diff --git a/client/src/components/ContentNavigator/ContentDataProvider.ts b/client/src/components/ContentNavigator/ContentDataProvider.ts
index 3febc6634..785a7a2fb 100644
--- a/client/src/components/ContentNavigator/ContentDataProvider.ts
+++ b/client/src/components/ContentNavigator/ContentDataProvider.ts
@@ -36,6 +36,7 @@ import { basename, join } from "path";
 import { promisify } from "util";
 
 import { profileConfig } from "../../commands/profile";
+import { getResourceId } from "../../connection/rest/util";
 import { SubscriptionProvider } from "../SubscriptionProvider";
 import { ViyaProfile } from "../profile";
 import { ContentModel } from "./ContentModel";
@@ -79,6 +80,8 @@ class ContentDataProvider
   public dropMimeTypes: string[];
   public dragMimeTypes: string[];
 
+  private uriToParentMap = new Map<string, string>();
+
   get treeView(): TreeView<ContentItem> {
     return this._treeView;
   }
@@ -214,6 +217,11 @@ class ContentDataProvider
     const isContainer = getIsContainer(item);
     const uri = await this.model.getUri(item, false);
 
+    // Cache the URI to parent mapping
+    if (item.parentFolderUri) {
+      this.uriToParentMap.set(item.uri, item.parentFolderUri);
+    }
+
     return {
       collapsibleState: isContainer
         ? TreeItemCollapsibleState.Collapsed
@@ -505,6 +513,94 @@ class ContentDataProvider
     }
   }
 
+  public async checkFolderDirty(resource: ContentItem): Promise<boolean> {
+    if (!resource.vscUri) {
+      return false;
+    }
+
+    const targetFolderUri = resource.uri;
+
+    const dirtyFiles = workspace.textDocuments
+      .filter((doc) => {
+        if (!doc.isDirty) {
+          return false;
+        }
+
+        const scheme = doc.uri.scheme;
+        return (
+          scheme === "sasContent" ||
+          scheme === "sasServer" ||
+          scheme === "sasContentReadOnly" ||
+          scheme === "sasServerReadOnly"
+        );
+      })
+      .map((doc) => doc.uri);
+
+    if (dirtyFiles.length === 0) {
+      return false;
+    }
+
+    for (const dirtyFileUri of dirtyFiles) {
+      if (
+        await this.isDescendantOf(getResourceId(dirtyFileUri), targetFolderUri)
+      ) {
+        return true;
+      }
+    }
+
+    return false;
+  }
+
+  private async isDescendantOf(
+    fileUri: string,
+    ancestorFolderUri: string,
+  ): Promise<boolean> {
+    let currentParentUri = this.uriToParentMap.get(fileUri);
+
+    if (!currentParentUri) {
+      try {
+        const item = await this.model.getResourceByUri(Uri.parse(fileUri));
+        currentParentUri = item.parentFolderUri;
+        if (currentParentUri) {
+          this.uriToParentMap.set(fileUri, currentParentUri);
+        }
+      } catch {
+        return false;
+      }
+    }
+
+    let depth = 0;
+    while (currentParentUri || depth >= 10) {
+      if (currentParentUri === ancestorFolderUri) {
+        return true;
+      }
+
+      const nextParentUri = this.uriToParentMap.get(currentParentUri);
+
+      if (nextParentUri) {
+        currentParentUri = nextParentUri;
+      } else {
+        try {
+          const parentItem = await this.model.getResourceByUri(
+            Uri.parse(currentParentUri),
+          );
+          currentParentUri = parentItem.parentFolderUri;
+          if (currentParentUri) {
+            this.uriToParentMap.set(
+              currentParentUri,
+              parentItem.parentFolderUri,
+            );
+          }
+        } catch {
+          break;
+        }
+      }
+      depth++;
+    }
+
+    return false;
+  }
+
   public async downloadContentItems(
     folderUri: Uri,
     selections: ContentItem[],
@@ -759,6 +855,5 @@ const closeFileIfOpen = (item: ContentItem): Promise<Uri[]> | boolean => {
         .catch(reject);
     });
   }
-
   return true;
 };
diff --git a/client/src/components/ContentNavigator/const.ts b/client/src/components/ContentNavigator/const.ts
index f448575bf..906b40907 100644
--- a/client/src/components/ContentNavigator/const.ts
+++ b/client/src/components/ContentNavigator/const.ts
@@ -62,9 +62,13 @@ export const Messages = {
   AddFileToMyFolderSuccess: l10n.t("File added to my folder."),
   AddToFavoritesError: l10n.t("The item could not be added to My Favorites."),
   DeleteButtonLabel: l10n.t("Delete"),
+  MoveToRecycleBinLabel: l10n.t("Move to Recycle Bin"),
   DeleteWarningMessage: l10n.t(
     'Are you sure you want to permanently delete the item "{name}"?',
   ),
+  RecycleDirtyFolderWarning: l10n.t(
+    "This folder contains unsaved files, are you sure you want to delete?",
+  ),
   EmptyRecycleBinError: l10n.t("Unable to empty the recycle bin."),
   EmptyRecycleBinWarningMessage: l10n.t(
     "Are you sure you want to permanently delete all the items? You cannot undo this action.",
diff --git a/client/src/components/ContentNavigator/index.ts b/client/src/components/ContentNavigator/index.ts
index 01f1b7ea6..f31adec4f 100644
--- a/client/src/components/ContentNavigator/index.ts
+++ b/client/src/components/ContentNavigator/index.ts
@@ -107,30 +107,47 @@ class ContentNavigator implements SubscriptionProvider {
                 return;
               }
               const isContainer = getIsContainer(resource);
+              const hasUnsavedFiles = isContainer
+                ? await this.contentDataProvider.checkFolderDirty(resource)
+                : isContainer;
               const moveToRecycleBin =
                 this.contentDataProvider.canRecycleResource(resource);
 
