diff --git a/crates/file_finder/src/file_finder.rs b/crates/file_finder/src/file_finder.rs
index b2a27047bb..7bcfe9c93c 100644
--- a/crates/file_finder/src/file_finder.rs
+++ b/crates/file_finder/src/file_finder.rs
@@ -530,17 +530,68 @@ impl Matches {
         match (&a, &b) {
             // bubble currently opened files to the top
             (Match::History { path, .. }, _) if Some(path) == currently_opened => {
-                cmp::Ordering::Greater
+                return cmp::Ordering::Greater;
             }
             (_, Match::History { path, .. }) if Some(path) == currently_opened => {
-                cmp::Ordering::Less
+                return cmp::Ordering::Less;
             }
 
-            (Match::History { .. }, Match::Search(_)) if separate_history => cmp::Ordering::Greater,
-            (Match::Search(_), Match::History { .. }) if separate_history => cmp::Ordering::Less,
-
-            _ => a.panel_match().cmp(&b.panel_match()),
+            _ => {}
         }
+
+        if separate_history {
+            match (a, b) {
+                (Match::History { .. }, Match::Search(_)) => return cmp::Ordering::Greater,
+                (Match::Search(_), Match::History { .. }) => return cmp::Ordering::Less,
+
+                _ => {}
+            }
+        }
+
+        let a_panel_match = match a.panel_match() {
+            Some(pm) => pm,
+            None => {
+                return if b.panel_match().is_some() {
+                    cmp::Ordering::Less
+                } else {
+                    cmp::Ordering::Equal
+                };
+            }
+        };
+
+        let b_panel_match = match b.panel_match() {
+            Some(pm) => pm,
+            None => return cmp::Ordering::Greater,
+        };
+
+        let a_in_filename = Self::is_filename_match(a_panel_match);
+        let b_in_filename = Self::is_filename_match(b_panel_match);
+
+        match (a_in_filename, b_in_filename) {
+            (true, false) => return cmp::Ordering::Greater,
+            (false, true) => return cmp::Ordering::Less,
+            _ => {} // Both are filename matches or both are path matches
+        }
+
+        a_panel_match.cmp(b_panel_match)
+    }
+
+    /// Determines if the match occurred within the filename rather than in the path
+    fn is_filename_match(panel_match: &ProjectPanelOrdMatch) -> bool {
+        if panel_match.0.positions.is_empty() {
+            return false;
+        }
+
+        if let Some(filename) = panel_match.0.path.file_name() {
+            let path_str = panel_match.0.path.to_string_lossy();
+            let filename_str = filename.to_string_lossy();
+
+            if let Some(filename_pos) = path_str.rfind(&*filename_str) {
+                return panel_match.0.positions[0] >= filename_pos;
+            }
+        }
+
+        false
     }
 }
 
diff --git a/crates/file_finder/src/file_finder_tests.rs b/crates/file_finder/src/file_finder_tests.rs
index d37e3d9cb7..d5d3582858 100644
--- a/crates/file_finder/src/file_finder_tests.rs
+++ b/crates/file_finder/src/file_finder_tests.rs
@@ -2372,3 +2372,48 @@ fn assert_match_at_position(
     .to_string_lossy();
     assert_eq!(match_file_name, expected_file_name);
 }
+
+#[gpui::test]
+async fn test_filename_precedence(cx: &mut TestAppContext) {
+    let app_state = init_test(cx);
+
+    app_state
+        .fs
+        .as_fake()
+        .insert_tree(
+            path!("/src"),
+            json!({
+                "layout": {
+                    "app.css": "",
+                    "app.d.ts": "",
+                    "app.html": "",
+                    "+page.svelte": "",
+                },
+                "routes": {
+                    "+layout.svelte": "",
+                }
+            }),
+        )
+        .await;
+
+    let project = Project::test(app_state.fs.clone(), [path!("/src").as_ref()], cx).await;
+    let (picker, _, cx) = build_find_picker(project, cx);
+
+    cx.simulate_input("layout");
+
+    picker.update(cx, |finder, _| {
+        let search_matches = collect_search_matches(finder).search_paths_only();
+
+        assert_eq!(
+            search_matches,
+            vec![
+                PathBuf::from("routes/+layout.svelte"),
+                PathBuf::from("layout/app.css"),
+                PathBuf::from("layout/app.d.ts"),
+                PathBuf::from("layout/app.html"),
+                PathBuf::from("layout/+page.svelte"),
+            ],
+            "File with 'layout' in filename should be prioritized over files in 'layout' directory"
+        );
+    });
+}