diff --git a/CHANGELOG.md b/CHANGELOG.md
index 95892d9..4b121bd 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -3,6 +3,7 @@
 ## Features
 * Supports golang: https://github.com/TabbyML/tabby/issues/553
 * Supports ruby: https://github.com/TabbyML/tabby/pull/597
+* Supports using local directory for `Repository.git_url`: use `file:///path/to/repo` to specify a local directory.
 
 ## Fixes and Improvements
 * Improve snippets retrieval by dedup candidates to existing content + snippets: https://github.com/TabbyML/tabby/pull/582
diff --git a/Cargo.lock b/Cargo.lock
index baac196..2081cf7 100644
--- a/Cargo.lock
+++ b/Cargo.lock
@@ -50,9 +50,9 @@ dependencies = [
 
 [[package]]
 name = "aho-corasick"
-version = "1.0.1"
+version = "1.1.2"
 source = "registry+https://github.com/rust-lang/crates.io-index"
-checksum = "67fc08ce920c31afb70f013dcce1bfc3a3195de6a228474e45e1f145b36f8d04"
+checksum = "b2969dcb958b36655471fc61f7e416fa76033bdd4bfed0678d8fee1e2d07a1f0"
 dependencies = [
  "memchr",
 ]
@@ -345,6 +345,16 @@ dependencies = [
  "generic-array",
 ]
 
+[[package]]
+name = "bstr"
+version = "1.7.0"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "c79ad7fb2dd38f3dabd76b09c6a5a20c038fc0213ef1e9afd30eb777f120f019"
+dependencies = [
+ "memchr",
+ "serde",
+]
+
 [[package]]
 name = "bumpalo"
 version = "3.13.0"
@@ -1213,6 +1223,19 @@ version = "0.3.1"
 source = "registry+https://github.com/rust-lang/crates.io-index"
 checksum = "d2fabcfbdc87f4758337ca535fb41a6d701b65693ce38287d856d1674551ec9b"
 
+[[package]]
+name = "globset"
+version = "0.4.13"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "759c97c1e17c55525b57192c06a267cda0ac5210b222d6b82189a2338fa1c13d"
+dependencies = [
+ "aho-corasick 1.1.2",
+ "bstr",
+ "fnv",
+ "log",
+ "regex",
+]
+
 [[package]]
 name = "h2"
 version = "0.3.19"
@@ -1425,6 +1448,23 @@ dependencies = [
  "unicode-normalization",
 ]
 
+[[package]]
+name = "ignore"
+version = "0.4.20"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "dbe7873dab538a9a44ad79ede1faf5f30d49f9a5c883ddbab48bce81b64b7492"
+dependencies = [
+ "globset",
+ "lazy_static",
+ "log",
+ "memchr",
+ "regex",
+ "same-file",
+ "thread_local",
+ "walkdir",
+ "winapi-util",
+]
+
 [[package]]
 name = "indexmap"
 version = "1.9.3"
@@ -2518,7 +2558,7 @@ version = "1.10.0"
 source = "registry+https://github.com/rust-lang/crates.io-index"
 checksum = "d119d7c7ca818f8a53c300863d4f87566aac09943aef5b355bb83969dae75d87"
 dependencies = [
- "aho-corasick 1.0.1",
+ "aho-corasick 1.1.2",
  "memchr",
  "regex-automata 0.4.1",
  "regex-syntax 0.8.1",
@@ -2539,7 +2579,7 @@ version = "0.4.1"
 source = "registry+https://github.com/rust-lang/crates.io-index"
 checksum = "465c6fc0621e4abc4187a2bda0937bfd4f722c2730b29562e19689ea796c9a4b"
 dependencies = [
- "aho-corasick 1.0.1",
+ "aho-corasick 1.1.2",
  "memchr",
  "regex-syntax 0.8.1",
 ]
@@ -3208,6 +3248,7 @@ dependencies = [
  "anyhow",
  "file-rotate",
  "filenamify",
+ "ignore",
  "job_scheduler",
  "lazy_static",
  "serde",
@@ -3225,7 +3266,6 @@ dependencies = [
  "tree-sitter-rust",
  "tree-sitter-tags",
  "tree-sitter-typescript",
- "walkdir",
 ]
 
 [[package]]
@@ -3234,7 +3274,7 @@ version = "0.21.0"
 source = "registry+https://github.com/rust-lang/crates.io-index"
 checksum = "c1d4675fed6fe2218ce11445374e181e864a8ffd0f28e7e0591ccfc38cd000ae"
 dependencies = [
- "aho-corasick 1.0.1",
+ "aho-corasick 1.1.2",
  "arc-swap",
  "async-trait",
  "base64 0.21.2",
diff --git a/crates/tabby-common/src/config.rs b/crates/tabby-common/src/config.rs
index 7e77db7..69f7b66 100644
--- a/crates/tabby-common/src/config.rs
+++ b/crates/tabby-common/src/config.rs
@@ -49,17 +49,40 @@ pub struct Repository {
 
 impl Repository {
     pub fn dir(&self) -> PathBuf {
-        repositories_dir().join(filenamify(&self.git_url))
+        if self.is_local_dir() {
+            let path = self.git_url.strip_prefix("file:/").unwrap();
+            path.into()
+        } else {
+            repositories_dir().join(filenamify(&self.git_url))
+        }
+    }
+
+    pub fn is_local_dir(&self) -> bool {
+        self.git_url.starts_with("file://")
     }
 }
 
