diff --git a/packages/design-system/src/components/N8nActionToggle/ActionToggle.vue b/packages/design-system/src/components/N8nActionToggle/ActionToggle.vue
index 78da26b4afee3..8e0a08122064c 100644
--- a/packages/design-system/src/components/N8nActionToggle/ActionToggle.vue
+++ b/packages/design-system/src/components/N8nActionToggle/ActionToggle.vue
@@ -16,6 +16,9 @@ interface ActionToggleProps {
 	iconSize?: IconSize;
 	theme?: (typeof THEME)[number];
 	iconOrientation?: IconOrientation;
+	loading?: boolean;
+	loadingRowCount?: number;
+	disabled?: boolean;
 }
 
 defineOptions({ name: 'N8nActionToggle' });
@@ -24,7 +27,11 @@ withDefaults(defineProps<ActionToggleProps>(), {
 	placement: 'bottom',
 	size: 'medium',
 	theme: 'default',
+	iconSize: 'medium',
 	iconOrientation: 'vertical',
+	loading: false,
+	loadingRowCount: 3,
+	disabled: false,
 });
 
 const emit = defineEmits<{
@@ -40,6 +47,7 @@ const onVisibleChange = (value: boolean) => emit('visible-change', value);
 		<ElDropdown
 			:placement="placement"
 			:size="size"
+			:disabled="disabled"
 			trigger="click"
 			@command="onCommand"
 			@visible-change="onVisibleChange"
@@ -54,7 +62,18 @@ const onVisibleChange = (value: boolean) => emit('visible-change', value);
 			</slot>
 
 			<template #dropdown>
-				<ElDropdownMenu data-test-id="action-toggle-dropdown">
+				<ElDropdownMenu
+					v-if="loading"
+					:class="$style['loading-dropdown']"
+					data-test-id="action-toggle-loading-dropdown"
+				>
+					<ElDropdownItem v-for="index in loadingRowCount" :key="index" :disabled="true">
+						<template #default>
+							<N8nLoading :class="$style.loading" animated variant="text" />
+						</template>
+					</ElDropdownItem>
+				</ElDropdownMenu>
+				<ElDropdownMenu v-else data-test-id="action-toggle-dropdown">
 					<ElDropdownItem
 						v-for="action in actions"
 						:key="action.value"
@@ -113,4 +132,17 @@ const onVisibleChange = (value: boolean) => emit('visible-change', value);
 li:hover .iconContainer svg {
 	color: var(--color-primary-tint-1);
 }
+
+.loading-dropdown {
+	display: flex;
+	flex-direction: column;
+	padding: var(--spacing-xs) 0;
+	gap: var(--spacing-2xs);
+}
+
+.loading {
+	display: flex;
+	width: 100%;
+	min-width: var(--spacing-3xl);
+}
 </style>
diff --git a/packages/design-system/src/components/N8nBreadcrumbs/AsyncLoadingCacheDemo.vue b/packages/design-system/src/components/N8nBreadcrumbs/AsyncLoadingCacheDemo.vue
new file mode 100644
index 0000000000000..003a7bb9a8067
--- /dev/null
+++ b/packages/design-system/src/components/N8nBreadcrumbs/AsyncLoadingCacheDemo.vue
@@ -0,0 +1,123 @@
+<script setup lang="ts">
+import { ref } from 'vue';
+
+import type { PathItem } from './Breadcrumbs.vue';
+import Breadcrumbs from './Breadcrumbs.vue';
+
+/**
+ * Demo component to showcase different usage of Breadcrumbs component
+ */
+
+defineOptions({ name: 'AsyncLoadingCacheDemo' });
+
+const FETCH_TIMEOUT = 1000;
+
+type Props = {
+	title: string;
+	mode: 'sync' | 'async';
+	testCache?: boolean;
+	// Breadcrumbs props
+	theme?: 'small' | 'medium';
+	showBorder?: boolean;
+};
+
+const props = withDefaults(defineProps<Props>(), {
+	mode: 'sync',
+	testCache: false,
+	theme: 'medium',
+	showBorder: false,
+});
+
+// We'll use this to break the cache after a few fetches in the demo
+const fetchCount = ref(0);
+
+const items = ref<PathItem[]>([
+	{ id: '1', label: 'Home', href: '/' },
+	{ id: '2', label: 'Parent', href: '/parent' },
+]);
+
+// For async version, hidden items are a promise, we can also make it reactive like this
+const hiddenItemsPromise = ref<Promise<PathItem[]>>(new Promise(() => {}));
+// For sync version, hidden items are a just a reactive array
+const hiddenItemsSync = ref<PathItem[]>([
+	{ id: 'folder2', label: 'Folder 2' },
+	{ id: 'folder3', label: 'Folder 3' },
+]);
+
+const onDropdownOpened = () => {
+	// In the current implementation, we need to init a promise only when needed
+	if (fetchCount.value === 0) {
+		hiddenItemsPromise.value = fetchHiddenItems();
+	}
+	// Demo code
+	fetchCount.value++;
+	if (props.testCache) {
+		if (fetchCount.value > 2 && props.mode === 'async') {
+			updatePromise();
+		} else if (props.mode === 'sync') {
+			updateSyncItems();
+		}
+	}
+};
+
+const fetchHiddenItems = async (): Promise<PathItem[]> => {
+	await new Promise((resolve) => setTimeout(resolve, FETCH_TIMEOUT));
+	return [
+		{ id: 'home', label: 'Home' },
+		{ id: 'projects', label: 'Projects' },
+		{ id: 'folder1', label: 'Folder 1' },
+	];
+};
+
+// Updates the promise ref with new items to showcase it's reactivity
+const updatePromise = () => {
+	hiddenItemsPromise.value = new Promise((resolve) => {
