diff --git a/crates/nu-cli/src/completions/completer.rs b/crates/nu-cli/src/completions/completer.rs
index b6a15ff0a2..ed81782768 100644
--- a/crates/nu-cli/src/completions/completer.rs
+++ b/crates/nu-cli/src/completions/completer.rs
@@ -250,7 +250,9 @@ impl NuCompleter {
                                             working_set.get_span_contents(previous_expr.0).to_vec();
 
                                         // Completion for .nu files
-                                        if prev_expr_str == b"use" || prev_expr_str == b"source-env"
+                                        if prev_expr_str == b"use"
+                                            || prev_expr_str == b"overlay use"
+                                            || prev_expr_str == b"source-env"
                                         {
                                             let mut completer =
                                                 DotNuCompletion::new(self.engine_state.clone());
diff --git a/crates/nu-cli/src/completions/dotnu_completions.rs b/crates/nu-cli/src/completions/dotnu_completions.rs
index fd5c346d95..d82d5a8913 100644
--- a/crates/nu-cli/src/completions/dotnu_completions.rs
+++ b/crates/nu-cli/src/completions/dotnu_completions.rs
@@ -5,7 +5,7 @@ use nu_protocol::{
 };
 use reedline::Suggestion;
 use std::{
-    path::{is_separator, MAIN_SEPARATOR as SEP, MAIN_SEPARATOR_STR},
+    path::{is_separator, Path, MAIN_SEPARATOR as SEP, MAIN_SEPARATOR_STR},
     sync::Arc,
 };
 
@@ -91,16 +91,21 @@ impl Completer for DotNuCompletion {
         // and transform them into suggestions
         let output: Vec<Suggestion> = search_dirs
             .into_iter()
-            .flat_map(|it| {
-                file_path_completion(span, &partial, &it, options)
+            .flat_map(|search_dir| {
+                let completions = file_path_completion(span, &partial, &search_dir, options);
+                completions
                     .into_iter()
-                    .filter(|it| {
+                    .filter(move |it| {
                         // Different base dir, so we list the .nu files or folders
                         if !is_current_folder {
                             it.1.ends_with(".nu") || it.1.ends_with(SEP)
                         } else {
-                            // Lib dirs, so we filter only the .nu files
-                            it.1.ends_with(".nu")
+                            // Lib dirs, so we filter only the .nu files or directory modules
+                            if it.1.ends_with(SEP) {
+                                Path::new(&search_dir).join(&it.1).join("mod.nu").exists()
+                            } else {
+                                it.1.ends_with(".nu")
+                            }
                         }
                     })
                     .map(move |x| Suggestion {
diff --git a/crates/nu-cli/tests/completions.rs b/crates/nu-cli/tests/completions.rs
index e5db82e4ea..e48c1e9ee4 100644
--- a/crates/nu-cli/tests/completions.rs
+++ b/crates/nu-cli/tests/completions.rs
@@ -91,7 +91,7 @@ fn variables_dollar_sign_with_varialblecompletion() {
     let target_dir = "$ ";
     let suggestions = completer.complete(target_dir, target_dir.len());
 
-    assert_eq!(7, suggestions.len());
+    assert_eq!(8, suggestions.len());
 }
 
 #[rstest]
@@ -144,15 +144,34 @@ fn dotnu_completions() {
     let completion_str = "source-env ".to_string();
     let suggestions = completer.complete(&completion_str, completion_str.len());
 
-    assert_eq!(1, suggestions.len());
+    assert_eq!(2, suggestions.len());
     assert_eq!("custom_completion.nu", suggestions.first().unwrap().value);
+    #[cfg(windows)]
+    assert_eq!("directory_completion\\", suggestions.get(1).unwrap().value);
+    #[cfg(not(windows))]
+    assert_eq!("directory_completion/", suggestions.get(1).unwrap().value);
 
     // Test use completion
     let completion_str = "use ".to_string();
     let suggestions = completer.complete(&completion_str, completion_str.len());
 
