diff --git a/util/complete/src/main/scala/sbt/complete/ExampleSource.scala b/util/complete/src/main/scala/sbt/complete/ExampleSource.scala
index e13626083..565a8c3f1 100644
--- a/util/complete/src/main/scala/sbt/complete/ExampleSource.scala
+++ b/util/complete/src/main/scala/sbt/complete/ExampleSource.scala
@@ -1,6 +1,7 @@
 package sbt.complete
 
 import java.io.File
+import sbt.IO._
 
 /**
  * These sources of examples are used in parsers for user input completion. An example of such a source is the
@@ -27,12 +28,15 @@ trait ExampleSource
  * A convenience example source that wraps any collection of strings into a source of examples.
  * @param examples the examples that will be displayed to the user when they press the TAB key.
  */
-sealed case class FixedSetExamples(examples: Iterable[String]) extends ExampleSource {
+sealed case class FixedSetExamples(examples: Iterable[String]) extends ExampleSource
+{
 	override def withAddedPrefix(addedPrefix: String): ExampleSource = FixedSetExamples(examplesWithRemovedPrefix(addedPrefix))
 
 	override def apply(): Iterable[String] = examples
 
-	private def examplesWithRemovedPrefix(prefix: String) = examples.collect { case example if example startsWith prefix => example substring prefix.length }
+	private def examplesWithRemovedPrefix(prefix: String) = examples.collect {
+		case example if example startsWith prefix => example substring prefix.length
+	}
 }
 
 /**
@@ -40,22 +44,19 @@ sealed case class FixedSetExamples(examples: Iterable[String]) extends ExampleSo
  * @param base the directory within which this class will search for completion examples.
  * @param prefix the part of the path already written by the user.
  */
-class FileExamples(base: File, prefix: String = "") extends ExampleSource {
-	private val relativizedPrefix: String = "." + File.separator + prefix
-
-	override def apply(): Iterable[String] = files(base).map(_.toString.substring(relativizedPrefix.length))
+class FileExamples(base: File, prefix: String = "") extends ExampleSource
+{
+	override def apply(): Stream[String] = files(base).map(_ substring prefix.length)
 
 	override def withAddedPrefix(addedPrefix: String): FileExamples = new FileExamples(base, prefix + addedPrefix)
 
-	protected def fileStartsWithPrefix(path: File): Boolean = path.toString.startsWith(relativizedPrefix)
-
-	protected def directoryStartsWithPrefix(path: File): Boolean = {
-		val pathString = path.toString
-		pathString.startsWith(relativizedPrefix) || relativizedPrefix.startsWith(pathString)
+	protected def files(directory: File): Stream[String] = {
+		val childPaths = directory.listFiles().toStream
+		val prefixedDirectChildPaths = childPaths.map(relativize(base, _).get).filter(_ startsWith prefix)
+		val dirsToRecurseInto = childPaths.filter(_.isDirectory).map(relativize(base, _).get).filter(dirStartsWithPrefix)
+		prefixedDirectChildPaths append dirsToRecurseInto.flatMap(dir => files(new File(base, dir)))
 	}
 