+		setTimeout(() => {
+			resolve([
+				{ id: 'folder1', label: 'New Folder 1' },
+				{ id: 'folder2', label: 'Folder 2' },
+				{ id: 'folder3', label: 'Folder 3' },
+			]);
+		}, FETCH_TIMEOUT);
+	});
+};
+
+// Updates the sync array to showcase it's reactivity
+const updateSyncItems = () => {
+	const newId = fetchCount.value + 3;
+	const newItem = { id: `'folder${newId}'`, label: `Folder ${newId}` };
+	hiddenItemsSync.value.push(newItem);
+};
+</script>
+
+<template>
+	<div :class="$style.container">
+		<div :class="$style.heading">{{ title }}</div>
+		<div :class="$style.breadcrumbs">
+			<Breadcrumbs
+				v-if="props.mode === 'sync'"
+				:items="items"
+				:hidden-items="hiddenItemsSync"
+				:theme="theme"
+				:show-border="props.showBorder"
+				@tooltip-opened="onDropdownOpened"
+			/>
+			<Breadcrumbs
+				v-else-if="props.mode === 'async'"
+				:items="items"
+				:hidden-items="hiddenItemsPromise"
+				:theme="theme"
+				:show-border="props.showBorder"
+				@tooltip-opened="onDropdownOpened"
+			/>
+		</div>
+	</div>
+</template>
+
+<style lang="scss" module>
+.container {
+	display: flex;
+	flex-direction: column;
+	gap: 1em;
+}
+</style>
diff --git a/packages/design-system/src/components/N8nBreadcrumbs/BreadCrumbs.test.ts b/packages/design-system/src/components/N8nBreadcrumbs/BreadCrumbs.test.ts
new file mode 100644
index 0000000000000..1c3cf8b8e2c0a
--- /dev/null
+++ b/packages/design-system/src/components/N8nBreadcrumbs/BreadCrumbs.test.ts
@@ -0,0 +1,330 @@
+import userEvent from '@testing-library/user-event';
+import { render } from '@testing-library/vue';
+import { defineComponent } from 'vue';
+import { createRouter, createWebHistory } from 'vue-router';
+
+import Breadcrumbs from '.';
+import type { PathItem } from './Breadcrumbs.vue';
+
+// Simple mock for the N8nActionToggle component to test hidden items and events
+const N8nActionToggleMock = defineComponent({
+	name: 'N8nActionToggle',
+	props: {
+		actions: {
+			type: Array as () => Array<{ value: string; label: string }>,
+			required: true,
+		},
+		loading: {
+			type: Boolean,
+			default: false,
+		},
+	},
+	emits: ['visible-change', 'action'],
+	data() {
+		return {
+			showContent: false,
+		};
+	},
+	methods: {
+		handleClick() {
+			this.showContent = !this.showContent;
+			this.$emit('visible-change', this.showContent);
+		},
+	},
+	template: `
+    <div data-test-id="action-toggle-mock" class="mock-action-toggle">
+      <button
+        data-test-id="mock-dropdown-button"
+        @click="handleClick"
+      >
+        Toggle Dropdown
+      </button>
+      <div class="dropdown-content" v-if="showContent">
+        <div v-if="loading" data-test-id="loading-state">
+          Loading...
+        </div>
+        <template v-else>
+          <div
+            v-for="action in actions"
+            :key="action.value"
+            :data-test-id="'action-' + action.value"
+            class="dropdown-item"
+            @click="$emit('action', action.value)"
+          >
+            {{ action.label }}
+          </div>
+        </template>
+      </div>
+    </div>
+  `,
+});
+
+const router = createRouter({
+	history: createWebHistory(),
+	routes: [{ path: '/', component: { template: '<div>Home</div>' } }],
+});
+
+describe('Breadcrumbs', async () => {
+	it('renders default version correctly', () => {
+		const wrapper = render(Breadcrumbs, {
+			props: {
+				items: [
+					{ id: '1', label: 'Folder 1', href: '/folder1' },
+					{ id: '2', label: 'Folder 2', href: '/folder2' },
+					{ id: '3', label: 'Folder 3', href: '/folder3' },
+					{ id: '4', label: 'Current' },
+				],
+			},
+			global: {
+				plugins: [router],
+			},
+		});
+		expect(wrapper.html()).toMatchSnapshot();
+	});
+
+	it('renders small version correctly', () => {
+		const wrapper = render(Breadcrumbs, {
+			props: {
+				items: [
+					{ id: '1', label: 'Folder 1', href: '/folder1' },
+					{ id: '2', label: 'Folder 2', href: '/folder2' },
+					{ id: '3', label: 'Folder 3', href: '/folder3' },
+					{ id: '4', label: 'Current' },
+				],
+				theme: 'small',
+			},
+			global: {
+				plugins: [router],
+			},
+		});
+		expect(wrapper.html()).toMatchSnapshot();
+	});
+
+	it('renders custom separator correctly', () => {
+		const wrapper = render(Breadcrumbs, {
+			props: {
+				items: [
+					{ id: '1', label: 'Folder 1', href: '/folder1' },
+					{ id: '2', label: 'Folder 2', href: '/folder2' },
+					{ id: '3', label: 'Folder 3', href: '/folder3' },
+					{ id: '4', label: 'Current' },
+				],
+				separator: '➮',
+			},
+			global: {
+				plugins: [router],
+			},
+		});