-              if (
-                !moveToRecycleBin &&
-                !(await window.showWarningMessage(
-                  l10n.t(Messages.DeleteWarningMessage, {
-                    name: resource.name,
-                  }),
-                  { modal: true },
-                  Messages.DeleteButtonLabel,
-                ))
-              ) {
-                return;
-              }
-              const deleteResult = moveToRecycleBin
-                ? await this.contentDataProvider.recycleResource(resource)
-                : await this.contentDataProvider.deleteResource(resource);
-              if (!deleteResult) {
-                window.showErrorMessage(
-                  isContainer
-                    ? Messages.FolderDeletionError
-                    : Messages.FileDeletionError,
-                );
+              if (resource.contextValue.includes("delete")) {
+                if (
+                  !moveToRecycleBin &&
+                  !(await window.showWarningMessage(
+                    l10n.t(Messages.DeleteWarningMessage, {
+                      name: resource.name,
+                    }),
+                    { modal: true },
+                    Messages.DeleteButtonLabel,
+                  ))
+                ) {
+                  return;
+                } else if (moveToRecycleBin && hasUnsavedFiles) {
+                  if (
+                    !(await window.showWarningMessage(
+                      l10n.t(Messages.RecycleDirtyFolderWarning, {
+                        name: resource.name,
+                      }),
+                      { modal: true },
+                      Messages.MoveToRecycleBinLabel,
+                    ))
+                  ) {
+                    return;
+                  }
+                }
+                const deleteResult = moveToRecycleBin
+                  ? await this.contentDataProvider.recycleResource(resource)
+                  : await this.contentDataProvider.deleteResource(resource);
+                if (!deleteResult) {
+                  window.showErrorMessage(
+                    isContainer
+                      ? Messages.FolderDeletionError
+                      : Messages.FileDeletionError,
+                  );
+                }
               }
             },
           );
@@ -523,5 +540,4 @@ class ContentNavigator implements SubscriptionProvider {
     }
   }
 }
-
 export default ContentNavigator;