diff --git a/CHANGELOG.md b/CHANGELOG.md
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -1,3 +1,8 @@
+0.2.0.0
+=======
+
+Implement #1. Tool now preserves subfolder structure.
+
 0.1.3.0
 =======
 
diff --git a/JuicyPixels-blp.cabal b/JuicyPixels-blp.cabal
--- a/JuicyPixels-blp.cabal
+++ b/JuicyPixels-blp.cabal
@@ -1,5 +1,5 @@
 name:                JuicyPixels-blp
-version:             0.1.3.0
+version:             0.2.0.0
 synopsis:            BLP format decoder/encoder over JuicyPixels library
 description:
   The library provides decoding/encoding functions for BLP1 texture format of Warcraft III game.
diff --git a/blp2any/Convert.hs b/blp2any/Convert.hs
--- a/blp2any/Convert.hs
+++ b/blp2any/Convert.hs
@@ -97,12 +97,14 @@
     then convertFile opts False convertInput
     else do
       edx <- doesDirectoryExist convertInput
-      if edx then forEachFile' convertInput fileFilter $ convertFile opts True
-      else fail "Given path is not exists!"
+      if edx then do 
+        putStrLn $ "Converting all files from " ++ convertInput ++ " folder"
+        forEachFile' convertInput fileFilter $ convertFile opts True
+      else fail $ "Given path " ++ convertInput ++ " doesn't exsist!"
   where
     fileFilter s = case convertFormat of
-      Blp -> or $ ((takeExtension s) ==) <$> supportedExtensions
-      _ -> (".blp" ==) . takeExtension $ s
+      Blp -> (fmap toLower $ takeExtension s) `elem` supportedExtensions
+      _ -> (".blp" ==) . fmap toLower . takeExtension $ s
 
 -- | Trye to guess format from name of file
 guessFormat :: FilePath -> Maybe ConvertFormat
@@ -144,11 +146,14 @@
 
   when isDir $ createDirectoryIfMissing True convertOutput
   let outputFile = if isDir
-      then convertOutput <> "/" <> takeBaseName inputFile <> fromMaybe "" (listToMaybe $ formatExtension distFormat)
+      then convertOutput 
+        </> drop (length convertInput + 1) (takeDirectory inputFile)
+        </> (takeBaseName inputFile <> fromMaybe "" (listToMaybe $ formatExtension distFormat))
       else convertOutput
+  createDirectoryIfMissing True $ takeDirectory outputFile
 
   let mipsCount = mipMapsUpTo convertBlpMinMipSize img
-  res <- (convertionFunction distFormat convertQuality convertBlpFormat) outputFile mipsCount img
+  res <- convertionFunction distFormat convertQuality convertBlpFormat outputFile mipsCount img
   case res of
     Left err -> fail $ inputFile <> ": " <> err
     Right _ -> putStrLn $ inputFile <> ": Success"