diff --git a/test/sharness/t0260-sharding.sh b/test/sharness/t0260-sharding.sh
index 20be436c7a3..e958cd8fb09 100755
--- a/test/sharness/t0260-sharding.sh
+++ b/test/sharness/t0260-sharding.sh
@@ -8,51 +8,71 @@ test_description="Test directory sharding"
 
 . lib/test-lib.sh
 
+# FIXME: We now have dropped the global binary option of either sharding nothing
+#  or sharding everything. We now have a threshold of 256 KiB (see `HAMTShardingSize`
+#  in core/node/groups.go) above which directories are sharded. The directory size
+#  is estimated as the size of each link (roughly entry name and CID byte length,
+#  normally 34 bytes). So we need 256 KiB / (34 + 10) ~ 6000 entries in the directory
+#  (estimating a fixed 10 char for each name) to trigger sharding.
+# We also need to update the SHARDED/UNSHARDED CIDs.
+
 test_expect_success "set up test data" '
-  mkdir testdata
-  for i in `seq 2000`
+  mkdir big_dir
+  for i in `seq 6500` # just to be sure
+  do
+    echo $i > big_dir/`printf "file%06d" $i`
+  done
+
+  mkdir small_dir
+  for i in `seq 100`
   do
-    echo $i > testdata/file$i
+    echo $i > small_dir/file$i
   done
 '
 
 test_add_large_dir() {
   exphash="$1"
+  input_dir="$2" # FIXME: added a new entry to switch between small and big_dir
+                 #  we need to update the calls.
   test_expect_success "ipfs add on very large directory succeeds" '
-    ipfs add -r -q testdata | tail -n1 > sharddir_out &&
+    ipfs add -r -q $input_dir | tail -n1 > sharddir_out &&
     echo "$exphash" > sharddir_exp &&
     test_cmp sharddir_exp sharddir_out
   '
   test_expect_success "ipfs get on very large directory succeeds" '
-    ipfs get -o testdata-out "$exphash" &&
-    test_cmp testdata testdata-out
+    ipfs get -o output_dir "$exphash" &&
+    test_cmp $input_dir output_dir
+    rm output_dir -r # FIXME: Cleaning the output directory because we now have
+                     #  two different directories and it seems `ipfs get` doesnt
+                     #  overwrite just adds files to the output dir.
   '
 }
 
 test_init_ipfs
 
-UNSHARDED="QmavrTrQG4VhoJmantURAYuw3bowq3E2WcvP36NRQDAC1N"
-test_add_large_dir "$UNSHARDED"
+# FIXME: Updating CID based just on the expected output of a failed test run. These
+#  need to be confirmed.
+UNSHARDED_SMALL="QmZedLGyvgWiyGQzAw2GpuLZeqzxmVcUQUbyRkVWx5DkxK"
+test_add_large_dir "$UNSHARDED_SMALL" small_dir
 
 test_launch_ipfs_daemon
 
-test_add_large_dir "$UNSHARDED"
+test_add_large_dir "$UNSHARDED_SMALL" small_dir
 
 test_kill_ipfs_daemon
 
-test_expect_success "enable sharding" '
-  ipfs config --json Experimental.ShardingEnabled true
-'
-
-SHARDED="QmSCJD1KYLhVVHqBK3YyXuoEqHt7vggyJhzoFYbT8v1XYL"
-test_add_large_dir "$SHARDED"
+SHARDED_BIG="Qmbgq1VC2KSWWhdFLvH6mapN1wuY67FZVPYbCGyR5TnYSv"
+test_add_large_dir "$SHARDED_BIG" big_dir
 
 test_launch_ipfs_daemon
 
-test_add_large_dir "$SHARDED"
+test_add_large_dir "$SHARDED_BIG" big_dir
 
 test_kill_ipfs_daemon
 
+# FIXME: This test no longer works, we have different directories for sharded
+#  and unsharded. We might have to duplicate the UNSHARDED/SHARDED for small
+#  and big dirs.
 test_expect_success "sharded and unsharded output look the same" '
   ipfs ls "$SHARDED" | sort > sharded_out &&
   ipfs ls "$UNSHARDED" | sort > unsharded_out &&
@@ -65,15 +85,16 @@ test_expect_success "ipfs cat error output the same" '
   test_cmp sharded_err unsharded_err
 '
 
+# FIXME: Should we replicate this test for the small (non sharded) directory as well?
 test_expect_success "'ipfs ls --resolve-type=false --size=false' admits missing block" '
-  ipfs ls "$SHARDED" | head -1 > first_file &&
-  ipfs ls --size=false "$SHARDED" | sort > sharded_out_nosize &&
+  ipfs ls "$SHARDED_BIG" | head -1 > first_file &&
+  ipfs ls --size=false "$SHARDED_BIG" | sort > sharded_out_nosize &&
   read -r HASH _ NAME <first_file &&
-  ipfs pin rm "$SHARDED" "$UNSHARDED" && # To allow us to remove the block
+  ipfs pin rm "$SHARDED_BIG" "$UNSHARDED" && # To allow us to remove the block
   ipfs block rm "$HASH" &&
-  test_expect_code 1 ipfs cat "$SHARDED/$NAME" &&
-  test_expect_code 1 ipfs ls "$SHARDED" &&
-  ipfs ls --resolve-type=false --size=false "$SHARDED" | sort > missing_out &&
+  test_expect_code 1 ipfs cat "$SHARDED_BIG/$NAME" &&
+  test_expect_code 1 ipfs ls "$SHARDED_BIG" &&
+  ipfs ls --resolve-type=false --size=false "$SHARDED_BIG" | sort > missing_out &&
   test_cmp sharded_out_nosize missing_out
 '
 
@@ -81,13 +102,13 @@ test_launch_ipfs_daemon
 
 test_expect_success "gateway can resolve sharded dirs" '
   echo 100 > expected &&
-  curl -sfo actual "http://127.0.0.1:$GWAY_PORT/ipfs/$SHARDED/file100" &&
+  curl -sfo actual "http://127.0.0.1:$GWAY_PORT/ipfs/$SHARDED_BIG/file100" &&
   test_cmp expected actual
 '
 
 test_expect_success "'ipfs resolve' can resolve sharded dirs" '
   echo /ipfs/QmZ3RfWk1u5LEGYLHA633B5TNJy3Du27K6Fny9wcxpowGS > expected &&
-  ipfs resolve "/ipfs/$SHARDED/file100" > actual &&
+  ipfs resolve "/ipfs/$SHARDED_BIG/file100" > actual &&
   test_cmp expected actual
 '