diff --git a/scm-dao-xml/src/main/java/sonia/scm/repository/xml/PathBasedRepositoryLocationResolver.java b/scm-dao-xml/src/main/java/sonia/scm/repository/xml/PathBasedRepositoryLocationResolver.java
index b4a5b0aa27..14efd0995b 100644
--- a/scm-dao-xml/src/main/java/sonia/scm/repository/xml/PathBasedRepositoryLocationResolver.java
+++ b/scm-dao-xml/src/main/java/sonia/scm/repository/xml/PathBasedRepositoryLocationResolver.java
@@ -1,19 +1,21 @@
 package sonia.scm.repository.xml;
 
-import com.google.common.annotations.VisibleForTesting;
 import sonia.scm.SCMContextProvider;
 import sonia.scm.repository.BasicRepositoryLocationResolver;
 import sonia.scm.repository.InitialRepositoryLocationResolver;
-import sonia.scm.repository.Repository;
+import sonia.scm.repository.InternalRepositoryException;
 import sonia.scm.store.StoreConstants;
 
 import javax.inject.Inject;
+import java.io.IOException;
+import java.nio.file.Files;
 import java.nio.file.Path;
 import java.time.Clock;
 import java.util.Map;
 import java.util.concurrent.ConcurrentHashMap;
 import java.util.function.BiConsumer;
-import java.util.function.Consumer;
+
+import static sonia.scm.ContextEntry.ContextBuilder.entity;
 
 /**
  * A Location Resolver for File based Repository Storage.
@@ -75,7 +77,13 @@ public class PathBasedRepositoryLocationResolver extends BasicRepositoryLocation
     Path path = initialRepositoryLocationResolver.getPath(repositoryId);
     pathById.put(repositoryId, path);
     writePathDatabase();
-    return contextProvider.resolve(path);
+    Path resolvedPath = contextProvider.resolve(path);
+    try {
+      Files.createDirectories(resolvedPath);
+    } catch (IOException e) {
+      throw new InternalRepositoryException(entity("Repository", repositoryId), "could not create directory for new repository", e);
+    }
+    return resolvedPath;
   }
 
   Path remove(String repositoryId) {
diff --git a/scm-dao-xml/src/test/java/sonia/scm/repository/xml/PathBasedRepositoryLocationResolverTest.java b/scm-dao-xml/src/test/java/sonia/scm/repository/xml/PathBasedRepositoryLocationResolverTest.java
index 2f20a46c5e..f8b517e18b 100644
--- a/scm-dao-xml/src/test/java/sonia/scm/repository/xml/PathBasedRepositoryLocationResolverTest.java
+++ b/scm-dao-xml/src/test/java/sonia/scm/repository/xml/PathBasedRepositoryLocationResolverTest.java
@@ -1,43 +1,172 @@
 package sonia.scm.repository.xml;
 
+import com.google.common.base.Charsets;
 import org.junit.jupiter.api.BeforeEach;
+import org.junit.jupiter.api.Nested;
 import org.junit.jupiter.api.Test;
 import org.junit.jupiter.api.extension.ExtendWith;
-import org.mockito.InjectMocks;
+import org.junitpioneer.jupiter.TempDirectory;
 import org.mockito.Mock;
 import org.mockito.junit.jupiter.MockitoExtension;
 import org.mockito.junit.jupiter.MockitoSettings;
 import org.mockito.quality.Strictness;
-import org.mockito.stubbing.Answer;
 import sonia.scm.SCMContextProvider;
 import sonia.scm.repository.InitialRepositoryLocationResolver;
-import sonia.scm.repository.RepositoryDAO;
-import sonia.scm.repository.RepositoryLocationResolver;
 
+import java.io.IOException;
+import java.nio.file.Files;
 import java.nio.file.Path;
-import java.nio.file.Paths;
+import java.time.Clock;
+import java.util.HashMap;
+import java.util.Map;
 
 import static org.assertj.core.api.Assertions.assertThat;
 import static org.mockito.ArgumentMatchers.any;
+import static org.mockito.ArgumentMatchers.anyString;
 import static org.mockito.Mockito.when;
 
-@ExtendWith({MockitoExtension.class})
+@ExtendWith(MockitoExtension.class)
+@ExtendWith(TempDirectory.class)
 @MockitoSettings(strictness = Strictness.LENIENT)
 class PathBasedRepositoryLocationResolverTest {
 
+  private static final long CREATION_TIME = 42;
+
   @Mock
   private SCMContextProvider contextProvider;
 
   @Mock
   private InitialRepositoryLocationResolver initialRepositoryLocationResolver;
 
+  @Mock
+  private Clock clock;
+
+  private Path basePath;
+
   private PathBasedRepositoryLocationResolver resolver;
 
