_files", &files.len()).finish()
             }
-            Message::DidSwitchConfig { n_entries } => {
-                f.debug_struct("DidSwitchConfig").field("n_entries", n_entries).finish()
-            }
-            Message::DidLoadAllEntries => f.debug_struct("DidLoadAllEntries").finish(),
+            Message::Progress { n_entries_total, n_entries_done } => f
+                .debug_struct("Progress")
+                .field("n_entries_total", n_entries_total)
+                .field("n_entries_done", n_entries_done)
+                .finish(),
         }
     }
 }
diff --git a/crates/vfs/src/vfs_path.rs b/crates/vfs/src/vfs_path.rs
index de5dc0bf3..0a8a86c62 100644
--- a/crates/vfs/src/vfs_path.rs
+++ b/crates/vfs/src/vfs_path.rs
@@ -9,9 +9,17 @@ use paths::{AbsPath, AbsPathBuf};
 pub struct VfsPath(VfsPathRepr);
 
 impl VfsPath {
+    /// Creates an "in-memory" path from `/`-separates string.
+    /// This is most useful for testing, to avoid windows/linux differences
+    pub fn new_virtual_path(path: String) -> VfsPath {
+        assert!(path.starts_with('/'));
+        VfsPath(VfsPathRepr::VirtualPath(VirtualPath(path)))
+    }
+
     pub fn as_path(&self) -> Option<&AbsPath> {
         match &self.0 {
             VfsPathRepr::PathBuf(it) => Some(it.as_path()),
+            VfsPathRepr::VirtualPath(_) => None,
         }
     }
     pub fn join(&self, path: &str) -> VfsPath {
@@ -20,11 +28,24 @@ impl VfsPath {
                 let res = it.join(path).normalize();
                 VfsPath(VfsPathRepr::PathBuf(res))
             }
+            VfsPathRepr::VirtualPath(it) => {
+                let res = it.join(path);
+                VfsPath(VfsPathRepr::VirtualPath(res))
+            }
         }
     }
     pub fn pop(&mut self) -> bool {
         match &mut self.0 {
             VfsPathRepr::PathBuf(it) => it.pop(),
+            VfsPathRepr::VirtualPath(it) => it.pop(),
+        }
+    }
+    pub fn starts_with(&self, other: &VfsPath) -> bool {
+        match (&self.0, &other.0) {
+            (VfsPathRepr::PathBuf(lhs), VfsPathRepr::PathBuf(rhs)) => lhs.starts_with(rhs),
+            (VfsPathRepr::PathBuf(_), _) => false,
+            (VfsPathRepr::VirtualPath(lhs), VfsPathRepr::VirtualPath(rhs)) => lhs.starts_with(rhs),
+            (VfsPathRepr::VirtualPath(_), _) => false,
         }
     }
 }
@@ -32,11 +53,12 @@ impl VfsPath {
 #[derive(Debug, Clone, Ord, PartialOrd, Eq, PartialEq, Hash)]
 enum VfsPathRepr {
     PathBuf(AbsPathBuf),
+    VirtualPath(VirtualPath),
 }
 
 impl From<AbsPathBuf> for VfsPath {
     fn from(v: AbsPathBuf) -> Self {
-        VfsPath(VfsPathRepr::PathBuf(v))
+        VfsPath(VfsPathRepr::PathBuf(v.normalize()))
     }
 }
 
