diff --git a/NEXT_CHANGELOG.md b/NEXT_CHANGELOG.md
index 4f19731d9c..9394dd223f 100644
--- a/NEXT_CHANGELOG.md
+++ b/NEXT_CHANGELOG.md
@@ -7,6 +7,7 @@
 ### New Features and Improvements
 
 * Added `expected_workspace_status` to `databricks_mws_workspaces` to support creating workspaces in provisioning status ([#5019](https://github.com/databricks/terraform-provider-databricks/pull/5019))
+* Added `databricks_volume_directory` resource ([#5141](https://github.com/databricks/terraform-provider-databricks/pull/5141))
 
 ### Bug Fixes
 
diff --git a/docs/resources/volume_directory.md b/docs/resources/volume_directory.md
new file mode 100644
index 0000000000..a2aaa5fea5
--- /dev/null
+++ b/docs/resources/volume_directory.md
@@ -0,0 +1,119 @@
+---
+subcategory: "Unity Catalog"
+---
+# databricks_volume_directory Resource
+
+This resource allows creating and managing directories in Unity Catalog [volumes](volume.md) using the Files API.
+
+-> This resource can only be used with a workspace-level provider!
+
+Directories in Unity Catalog volumes provide a way to organize files and data within volumes. The Files API automatically creates parent directories as needed (similar to `mkdir -p`), making it easy to create nested directory structures.
+
+The directory path uses the following format:
+
+```
+/Volumes/<catalog>/<schema>/<volume>/<path>
+```
+
+
+## Example Usage
+
+### Basic Directory Creation
+
+```hcl
+resource "databricks_catalog" "sandbox" {
+  name    = "sandbox"
+  comment = "this catalog is managed by terraform"
+  properties = {
+    purpose = "testing"
+  }
+}
+
+resource "databricks_schema" "things" {
+  catalog_name = databricks_catalog.sandbox.name
+  name         = "things"
+  comment      = "this schema is managed by terraform"
+  properties = {
+    kind = "various"
+  }
+}
+
+resource "databricks_volume" "this" {
+  name         = "quickstart_volume"
+  catalog_name = databricks_catalog.sandbox.name
+  schema_name  = databricks_schema.things.name
+  volume_type  = "MANAGED"
+  comment      = "this volume is managed by terraform"
+}
+
+resource "databricks_volume_directory" "data" {
+  directory_path = "${databricks_volume.this.volume_path}/data"
+}
+```
+
+### Nested Directory Structure
+
+```hcl
+resource "databricks_volume_directory" "logs" {
+  directory_path = "${databricks_volume.this.volume_path}/logs/2024/01"
+}
+
+resource "databricks_volume_directory" "raw_data" {
+  directory_path = "${databricks_volume.this.volume_path}/raw/input"
+}
+
+resource "databricks_volume_directory" "processed_data" {
+  directory_path = "${databricks_volume.this.volume_path}/processed/output"
+}
+```
+
+### Directory with Files
+
+```hcl
+resource "databricks_volume_directory" "scripts" {
+  directory_path = "${databricks_volume.this.volume_path}/scripts"
+}
+
+resource "databricks_file" "init_script" {
+  source = "/local/path/to/init.sh"
+  path   = "${databricks_volume_directory.scripts.id}/init.sh"
+}
+```
+
+## Argument Reference
+
+The following arguments are required:
+
+* `directory_path` - (Required) The absolute path of the directory in a Unity Catalog volume. Must be in the format `/Volumes/<catalog>/<schema>/<volume>/<path>`. Changing this value will force recreation of the resource.
+
+## Attribute Reference
+
+In addition to all arguments above, the following attributes are exported:
+
+* `id` - The ID of the directory resource, same as `directory_path`.
+
+## Import
+
+The resource `databricks_volume_directory` can be imported using the directory path:
+
+```hcl
+import {
+  to = databricks_volume_directory.this
+  id = "/Volumes/main/default/my_volume/my_directory"
+}
+```
+
+Alternatively, when using `terraform` version 1.4 or earlier, import using the `terraform import` command:
+
+```bash
+terraform import databricks_volume_directory.this /Volumes/main/default/my_volume/my_directory
+```
+
+## Related Resources
+
+The following resources are often used in the same context:
+
+* [databricks_file](file.md) to manage files in Unity Catalog volumes.