+		expect(wrapper.html()).toMatchSnapshot();
+	});
+
+	it('renders slots correctly', () => {
+		const wrapper = render(Breadcrumbs, {
+			props: {
+				items: [
+					{ id: '1', label: 'Folder 1', href: '/folder1' },
+					{ id: '2', label: 'Folder 2', href: '/folder2' },
+					{ id: '3', label: 'Folder 3', href: '/folder3' },
+					{ id: '4', label: 'Current' },
+				],
+			},
+			global: {
+				plugins: [router],
+			},
+			slots: {
+				prepend: '<div>[PRE] Custom content</div>',
+				append: '<div>[POST] Custom content</div>',
+			},
+		});
+		expect(wrapper.html()).toMatchSnapshot();
+	});
+
+	it('renders ellipsis when for "pathTruncated = true"', () => {
+		const { getByTestId } = render(Breadcrumbs, {
+			props: {
+				items: [
+					{ id: '1', label: 'Folder 1', href: '/folder1' },
+					{ id: '2', label: 'Folder 2', href: '/folder2' },
+					{ id: '3', label: 'Folder 3', href: '/folder3' },
+					{ id: '4', label: 'Current' },
+				],
+				pathTruncated: true,
+			},
+			global: {
+				plugins: [router],
+			},
+		});
+		expect(getByTestId('ellipsis')).toBeTruthy();
+		expect(getByTestId('action-toggle')).toBeTruthy();
+		expect(getByTestId('ellipsis')).toHaveClass('disabled');
+		expect(getByTestId('action-toggle').querySelector('.el-dropdown')).toHaveClass('is-disabled');
+	});
+
+	it('does not highlight last item for "highlightLastItem = false" ', () => {
+		const wrapper = render(Breadcrumbs, {
+			props: {
+				items: [
+					{ id: '1', label: 'Folder 1', href: '/folder1' },
+					{ id: '2', label: 'Folder 2', href: '/folder2' },
+					{ id: '3', label: 'Folder 3', href: '/folder3' },
+					{ id: '4', label: 'Current' },
+				],
+				highlightLastItem: false,
+			},
+			global: {
+				plugins: [router],
+			},
+		});
+		expect(wrapper.html()).toMatchSnapshot();
+	});
+
+	it('renders hidden items correctly', async () => {
+		const hiddenItems = [
+			{ id: '3', label: 'Parent 1', href: '/hidden1' },
+			{ id: '4', label: 'Parent 2', href: '/hidden2' },
+		];
+
+		const { container, getByTestId, queryByTestId } = render(Breadcrumbs, {
+			props: {
+				items: [
+					{ id: '1', label: 'Folder 1', href: '/folder1' },
+					{ id: '2', label: 'Folder 2', href: '/folder2' },
+					{ id: '3', label: 'Folder 3', href: '/folder3' },
+					{ id: '4', label: 'Current' },
+				],
+				hiddenItems,
+			},
+			global: {
+				stubs: {
+					'n8n-action-toggle': N8nActionToggleMock,
+				},
+				plugins: [router],
+			},
+		});
+		await userEvent.click(getByTestId('mock-dropdown-button'));
+		// Should not show the loading state
+		expect(queryByTestId('loading-state')).toBeFalsy();
+		const dropdownItems = container.querySelectorAll('.dropdown-item');
+
+		// Check if the number of rendered items matches the hidden items
+		expect(dropdownItems.length).toBe(hiddenItems.length);
+		hiddenItems.forEach((item, index) => {
+			const dropdownItem = dropdownItems[index];
+			expect(dropdownItem).toBeTruthy();
+			expect(dropdownItem.textContent?.trim()).toBe(item.label);
+			expect(dropdownItem.getAttribute('data-test-id')).toBe(`action-${item.id}`);
+		});
+	});
+
+	it('renders async hidden items correctly', async () => {
+		const FETCH_TIMEOUT = 1000;
+		const hiddenItems = [
+			{ id: 'home', label: 'Home' },
+			{ id: 'projects', label: 'Projects' },
+			{ id: 'folder1', label: 'Folder 1' },
+		];
+		const fetchHiddenItems = async (): Promise<PathItem[]> => {
+			await new Promise((resolve) => setTimeout(resolve, FETCH_TIMEOUT));
+			return hiddenItems;
+		};
+		const hiddenItemsPromise = fetchHiddenItems();
+		const { container, getByTestId, queryByTestId } = render(Breadcrumbs, {
+			props: {
+				items: [
+					{ id: '1', label: 'Folder 1', href: '/folder1' },
+					{ id: '2', label: 'Folder 2', href: '/folder2' },
+					{ id: '3', label: 'Folder 3', href: '/folder3' },
+					{ id: '4', label: 'Current' },
+				],
+				hiddenItems: hiddenItemsPromise,
+			},
+			global: {
+				stubs: {
+					'n8n-action-toggle': N8nActionToggleMock,
+				},
+				plugins: [router],
+			},
+		});
+		await userEvent.click(getByTestId('mock-dropdown-button'));
+		// Should show loading state at first
+		expect(container.querySelector('.dropdown-item')).toBeFalsy();
+		expect(getByTestId('loading-state')).toBeTruthy();
+		// Wait for the hidden items to be fetched
+		await new Promise((resolve) => setTimeout(resolve, FETCH_TIMEOUT));
+		// Should not show the loading state
+		expect(queryByTestId('loading-state')).toBeFalsy();
+		const dropdownItems = container.querySelectorAll('.dropdown-item');
+		// Check if the number of rendered items matches the hidden items
+		expect(dropdownItems.length).toBe(hiddenItems.length);