@@ -44,6 +66,33 @@ impl fmt::Display for VfsPath {
     fn fmt(&self, f: &mut std::fmt::Formatter<'_>) -> std::fmt::Result {
         match &self.0 {
             VfsPathRepr::PathBuf(it) => fmt::Display::fmt(&it.display(), f),
+            VfsPathRepr::VirtualPath(VirtualPath(it)) => fmt::Display::fmt(it, f),
+        }
+    }
+}
+
+#[derive(Debug, Clone, Ord, PartialOrd, Eq, PartialEq, Hash)]
+struct VirtualPath(String);
+
+impl VirtualPath {
+    fn starts_with(&self, other: &VirtualPath) -> bool {
+        self.0.starts_with(&other.0)
+    }
+    fn pop(&mut self) -> bool {
+        let pos = match self.0.rfind('/') {
+            Some(pos) => pos,
+            None => return false,
+        };
+        self.0 = self.0[..pos].to_string();
+        true
+    }
+    fn join(&self, mut path: &str) -> VirtualPath {
+        let mut res = self.clone();
+        while path.starts_with("../") {
+            assert!(res.pop());
+            path = &path["../".len()..]
         }
+        res.0 = format!("{}/{}", res.0, path);
+        res
     }
 }
diff --git a/crates/vfs/src/walkdir_loader.rs b/crates/vfs/src/walkdir_loader.rs
deleted file mode 100644
index 13e59e3f3..000000000
--- a/crates/vfs/src/walkdir_loader.rs
+++ /dev/null
@@ -1,108 +0,0 @@
-//! A walkdir-based implementation of `loader::Handle`, which doesn't try to
-//! watch files.
-use std::convert::TryFrom;
-
-use globset::{Glob, GlobSetBuilder};
-use paths::{AbsPath, AbsPathBuf};
-use walkdir::WalkDir;
-
-use crate::loader;
-
-#[derive(Debug)]
-pub struct WalkdirLoaderHandle {
-    // Relative order of fields below is significant.
-    sender: crossbeam_channel::Sender<Message>,
-    _thread: jod_thread::JoinHandle,
-}
-
-enum Message {
-    Config(loader::Config),
-    Invalidate(AbsPathBuf),
-}
-
-impl loader::Handle for WalkdirLoaderHandle {
-    fn spawn(sender: loader::Sender) -> WalkdirLoaderHandle {
-        let actor = WalkdirLoaderActor { sender };
-        let (sender, receiver) = crossbeam_channel::unbounded::<Message>();
-        let thread = jod_thread::spawn(move || actor.run(receiver));
-        WalkdirLoaderHandle { sender, _thread: thread }
-    }
-    fn set_config(&mut self, config: loader::Config) {
-        self.sender.send(Message::Config(config)).unwrap()
-    }
-    fn invalidate(&mut self, path: AbsPathBuf) {
-        self.sender.send(Message::Invalidate(path)).unwrap();
-    }
-    fn load_sync(&mut self, path: &AbsPathBuf) -> Option<Vec<u8>> {
-        read(path)
-    }
-}
-
-struct WalkdirLoaderActor {
-    sender: loader::Sender,
-}
-
-impl WalkdirLoaderActor {
-    fn run(mut self, receiver: crossbeam_channel::Receiver<Message>) {
-        for msg in receiver {
-            match msg {
-                Message::Config(config) => {
-                    self.send(loader::Message::DidSwitchConfig { n_entries: config.load.len() });
-                    for entry in config.load.into_iter() {
-                        let files = self.load_entry(entry);
-                        self.send(loader::Message::Loaded { files });
-                    }
-                    drop(config.watch);
-                    self.send(loader::Message::DidLoadAllEntries);
-                }
-                Message::Invalidate(path) => {
-                    let contents = read(path.as_path());
-                    let files = vec![(path, contents)];
-                    self.send(loader::Message::Loaded { files });
-                }
-            }
-        }
-    }
-    fn load_entry(&mut self, entry: loader::Entry) -> Vec<(AbsPathBuf, Option<Vec<u8>>)> {
-        match entry {
-            loader::Entry::Files(files) => files
-                .into_iter()
-                .map(|file| {
-                    let contents = read(file.as_path());
-                    (file, contents)
-                })
-                .collect::<Vec<_>>(),
-            loader::Entry::Directory { path, globs } => {
-                let globset = {
-                    let mut builder = GlobSetBuilder::new();
-                    for glob in &globs {
-                        builder.add(Glob::new(glob).unwrap());
-                    }
-                    builder.build().unwrap()
-                };
-
-                let files = WalkDir::new(path)
-                    .into_iter()
-                    .filter_map(|it| it.ok())
-                    .filter(|it| it.file_type().is_file())
-                    .map(|it| it.into_path())
-                    .map(|it| AbsPathBuf::try_from(it).unwrap())
-                    .filter(|it| globset.is_match(&it));
-
-                files
-                    .map(|file| {
-                        let contents = read(file.as_path());
-                        (file, contents)
-                    })
-                    .collect()
-            }
-        }
-    }
-    fn send(&mut self, msg: loader::Message) {
-        (self.sender)(msg)
-    }
-}
-
-fn read(path: &AbsPath) -> Option<Vec<u8>> {
-    std::fs::read(path).ok()
-}