+* [databricks_volume](volume.md) to manage [volumes within Unity Catalog](https://docs.databricks.com/en/connect/unity-catalog/volumes.html).
+* [databricks_schema](schema.md) to manage schemas within Unity Catalog.
+* [databricks_catalog](catalog.md) to manage catalogs within Unity Catalog.
diff --git a/internal/providers/pluginfw/pluginfw_rollout_utils.go b/internal/providers/pluginfw/pluginfw_rollout_utils.go
index 575f2507c4..f18b18cbe4 100644
--- a/internal/providers/pluginfw/pluginfw_rollout_utils.go
+++ b/internal/providers/pluginfw/pluginfw_rollout_utils.go
@@ -49,6 +49,7 @@ var migratedDataSources = []func() datasource.DataSource{
 var pluginFwOnlyResources = append(
 	[]func() resource.Resource{
 		app.ResourceApp,
+		volume.ResourceVolumeDirectory,
 	},
 	autoGeneratedResources...,
 )
diff --git a/internal/providers/pluginfw/products/volume/resource_volume_directory.go b/internal/providers/pluginfw/products/volume/resource_volume_directory.go
new file mode 100644
index 0000000000..0787405af5
--- /dev/null
+++ b/internal/providers/pluginfw/products/volume/resource_volume_directory.go
@@ -0,0 +1,194 @@
+package volume
+
+import (
+	"context"
+
+	"github.com/databricks/databricks-sdk-go/apierr"
+	"github.com/databricks/databricks-sdk-go/service/files"
+	"github.com/databricks/terraform-provider-databricks/common"
+	pluginfwcommon "github.com/databricks/terraform-provider-databricks/internal/providers/pluginfw/common"
+	pluginfwcontext "github.com/databricks/terraform-provider-databricks/internal/providers/pluginfw/context"
+	"github.com/hashicorp/terraform-plugin-framework/resource"
+	"github.com/hashicorp/terraform-plugin-framework/resource/schema"
+	"github.com/hashicorp/terraform-plugin-framework/resource/schema/planmodifier"
+	"github.com/hashicorp/terraform-plugin-framework/resource/schema/stringplanmodifier"
+	"github.com/hashicorp/terraform-plugin-framework/types"
+)
+
+const resourceName = "volume_directory"
+
+var _ resource.ResourceWithConfigure = &VolumeDirectoryResource{}
+
+func ResourceVolumeDirectory() resource.Resource {
+	return &VolumeDirectoryResource{}
+}
+
+type VolumeDirectoryResource struct {
+	Client *common.DatabricksClient
+}
+
+type VolumeDirectoryModel struct {
+	DirectoryPath types.String `tfsdk:"directory_path"`
+	ID            types.String `tfsdk:"id"`
+}
+
+func (r *VolumeDirectoryResource) Metadata(ctx context.Context, req resource.MetadataRequest, resp *resource.MetadataResponse) {
+	resp.TypeName = pluginfwcommon.GetDatabricksProductionName(resourceName)
+}
+
+func (r *VolumeDirectoryResource) Schema(ctx context.Context, req resource.SchemaRequest, resp *resource.SchemaResponse) {
+	resp.Schema = schema.Schema{
+		Description: "Manages directories in Unity Catalog volumes using the Files API.",
+		Attributes: map[string]schema.Attribute{
+			"directory_path": schema.StringAttribute{
+				Description: "The absolute path of the directory in a Unity Catalog volume (e.g., `/Volumes/catalog/schema/volume/path/to/dir`).",
+				Required:    true,
+				PlanModifiers: []planmodifier.String{
+					stringplanmodifier.RequiresReplace(),
+				},
+			},
+			"id": schema.StringAttribute{
+				Description: "The ID of the directory resource, same as directory_path.",
+				Computed:    true,
+				PlanModifiers: []planmodifier.String{
+					stringplanmodifier.UseStateForUnknown(),
+				},
+			},
+		},
+	}
+}
+
+func (r *VolumeDirectoryResource) Configure(ctx context.Context, req resource.ConfigureRequest, resp *resource.ConfigureResponse) {
+	if r.Client == nil {
+		r.Client = pluginfwcommon.ConfigureResource(req, resp)
+	}
+}
+
+func (r *VolumeDirectoryResource) Create(ctx context.Context, req resource.CreateRequest, resp *resource.CreateResponse) {
+	ctx = pluginfwcontext.SetUserAgentInResourceContext(ctx, resourceName)
+
+	w, diags := r.Client.GetWorkspaceClient()
+	resp.Diagnostics.Append(diags...)