+		hiddenItems.forEach((item, index) => {
+			const dropdownItem = dropdownItems[index];
+			expect(dropdownItem).toBeTruthy();
+			expect(dropdownItem.textContent?.trim()).toBe(item.label);
+			expect(dropdownItem.getAttribute('data-test-id')).toBe(`action-${item.id}`);
+		});
+	});
+
+	it('emits event when item is clicked', async () => {
+		const items = [
+			{ id: '1', label: 'Folder 1', href: '/folder1' },
+			{ id: '2', label: 'Folder 2', href: '/folder2' },
+			{ id: '3', label: 'Folder 3', href: '/folder3' },
+			{ id: '4', label: 'Current' },
+		];
+		const hiddenItems = [
+			{ id: '3', label: 'Parent 1', href: '/hidden1' },
+			{ id: '4', label: 'Parent 2', href: '/hidden2' },
+		];
+
+		const { container, emitted, getByTestId, getAllByTestId } = render(Breadcrumbs, {
+			props: {
+				items,
+				hiddenItems,
+			},
+			global: {
+				stubs: {
+					'n8n-action-toggle': N8nActionToggleMock,
+				},
+				plugins: [router],
+			},
+		});
+		const visibleItems = getAllByTestId('breadcrumbs-item');
+		await userEvent.click(visibleItems[0]);
+		expect(emitted()).toHaveProperty('itemSelected');
+		expect(emitted().itemSelected[0]).toEqual([items[0]]);
+		// Click on the hidden item, should fire the same event
+		await userEvent.click(getByTestId('mock-dropdown-button'));
+		const dropdownItems = container.querySelectorAll('.dropdown-item');
+		await userEvent.click(dropdownItems[0]);
+		expect(emitted()).toHaveProperty('itemSelected');
+		expect(emitted().itemSelected[1]).toEqual([hiddenItems[0]]);
+	});
+
+	it('emits tooltipOpened and tooltipClosed events', async () => {
+		const { emitted, getByTestId } = render(Breadcrumbs, {
+			props: {
+				items: [
+					{ id: '1', label: 'Folder 1', href: '/folder1' },
+					{ id: '2', label: 'Folder 2', href: '/folder2' },
+					{ id: '3', label: 'Folder 3', href: '/folder3' },
+					{ id: '4', label: 'Current' },
+				],
+				hiddenItems: [
+					{ id: '3', label: 'Parent 1', href: '/hidden1' },
+					{ id: '4', label: 'Parent 2', href: '/hidden2' },
+				],
+			},
+			global: {
+				stubs: {
+					'n8n-action-toggle': N8nActionToggleMock,
+				},
+				plugins: [router],
+			},
+		});
+		await userEvent.click(getByTestId('mock-dropdown-button'));
+		expect(emitted()).toHaveProperty('tooltipOpened');
+		// close the tooltip
+		await userEvent.click(getByTestId('mock-dropdown-button'));
+		expect(emitted()).toHaveProperty('tooltipClosed');
+	});
+});
diff --git a/packages/design-system/src/components/N8nBreadcrumbs/Breadcrumbs.stories.ts b/packages/design-system/src/components/N8nBreadcrumbs/Breadcrumbs.stories.ts
new file mode 100644
index 0000000000000..1ed833502f977
--- /dev/null
+++ b/packages/design-system/src/components/N8nBreadcrumbs/Breadcrumbs.stories.ts
@@ -0,0 +1,230 @@
+import type { StoryFn } from '@storybook/vue3';
+
+import type { UserAction } from 'n8n-design-system/types';
+
+import AsyncLoadingCacheDemo from './AsyncLoadingCacheDemo.vue';
+import Breadcrumbs from './Breadcrumbs.vue';
+import type { PathItem } from './Breadcrumbs.vue';
+import ActionToggle from '../N8nActionToggle/ActionToggle.vue';
+import Tags from '../N8nTags/Tags.vue';
+
+export default {
+	title: 'Atoms/Breadcrumbs',
+	component: Breadcrumbs,
+	argTypes: {
+		items: { control: 'object' },
+		hiddenItemsSource: { control: 'object' },
+		theme: {
+			control: {
+				type: 'select',
+			},
+			options: ['medium', 'small'],
+		},
+		showBorder: { control: 'boolean' },
+		tooltipTrigger: {
+			control: {
+				type: 'select',
+			},
+			options: ['hover', 'click'],
+		},
+	},
+};
+
+const items: PathItem[] = [
+	{ id: '1', label: 'Folder 1', href: '/folder1' },
+	{ id: '2', label: 'Folder 2', href: '/folder2' },
+	{ id: '3', label: 'Folder 3', href: '/folder3' },
+	{ id: '4', label: 'Current' },
+];
+
+const defaultTemplate: StoryFn = (args, { argTypes }) => ({
+	setup: () => ({ args }),
+	components: { Breadcrumbs },
+	props: Object.keys(argTypes),
+	template: '<Breadcrumbs v-bind="args" />',
+});
+
+export const Default = defaultTemplate.bind({});
+Default.args = {
+	items,
+};
+
+export const CustomSeparator = defaultTemplate.bind({});
+CustomSeparator.args = {
+	items,
+	separator: '➮',
+};
+
+const withHiddenItemsTemplate: StoryFn = (args, { argTypes }) => ({
+	setup: () => ({ args }),
+	components: { Breadcrumbs },
+	props: Object.keys(argTypes),
+	template: '<Breadcrumbs v-bind="args" />',
+});
+
+export const WithHiddenItems = withHiddenItemsTemplate.bind({});
+WithHiddenItems.args = {
+	items: items.slice(2),
+	hiddenItems: [
+		{ id: '3', label: 'Parent 1', href: '/hidden1' },