 #[cfg(test)]
 mod tests {
-    use super::Config;
+    use super::{Config, Repository};
 
     #[test]
     fn it_parses_empty_config() {
         let config = serdeconv::from_toml_str::<Config>("");
         debug_assert!(config.is_ok(), "{}", config.err().unwrap());
     }
+
+    #[test]
+    fn it_parses_local_dir() {
+        let repo = Repository {
+            git_url: "file://home/user".to_owned(),
+        };
+        assert!(repo.is_local_dir());
+        assert_eq!(repo.dir().display().to_string(), "/home/user");
+
+        let repo = Repository {
+            git_url: "https://github.com/TabbyML/tabby".to_owned(),
+        };
+        assert!(!repo.is_local_dir());
+    }
 }
diff --git a/crates/tabby-scheduler/Cargo.toml b/crates/tabby-scheduler/Cargo.toml
index 2f50b3c..1289cc8 100644
--- a/crates/tabby-scheduler/Cargo.toml
+++ b/crates/tabby-scheduler/Cargo.toml
@@ -13,7 +13,6 @@ tabby-common = { path = "../tabby-common" }
 tantivy = { workspace = true }
 tracing = { workspace = true }
 tree-sitter-tags = "0.20.2"
-walkdir = "2.3.3"
 lazy_static = { workspace = true }
 serde = { workspace = true }
 serde-jsonlines = { workspace = true }
@@ -23,6 +22,7 @@ tree-sitter-rust = "0.20.3"
 tree-sitter-typescript = "0.20.3"
 tree-sitter-go = "0.20.0"
 tree-sitter-ruby= "0.20.0"
+ignore = "0.4.20"
 
 [dev-dependencies]
 temp_testdir = "0.2"
diff --git a/crates/tabby-scheduler/src/dataset.rs b/crates/tabby-scheduler/src/dataset.rs
index 7be9faf..a224a6d 100644
--- a/crates/tabby-scheduler/src/dataset.rs
+++ b/crates/tabby-scheduler/src/dataset.rs
@@ -7,6 +7,7 @@ use std::{
 
 use anyhow::Result;
 use file_rotate::{compression::Compression, suffix::AppendCount, ContentLimit, FileRotate};
+use ignore::{DirEntry, Walk};
 use lazy_static::lazy_static;
 use serde_jsonlines::WriteExt;
 use tabby_common::{
@@ -16,7 +17,6 @@ use tabby_common::{
 };
 use tracing::{error, info};
 use tree_sitter_tags::{TagsConfiguration, TagsContext};
-use walkdir::{DirEntry, WalkDir};
 
 trait RepositoryExt {
     fn create_dataset(&self, writer: &mut impl Write) -> Result<()>;
@@ -27,9 +27,7 @@ impl RepositoryExt for Repository {
         let dir = self.dir();
 
         info!("Start indexing repository {}", self.git_url);
-        let walk_dir = WalkDir::new(dir.as_path())
-            .into_iter()
-            .filter_entry(is_not_hidden)
+        let walk_dir = Walk::new(dir.as_path())
             .filter_map(Result::ok)
             .filter(is_source_code);
 
@@ -67,21 +65,13 @@ fn get_language(ext: &OsStr) -> Option<&str> {
 }
 
 fn is_source_code(entry: &DirEntry) -> bool {
-    if entry.file_type().is_file() {
+    if entry.file_type().is_some_and(|x| x.is_file()) {
         entry.path().extension().and_then(get_language).is_some()
     } else {
         false
     }
 }
 
-fn is_not_hidden(entry: &DirEntry) -> bool {
-    entry
-        .file_name()
-        .to_str()
-        .map(|s| entry.depth() == 0 || !s.starts_with('.'))
-        .unwrap_or(false)
-}
-
 pub fn create_dataset(config: &Config) -> Result<()> {
     fs::remove_dir_all(dataset_dir()).ok();
     fs::create_dir_all(dataset_dir())?;
diff --git a/crates/tabby-scheduler/src/repository.rs b/crates/tabby-scheduler/src/repository.rs
index 8fb9809..6cf0fd5 100644
--- a/crates/tabby-scheduler/src/repository.rs
+++ b/crates/tabby-scheduler/src/repository.rs
@@ -10,7 +10,13 @@ trait ConfigExt {
 impl ConfigExt for Config {
     fn sync_repositories(&self) -> Result<()> {
         for repository in self.repositories.iter() {
-            repository.sync()?;
+            if repository.is_local_dir() {
+                if !repository.dir().exists() {
+                    panic!("Directory {} does not exist", repository.dir().display());
+                }
+            } else {
+                repository.sync()?;
+            }
         }
 
         Ok(())