diff --git a/code/go/0chain.net/blobbercore/allocation/allocationchange.go b/code/go/0chain.net/blobbercore/allocation/allocationchange.go
index 09c124885..554cf3151 100644
--- a/code/go/0chain.net/blobbercore/allocation/allocationchange.go
+++ b/code/go/0chain.net/blobbercore/allocation/allocationchange.go
@@ -20,6 +20,7 @@ const (
 	RENAME_OPERATION       = "rename"
 	COPY_OPERATION         = "copy"
 	UPDATE_ATTRS_OPERATION = "update_attrs"
+	CREATEDIR_OPERATION    = "createdir"
 )
 
 const (
diff --git a/code/go/0chain.net/blobbercore/allocation/newfilechange.go b/code/go/0chain.net/blobbercore/allocation/newfilechange.go
index 8683f1d65..f3761f158 100644
--- a/code/go/0chain.net/blobbercore/allocation/newfilechange.go
+++ b/code/go/0chain.net/blobbercore/allocation/newfilechange.go
@@ -43,9 +43,79 @@ type NewFileChange struct {
 	IsFinal bool `json:"is_final,omitempty"`
 }
 
+func (nf *NewFileChange) CreateDir(ctx context.Context, allocationID, dirName, allocationRoot string) (*reference.Ref, error) {
+	path := filepath.Clean(dirName)
+	tSubDirs := reference.GetSubDirsFromPath(path)
+
+	rootRef, err := reference.GetReferencePath(ctx, allocationID, nf.Path)
+	if err != nil {
+		return nil, err
+	}
+
+	dirRef := rootRef
+	treelevel := 0
+	for {
+		found := false
+		for _, child := range dirRef.Children {
+			if child.Type == reference.DIRECTORY && treelevel < len(tSubDirs) {
+				if child.Name == tSubDirs[treelevel] {
+					dirRef = child
+					found = true
+					break
+				}
+			}
+		}
+		if found {
+			treelevel++
+			continue
+		}
+		if len(tSubDirs) > treelevel {
+			newRef := reference.NewDirectoryRef()
+			newRef.AllocationID = dirRef.AllocationID
+			newRef.Path = "/" + strings.Join(tSubDirs[:treelevel+1], "/")
+			newRef.ParentPath = "/" + strings.Join(tSubDirs[:treelevel], "/")
+			newRef.Name = tSubDirs[treelevel]
+			newRef.LookupHash = reference.GetReferenceLookup(dirRef.AllocationID, newRef.Path)
+			dirRef.AddChild(newRef)
+			dirRef = newRef
+			treelevel++
+			continue
+		} else {
+			break
+		}
+	}
+
+	var newDir = reference.NewDirectoryRef()
+	newDir.ActualFileSize = 2
+	newDir.AllocationID = dirRef.AllocationID
+	newDir.MerkleRoot = nf.MerkleRoot
+	newDir.Name = dirName
+	newDir.Size = 2
+	newDir.NumBlocks = 2
+	newDir.ParentPath = dirRef.Path
+	newDir.WriteMarker = allocationRoot
+	dirRef.AddChild(newDir)
+
+	if _, err := rootRef.CalculateHash(ctx, true); err != nil {
+		return nil, err
+	}
+
+	stats.NewDirCreated(ctx, dirRef.ID)
+	return rootRef, nil
+}
+
 func (nf *NewFileChange) ProcessChange(ctx context.Context,
 	change *AllocationChange, allocationRoot string) (*reference.Ref, error) {
 
+	if change.Operation == CREATEDIR_OPERATION {
+		err := nf.Unmarshal(change.Input)
+		if err != nil {
+			return nil, err
+		}
+
+		return nf.CreateDir(ctx, nf.AllocationID, nf.Path, allocationRoot)
+	}
+
 	path, _ := filepath.Split(nf.Path)
 	path = filepath.Clean(path)
 	tSubDirs := reference.GetSubDirsFromPath(path)
@@ -117,6 +187,7 @@ func (nf *NewFileChange) ProcessChange(ctx context.Context,
 	if _, err := rootRef.CalculateHash(ctx, true); err != nil {
 		return nil, err
 	}
+
 	stats.NewFileCreated(ctx, newFile.ID)
 	return rootRef, nil
 }
diff --git a/code/go/0chain.net/blobbercore/filestore/fs_store.go b/code/go/0chain.net/blobbercore/filestore/fs_store.go
index 84b30b7d1..64e43b492 100644
--- a/code/go/0chain.net/blobbercore/filestore/fs_store.go
+++ b/code/go/0chain.net/blobbercore/filestore/fs_store.go
@@ -475,6 +475,14 @@ func (fs *FileFSStore) GetMerkleTreeForFile(allocationID string, fileData *FileI
 	return mt, nil
 }
 
