diff --git a/applicationset/services/scm_provider/gitlab.go b/applicationset/services/scm_provider/gitlab.go
index 28aec4d5d6033..e77455296bf9b 100644
--- a/applicationset/services/scm_provider/gitlab.go
+++ b/applicationset/services/scm_provider/gitlab.go
@@ -2,10 +2,10 @@ package scm_provider
 
 import (
 	"context"
+	"errors"
 	"fmt"
 	"net/http"
 	"os"
-	pathpkg "path"
 
 	"github.com/hashicorp/go-retryablehttp"
 	"github.com/xanzy/go-gitlab"
@@ -129,33 +129,31 @@ func (g *GitlabProvider) ListRepos(ctx context.Context, cloneProtocol string) ([
 func (g *GitlabProvider) RepoHasPath(_ context.Context, repo *Repository, path string) (bool, error) {
 	p, _, err := g.client.Projects.GetProject(repo.Organization+"/"+repo.Repository, nil)
 	if err != nil {
-		return false, err
+		return false, fmt.Errorf("error getting Project Info: %w", err)
 	}
 
-	options := gitlab.ListTreeOptions{
-		Path: gitlab.Ptr(pathpkg.Dir(path)), // search parent folder
-		Ref:  &repo.Branch,
-	}
-	for {
-		treeNode, resp, err := g.client.Repositories.ListTree(p.ID, &options)
-		if err != nil {
-			return false, err
-		}
-
-		// search for presence of the requested file in the parent folder
-		for i := range treeNode {
-			if treeNode[i].Path == path {
-				return true, nil
+	// search if the path is a file and exists in the repo
+	fileOptions := gitlab.GetFileOptions{Ref: &repo.Branch}
+	_, _, err = g.client.RepositoryFiles.GetFile(p.ID, path, &fileOptions)
+	if err != nil {
+		if errors.Is(err, gitlab.ErrNotFound) {
+			// no file found, check for a directory
+			options := gitlab.ListTreeOptions{
+				Path: &path,
+				Ref:  &repo.Branch,
 			}
+			_, _, err := g.client.Repositories.ListTree(p.ID, &options)
+			if err != nil {
+				if errors.Is(err, gitlab.ErrNotFound) {
+					return false, nil // no file or directory found
+				}
+				return false, err
+			}
+			return true, nil // directory found
 		}
-		if resp.NextPage == 0 {
-			// no future pages
-			break
-		}
-		options.Page = resp.NextPage
+		return false, err
 	}
-
-	return false, nil
+	return true, nil // file found
 }
 
 func (g *GitlabProvider) listBranches(_ context.Context, repo *Repository) ([]gitlab.Branch, error) {
diff --git a/applicationset/services/scm_provider/gitlab_test.go b/applicationset/services/scm_provider/gitlab_test.go
index b781c655872b2..bf980538d5a8f 100644
--- a/applicationset/services/scm_provider/gitlab_test.go
+++ b/applicationset/services/scm_provider/gitlab_test.go
@@ -20,6 +20,7 @@ func gitlabMockHandler(t *testing.T) func(http.ResponseWriter, *http.Request) {
 	t.Helper()
 	return func(w http.ResponseWriter, r *http.Request) {
 		w.Header().Set("Content-Type", "application/json")
+		fmt.Println(r.RequestURI)
 		switch r.RequestURI {
 		case "/api/v4":
 			fmt.Println("here1")
@@ -1040,11 +1041,31 @@ func gitlabMockHandler(t *testing.T) func(http.ResponseWriter, *http.Request) {
 			if err != nil {
 				t.Fail()
 			}
-		// Recent versions of the Gitlab API (v17.7+) return 404 not only when a file doesn't exist, but also
-		// when a path is to a file instead of a directory. Our code should not hit this path, because
-		// we should only send requests for parent directories. But we leave this handler in place
-		// to prevent regressions.
-		case "/api/v4/projects/27084533/repository/tree?path=argocd/filepath.yaml&ref=master":
+			// Recent versions of the Gitlab API (v17.7+) listTree return 404 not only when a file doesn't exist, but also
+			// when a path is to a file instead of a directory. Code was refactored to explicitly search for file then
+			// search for directory, catching 404 errors as "file not found".
+		case "/api/v4/projects/27084533/repository/files/argocd?ref=master":
+			w.WriteHeader(http.StatusNotFound)
+		case "/api/v4/projects/27084533/repository/files/argocd%2Finstall%2Eyaml?ref=master":
+			_, err := io.WriteString(w, `{"file_name":"install.yaml","file_path":"argocd/install.yaml","size":0,"encoding":"base64","content_sha256":"e3b0c44298fc1c149afbf4c8996fb92427ae41e4649b934ca495991b7852b855","ref":"main","blob_id":"e69de29bb2d1d6434b8b29ae775ad8c2e48c5391","commit_id":"6d4c0f9d34534ccc73aa3f3180b25e2aebe630eb","last_commit_id":"b50eb63f9c0e09bfdb070db26fd32c7210291f52","execute_filemode":false,"content":""}`)
+			if err != nil {
+				t.Fail()
+			}
+		case "/api/v4/projects/27084533/repository/files/notathing?ref=master":
+			w.WriteHeader(http.StatusNotFound)
+		case "/api/v4/projects/27084533/repository/tree?path=notathing&ref=master":
+			w.WriteHeader(http.StatusNotFound)
+		case "/api/v4/projects/27084533/repository/files/argocd%2Fnotathing%2Eyaml?ref=master":
+			w.WriteHeader(http.StatusNotFound)
+		case "/api/v4/projects/27084533/repository/tree?path=argocd%2Fnotathing.yaml&ref=master":
+			w.WriteHeader(http.StatusNotFound)
+		case "/api/v4/projects/27084533/repository/files/notathing%2Fnotathing%2Eyaml?ref=master":
+			w.WriteHeader(http.StatusNotFound)
+		case "/api/v4/projects/27084533/repository/tree?path=notathing%2Fnotathing.yaml&ref=master":
+			w.WriteHeader(http.StatusNotFound)
+		case "/api/v4/projects/27084533/repository/files/notathing%2Fnotathing%2Fnotathing%2Eyaml?ref=master":
+			w.WriteHeader(http.StatusNotFound)
+		case "/api/v4/projects/27084533/repository/tree?path=notathing%2Fnotathing%2Fnotathing.yaml&ref=master":
 			w.WriteHeader(http.StatusNotFound)
 		case "/api/v4/projects/27084533/repository/branches/foo":
 			w.WriteHeader(http.StatusNotFound)
@@ -1201,8 +1222,13 @@ func TestGitlabHasPath(t *testing.T) {
 			exists: false,
 		},
 		{
-			name:   "send a file path",
-			path:   "argocd/filepath.yaml",
+			name:   "noexistent file in noexistent directory",
+			path:   "notathing/notathing.yaml",
+			exists: false,
+		},
+		{
+			name:   "noexistent file in nested noexistent directory",
+			path:   "notathing/notathing/notathing.yaml",
 			exists: false,
 		},
 	}