diff --git a/src/vscode-tree-item/vscode-tree-item.ts b/src/vscode-tree-item/vscode-tree-item.ts
index 9b20439ca..46733ca9b 100644
--- a/src/vscode-tree-item/vscode-tree-item.ts
+++ b/src/vscode-tree-item/vscode-tree-item.ts
@@ -120,7 +120,6 @@ export class VscodeTreeItem extends VscElement {
     hasBranchItem: false,
     rootElement: null,
     activeItem: null,
-    highlightedItems: [],
   };
 
   @consume({context: configContext, subscribe: true})
@@ -335,9 +334,16 @@ export class VscodeTreeItem extends VscElement {
     if (isShiftDown && this._configContext.multiSelect) {
       this._selectRange();
       this._treeContextState.emitSelectEvent?.();
+
+      this.updateComplete.then(() => {
+        this._treeContextState.highlightIndentGuides?.();
+      });
     } else {
       this._selectItem(isCtrlDown);
       this._treeContextState.emitSelectEvent?.();
+      this.updateComplete.then(() => {
+        this._treeContextState.highlightIndentGuides?.();
+      });
 
       if (this._configContext.expandMode === ExpandMode.singleClick) {
         if (this.branch && !(this._configContext.multiSelect && isCtrlDown)) {
@@ -351,10 +357,6 @@ export class VscodeTreeItem extends VscElement {
     if (!isShiftDown) {
       this._treeContextState.prevFocusedItem = this;
     }
-
-    this.updateComplete.then(() => {
-      this._treeContextState.highlightGuides?.();
-    });
   }
 
   private _handleDoubleClick(ev: MouseEvent) {
diff --git a/src/vscode-tree/helpers.test.ts b/src/vscode-tree/helpers.test.ts
index 9a92873a9..fbc665d92 100644
--- a/src/vscode-tree/helpers.test.ts
+++ b/src/vscode-tree/helpers.test.ts
@@ -1,5 +1,5 @@
 import {expect, fixture, html} from '@open-wc/testing';
-import {findLastChildItem, findPrevItem} from './helpers';
+import {findLastChildItem, findNextItem, findPrevItem} from './helpers';
 import {VscodeTreeItem} from '../vscode-tree-item';
 import '../vscode-tree-item/vscode-tree-item.js';
 import {VscodeTree} from './vscode-tree';
@@ -66,7 +66,7 @@ describe('vscode-tree helpers', () => {
       expect(findPrevItem(item2)).to.eq(item1);
     });
 
-    it('returns last children of the opened branch', async () => {
+    it('returns last child of the opened branch', async () => {
       const el = await fixture<VscodeTree>(html`
         <vscode-tree>
           <vscode-tree-item id="item1" open>
@@ -114,16 +114,133 @@ describe('vscode-tree helpers', () => {
           <vscode-tree-item id="item1" open>
             1
             <vscode-tree-item>1.1</vscode-tree-item>
-            <vscode-tree-item id="item1_2">1.2</vscode-tree-item>
+            <vscode-tree-item>1.2</vscode-tree-item>
+            <vscode-tree-item open>
+              1.3
+              <vscode-tree-item>1.3.1</vscode-tree-item>
+              <vscode-tree-item>1.3.2</vscode-tree-item>
+              <vscode-tree-item id="item1_3_3">1.3.3</vscode-tree-item>
+            </vscode-tree-item>
           </vscode-tree-item>
           <vscode-tree-item>2</vscode-tree-item>
         </vscode-tree>
       `);
 
