diff --git a/hadoop-ozone/s3gateway/src/main/java/org/apache/hadoop/ozone/s3/endpoint/BucketEndpoint.java b/hadoop-ozone/s3gateway/src/main/java/org/apache/hadoop/ozone/s3/endpoint/BucketEndpoint.java
index d3b36b48376..67e25c3541b 100644
--- a/hadoop-ozone/s3gateway/src/main/java/org/apache/hadoop/ozone/s3/endpoint/BucketEndpoint.java
+++ b/hadoop-ozone/s3gateway/src/main/java/org/apache/hadoop/ozone/s3/endpoint/BucketEndpoint.java
@@ -46,17 +46,16 @@ import org.apache.hadoop.ozone.s3.endpoint.MultiDeleteResponse.DeletedObject;
 import org.apache.hadoop.ozone.s3.endpoint.MultiDeleteResponse.Error;
 import org.apache.hadoop.ozone.s3.exception.OS3Exception;
 import org.apache.hadoop.ozone.s3.exception.S3ErrorTable;
+import org.apache.hadoop.ozone.s3.util.ContinueToken;
+import org.apache.hadoop.ozone.s3.util.S3StorageType;
 
 import edu.umd.cs.findbugs.annotations.SuppressFBWarnings;
 import org.apache.commons.lang3.StringUtils;
-import org.apache.hadoop.ozone.s3.util.S3StorageType;
-import org.apache.hadoop.ozone.s3.util.S3utils;
+import static org.apache.hadoop.ozone.s3.util.S3Consts.ENCODING_TYPE;
 import org.apache.http.HttpStatus;
 import org.slf4j.Logger;
 import org.slf4j.LoggerFactory;
 
-import static org.apache.hadoop.ozone.s3.util.S3Consts.ENCODING_TYPE;
-
 /**
  * Bucket level rest endpoints.
  */
@@ -104,16 +103,17 @@ public class BucketEndpoint extends EndpointBase {
 
     Iterator<? extends OzoneKey> ozoneKeyIterator;
 
-    String decodedToken = S3utils.decodeContinueToken(continueToken);
+    ContinueToken decodedToken =
+        ContinueToken.decodeFromString(continueToken);
 
     if (startAfter != null && continueToken != null) {
       // If continuation token and start after both are provided, then we
       // ignore start After
-      ozoneKeyIterator = bucket.listKeys(prefix, decodedToken);
+      ozoneKeyIterator = bucket.listKeys(prefix, decodedToken.getLastKey());
     } else if (startAfter != null && continueToken == null) {
       ozoneKeyIterator = bucket.listKeys(prefix, startAfter);
     } else if (startAfter == null && continueToken != null){
-      ozoneKeyIterator = bucket.listKeys(prefix, decodedToken);
+      ozoneKeyIterator = bucket.listKeys(prefix, decodedToken.getLastKey());
     } else {
       ozoneKeyIterator = bucket.listKeys(prefix);
     }
@@ -130,6 +130,9 @@ public class BucketEndpoint extends EndpointBase {
     response.setContinueToken(continueToken);
 