-    assert_eq!(1, suggestions.len());
+    assert_eq!(2, suggestions.len());
     assert_eq!("custom_completion.nu", suggestions.first().unwrap().value);
+    #[cfg(windows)]
+    assert_eq!("directory_completion\\", suggestions.get(1).unwrap().value);
+    #[cfg(not(windows))]
+    assert_eq!("directory_completion/", suggestions.get(1).unwrap().value);
+
+    // Test overlay use completion
+    let completion_str = "overlay use ".to_string();
+    let suggestions = completer.complete(&completion_str, completion_str.len());
+
+    assert_eq!(2, suggestions.len());
+    assert_eq!("custom_completion.nu", suggestions.first().unwrap().value);
+    #[cfg(windows)]
+    assert_eq!("directory_completion\\", suggestions.get(1).unwrap().value);
+    #[cfg(not(windows))]
+    assert_eq!("directory_completion/", suggestions.get(1).unwrap().value);
 }
 
 #[test]
@@ -208,6 +227,7 @@ fn file_completions() {
     let expected_paths: Vec<String> = vec![
         folder(dir.join("another")),
         file(dir.join("custom_completion.nu")),
+        folder(dir.join("directory_completion")),
         file(dir.join("nushell")),
         folder(dir.join("test_a")),
         folder(dir.join("test_b")),
@@ -323,6 +343,7 @@ fn command_ls_with_filecompletion() {
     let expected_paths: Vec<String> = vec![
         "another\\".to_string(),
         "custom_completion.nu".to_string(),
+        "directory_completion\\".to_string(),
         "nushell".to_string(),
         "test_a\\".to_string(),
         "test_b\\".to_string(),
@@ -333,6 +354,7 @@ fn command_ls_with_filecompletion() {
     let expected_paths: Vec<String> = vec![
         "another/".to_string(),
         "custom_completion.nu".to_string(),
+        "directory_completion/".to_string(),
         "nushell".to_string(),
         "test_a/".to_string(),
         "test_b/".to_string(),
@@ -355,6 +377,7 @@ fn command_open_with_filecompletion() {
     let expected_paths: Vec<String> = vec![
         "another\\".to_string(),
         "custom_completion.nu".to_string(),
+        "directory_completion\\".to_string(),
         "nushell".to_string(),
         "test_a\\".to_string(),
         "test_b\\".to_string(),
@@ -365,6 +388,7 @@ fn command_open_with_filecompletion() {
     let expected_paths: Vec<String> = vec![
         "another/".to_string(),
         "custom_completion.nu".to_string(),
+        "directory_completion/".to_string(),
         "nushell".to_string(),
         "test_a/".to_string(),
         "test_b/".to_string(),
@@ -388,6 +412,7 @@ fn command_rm_with_globcompletion() {
     let expected_paths: Vec<String> = vec![
         "another\\".to_string(),
         "custom_completion.nu".to_string(),
+        "directory_completion\\".to_string(),
         "nushell".to_string(),
         "test_a\\".to_string(),
         "test_b\\".to_string(),
@@ -398,6 +423,7 @@ fn command_rm_with_globcompletion() {
     let expected_paths: Vec<String> = vec![
         "another/".to_string(),
         "custom_completion.nu".to_string(),
+        "directory_completion/".to_string(),
         "nushell".to_string(),
         "test_a/".to_string(),
         "test_b/".to_string(),
@@ -421,6 +447,7 @@ fn command_cp_with_globcompletion() {
     let expected_paths: Vec<String> = vec![
         "another\\".to_string(),
         "custom_completion.nu".to_string(),
+        "directory_completion\\".to_string(),
         "nushell".to_string(),
         "test_a\\".to_string(),
         "test_b\\".to_string(),
@@ -431,6 +458,7 @@ fn command_cp_with_globcompletion() {
     let expected_paths: Vec<String> = vec![
         "another/".to_string(),
         "custom_completion.nu".to_string(),
+        "directory_completion/".to_string(),
         "nushell".to_string(),
         "test_a/".to_string(),
         "test_b/".to_string(),