       const item1 = el.querySelector<VscodeTreeItem>('#item1')!;
-      const item1_2 = el.querySelector<VscodeTreeItem>('#item1_2')!;
+      const item1_3_3 = el.querySelector<VscodeTreeItem>('#item1_3_3')!;
+
+      expect(findLastChildItem(item1)).to.eq(item1_3_3);
+    });
+
+    it('does not traverse the closed branches', async () => {
+      const el = await fixture(html`
+        <vscode-tree>
+          <vscode-tree-item id="item1" open>
+            1
+            <vscode-tree-item>1.1</vscode-tree-item>
+            <vscode-tree-item>1.2</vscode-tree-item>
+            <vscode-tree-item id="item1_3">
+              1.3
+              <vscode-tree-item>1.3.1</vscode-tree-item>
+              <vscode-tree-item>1.3.2</vscode-tree-item>
+              <vscode-tree-item>1.3.3</vscode-tree-item>
+            </vscode-tree-item>
+          </vscode-tree-item>
+          <vscode-tree-item>2</vscode-tree-item>
+        </vscode-tree>
+      `);
+
+      const item1 = el.querySelector<VscodeTreeItem>('#item1')!;
+      const item1_3 = el.querySelector<VscodeTreeItem>('#item1_3')!;
+
+      expect(findLastChildItem(item1)).to.eq(item1_3);
+    });
+
+    it('returns the passed item if it is not a tree-item', async () => {
+      const el = await fixture(html`<div></div>`);
+
+      expect(findLastChildItem(el as VscodeTreeItem)).to.eq(el);
+    });
+
+    it('returns the passed item if it does not have a child', async () => {
+      await fixture(
+        html` <vscode-tree>
+          <vscode-tree-item id="leaf">leaf</vscode-tree-item>
+        </vscode-tree>`
+      );
+
+      const item = document.getElementById('leaf')! as VscodeTreeItem;
+
+      expect(findLastChildItem(item)).to.eq(item);
+    });
+  });
+
+  describe('findNextItem()', () => {
+    it('returns null if does not have parent element', () => {
+      const el = document.createElement('vscode-tree-item');
+
+      expect(findNextItem(el)).to.be.null;
+    });
+
+    it('returns null if it is not a tree item', async () => {
+      const el = await fixture(
+        html`<vscode-tree><div id="item"></div></vscode-tree>`
+      );
+
+      expect(findNextItem(el.querySelector('#item') as VscodeTreeItem)).to.be
+        .null;
+    });
+
+    it('returns last children of the opened branch', async () => {
+      const el = await fixture<VscodeTree>(html`
+        <vscode-tree>
+          <vscode-tree-item id="item1" open>
+            1
+            <vscode-tree-item id="item1_1">1.1</vscode-tree-item>
+            <vscode-tree-item>1.2</vscode-tree-item>
+          </vscode-tree-item>
+          <vscode-tree-item>2</vscode-tree-item>
+        </vscode-tree>
+      `);
+
+      const item1 = el.querySelector<VscodeTreeItem>('#item1')!;
+      const item1_1 = el.querySelector<VscodeTreeItem>('#item1_1')!;
+
+      expect(findNextItem(item1)).to.eq(item1_1);
+    });
+
+    it('returns the next sibling if the opened branch does not contain any item', async () => {
+      const el = await fixture<VscodeTree>(html`
+        <vscode-tree>
+          <vscode-tree-item id="item1" open>1</vscode-tree-item>
+          <vscode-tree-item id="item2">2</vscode-tree-item>
+        </vscode-tree>
+      `);
+
+      const item1 = el.querySelector<VscodeTreeItem>('#item1')!;
+      const item2 = el.querySelector<VscodeTreeItem>('#item2')!;
+
+      expect(findNextItem(item1)).to.eq(item2);
+    });
+
+    it('returns the next ancestor', async () => {
+      const el = await fixture<VscodeTree>(html`
+        <vscode-tree>
+          <vscode-tree-item open>
+            1
+            <vscode-tree-item>
+              1.1
+              <vscode-tree-item id="item1_1_1"> 1.1.1 </vscode-tree-item>
+            </vscode-tree-item>
+          </vscode-tree-item>
+          <vscode-tree-item id="item2">2</vscode-tree-item>
+        </vscode-tree>
+      `);
+
+      const item1_1_1 = el.querySelector<VscodeTreeItem>('#item1_1_1')!;
+      const item2 = el.querySelector<VscodeTreeItem>('#item2')!;
 