     String prevDir = null;
+    if (continueToken != null) {
+      prevDir = decodedToken.getLastDir();
+    }
     String lastKey = null;
     int count = 0;
     while (ozoneKeyIterator.hasNext()) {
@@ -176,7 +179,8 @@ public class BucketEndpoint extends EndpointBase {
       response.setTruncated(false);
     } else if(ozoneKeyIterator.hasNext()) {
       response.setTruncated(true);
-      response.setNextToken(S3utils.generateContinueToken(lastKey));
+      ContinueToken nextToken = new ContinueToken(lastKey, prevDir);
+      response.setNextToken(nextToken.encodeToString());
     } else {
       response.setTruncated(false);
     }
diff --git a/hadoop-ozone/s3gateway/src/main/java/org/apache/hadoop/ozone/s3/util/ContinueToken.java b/hadoop-ozone/s3gateway/src/main/java/org/apache/hadoop/ozone/s3/util/ContinueToken.java
new file mode 100644
index 00000000000..92ae6d44739
--- /dev/null
+++ b/hadoop-ozone/s3gateway/src/main/java/org/apache/hadoop/ozone/s3/util/ContinueToken.java
@@ -0,0 +1,173 @@
+/**
+ * Licensed to the Apache Software Foundation (ASF) under one
+ * or more contributor license agreements.  See the NOTICE file
+ * distributed with this work for additional information
+ * regarding copyright ownership.  The ASF licenses this file
+ * to you under the Apache License, Version 2.0 (the
+ * "License"); you may not use this file except in compliance
+ * with the License.  You may obtain a copy of the License at
+ * <p>
+ * http://www.apache.org/licenses/LICENSE-2.0
+ * <p>
+ * Unless required by applicable law or agreed to in writing, software
+ * distributed under the License is distributed on an "AS IS" BASIS,
+ * WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+ * See the License for the specific language governing permissions and
+ * limitations under the License.
+ */
+package org.apache.hadoop.ozone.s3.util;
+
+import java.nio.ByteBuffer;
+import java.nio.charset.StandardCharsets;
+import java.util.Objects;
+
+import org.apache.hadoop.ozone.s3.exception.OS3Exception;
+import org.apache.hadoop.ozone.s3.exception.S3ErrorTable;
+
+import com.google.common.base.Preconditions;
+import org.apache.commons.codec.DecoderException;
+import org.apache.commons.codec.binary.Hex;
+import org.apache.commons.codec.digest.DigestUtils;
+
+/**
+ * Token which holds enough information to continue the key iteration.
+ */
+public class ContinueToken {
+
+  private String lastKey;
+
+  private String lastDir;
+
+  private static final String CONTINUE_TOKEN_SEPERATOR = "-";
+
+  public ContinueToken(String lastKey, String lastDir) {
+    Preconditions.checkNotNull(lastKey,
+        "The last key can't be null in the continue token.");
+    this.lastKey = lastKey;
+    if (lastDir != null && lastDir.length() > 0) {
+      this.lastDir = lastDir;
+    }
+  }
+
+  /**
+   * Generate a continuation token which is used in get Bucket.
+   *
+   * @return if key is not null return continuation token, else returns null.
+   */
+  public String encodeToString() {
+    if (this.lastKey != null) {
+
+      ByteBuffer buffer = ByteBuffer
+          .allocate(4 + lastKey.length()
+              + (lastDir == null ? 0 : lastDir.length()));
+      buffer.putInt(lastKey.length());
+      buffer.put(lastKey.getBytes(StandardCharsets.UTF_8));
+      if (lastDir != null) {
+        buffer.put(lastDir.getBytes(StandardCharsets.UTF_8));
+      }
+