+	if resp.Diagnostics.HasError() {
+		return
+	}
+
+	var data VolumeDirectoryModel
+	resp.Diagnostics.Append(req.Plan.Get(ctx, &data)...)
+	if resp.Diagnostics.HasError() {
+		return
+	}
+
+	directoryPath := data.DirectoryPath.ValueString()
+
+	// Create the directory using the Files API
+	err := w.Files.CreateDirectory(ctx, files.CreateDirectoryRequest{
+		DirectoryPath: directoryPath,
+	})
+	if err != nil {
+		resp.Diagnostics.AddError("failed to create directory", err.Error())
+		return
+	}
+
+	// Set the ID to the directory path
+	data.ID = types.StringValue(directoryPath)
+
+	// Save the state
+	resp.Diagnostics.Append(resp.State.Set(ctx, &data)...)
+}
+
+func (r *VolumeDirectoryResource) Read(ctx context.Context, req resource.ReadRequest, resp *resource.ReadResponse) {
+	ctx = pluginfwcontext.SetUserAgentInResourceContext(ctx, resourceName)
+
+	w, diags := r.Client.GetWorkspaceClient()
+	resp.Diagnostics.Append(diags...)
+	if resp.Diagnostics.HasError() {
+		return
+	}
+
+	var data VolumeDirectoryModel
+	resp.Diagnostics.Append(req.State.Get(ctx, &data)...)
+	if resp.Diagnostics.HasError() {
+		return
+	}
+
+	directoryPath := data.ID.ValueString()
+
+	// Check if the directory still exists using GetDirectoryMetadata
+	err := w.Files.GetDirectoryMetadata(ctx, files.GetDirectoryMetadataRequest{
+		DirectoryPath: directoryPath,
+	})
+	if err != nil {
+		if apierr.IsMissing(err) {
+			// Directory no longer exists, remove from state
+			resp.State.RemoveResource(ctx)
+			return
+		}
+		resp.Diagnostics.AddError("failed to get directory metadata", err.Error())
+		return
+	}
+
+	// Directory exists, keep the state as is
+	resp.Diagnostics.Append(resp.State.Set(ctx, &data)...)
+}
+
+func (r *VolumeDirectoryResource) Update(ctx context.Context, req resource.UpdateRequest, resp *resource.UpdateResponse) {
+	// Update is a no-op since directories are immutable once created
+	// The directory_path has RequiresReplace plan modifier, so any change will trigger recreation
+	ctx = pluginfwcontext.SetUserAgentInResourceContext(ctx, resourceName)
+
+	var data VolumeDirectoryModel
+	resp.Diagnostics.Append(req.Plan.Get(ctx, &data)...)
+	if resp.Diagnostics.HasError() {
+		return
+	}
+
+	// Just update the state with the current data
+	resp.Diagnostics.Append(resp.State.Set(ctx, &data)...)
+}
+
+func (r *VolumeDirectoryResource) Delete(ctx context.Context, req resource.DeleteRequest, resp *resource.DeleteResponse) {
+	ctx = pluginfwcontext.SetUserAgentInResourceContext(ctx, resourceName)
+
+	w, diags := r.Client.GetWorkspaceClient()
+	resp.Diagnostics.Append(diags...)
+	if resp.Diagnostics.HasError() {
+		return
+	}
+
+	var data VolumeDirectoryModel
+	resp.Diagnostics.Append(req.State.Get(ctx, &data)...)