+		{ id: '4', label: 'Parent 2', href: '/hidden2' },
+	],
+};
+
+const hiddenItemsDisabledTemplate: StoryFn = (args, { argTypes }) => ({
+	setup: () => ({ args }),
+	components: { Breadcrumbs },
+	props: Object.keys(argTypes),
+	template: '<Breadcrumbs v-bind="args" />',
+});
+
+export const HiddenItemsDisabled = hiddenItemsDisabledTemplate.bind({});
+HiddenItemsDisabled.args = {
+	items: items.slice(2),
+	pathTruncated: true,
+};
+
+const asyncLoadingTemplate: StoryFn = (args, { argTypes }) => ({
+	setup: () => ({ args }),
+	components: { AsyncLoadingCacheDemo },
+	props: Object.keys(argTypes),
+	template: '<AsyncLoadingCacheDemo v-bind="args" />',
+});
+
+export const AsyncLoading = asyncLoadingTemplate.bind({});
+AsyncLoading.args = {
+	mode: 'async',
+	title: '[Demo] Async loading with cached items',
+};
+
+const asyncLoadingNoCacheTemplate: StoryFn = (args, { argTypes }) => ({
+	setup: () => ({ args }),
+	components: { AsyncLoadingCacheDemo },
+	props: Object.keys(argTypes),
+	template: '<AsyncLoadingCacheDemo v-bind="args" />',
+});
+
+export const AsyncLoadingCacheTest = asyncLoadingNoCacheTemplate.bind({});
+AsyncLoadingCacheTest.args = {
+	mode: 'async',
+	testCache: true,
+	title: '[Demo] This will bust the cache after hidden items are loaded 2 times',
+};
+
+const syncLoadingNoCacheTemplate: StoryFn = (args, { argTypes }) => ({
+	setup: () => ({ args }),
+	components: { AsyncLoadingCacheDemo },
+	props: Object.keys(argTypes),
+	template: '<AsyncLoadingCacheDemo v-bind="args" />',
+});
+
+export const SyncLoadingCacheTest = syncLoadingNoCacheTemplate.bind({});
+SyncLoadingCacheTest.args = {
+	mode: 'sync',
+	testCache: true,
+	title: '[Demo] This will update the hidden items every time dropdown is opened',
+};
+
+const testActions: UserAction[] = [
+	{ label: 'Create Folder', value: 'action1', disabled: false },
+	{ label: 'Create Workflow', value: 'action2', disabled: false },
+	{ label: 'Rename', value: 'action3', disabled: false },
+];
+const testTags: Array<{ id: string; name: string }> = [
+	{ id: '1', name: 'tag1' },
+	{ id: '2', name: 'tag2' },
+];
+const withSlotsTemplate: StoryFn = (args, { argTypes }) => ({
+	setup: () => ({ args, testActions, testTags }),
+	components: { Breadcrumbs, ActionToggle, Tags },
+	props: Object.keys(argTypes),
+	template: `<Breadcrumbs v-bind="args">
+    <template #prepend>
+      <div style="display: flex; align-items: center; gap: 8px;">
+        <n8n-icon icon="layer-group"/>
+        <n8n-text>My Project</n8n-text>
+      </div>
+    </template>
+    <template #append>
+      <div style="display: flex; align-items: center;">
+				<n8n-tags :tags="testTags" />
+        <n8n-action-toggle size="small" :actions="testActions" theme="dark"/>
+      </div>
+    </template>
+  </Breadcrumbs>`,
+});
+export const WithSlots = withSlotsTemplate.bind({});
+WithSlots.args = {
+	items: items.slice(2),
+	hiddenItems: [
+		{ id: '3', label: 'Parent 1', href: '/hidden1' },
+		{ id: '4', label: 'Parent 2', href: '/hidden2' },
+	],
+};
+
+const smallVersionTemplate: StoryFn = (args, { argTypes }) => ({
+	setup: () => ({ args }),
+	components: { Breadcrumbs },
+	props: Object.keys(argTypes),
+	template: '<Breadcrumbs v-bind="args" />',
+});
+export const SmallVersion = smallVersionTemplate.bind({});
+SmallVersion.args = {
+	items,
+	theme: 'small',
+	showBorder: true,
+};
+
+const smallWithSlotsTemplate: StoryFn = (args, { argTypes }) => ({
+	setup: () => ({ args }),
+	components: { Breadcrumbs },
+	props: Object.keys(argTypes),
+	template: `<Breadcrumbs v-bind="args">
+	<template #prepend>
+		<div style="display: flex; align-items: center; gap: 4px; font-size: 10px">
+			<n8n-icon icon="user"/>
+			<n8n-text>Personal</n8n-text>
+		</div>
+	</template>
+</Breadcrumbs>`,
+});
+export const SmallWithSlots = smallWithSlotsTemplate.bind({});
+SmallWithSlots.args = {
+	theme: 'small',
+	showBorder: true,
+	items: items.slice(2),
+	hiddenItems: [
+		{ id: '3', label: 'Parent 1', href: '/hidden1' },
+		{ id: '4', label: 'Parent 2', href: '/hidden2' },
+	],
+};
+
+const smallAsyncLoadingTemplate: StoryFn = (args, { argTypes }) => ({
+	setup: () => ({ args }),
+	components: { AsyncLoadingCacheDemo },
+	props: Object.keys(argTypes),
+	template: '<AsyncLoadingCacheDemo v-bind="args" />',
+});
+
+export const SmallAsyncLoading = smallAsyncLoadingTemplate.bind({});
+SmallAsyncLoading.args = {
+	mode: 'async',
+	title: '[Demo] Small version with async loading',
+	theme: 'small',
+	showBorder: true,
+};
+
+const smallHiddenItemsDisabledTemplate: StoryFn = (args, { argTypes }) => ({
+	setup: () => ({ args }),
+	components: { Breadcrumbs },
+	props: Object.keys(argTypes),
