diff --git a/renku/core/dataset/providers/local.py b/renku/core/dataset/providers/local.py
index 19598cd7c5..87607a7f8d 100644
--- a/renku/core/dataset/providers/local.py
+++ b/renku/core/dataset/providers/local.py
@@ -130,6 +130,7 @@ def add(
         elif copy:
             prompt_action = False
 
+        ends_with_slash = False
         u = urllib.parse.urlparse(uri)
         path = u.path
 
@@ -137,6 +138,9 @@ def add(
         source_root = Path(get_absolute_path(path))
         warnings: List[str] = []
 
+        if source_root.is_dir() and uri.endswith("/"):
+            ends_with_slash = True
+
         def check_recursive_addition(src: Path):
             if is_subpath(destination, src):
                 raise errors.ParameterError(f"Cannot recursively add path containing dataset's data directory: {path}")
@@ -155,7 +159,12 @@ def get_destination_root():
             if source_root.is_dir() and destination_exists and not destination_is_dir:
                 raise errors.ParameterError(f"Cannot copy directory '{path}' to non-directory '{destination}'")
 
-            return destination / source_root.name if destination_exists and destination_is_dir else destination
+            if destination_exists and destination_is_dir:
+                if ends_with_slash:
+                    return destination
+
+                return destination / source_root.name
+            return destination
 
         def get_metadata(src: Path) -> DatasetAddMetadata:
             is_tracked = repository.contains(src)
diff --git a/renku/ui/cli/dataset.py b/renku/ui/cli/dataset.py
index bf397e8063..d09f98ba9a 100644
--- a/renku/ui/cli/dataset.py
+++ b/renku/ui/cli/dataset.py
@@ -137,6 +137,14 @@
 This will copy the contents of ``data-url`` to the dataset and add it
 to the dataset metadata.
 
+.. note::
+
+   If the URL refers to a local directory, data is added differently depending
+   on if there is a trailing slash (``/``) or not. If the URL ends in a slash,
+   files inside the directory are added to the target directory. If it does
+   not end in a slash, then the directory itself will be added inside the
+   target directory.
+
 You can create a dataset when you add data to it for the first time by passing
 ``--create`` flag to add command:
 
diff --git a/tests/core/commands/test_dataset.py b/tests/core/commands/test_dataset.py
index 7aff8dbc00..60807e6ccd 100644
--- a/tests/core/commands/test_dataset.py
+++ b/tests/core/commands/test_dataset.py
@@ -42,7 +42,7 @@
 from renku.core.util.contexts import chdir
 from renku.core.util.git import get_git_user
 from renku.core.util.urls import get_slug
-from renku.domain_model.dataset import Dataset, is_dataset_name_valid
+from renku.domain_model.dataset import Dataset, Url, is_dataset_name_valid
 from renku.domain_model.project_context import project_context
 from renku.domain_model.provenance.agent import Person
 from renku.infrastructure.gateway.dataset_gateway import DatasetGateway
@@ -88,6 +88,22 @@ def test_data_add(scheme, path, overwrite, error, project_with_injection, direct
             assert os.path.exists(target_path)
 
 
+@pytest.mark.parametrize(
+    "slash, target",
+    [
+        (False, "data/dataset/dir1/file2"),
+        (True, "data/dataset/file2"),
+    ],
+)
+def test_data_add_trailing_slash(slash, target, directory_tree, project_with_injection):
+    """Test recursive data imports."""
+
+    dataset = add_to_dataset("dataset", [str(directory_tree / "dir1") + ("/" if slash else "")], create=True)
+
+    file = next(f for f in dataset.files if f.entity.path.endswith("file2"))
+    assert file.entity.path == target
+
+
 def test_data_add_recursive(directory_tree, project_with_injection):
     """Test recursive data imports."""
     dataset = add_to_dataset("dataset", [str(directory_tree / "dir1")], create=True)
@@ -178,7 +194,7 @@ def test_mutate(project):
         name="my-dataset",
         creators=[Person.from_string("John Doe <john.doe@mail.com>")],
         date_published=datetime.datetime.now(datetime.timezone.utc),
-        same_as="http://some-url",
+        same_as=Url(url_str="http://some-url"),
     )
     old_dataset = copy.deepcopy(dataset)
 
@@ -197,7 +213,7 @@ def test_mutator_is_added_once(project):
         name="my-dataset",
         creators=[mutator],
         date_published=datetime.datetime.now(datetime.timezone.utc),
-        same_as="http://some-url",
+        same_as=Url(url_str="http://some-url"),
     )
     old_dataset = copy.deepcopy(dataset)