+      String hex = Hex.encodeHexString(buffer.array());
+      String digest = DigestUtils.sha256Hex(hex);
+      return hex + CONTINUE_TOKEN_SEPERATOR + digest;
+    } else {
+      return null;
+    }
+  }
+
+  /**
+   * Decode a continuation token which is used in get Bucket.
+   *
+   * @param key
+   * @return if key is not null return decoded token, otherwise returns null.
+   * @throws OS3Exception
+   */
+  public static ContinueToken decodeFromString(String key) throws OS3Exception {
+    if (key != null) {
+      int indexSeparator = key.indexOf(CONTINUE_TOKEN_SEPERATOR);
+      if (indexSeparator == -1) {
+        throw S3ErrorTable.newError(S3ErrorTable.INVALID_ARGUMENT, key);
+      }
+      String hex = key.substring(0, indexSeparator);
+      String digest = key.substring(indexSeparator + 1);
+      try {
+        checkHash(key, hex, digest);
+
+        ByteBuffer buffer = ByteBuffer.wrap(Hex.decodeHex(hex));
+        int keySize = buffer.getInt();
+
+        byte[] actualKeyBytes = new byte[keySize];
+        buffer.get(actualKeyBytes);
+
+        byte[] actualDirBytes = new byte[buffer.remaining()];
+        buffer.get(actualDirBytes);
+
+        return new ContinueToken(
+            new String(actualKeyBytes, StandardCharsets.UTF_8),
+            new String(actualDirBytes, StandardCharsets.UTF_8)
+        );
+
+      } catch (DecoderException ex) {
+        OS3Exception os3Exception = S3ErrorTable.newError(S3ErrorTable
+            .INVALID_ARGUMENT, key);
+        os3Exception.setErrorMessage("The continuation token provided is " +
+            "incorrect");
+        throw os3Exception;
+      }
+    } else {
+      return null;
+    }
+  }
+
+  private static void checkHash(String key, String hex, String digest)
+      throws OS3Exception {
+    String digestActualKey = DigestUtils.sha256Hex(hex);
+    if (!digest.equals(digestActualKey)) {
+      OS3Exception ex = S3ErrorTable.newError(S3ErrorTable
+          .INVALID_ARGUMENT, key);
+      ex.setErrorMessage("The continuation token provided is incorrect");
+      throw ex;
+    }
+  }
+
+  public String getLastKey() {
+    return lastKey;
+  }
+
+  public void setLastKey(String lastKey) {
+    this.lastKey = lastKey;
+  }
+
+  public String getLastDir() {
+    return lastDir;
+  }
+
+  public void setLastDir(String lastDir) {
+    this.lastDir = lastDir;
+  }
+
+  @Override
+  public boolean equals(Object o) {
+    if (this == o) {
+      return true;
+    }
+    if (o == null || getClass() != o.getClass()) {
+      return false;
+    }
+    ContinueToken that = (ContinueToken) o;
+    return lastKey.equals(that.lastKey) &&
+        Objects.equals(lastDir, that.lastDir);
+  }
+
+  @Override
+  public int hashCode() {
+    return Objects.hash(lastKey);
+  }
+
+  @Override
+  public String toString() {
+    return "ContinueToken{" +
+        "lastKey='" + lastKey + '\'' +
+        ", lastDir='" + lastDir + '\'' +
+        '}';
+  }
+}
diff --git a/hadoop-ozone/s3gateway/src/main/java/org/apache/hadoop/ozone/s3/util/S3utils.java b/hadoop-ozone/s3gateway/src/main/java/org/apache/hadoop/ozone/s3/util/S3utils.java
index 3ce9bbdaa18..7b9c7e8e5a0 100644
--- a/hadoop-ozone/s3gateway/src/main/java/org/apache/hadoop/ozone/s3/util/S3utils.java
+++ b/hadoop-ozone/s3gateway/src/main/java/org/apache/hadoop/ozone/s3/util/S3utils.java
@@ -18,19 +18,11 @@
  */
 package org.apache.hadoop.ozone.s3.util;
 