+	template: '<Breadcrumbs v-bind="args" />',
+});
+
+export const SmallWithHiddenItemsDisabled = smallHiddenItemsDisabledTemplate.bind({});
+SmallWithHiddenItemsDisabled.args = {
+	theme: 'small',
+	showBorder: true,
+	items: items.slice(2),
+	pathTruncated: true,
+};
diff --git a/packages/design-system/src/components/N8nBreadcrumbs/Breadcrumbs.vue b/packages/design-system/src/components/N8nBreadcrumbs/Breadcrumbs.vue
new file mode 100644
index 0000000000000..c1db204000ae8
--- /dev/null
+++ b/packages/design-system/src/components/N8nBreadcrumbs/Breadcrumbs.vue
@@ -0,0 +1,362 @@
+<script lang="ts" setup>
+import { computed, ref, watch } from 'vue';
+
+import type { UserAction } from 'n8n-design-system/types';
+
+import N8nLoading from '../N8nLoading';
+
+export type PathItem = {
+	id: string;
+	label: string;
+	href?: string;
+};
+
+type Props = {
+	items: PathItem[];
+	hiddenItems?: PathItem[] | Promise<PathItem[]>;
+	theme?: 'small' | 'medium';
+	showBorder?: boolean;
+	loadingSkeletonRows?: number;
+	separator?: string;
+	highlightLastItem?: boolean;
+	// Setting this to true will show the ellipsis even if there are no hidden items
+	pathTruncated?: boolean;
+};
+
+defineOptions({ name: 'N8nBreadcrumbs' });
+
+const emit = defineEmits<{
+	tooltipOpened: [];
+	tooltipClosed: [];
+	hiddenItemsLoadingError: [error: unknown];
+	itemSelected: [item: PathItem];
+}>();
+
+const props = withDefaults(defineProps<Props>(), {
+	hiddenItems: () => new Array<PathItem>(),
+	theme: 'medium',
+	showBorder: false,
+	loadingSkeletonRows: 3,
+	separator: '/',
+	highlightLastItem: true,
+	isPathTruncated: false,
+});
+
+const loadedHiddenItems = ref<PathItem[]>([]);
+const isLoadingHiddenItems = ref(false);
+const currentPromise = ref<Promise<PathItem[]> | null>(null);
+
+const hasHiddenItems = computed(() => {
+	return Array.isArray(props.hiddenItems)
+		? props.hiddenItems.length > 0
+		: props.hiddenItems !== undefined;
+});
+
+const showEllipsis = computed(() => {
+	return hasHiddenItems.value || props.pathTruncated;
+});
+
+const dropdownDisabled = computed(() => {
+	return props.pathTruncated && !hasHiddenItems.value;
+});
+
+const hiddenItemActions = computed((): UserAction[] => {
+	return loadedHiddenItems.value.map((item) => ({
+		value: item.id,
+		label: item.label,
+		disabled: false,
+	}));
+});
+
+const getHiddenItems = async () => {
+	// If we already have items loaded and the source hasn't changed, use cache
+	if (loadedHiddenItems.value.length > 0 && props.hiddenItems === currentPromise.value) {
+		return;
+	}
+
+	// Handle synchronous array
+	if (Array.isArray(props.hiddenItems)) {
+		loadedHiddenItems.value = props.hiddenItems;
+		return;
+	}
+
+	isLoadingHiddenItems.value = true;
+	try {
+		// Store the current promise for cache comparison
+		currentPromise.value = props.hiddenItems;
+		const items = await props.hiddenItems;
+		loadedHiddenItems.value = items;
+	} catch (error) {
+		loadedHiddenItems.value = [];
+		emit('hiddenItemsLoadingError', error);
+	} finally {
+		isLoadingHiddenItems.value = false;
+	}
+};
+
+watch(
+	(): PathItem[] | Promise<PathItem[]> => props.hiddenItems,
+	(_newValue: PathItem[] | Promise<PathItem[]>) => {
+		void getHiddenItems();
+	},
+);
+
+const onHiddenMenuVisibleChange = async (visible: boolean) => {
+	if (visible) {
+		emit('tooltipOpened');
+		await getHiddenItems();
+	} else {
+		emit('tooltipClosed');
+	}
+};
+
+const emitItemSelected = (id: string) => {
+	const item = [...loadedHiddenItems.value, ...props.items].find((i) => i.id === id);
+	if (!item) {
+		return;
+	}
+	emit('itemSelected', item);
+};
+
+const handleTooltipShow = async () => {
+	emit('tooltipOpened');
+	await getHiddenItems();
+};
+
+const handleTooltipClose = () => {
+	emit('tooltipClosed');
+};
+</script>
+<template>
+	<div
+		:class="{
+			[$style.container]: true,
+			[$style.border]: props.showBorder,
+			[$style[props.theme]]: true,
+		}"
+	>
+		<slot name="prepend"></slot>
+		<ul :class="$style.list">
+			<li v-if="$slots.prepend" :class="$style.separator" aria-hidden="true">{{ separator }}</li>
+			<li
+				v-if="showEllipsis"
+				:class="{ [$style.ellipsis]: true, [$style.disabled]: dropdownDisabled }"
+				data-test-id="ellipsis"
+			>
+				<!-- Show interactive dropdown for larger versions -->
+				<div v-if="props.theme !== 'small'" :class="$style['hidden-items-menu']">
+					<n8n-action-toggle
+						:actions="hiddenItemActions"
+						:loading="isLoadingHiddenItems"
+						:loading-row-count="loadingSkeletonRows"
+						:disabled="dropdownDisabled"
+						:class="$style['action-toggle']"
+						theme="dark"
+						placement="bottom"
+						size="small"