+	if resp.Diagnostics.HasError() {
+		return
+	}
+
+	directoryPath := data.ID.ValueString()
+
+	// Delete the directory using the Files API
+	err := w.Files.DeleteDirectory(ctx, files.DeleteDirectoryRequest{
+		DirectoryPath: directoryPath,
+	})
+	if err != nil {
+		// If the directory is already gone, that's okay
+		if !apierr.IsMissing(err) {
+			resp.Diagnostics.AddError("failed to delete directory", err.Error())
+			return
+		}
+	}
+}
+
+// ImportState implements resource.ResourceWithImportState
+func (r *VolumeDirectoryResource) ImportState(ctx context.Context, req resource.ImportStateRequest, resp *resource.ImportStateResponse) {
+	ctx = pluginfwcontext.SetUserAgentInResourceContext(ctx, resourceName)
+
+	// The import ID is the directory path
+	directoryPath := req.ID
+
+	// Set the state with the imported directory path
+	data := VolumeDirectoryModel{
+		DirectoryPath: types.StringValue(directoryPath),
+		ID:            types.StringValue(directoryPath),
+	}
+
+	resp.Diagnostics.Append(resp.State.Set(ctx, &data)...)
+}
diff --git a/internal/providers/pluginfw/products/volume/resource_volume_directory_acc_test.go b/internal/providers/pluginfw/products/volume/resource_volume_directory_acc_test.go
new file mode 100644
index 0000000000..df0f192d19
--- /dev/null
+++ b/internal/providers/pluginfw/products/volume/resource_volume_directory_acc_test.go
@@ -0,0 +1,107 @@
+package volume_test
+
+import (
+	"testing"
+
+	"github.com/databricks/terraform-provider-databricks/internal/acceptance"
+)
+
+const volumeDirectorySetup = `
+resource "databricks_catalog" "sandbox" {
+	name         = "sandbox{var.STICKY_RANDOM}"
+	comment      = "this catalog is managed by terraform"
+	properties = {
+		purpose = "testing"
+	}
+	force_destroy = true
+}
+
+resource "databricks_schema" "things" {
+	catalog_name = databricks_catalog.sandbox.id
+	name         = "things{var.STICKY_RANDOM}"
+	comment      = "this schema is managed by terraform"
+	properties = {
+		kind = "various"
+	}
+}
+
+resource "databricks_volume" "this" {
+	name         = "volume{var.STICKY_RANDOM}"
+	catalog_name = databricks_catalog.sandbox.name
+	schema_name  = databricks_schema.things.name
+	volume_type  = "MANAGED"
+	comment      = "this volume is managed by terraform"
+}
+`
+
+func TestUcAccVolumeDirectoryCreate(t *testing.T) {
+	acceptance.UnityWorkspaceLevel(t, acceptance.Step{
+		Template: volumeDirectorySetup + `
+resource "databricks_volume_directory" "test" {
+	directory_path = "${databricks_volume.this.volume_path}/test_directory"
+}
+`,
+	})
+}
+
+func TestUcAccVolumeDirectoryCreateNested(t *testing.T) {
+	acceptance.UnityWorkspaceLevel(t, acceptance.Step{
+		Template: volumeDirectorySetup + `
+resource "databricks_volume_directory" "parent" {
+	directory_path = "${databricks_volume.this.volume_path}/parent"
+}
+
+resource "databricks_volume_directory" "child" {
+	directory_path = "${databricks_volume_directory.parent.id}/child"
+	depends_on = [databricks_volume_directory.parent]
+}
+`,
+	})
+}
+
+func TestUcAccVolumeDirectoryMultiple(t *testing.T) {
+	acceptance.UnityWorkspaceLevel(t, acceptance.Step{
+		Template: volumeDirectorySetup + `
+resource "databricks_volume_directory" "dir1" {
+	directory_path = "${databricks_volume.this.volume_path}/dir1"
+}
+
+resource "databricks_volume_directory" "dir2" {
+	directory_path = "${databricks_volume.this.volume_path}/dir2"