+func (fs *FileFSStore) CreateDir(dirName string) error {
+	return createDirs(dirName)
+}
+
+func (fs *FileFSStore) DeleteDir(allocationID, dirPath, connectionID string) error {
+	return nil
+}
+
 func (fs *FileFSStore) WriteFile(allocationID string, fileData *FileInputData,
 	infile multipart.File, connectionID string) (*FileOutputData, error) {
 
diff --git a/code/go/0chain.net/blobbercore/filestore/store.go b/code/go/0chain.net/blobbercore/filestore/store.go
index 4d98a5136..565b27d15 100644
--- a/code/go/0chain.net/blobbercore/filestore/store.go
+++ b/code/go/0chain.net/blobbercore/filestore/store.go
@@ -43,6 +43,8 @@ type FileObjectHandler func(contentHash string, contentSize int64)
 type FileStore interface {
 	WriteFile(allocationID string, fileData *FileInputData, infile multipart.File, connectionID string) (*FileOutputData, error)
 	DeleteTempFile(allocationID string, fileData *FileInputData, connectionID string) error
+	CreateDir(dirName string) error
+	DeleteDir(allocationID, dirPath, connectionID string) error
 	GetFileBlock(allocationID string, fileData *FileInputData, blockNum int64, numBlocks int64) ([]byte, error)
 	CommitWrite(allocationID string, fileData *FileInputData, connectionID string) (bool, error)
 	//GetMerkleTreeForFile(allocationID string, fileData *FileInputData) (util.MerkleTreeI, error)
diff --git a/code/go/0chain.net/blobbercore/handler/handler.go b/code/go/0chain.net/blobbercore/handler/handler.go
index 45b7163fb..9e92f37e1 100644
--- a/code/go/0chain.net/blobbercore/handler/handler.go
+++ b/code/go/0chain.net/blobbercore/handler/handler.go
@@ -34,6 +34,9 @@ func SetupHandlers(r *mux.Router) {
 	r.HandleFunc("/v1/file/rename/{allocation}", common.UserRateLimit(common.ToJSONResponse(WithConnection(RenameHandler))))
 	r.HandleFunc("/v1/file/copy/{allocation}", common.UserRateLimit(common.ToJSONResponse(WithConnection(CopyHandler))))
 	r.HandleFunc("/v1/file/attributes/{allocation}", common.UserRateLimit(common.ToJSONResponse(WithConnection(UpdateAttributesHandler))))
+	r.HandleFunc("/v1/dir/{allocation}", common.UserRateLimit(common.ToJSONResponse(WithConnection(CreateDirHandler)))).Methods("POST")
+	r.HandleFunc("/v1/dir/{allocation}", common.UserRateLimit(common.ToJSONResponse(WithConnection(CreateDirHandler)))).Methods("DELETE")
+	r.HandleFunc("/v1/dir/rename/{allocation}", common.UserRateLimit(common.ToJSONResponse(WithConnection(CreateDirHandler)))).Methods("POST")
 
 	r.HandleFunc("/v1/connection/commit/{allocation}", common.UserRateLimit(common.ToJSONResponse(WithConnection(CommitHandler))))
 	r.HandleFunc("/v1/file/commitmetatxn/{allocation}", common.UserRateLimit(common.ToJSONResponse(WithConnection(CommitMetaTxnHandler))))
@@ -259,6 +262,17 @@ func CopyHandler(ctx context.Context, r *http.Request) (interface{}, error) {
 	return response, nil
 }
 
+/*CreateDirHandler is the handler to respond to create dir for allocation*/
+func CreateDirHandler(ctx context.Context, r *http.Request) (interface{}, error) {
+	ctx = setupHandlerContext(ctx, r)
+	response, err := storageHandler.CreateDir(ctx, r)
+	if err != nil {
+		return nil, err
+	}
+
+	return response, nil
+}
+
 /*UploadHandler is the handler to respond to upload requests fro clients*/
 func UploadHandler(ctx context.Context, r *http.Request) (interface{}, error) {
 	ctx = setupHandlerContext(ctx, r)
diff --git a/code/go/0chain.net/blobbercore/handler/object_operation_handler.go b/code/go/0chain.net/blobbercore/handler/object_operation_handler.go
index 3f3357d0b..8dd7023e7 100644
--- a/code/go/0chain.net/blobbercore/handler/object_operation_handler.go
+++ b/code/go/0chain.net/blobbercore/handler/object_operation_handler.go
@@ -910,6 +910,88 @@ func (fsh *StorageHandler) DeleteFile(ctx context.Context, r *http.Request, conn
 	return nil, common.NewError("invalid_file", "File does not exist at path")
 }
 
