diff --git a/core/directories.py b/core/directories.py
index 6b84295b..1a82e183 100644
--- a/core/directories.py
+++ b/core/directories.py
@@ -51,6 +51,7 @@ class Directories:
     #---Override
     def __init__(self, fileclasses=[fs.File]):
         self._dirs = []
+        # {path: state}
         self.states = {}
         self.fileclasses = fileclasses
         self.folderclass = fs.Folder
@@ -220,7 +221,7 @@ class Directories:
                 continue
             path = attrib['path']
             state = attrib['value']
-            self.set_state(Path(path), int(state))
+            self.states[Path(path)] = int(state)
     
     def save_to_file(self, outfile):
         """Save folder selection as XML to ``outfile``.
@@ -248,11 +249,8 @@ class Directories:
         """
         if self.get_state(path) == state:
             return
-        # we don't want to needlessly fill self.states. if get_state returns the same thing
-        # without an explicit entry, remove that entry
-        if path in self.states:
-            del self.states[path]
-            if self.get_state(path) == state: # no need for an entry
-                return
+        for iter_path in list(self.states.keys()):
+            if path.is_parent_of(iter_path):
+                del self.states[iter_path]
         self.states[path] = state
     
diff --git a/core/tests/directories_test.py b/core/tests/directories_test.py
index 0c789d46..e5eef713 100644
--- a/core/tests/directories_test.py
+++ b/core/tests/directories_test.py
@@ -135,31 +135,18 @@ def test_get_state_with_path_not_there():
     d.add_path(testpath['onefile'])
     eq_(d.get_state(testpath), DirectoryState.Normal)
 
-def test_states_remain_when_larger_directory_eat_smaller_ones():
+def test_states_overwritten_when_larger_directory_eat_smaller_ones():
+    # ref #248
+    # When setting the state of a folder, we overwrite previously set states for subfolders.
     d = Directories()
     p = testpath['onefile']
     d.add_path(p)
     d.set_state(p, DirectoryState.Excluded)
     d.add_path(testpath)
     d.set_state(testpath, DirectoryState.Reference)
-    eq_(DirectoryState.Excluded ,d.get_state(p))
-    eq_(DirectoryState.Excluded ,d.get_state(p['dir1']))
-    eq_(DirectoryState.Reference ,d.get_state(testpath))
-
-def test_set_state_keep_state_dict_size_to_minimum():
-    d = Directories()
-    p = testpath['fs']
-    d.add_path(p)
-    d.set_state(p, DirectoryState.Reference)
-    d.set_state(p['dir1'], DirectoryState.Reference)
-    eq_(1,len(d.states))
-    eq_(DirectoryState.Reference ,d.get_state(p['dir1']))
-    d.set_state(p['dir1'], DirectoryState.Normal)
-    eq_(2,len(d.states))
-    eq_(DirectoryState.Normal ,d.get_state(p['dir1']))
-    d.set_state(p['dir1'], DirectoryState.Reference)
-    eq_(1,len(d.states))
-    eq_(DirectoryState.Reference ,d.get_state(p['dir1']))
+    eq_(d.get_state(p), DirectoryState.Reference)
+    eq_(d.get_state(p['dir1']), DirectoryState.Reference)
+    eq_(d.get_state(testpath), DirectoryState.Reference)
 
 def test_get_files():
     d = Directories()
diff --git a/hscommon/path.py b/hscommon/path.py
index b7166895..55a3ed42 100755
--- a/hscommon/path.py
+++ b/hscommon/path.py
@@ -117,6 +117,17 @@ class Path(tuple):
         first = self[0]
         return (len(first) == 2) and (first[1] == ':')
     
+    def is_parent_of(self, other):
+        """Whether ``other`` is a subpath of ``self``.
+
+        Almost the same as ``other in self``, but it's a bit more self-explicative and when
+        ``other == self``, returns False.
+        """
+        if other == self:
+            return False
+        else:
+            return other in self
+
     def remove_drive_letter(self):
         if self.has_drive_letter():
             return self[1:]
diff --git a/hscommon/tests/path_test.py b/hscommon/tests/path_test.py
index c9b40548..108a99e1 100644
--- a/hscommon/tests/path_test.py
+++ b/hscommon/tests/path_test.py
@@ -163,6 +163,11 @@ def test_contains(force_ossep):
     assert 'bleh' not in p
     assert Path('foo') not in p
 
+def test_is_parent_of(force_ossep):
+    assert Path(('foo','bar')).is_parent_of(Path(('foo','bar','bleh')))
+    assert not Path(('foo','bar')).is_parent_of(Path(('foo','baz')))
+    assert not Path(('foo','bar')).is_parent_of(Path(('foo','bar')))
+
 def test_windows_drive_letter(force_ossep):
     p = Path(('c:',))
     eq_('c:\\',str(p))