-      expect(findLastChildItem(item1)).to.eq(item1_2);
+      expect(findNextItem(item1_1_1)).to.eq(item2);
     });
   });
 });
diff --git a/src/vscode-tree/tree-context.ts b/src/vscode-tree/tree-context.ts
index e22a5fa63..870434f73 100644
--- a/src/vscode-tree/tree-context.ts
+++ b/src/vscode-tree/tree-context.ts
@@ -15,8 +15,8 @@ export interface TreeContext {
   hasBranchItem: boolean;
   rootElement: VscodeTree | null;
   activeItem: VscodeTreeItem | null;
-  highlightedItems: VscodeTreeItem[];
-  highlightGuides?: () => void;
+  highlightedItems?: Set<VscodeTreeItem>;
+  highlightIndentGuides?: () => void;
   emitSelectEvent?: () => void;
 }
 
diff --git a/src/vscode-tree/vscode-tree.ts b/src/vscode-tree/vscode-tree.ts
index a26efb741..733650640 100644
--- a/src/vscode-tree/vscode-tree.ts
+++ b/src/vscode-tree/vscode-tree.ts
@@ -160,9 +160,9 @@ export class VscodeTree extends VscElement {
     prevFocusedItem: null,
     hasBranchItem: false,
     rootElement: this,
-    highlightedItems: [],
-    highlightGuides: () => {
-      this._highlightGuides();
+    highlightedItems: new Set(),
+    highlightIndentGuides: () => {
+      this._highlightIndentGuides();
     },
     emitSelectEvent: () => {
       this._emitSelectEvent();
@@ -258,43 +258,37 @@ export class VscodeTree extends VscElement {
     this.dispatchEvent(ev);
   }
 
-  private _highlightGuides() {
-    const {activeItem, highlightedItems, selectedItems} =
-      this._treeContextState;
+  private _highlightIndentGuideOfItem(item: VscodeTreeItem) {
+    if (item.branch && item.open) {
+      item.highlightedGuides = true;
+      this._treeContextState.highlightedItems?.add(item);
+    } else {
+      const parent = findParentItem(item);
 
-    highlightedItems.forEach((i) => (i.highlightedGuides = false));
+      if (parent) {
+        parent.highlightedGuides = true;
+        this._treeContextState.highlightedItems?.add(parent);
+      }
+    }
+  }
 
-    if (activeItem) {
-      this._treeContextState.highlightedItems = [];
+  private _highlightIndentGuides() {
+    if (this.indentGuides === IndentGuides.none) {
+      return;
+    }
 
-      if (activeItem.branch && activeItem.open) {
-        activeItem.highlightedGuides = true;
-        this._treeContextState.highlightedItems.push(activeItem);
-      } else {
-        const parent = findParentItem(activeItem);
+    this._treeContextState.highlightedItems?.forEach(
+      (i) => (i.highlightedGuides = false)
+    );
+    this._treeContextState.highlightedItems?.clear();
 
-        if (parent && parent.branch) {
-          parent.highlightedGuides = true;
-          this._treeContextState.highlightedItems.push(parent);
-        }
-      }
+    if (this._treeContextState.activeItem) {
+      this._highlightIndentGuideOfItem(this._treeContextState.activeItem);
     }
 
-    if (selectedItems) {
-      selectedItems.forEach((item) => {
-        if (item.branch && item.open) {
-          item.highlightedGuides = true;
-          this._treeContextState.highlightedItems.push(item);
-        } else {
-          const parent = findParentItem(item);
-
-          if (parent && parent.branch) {
-            parent.highlightedGuides = true;
-            this._treeContextState.highlightedItems.push(item);
-          }
-        }
-      });
-    }
+    this._treeContextState.selectedItems.forEach((item) => {
+      this._highlightIndentGuideOfItem(item);
+    });
   }
 
   private _updateConfigContext(changedProperties: PropertyValues) {
@@ -326,6 +320,7 @@ export class VscodeTree extends VscElement {
 
     item.updateComplete.then(() => {
       item.focus();
+      this._highlightIndentGuides();
     });
   }
 
@@ -430,6 +425,8 @@ export class VscodeTree extends VscElement {
       this._treeContextState.selectedItems.forEach(
         (li) => (li.selected = false)
       );
+      this._treeContextState.selectedItems.clear();
+      this._highlightIndentGuides();
 
       focusedItem.selected = true;
       this._emitSelectEvent();
@@ -496,8 +493,6 @@ export class VscodeTree extends VscElement {
           firstChild.active = true;
         }
       }
-
-      this._highlightGuides();
     });
   };