   @BeforeEach
-  void beforeEach() {
-    when(contextProvider.resolve(any(Path.class))).then((Answer<Path>) invocationOnMock -> invocationOnMock.getArgument(0));
-    resolver = new PathBasedRepositoryLocationResolver(contextProvider, initialRepositoryLocationResolver);
+  void beforeEach(@TempDirectory.TempDir Path temp) {
+    this.basePath = temp;
+    when(contextProvider.getBaseDirectory()).thenReturn(temp.toFile());
+    when(contextProvider.resolve(any(Path.class))).thenAnswer(invocation -> invocation.getArgument(0));
+    when(initialRepositoryLocationResolver.getPath(anyString())).thenAnswer(invocation -> temp.resolve(invocation.getArgument(0).toString()));
+    when(clock.millis()).thenReturn(CREATION_TIME);
+    resolver = createResolver();
   }
 
-  // TODO implement tests
+  @Test
+  void shouldCreateInitialDirectory() {
+    Path path = resolver.forClass(Path.class).getLocation("newId");
+
+    assertThat(path).isEqualTo(basePath.resolve("newId"));
+    assertThat(path).isDirectory();
+  }
+
+  @Test
+  void shouldPersistInitialDirectory() {
+    resolver.forClass(Path.class).getLocation("newId");
+
+    String content = getXmlFileContent();
+
+    assertThat(content).contains("newId");
+    assertThat(content).contains(basePath.resolve("newId").toString());
+  }
+
+  @Test
+  void shouldPersistWithCreationDate() {
+    long now = CREATION_TIME + 100;
+    when(clock.millis()).thenReturn(now);
+
+    resolver.forClass(Path.class).getLocation("newId");
+
+    assertThat(resolver.getCreationTime()).isEqualTo(CREATION_TIME);
+
+    String content = getXmlFileContent();
+    assertThat(content).contains("creation-time=\"" + CREATION_TIME + "\"");
+  }
+
+  @Test
+  void shouldUpdateWithModifiedDate() {
+    long now = CREATION_TIME + 100;
+    when(clock.millis()).thenReturn(now);
+
+    resolver.forClass(Path.class).getLocation("newId");
+
+    assertThat(resolver.getCreationTime()).isEqualTo(CREATION_TIME);
+    assertThat(resolver.getLastModified()).isEqualTo(now);
+
+    String content = getXmlFileContent();
+    assertThat(content).contains("creation-time=\"" + CREATION_TIME + "\"");
+    assertThat(content).contains("last-modified=\"" + now + "\"");
+  }
+
+  @Nested
+  class WithExistingData {
+
+    private PathBasedRepositoryLocationResolver resolverWithExistingData;
+
+    @BeforeEach
+    void createExistingDatabase() {
+      resolver.forClass(Path.class).getLocation("existingId_1");
+      resolver.forClass(Path.class).getLocation("existingId_2");
+      resolverWithExistingData = createResolver();
+    }
+
+    @Test
+    void shouldInitWithExistingData() {
+      Map<String, Path> foundRepositories = new HashMap<>();
+      resolverWithExistingData.forAllPaths(
+        foundRepositories::put
+      );
+      assertThat(foundRepositories)
+        .containsKeys("existingId_1", "existingId_2");
+    }
+
+    @Test
+    void shouldRemoveFromFile() {
+      resolverWithExistingData.remove("existingId_1");
+
+      assertThat(getXmlFileContent()).doesNotContain("existingId_1");
+    }
+
+    @Test
+    void shouldNotUpdateModificationDateForExistingDirectoryMapping() {
+      long now = CREATION_TIME + 100;
+      Path path = resolverWithExistingData.create(Path.class).getLocation("existingId_1");
+
+      assertThat(path).isEqualTo(basePath.resolve("existingId_1"));
+
+      String content = getXmlFileContent();
+      assertThat(content).doesNotContain("last-modified=\"" + now + "\"");
+    }
+
+    @Test
+    void shouldNotCreateDirectoryForExistingMapping() throws IOException {
+      Files.delete(basePath.resolve("existingId_1"));
+
+      Path path = resolverWithExistingData.create(Path.class).getLocation("existingId_1");
+
+      assertThat(path).doesNotExist();
+    }
+  }
+
+  private String getXmlFileContent() {
+    Path storePath = basePath.resolve("config").resolve("repositories.xml");
+
+    assertThat(storePath).isRegularFile();
+    return content(storePath);
+  }
+
+  private PathBasedRepositoryLocationResolver createResolver() {
+    return new PathBasedRepositoryLocationResolver(contextProvider, initialRepositoryLocationResolver, clock);
+  }
+
+  private String content(Path storePath) {
+    try {
+      return new String(Files.readAllBytes(storePath), Charsets.UTF_8);
+    } catch (IOException e) {
+      throw new RuntimeException(e);
+    }
+  }
 }