diff --git a/CHANGELOG.rst b/CHANGELOG.rst
index 9996e295b..44cd42335 100644
--- a/CHANGELOG.rst
+++ b/CHANGELOG.rst
@@ -4,6 +4,7 @@ fish 4.1.0 (released ???)
 Notable improvements and fixes
 ------------------------------
 - Compound commands (``begin; echo 1; echo 2; end``) can now be now be abbreviated using braces (``{ echo1; echo 2 }``), like in other shells.
+- When tab completion results are truncated, any common directory name is omitted.
 
 Deprecations and removed features
 ---------------------------------
diff --git a/src/reader.rs b/src/reader.rs
index 788d49643..f07aab2ed 100644
--- a/src/reader.rs
+++ b/src/reader.rs
@@ -6497,10 +6497,21 @@ fn handle_completions(&mut self, token_range: Range<usize>) -> bool {
             prefix.push_utfstr(&tok);
             prefix.push_utfstr(&common_prefix);
         } else {
-            // Append just the end of the string.
+            // Collapse parent directories and append end of string
             prefix.push(get_ellipsis_char());
+
             let full = tok + &common_prefix[..];
-            prefix.push_utfstr(&full[full.len() - PREFIX_MAX_LEN..]);
+            let truncated = &full[full.len() - PREFIX_MAX_LEN..];
+            let (i, last_component) = truncated.split('/').enumerate().last().unwrap();
+            if i == 0 {
+                // No path separators were found in the common prefix, so we can't collapse
+                // any further
+                prefix.push_utfstr(&truncated);
+            } else {
+                // Discard any parent directories and include whats left
+                prefix.push('/');
+                prefix.push_utfstr(last_component);
+            };
         }
 
         // Update the pager data.
diff --git a/tests/checks/tmux-prefix.fish b/tests/checks/tmux-prefix.fish
new file mode 100644
index 000000000..541507ec8
--- /dev/null
+++ b/tests/checks/tmux-prefix.fish
@@ -0,0 +1,26 @@
+#RUN: %fish %s
+#REQUIRES: command -v tmux
+#REQUIRES: test -z "$CI"
+
+isolated-tmux-start
+
+# Check no collapse
+mkdir -p a/b
+echo > a/b/f1
+echo > a/b/f2
+isolated-tmux send-keys 'HOME=$PWD ls ~/a/b/' Tab
+tmux-sleep
+isolated-tmux capture-pane -p
+# CHECK: prompt 0> HOME=$PWD ls ~/a/b/f
+# CHECK: ~/a/b/f1  ~/a/b/f2
+
+# Check collapse
+isolated-tmux send-keys C-c
+mkdir -p dddddd/eeeeee
+echo > dddddd/eeeeee/file1
+echo > dddddd/eeeeee/file2
+isolated-tmux send-keys 'HOME=$PWD ls ~/dddddd/eeeeee/' Tab
+tmux-sleep
+isolated-tmux capture-pane -p
+# CHECK: prompt 0> HOME=$PWD ls ~/dddddd/eeeeee/file
+# CHECK: …/file1  …/file2