+}
+
+resource "databricks_volume_directory" "dir3" {
+	directory_path = "${databricks_volume.this.volume_path}/dir3"
+}
+`,
+	})
+}
+
+func TestUcAccVolumeDirectoryUpdate(t *testing.T) {
+	acceptance.UnityWorkspaceLevel(t,
+		acceptance.Step{
+			Template: volumeDirectorySetup + `
+resource "databricks_volume_directory" "test" {
+	directory_path = "${databricks_volume.this.volume_path}/original_dir"
+}
+`,
+		},
+		acceptance.Step{
+			Template: volumeDirectorySetup + `
+resource "databricks_volume_directory" "test" {
+	directory_path = "${databricks_volume.this.volume_path}/new_dir"
+}
+`,
+		},
+	)
+}
+
+func TestUcAccVolumeDirectoryDeepNesting(t *testing.T) {
+	acceptance.UnityWorkspaceLevel(t, acceptance.Step{
+		Template: volumeDirectorySetup + `
+resource "databricks_volume_directory" "deep" {
+	directory_path = "${databricks_volume.this.volume_path}/level1/level2/level3/level4"
+}
+`,
+	})
+}
diff --git a/internal/providers/pluginfw/products/volume/resource_volume_directory_test.go b/internal/providers/pluginfw/products/volume/resource_volume_directory_test.go
new file mode 100644
index 0000000000..9d647ed36a
--- /dev/null
+++ b/internal/providers/pluginfw/products/volume/resource_volume_directory_test.go
@@ -0,0 +1,70 @@
+package volume
+
+import (
+	"context"
+	"testing"
+
+	"github.com/databricks/terraform-provider-databricks/common"
+	"github.com/hashicorp/terraform-plugin-framework/resource"
+	"github.com/stretchr/testify/assert"
+	"github.com/stretchr/testify/require"
+)
+
+func TestVolumeDirectoryResourceMetadata(t *testing.T) {
+	r := ResourceVolumeDirectory()
+	require.NotNil(t, r)
+
+	var resp resource.MetadataResponse
+	r.Metadata(context.Background(), resource.MetadataRequest{
+		ProviderTypeName: "databricks",
+	}, &resp)
+
+	assert.Equal(t, "databricks_volume_directory", resp.TypeName)
+}
+
+func TestVolumeDirectoryResourceSchema(t *testing.T) {
+	r := ResourceVolumeDirectory()
+	require.NotNil(t, r)
+
+	var resp resource.SchemaResponse
+	r.Schema(context.Background(), resource.SchemaRequest{}, &resp)
+
+	assert.NotNil(t, resp.Schema)
+	assert.Contains(t, resp.Schema.Attributes, "directory_path")
+	assert.Contains(t, resp.Schema.Attributes, "id")
+
+	// Verify directory_path is required
+	directoryPathAttr := resp.Schema.Attributes["directory_path"]
+	assert.True(t, directoryPathAttr.IsRequired())
+	assert.False(t, directoryPathAttr.IsOptional())
+	assert.False(t, directoryPathAttr.IsComputed())
+
+	// Verify id is computed
+	idAttr := resp.Schema.Attributes["id"]
+	assert.False(t, idAttr.IsRequired())
+	assert.False(t, idAttr.IsOptional())
+	assert.True(t, idAttr.IsComputed())
+}
+
+func TestVolumeDirectoryResourceConfigure(t *testing.T) {
+	r := &VolumeDirectoryResource{}
+	assert.Nil(t, r.Client)
+
+	// Configure with nil provider data should not panic
+	var resp resource.ConfigureResponse
+	r.Configure(context.Background(), resource.ConfigureRequest{}, &resp)
+
+	// Configure with mock client
+	mockClient := &common.DatabricksClient{}
+	r.Configure(context.Background(), resource.ConfigureRequest{
+		ProviderData: mockClient,
+	}, &resp)
+
+	assert.NotNil(t, r.Client)
+	assert.Equal(t, mockClient, r.Client)
+}
+
+func TestVolumeDirectoryResourceImplementsInterface(t *testing.T) {
+	var _ resource.Resource = &VolumeDirectoryResource{}
+	var _ resource.ResourceWithConfigure = &VolumeDirectoryResource{}
+}