+						icon-orientation="horizontal"
+						@visible-change="onHiddenMenuVisibleChange"
+						@action="emitItemSelected"
+					>
+						<n8n-text :bold="true" :class="$style.dots">...</n8n-text>
+					</n8n-action-toggle>
+				</div>
+				<!-- Just a tooltip for smaller versions -->
+				<n8n-tooltip
+					v-else
+					:popper-class="$style.tooltip"
+					:disabled="dropdownDisabled"
+					trigger="click"
+					@before-show="handleTooltipShow"
+					@hide="handleTooltipClose"
+				>
+					<template #content>
+						<div v-if="isLoadingHiddenItems" :class="$style['tooltip-loading']">
+							<N8nLoading
+								:rows="1"
+								:loading="isLoadingHiddenItems"
+								animated
+								variant="p"
+								:shrink-last="false"
+							/>
+						</div>
+						<div v-else :class="$style.tooltipContent">
+							<div>
+								<n8n-text>{{ loadedHiddenItems.map((item) => item.label).join(' / ') }}</n8n-text>
+							</div>
+						</div>
+					</template>
+					<span :class="$style['tooltip-ellipsis']">...</span>
+				</n8n-tooltip>
+			</li>
+			<li v-if="showEllipsis" :class="$style.separator" aria-hidden="true">{{ separator }}</li>
+			<template v-for="(item, index) in items" :key="item.id">
+				<li
+					:class="{
+						[$style.item]: true,
+						[$style.current]: props.highlightLastItem && index === items.length - 1,
+					}"
+					data-test-id="breadcrumbs-item"
+					@click.prevent="emitItemSelected(item.id)"
+				>
+					<n8n-link v-if="item.href" :href="item.href" theme="text">{{ item.label }}</n8n-link>
+					<n8n-text v-else>{{ item.label }}</n8n-text>
+				</li>
+				<li v-if="index !== items.length - 1" :class="$style.separator" aria-hidden="true">
+					{{ separator }}
+				</li>
+			</template>
+		</ul>
+		<slot name="append"></slot>
+	</div>
+</template>
+<style lang="scss" module>
+.container {
+	display: flex;
+	align-items: center;
+	gap: var(--spacing-5xs);
+
+	&.small {
+		display: inline-flex;
+		padding: var(--spacing-4xs) var(--spacing-2xs);
+	}
+
+	&.border {
+		border: var(--border-base);
+		border-radius: var(--border-radius-base);
+	}
+}
+
+.list {
+	display: flex;
+	list-style: none;
+}
+
+.item.current span {
+	color: var(--color-text-dark);
+}
+
+// Make disabled ellipsis look like a normal item
+.ellipsis {
+	.dots,
+	.tooltip-ellipsis {
+		cursor: pointer;
+		user-select: none;
+	}
+	&.disabled {
+		.dots,
+		.tooltip-ellipsis {
+			cursor: default;
+		}
+		.dots {
+			cursor: default;
+			color: var(--color-text-base);
+			&:hover {
+				color: var(--color-text-base);
+			}
+		}
+	}
+}
+
+.hidden-items-menu {
+	display: flex;
+	position: relative;
+	top: var(--spacing-5xs);
+	color: var(--color-text-base);
+}
+
+.tooltip-loading {
+	min-width: var(--spacing-3xl);
+	width: 100%;
+
+	:global(.n8n-loading) > div {
+		display: flex;
+		flex-direction: column;
+		gap: var(--spacing-xs);
+	}
+
+	:global(.el-skeleton__item) {
+		margin: 0;
+	}
+}
+
+.tooltip {
+	padding: var(--spacing-xs) var(--spacing-2xs);
+	& > div {
+		color: var(--color-text-lighter);
+		span {
+			font-size: var(--font-size-2xs);
+		}
+	}
+
+	.tooltip-loading {
+		min-width: var(--spacing-4xl);
+	}
+}
+
+.dots {
+	padding: 0 var(--spacing-4xs);
+	color: var(--color-text-light);
+	border-radius: var(--border-radius-base);
+
+	&:hover,
+	&:focus {
+		background-color: var(--color-background-base);
+		color: var(--color-primary);
+	}
+}
+
+// Small theme overrides
+.small {
+	.list {
+		gap: var(--spacing-5xs);
+	}
+
+	.item,
+	.item * {
+		color: var(--color-text-base);
+		font-size: var(--font-size-2xs);
+		font-weight: 600;
+	}
+
+	.item a:hover * {
+		color: var(--color-text-dark);
+	}
+
+	.separator {
+		font-size: var(--font-size-m);
+		color: var(--color-text-base);
+	}
+}
+
+// Medium theme overrides
+.medium {
+	li {
+		padding: var(--spacing-4xs);
+	}
+
+	.item,
+	.item * {
+		color: var(--color-text-light);
+		font-size: var(--font-size-m);
+	}
+
+	.item a:hover * {
+		color: var(--color-text-base);
+	}
+
+	.ellipsis {
+		padding-right: 0;
+		padding-left: 0;
+		color: var(--color-text-light);
+		&:hover {
+			color: var(--color-text-base);
+		}
+	}
+
+	.separator {
+		font-size: var(--font-size-xl);
+		color: var(--prim-gray-670);
+	}
+}
+</style>
diff --git a/packages/design-system/src/components/N8nBreadcrumbs/__snapshots__/BreadCrumbs.test.ts.snap b/packages/design-system/src/components/N8nBreadcrumbs/__snapshots__/BreadCrumbs.test.ts.snap
new file mode 100644
index 0000000000000..5e200d417ab0d
--- /dev/null
+++ b/packages/design-system/src/components/N8nBreadcrumbs/__snapshots__/BreadCrumbs.test.ts.snap
@@ -0,0 +1,93 @@
