diff --git a/packages/core/src/browser/dialogs.ts b/packages/core/src/browser/dialogs.ts
index 73ed510271999..58f83ac166298 100644
--- a/packages/core/src/browser/dialogs.ts
+++ b/packages/core/src/browser/dialogs.ts
@@ -194,7 +194,9 @@ export abstract class AbstractDialog<T> extends BaseWidget {
         this.activeElement = undefined;
         super.close();
     }
-
+    error(error: string): void {
+        this.setErrorMessage(error);
+    }
     protected onUpdateRequest(msg: Message): void {
         super.onUpdateRequest(msg);
         this.validate();
diff --git a/packages/workspace/src/browser/workspace-commands.ts b/packages/workspace/src/browser/workspace-commands.ts
index 070bcb7dcf7a3..070e21b0eb9bd 100644
--- a/packages/workspace/src/browser/workspace-commands.ts
+++ b/packages/workspace/src/browser/workspace-commands.ts
@@ -16,6 +16,7 @@
 
 import { inject, injectable } from 'inversify';
 import URI from '@theia/core/lib/common/uri';
+import * as path from 'path';
 import { SelectionService } from '@theia/core/lib/common/selection-service';
 import { Command, CommandContribution, CommandRegistry } from '@theia/core/lib/common/command';
 import { MenuContribution, MenuModelRegistry } from '@theia/core/lib/common/menu';
@@ -182,11 +183,13 @@ export class WorkspaceCommandContribution implements CommandContribution {
                     const parentUri = new URI(parent.uri);
                     const { fileName, fileExtension } = this.getDefaultFileConfig();
                     const vacantChildUri = FileSystemUtils.generateUniqueResourceURI(parentUri, parent, fileName, fileExtension);
-                    const dialog = new SingleTextInputDialog({
+
+                    const dialog: SingleTextInputDialog = new SingleTextInputDialog({
                         title: 'New File',
                         initialValue: vacantChildUri.path.base,
-                        validate: name => this.validateFileName(name, parent)
+                        validate: name => this.validateFileName(name, parent, true, dialog)
                     });
+
                     dialog.open().then(name => {
                         if (name) {
                             const fileUri = parentUri.resolve(name);
@@ -203,10 +206,10 @@ export class WorkspaceCommandContribution implements CommandContribution {
                 if (parent) {
                     const parentUri = new URI(parent.uri);
                     const vacantChildUri = FileSystemUtils.generateUniqueResourceURI(parentUri, parent, 'Untitled');
-                    const dialog = new SingleTextInputDialog({
+                    const dialog: SingleTextInputDialog = new SingleTextInputDialog({
                         title: 'New Folder',
                         initialValue: vacantChildUri.path.base,
-                        validate: name => this.validateFileName(name, parent)
+                        validate: name => this.validateFileName(name, parent, true, dialog)
                     });
                     dialog.open().then(name => {
                         if (name) {
@@ -240,7 +243,7 @@ export class WorkspaceCommandContribution implements CommandContribution {
                                 if (initialValue === name && mode === 'preview') {
                                     return false;
                                 }
-                                return this.validateFileName(name, parent);
+                                return this.validateFileName(name, parent, false);
                             }
                         });
                         dialog.open().then(name => {
@@ -308,18 +311,26 @@ export class WorkspaceCommandContribution implements CommandContribution {
      *
      * @param name the simple file name of the file to validate.
      * @param parent the parent directory's file stat.
+     * @param recursive allow file or folder creation using recursive path
+     * @param dialog optional SingleTextInputDialog instance
      */
-    protected validateFileName(name: string, parent: FileStat): string {
-        if (!validFilename(name)) {
-            return 'Invalid name, try other';
+    protected validateFileName(name: string, parent: FileStat, recursive: boolean = false, dialog?: SingleTextInputDialog): string {
+        if (!name) {
+            return '';
         }
-        if (parent.children) {
-            for (const child of parent.children) {
-                if (new URI(child.uri).path.base === name) {
-                    return 'A file with this name already exists.';
-                }
-            }
+        if (!recursive && !validFilename(name)) {
+            return 'Invalid file or folder name';
         }
+        const fileName = path.basename(name);
+        if (!validFilename(fileName) || name.startsWith('/') || name.startsWith(' ') || name.endsWith(' ')) {
+            return `The name <strong>${fileName}</strong> is not a valid file or folder name.`;
+        }
+        const childUri = new URI(parent.uri).resolve(name).toString();
+        this.fileSystem.exists(childUri).then(exists => {
+            if (exists && dialog) {
+                dialog.error(`A file or folder <strong>${fileName}</strong> already exists at this location.`);
+            }
+        });
         return '';
     }