-import org.apache.commons.codec.DecoderException;
-import org.apache.commons.codec.binary.Hex;
-import org.apache.commons.codec.digest.DigestUtils;
-import org.apache.hadoop.classification.InterfaceAudience;
-import org.apache.hadoop.ozone.s3.exception.OS3Exception;
-import org.apache.hadoop.ozone.s3.exception.S3ErrorTable;
-
-
-import java.nio.charset.StandardCharsets;
 import java.util.regex.Matcher;
 
-import static org.apache.hadoop.ozone.s3.util.S3Consts
-    .RANGE_HEADER_MATCH_PATTERN;
+import org.apache.hadoop.classification.InterfaceAudience;
+
+import static org.apache.hadoop.ozone.s3.util.S3Consts.RANGE_HEADER_MATCH_PATTERN;
 /**
  * Utility class for S3.
  */
@@ -40,60 +32,9 @@ public final class S3utils {
   private S3utils() {
 
   }
-  private static final String CONTINUE_TOKEN_SEPERATOR = "-";
 
-  /**
-   * Generate a continuation token which is used in get Bucket.
-   * @param key
-   * @return if key is not null return continuation token, else returns null.
-   */
-  public static String generateContinueToken(String key) {
-    if (key != null) {
-      byte[] byteData = key.getBytes(StandardCharsets.UTF_8);
-      String hex = Hex.encodeHexString(byteData);
-      String digest = DigestUtils.sha256Hex(key);
-      return hex + CONTINUE_TOKEN_SEPERATOR + digest;
-    } else {
-      return null;
-    }
-  }
 
-  /**
-   * Decode a continuation token which is used in get Bucket.
-   * @param key
-   * @return if key is not null return decoded token, otherwise returns null.
-   * @throws OS3Exception
-   */
-  public static String decodeContinueToken(String key) throws OS3Exception {
-    if (key != null) {
-      int indexSeparator = key.indexOf(CONTINUE_TOKEN_SEPERATOR);
-      if (indexSeparator == -1) {
-        throw S3ErrorTable.newError(S3ErrorTable.INVALID_ARGUMENT, key);
-      }
-      String hex = key.substring(0, indexSeparator);
-      String digest = key.substring(indexSeparator + 1);
-      try {
-        byte[] actualKeyBytes = Hex.decodeHex(hex);
-        String digestActualKey = DigestUtils.sha256Hex(actualKeyBytes);
-        if (digest.equals(digestActualKey)) {
-          return new String(actualKeyBytes, StandardCharsets.UTF_8);
-        } else {
-          OS3Exception ex = S3ErrorTable.newError(S3ErrorTable
-              .INVALID_ARGUMENT, key);
-          ex.setErrorMessage("The continuation token provided is incorrect");
-          throw ex;
-        }
-      } catch (DecoderException ex) {
-        OS3Exception os3Exception = S3ErrorTable.newError(S3ErrorTable
-            .INVALID_ARGUMENT, key);
-        os3Exception.setErrorMessage("The continuation token provided is " +
-            "incorrect");
-        throw os3Exception;
-      }
-    } else {
-      return null;
-    }
-  }
+
 
 
   /**
diff --git a/hadoop-ozone/s3gateway/src/test/java/org/apache/hadoop/ozone/s3/endpoint/TestBucketGet.java b/hadoop-ozone/s3gateway/src/test/java/org/apache/hadoop/ozone/s3/endpoint/TestBucketGet.java
index 8b70d2990bc..b3410b47092 100644
--- a/hadoop-ozone/s3gateway/src/test/java/org/apache/hadoop/ozone/s3/endpoint/TestBucketGet.java
+++ b/hadoop-ozone/s3gateway/src/test/java/org/apache/hadoop/ozone/s3/endpoint/TestBucketGet.java
@@ -211,6 +211,53 @@ public class TestBucketGet {
 