-	protected def files(directory: File): Iterable[File] = {
-		val (subDirectories, filesOnly) = directory.listFiles().toStream.partition(_.isDirectory)
-		filesOnly.filter(fileStartsWithPrefix) ++ subDirectories.filter(directoryStartsWithPrefix).flatMap(files)
-	}
+	private def dirStartsWithPrefix(relativizedPath: String): Boolean =
+		(relativizedPath startsWith prefix) || (prefix startsWith relativizedPath)
 }
\ No newline at end of file
diff --git a/util/complete/src/test/scala/sbt/complete/FileExamplesTest.scala b/util/complete/src/test/scala/sbt/complete/FileExamplesTest.scala
new file mode 100644
index 000000000..08c9a5884
--- /dev/null
+++ b/util/complete/src/test/scala/sbt/complete/FileExamplesTest.scala
@@ -0,0 +1,92 @@
+package sbt.complete
+
+import org.specs2.mutable.Specification
+import org.specs2.specification.Scope
+import sbt.IO.withTemporaryDirectory
+import java.io.File
+import sbt.IO._
+
+class FileExamplesTest extends Specification
+{
+
+	"listing all files in an absolute base directory" should {
+		"produce the entire base directory's contents" in new directoryStructure {
+			fileExamples().toList should containTheSameElementsAs(allRelativizedPaths)
+		}
+	}
+
+	"listing files with a prefix that matches none" should {
+		"produce an empty list" in new directoryStructure(withCompletionPrefix = "z") {
+			fileExamples().toList should beEmpty
+		}
+	}
+
+	"listing single-character prefixed files" should {
+		"produce matching paths only" in new directoryStructure(withCompletionPrefix = "f") {
+			fileExamples().toList should containTheSameElementsAs(prefixedPathsOnly)
+		}
+	}
+
+	"listing directory-prefixed files" should {
+		"produce matching paths only" in new directoryStructure(withCompletionPrefix = "far") {
+			fileExamples().toList should containTheSameElementsAs(prefixedPathsOnly)
+		}
+
+		"produce sub-dir contents only when appending a file separator to the directory" in new directoryStructure(withCompletionPrefix = "far" + File.separator) {
+			fileExamples().toList should containTheSameElementsAs(prefixedPathsOnly)
+		}
+	}
+
+	"listing files with a sub-path prefix" should {
+		"produce matching paths only" in new directoryStructure(withCompletionPrefix = "far" + File.separator + "ba") {
+			fileExamples().toList should containTheSameElementsAs(prefixedPathsOnly)
+		}
+	}
+
+	"completing a full path" should {
+		"produce a list with an empty string" in new directoryStructure(withCompletionPrefix = "bazaar") {
+			fileExamples().toList shouldEqual List("")
+		}
+	}
+
+	class directoryStructure(withCompletionPrefix: String = "") extends Scope with DelayedInit
+	{
+		var fileExamples: FileExamples = _
+		var baseDir: File = _
+		var childFiles: List[File] = _
+		var childDirectories: List[File] = _
+		var nestedFiles: List[File] = _
+		var nestedDirectories: List[File] = _
+
+		def allRelativizedPaths: List[String] =
+			(childFiles ++ childDirectories ++ nestedFiles ++ nestedDirectories).map(relativize(baseDir, _).get)
+
+		def prefixedPathsOnly: List[String] =
+			allRelativizedPaths.filter(_ startsWith withCompletionPrefix).map(_ substring withCompletionPrefix.length)
+
+		override def delayedInit(testBody: => Unit): Unit = {
+			withTemporaryDirectory {
+				tempDir =>
+					createSampleDirStructure(tempDir)
+					fileExamples = new FileExamples(baseDir, withCompletionPrefix)
+					testBody
+			}
+		}
+
+		private def createSampleDirStructure(tempDir: File): Unit = {
+			childFiles = toChildFiles(tempDir, List("foo", "bar", "bazaar"))
+			childDirectories = toChildFiles(tempDir, List("moo", "far"))
+			nestedFiles = toChildFiles(childDirectories(1), List("farfile1", "barfile2"))
+			nestedDirectories = toChildFiles(childDirectories(1), List("fardir1", "bardir2"))
+
+			(childDirectories ++ nestedDirectories).map(_.mkdirs())
+			(childFiles ++ nestedFiles).map(_.createNewFile())
+
+			// NOTE: Creating a new file here because `tempDir.listFiles()` returned an empty list.
+			baseDir = new File(tempDir.getCanonicalPath)
+		}
+
+		private def toChildFiles(baseDir: File, files: List[String]): List[File] = files.map(new File(baseDir, _))
+	}
+
+}