@@ -454,6 +482,7 @@ fn command_save_with_filecompletion() {
     let expected_paths: Vec<String> = vec![
         "another\\".to_string(),
         "custom_completion.nu".to_string(),
+        "directory_completion\\".to_string(),
         "nushell".to_string(),
         "test_a\\".to_string(),
         "test_b\\".to_string(),
@@ -464,6 +493,7 @@ fn command_save_with_filecompletion() {
     let expected_paths: Vec<String> = vec![
         "another/".to_string(),
         "custom_completion.nu".to_string(),
+        "directory_completion/".to_string(),
         "nushell".to_string(),
         "test_a/".to_string(),
         "test_b/".to_string(),
@@ -487,6 +517,7 @@ fn command_touch_with_filecompletion() {
     let expected_paths: Vec<String> = vec![
         "another\\".to_string(),
         "custom_completion.nu".to_string(),
+        "directory_completion\\".to_string(),
         "nushell".to_string(),
         "test_a\\".to_string(),
         "test_b\\".to_string(),
@@ -497,6 +528,7 @@ fn command_touch_with_filecompletion() {
     let expected_paths: Vec<String> = vec![
         "another/".to_string(),
         "custom_completion.nu".to_string(),
+        "directory_completion/".to_string(),
         "nushell".to_string(),
         "test_a/".to_string(),
         "test_b/".to_string(),
@@ -520,6 +552,7 @@ fn command_watch_with_filecompletion() {
     let expected_paths: Vec<String> = vec![
         "another\\".to_string(),
         "custom_completion.nu".to_string(),
+        "directory_completion\\".to_string(),
         "nushell".to_string(),
         "test_a\\".to_string(),
         "test_b\\".to_string(),
@@ -530,6 +563,7 @@ fn command_watch_with_filecompletion() {
     let expected_paths: Vec<String> = vec![
         "another/".to_string(),
         "custom_completion.nu".to_string(),
+        "directory_completion/".to_string(),
         "nushell".to_string(),
         "test_a/".to_string(),
         "test_b/".to_string(),
@@ -625,6 +659,7 @@ fn folder_with_directorycompletions() {
     // Create the expected values
     let expected_paths: Vec<String> = vec![
         folder(dir.join("another")),
+        folder(dir.join("directory_completion")),
         folder(dir.join("test_a")),
         folder(dir.join("test_b")),
         folder(dir.join(".hidden_folder")),
@@ -839,6 +874,7 @@ fn unknown_command_completion() {
     let expected_paths: Vec<String> = vec![
         "another\\".to_string(),
         "custom_completion.nu".to_string(),
+        "directory_completion\\".to_string(),
         "nushell".to_string(),
         "test_a\\".to_string(),
         "test_b\\".to_string(),
@@ -849,6 +885,7 @@ fn unknown_command_completion() {
     let expected_paths: Vec<String> = vec![
         "another/".to_string(),
         "custom_completion.nu".to_string(),
+        "directory_completion/".to_string(),
         "nushell".to_string(),
         "test_a/".to_string(),
         "test_b/".to_string(),
@@ -899,6 +936,7 @@ fn filecompletions_triggers_after_cursor() {
     let expected_paths: Vec<String> = vec![
         "another\\".to_string(),
         "custom_completion.nu".to_string(),
+        "directory_completion\\".to_string(),
         "nushell".to_string(),
         "test_a\\".to_string(),
         "test_b\\".to_string(),
@@ -909,6 +947,7 @@ fn filecompletions_triggers_after_cursor() {
     let expected_paths: Vec<String> = vec![
         "another/".to_string(),
         "custom_completion.nu".to_string(),
+        "directory_completion/".to_string(),
         "nushell".to_string(),
         "test_a/".to_string(),
         "test_b/".to_string(),
diff --git a/tests/fixtures/completions/directory_completion/mod.nu b/tests/fixtures/completions/directory_completion/mod.nu
new file mode 100644
index 0000000000..e69de29bb2