+func (fsh *StorageHandler) CreateDir(ctx context.Context, r *http.Request) (*blobberhttp.UploadResult, error) {
+	allocationTx := ctx.Value(constants.ALLOCATION_CONTEXT_KEY).(string)
+	clientID := ctx.Value(constants.CLIENT_CONTEXT_KEY).(string)
+
+	allocationObj, err := fsh.verifyAllocation(ctx, allocationTx, false)
+	if err != nil {
+		return nil, common.NewError("invalid_parameters", "Invalid allocation id passed."+err.Error())
+	}
+
+	valid, err := verifySignatureFromRequest(allocationTx, r.Header.Get(common.ClientSignatureHeader), allocationObj.OwnerPublicKey)
+	if !valid || err != nil {
+		return nil, common.NewError("invalid_signature", "Invalid signature")
+	}
+
+	allocationID := allocationObj.ID
+
+	if len(clientID) == 0 {
+		return nil, common.NewError("invalid_operation", "Operation needs to be performed by the owner or the payer of the allocation")
+	}
+
+	dirPath := r.FormValue("dir_path")
+	if len(dirPath) == 0 {
+		return nil, common.NewError("invalid_parameters", "Invalid dir path passed")
+	}
+
+	exisitingRef := fsh.checkIfFileAlreadyExists(ctx, allocationID, dirPath)
+	if allocationObj.OwnerID != clientID && allocationObj.PayerID != clientID {
+		return nil, common.NewError("invalid_operation", "Operation needs to be performed by the owner or the payer of the allocation")
+	}
+
+	if exisitingRef != nil {
+		return nil, common.NewError("duplicate_file", "File at path already exists")
+	}
+
+	connectionID := r.FormValue("connection_id")
+	if len(connectionID) == 0 {
+		return nil, common.NewError("invalid_parameters", "Invalid connection id passed")
+	}
+
+	connectionObj, err := allocation.GetAllocationChanges(ctx, connectionID, allocationID, clientID)
+	if err != nil {
+		return nil, common.NewError("meta_error", "Error reading metadata for connection")
+	}
+
+	mutex := lock.GetMutex(connectionObj.TableName(), connectionID)
+	mutex.Lock()
+	defer mutex.Unlock()
+
+	allocationChange := &allocation.AllocationChange{}
+	allocationChange.ConnectionID = connectionObj.ConnectionID
+	allocationChange.Size = 0
+	allocationChange.Operation = allocation.CREATEDIR_OPERATION
+	connectionObj.Size += allocationChange.Size
+	var formData allocation.NewFileChange
+	formData.Filename = dirPath
+	formData.Path = dirPath
+	formData.AllocationID = allocationID
+	formData.ConnectionID = connectionID
+	formData.ActualHash = "-"
+	formData.ActualSize = 1
+
+	connectionObj.AddChange(allocationChange, &formData)
+
+	err = filestore.GetFileStore().CreateDir(dirPath)
+	if err != nil {
+		return nil, common.NewError("upload_error", "Failed to upload the file. "+err.Error())
+	}
+
+	err = connectionObj.ApplyChanges(ctx, "/")
+	if err != nil {
+		return nil, err
+	}
+
+	result := &blobberhttp.UploadResult{}
+	result.Filename = dirPath
+	result.Hash = ""
+	result.MerkleRoot = ""
+	result.Size = 0
+
+	return result, nil
+}
+
 //WriteFile stores the file into the blobber files system from the HTTP request
 func (fsh *StorageHandler) WriteFile(ctx context.Context, r *http.Request) (*blobberhttp.UploadResult, error) {
 
diff --git a/code/go/0chain.net/blobbercore/stats/filestats.go b/code/go/0chain.net/blobbercore/stats/filestats.go
index 76ac3d2b0..e2e49e74f 100644
--- a/code/go/0chain.net/blobbercore/stats/filestats.go
+++ b/code/go/0chain.net/blobbercore/stats/filestats.go
@@ -26,6 +26,14 @@ func (FileStats) TableName() string {
 	return "file_stats"
 }
 
+func NewDirCreated(ctx context.Context, refID int64) {
+	db := datastore.GetStore().GetTransaction(ctx)
+	stats := &FileStats{RefID: refID}
+	stats.NumBlockDownloads = 0
+	stats.NumUpdates = 1
+	db.Save(stats)
+}
+
 func NewFileCreated(ctx context.Context, refID int64) {
 	db := datastore.GetStore().GetTransaction(ctx)
 	stats := &FileStats{RefID: refID}