   }
 
+  @Test
+  public void listWithContinuationTokenDirBreak()
+      throws OS3Exception, IOException {
+
+    BucketEndpoint getBucket = new BucketEndpoint();
+
+    OzoneClient ozoneClient =
+        createClientWithKeys(
+            "test/dir1/file1",
+            "test/dir1/file2",
+            "test/dir1/file3",
+            "test/dir2/file4",
+            "test/dir2/file5",
+            "test/dir2/file6",
+            "test/dir3/file7",
+            "test/file8");
+
+    getBucket.setClient(ozoneClient);
+
+    int maxKeys = 2;
+
+    ListObjectResponse getBucketResponse;
+
+    getBucketResponse =
+        (ListObjectResponse) getBucket.list("b1", "/", null, null, maxKeys,
+            "test/", null, null, null, null).getEntity();
+
+    Assert.assertEquals(0, getBucketResponse.getContents().size());
+    Assert.assertEquals(2, getBucketResponse.getCommonPrefixes().size());
+    Assert.assertEquals("test/dir1/",
+        getBucketResponse.getCommonPrefixes().get(0).getPrefix());
+    Assert.assertEquals("test/dir2/",
+        getBucketResponse.getCommonPrefixes().get(1).getPrefix());
+
+    getBucketResponse =
+        (ListObjectResponse) getBucket.list("b1", "/", null, null, maxKeys,
+            "test/", null, getBucketResponse.getNextToken(), null, null)
+            .getEntity();
+    Assert.assertEquals(1, getBucketResponse.getContents().size());
+    Assert.assertEquals(1, getBucketResponse.getCommonPrefixes().size());
+    Assert.assertEquals("test/dir3/",
+        getBucketResponse.getCommonPrefixes().get(0).getPrefix());
+    Assert.assertEquals("test/file8",
+        getBucketResponse.getContents().get(0).getKey());
+
+  }
+
   @Test
   /**
    * This test is with prefix and delimiter and verify continuation-token
@@ -237,7 +284,6 @@ public class TestBucketGet {
     Assert.assertTrue(getBucketResponse.isTruncated());
     Assert.assertTrue(getBucketResponse.getCommonPrefixes().size() == 2);
 
-
     // 2nd time
     String continueToken = getBucketResponse.getNextToken();
     getBucketResponse =
@@ -246,7 +292,6 @@ public class TestBucketGet {
     Assert.assertTrue(getBucketResponse.isTruncated());
     Assert.assertTrue(getBucketResponse.getCommonPrefixes().size() == 2);
 
-
     //3rd time
     continueToken = getBucketResponse.getNextToken();
     getBucketResponse =
diff --git a/hadoop-ozone/s3gateway/src/test/java/org/apache/hadoop/ozone/s3/util/TestContinueToken.java b/hadoop-ozone/s3gateway/src/test/java/org/apache/hadoop/ozone/s3/util/TestContinueToken.java
new file mode 100644
index 00000000000..a590367dfa0
--- /dev/null
+++ b/hadoop-ozone/s3gateway/src/test/java/org/apache/hadoop/ozone/s3/util/TestContinueToken.java
@@ -0,0 +1,50 @@
+/**
+ * Licensed to the Apache Software Foundation (ASF) under one
+ * or more contributor license agreements.  See the NOTICE file
+ * distributed with this work for additional information
+ * regarding copyright ownership.  The ASF licenses this file
+ * to you under the Apache License, Version 2.0 (the
+ * "License"); you may not use this file except in compliance
+ * with the License.  You may obtain a copy of the License at
+ * <p>
+ * http://www.apache.org/licenses/LICENSE-2.0
+ * <p>
+ * Unless required by applicable law or agreed to in writing, software
+ * distributed under the License is distributed on an "AS IS" BASIS,
+ * WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+ * See the License for the specific language governing permissions and
+ * limitations under the License.
+ */
+package org.apache.hadoop.ozone.s3.util;
+
+import org.apache.hadoop.ozone.s3.exception.OS3Exception;
+
+import org.junit.Assert;
+import org.junit.Test;
+
+/**
+ * Test encode/decode of the continue token.
+ */
+public class TestContinueToken {
+
+  @Test
+  public void encodeDecode() throws OS3Exception {
+    ContinueToken ct = new ContinueToken("key1", "dir1");
+
+    ContinueToken parsedToken =
+        ContinueToken.decodeFromString(ct.encodeToString());
+
+    Assert.assertEquals(ct, parsedToken);
+  }
+
+  @Test
+  public void encodeDecodeNullDir() throws OS3Exception {
+    ContinueToken ct = new ContinueToken("key1", null);
+
+    ContinueToken parsedToken =
+        ContinueToken.decodeFromString(ct.encodeToString());
+
+    Assert.assertEquals(ct, parsedToken);
+  }
+
+}
\ No newline at end of file