+// Vitest Snapshot v1, https://vitest.dev/guide/snapshot.html
+
+exports[`Breadcrumbs > does not highlight last item for "highlightLastItem = false"  1`] = `
+"<div class="container medium">
+  <ul class="list">
+    <!--v-if-->
+    <!--v-if-->
+    <!--v-if-->
+    <li class="item" data-test-id="breadcrumbs-item"><a href="/folder1" target="_blank" class="n8n-link"><span class="text"><span class="n8n-text size-medium regular">Folder 1</span></span></a></li>
+    <li class="separator" aria-hidden="true">/</li>
+    <li class="item" data-test-id="breadcrumbs-item"><a href="/folder2" target="_blank" class="n8n-link"><span class="text"><span class="n8n-text size-medium regular">Folder 2</span></span></a></li>
+    <li class="separator" aria-hidden="true">/</li>
+    <li class="item" data-test-id="breadcrumbs-item"><a href="/folder3" target="_blank" class="n8n-link"><span class="text"><span class="n8n-text size-medium regular">Folder 3</span></span></a></li>
+    <li class="separator" aria-hidden="true">/</li>
+    <li class="item" data-test-id="breadcrumbs-item"><span class="n8n-text size-medium regular">Current</span></li>
+    <!--v-if-->
+  </ul>
+</div>"
+`;
+
+exports[`Breadcrumbs > renders custom separator correctly 1`] = `
+"<div class="container medium">
+  <ul class="list">
+    <!--v-if-->
+    <!--v-if-->
+    <!--v-if-->
+    <li class="item" data-test-id="breadcrumbs-item"><a href="/folder1" target="_blank" class="n8n-link"><span class="text"><span class="n8n-text size-medium regular">Folder 1</span></span></a></li>
+    <li class="separator" aria-hidden="true">➮</li>
+    <li class="item" data-test-id="breadcrumbs-item"><a href="/folder2" target="_blank" class="n8n-link"><span class="text"><span class="n8n-text size-medium regular">Folder 2</span></span></a></li>
+    <li class="separator" aria-hidden="true">➮</li>
+    <li class="item" data-test-id="breadcrumbs-item"><a href="/folder3" target="_blank" class="n8n-link"><span class="text"><span class="n8n-text size-medium regular">Folder 3</span></span></a></li>
+    <li class="separator" aria-hidden="true">➮</li>
+    <li class="item current" data-test-id="breadcrumbs-item"><span class="n8n-text size-medium regular">Current</span></li>
+    <!--v-if-->
+  </ul>
+</div>"
+`;
+
+exports[`Breadcrumbs > renders default version correctly 1`] = `
+"<div class="container medium">
+  <ul class="list">
+    <!--v-if-->
+    <!--v-if-->
+    <!--v-if-->
+    <li class="item" data-test-id="breadcrumbs-item"><a href="/folder1" target="_blank" class="n8n-link"><span class="text"><span class="n8n-text size-medium regular">Folder 1</span></span></a></li>
+    <li class="separator" aria-hidden="true">/</li>
+    <li class="item" data-test-id="breadcrumbs-item"><a href="/folder2" target="_blank" class="n8n-link"><span class="text"><span class="n8n-text size-medium regular">Folder 2</span></span></a></li>
+    <li class="separator" aria-hidden="true">/</li>
+    <li class="item" data-test-id="breadcrumbs-item"><a href="/folder3" target="_blank" class="n8n-link"><span class="text"><span class="n8n-text size-medium regular">Folder 3</span></span></a></li>
+    <li class="separator" aria-hidden="true">/</li>
+    <li class="item current" data-test-id="breadcrumbs-item"><span class="n8n-text size-medium regular">Current</span></li>
+    <!--v-if-->
+  </ul>
+</div>"
+`;
+
+exports[`Breadcrumbs > renders slots correctly 1`] = `
+"<div class="container medium">
+  <div>[PRE] Custom content</div>
+  <ul class="list">
+    <li class="separator" aria-hidden="true">/</li>
+    <!--v-if-->
+    <!--v-if-->
+    <li class="item" data-test-id="breadcrumbs-item"><a href="/folder1" target="_blank" class="n8n-link"><span class="text"><span class="n8n-text size-medium regular">Folder 1</span></span></a></li>
+    <li class="separator" aria-hidden="true">/</li>
+    <li class="item" data-test-id="breadcrumbs-item"><a href="/folder2" target="_blank" class="n8n-link"><span class="text"><span class="n8n-text size-medium regular">Folder 2</span></span></a></li>
+    <li class="separator" aria-hidden="true">/</li>
+    <li class="item" data-test-id="breadcrumbs-item"><a href="/folder3" target="_blank" class="n8n-link"><span class="text"><span class="n8n-text size-medium regular">Folder 3</span></span></a></li>
+    <li class="separator" aria-hidden="true">/</li>
+    <li class="item current" data-test-id="breadcrumbs-item"><span class="n8n-text size-medium regular">Current</span></li>
+    <!--v-if-->
+  </ul>
+  <div>[POST] Custom content</div>
+</div>"
+`;
+
+exports[`Breadcrumbs > renders small version correctly 1`] = `
+"<div class="container small">
+  <ul class="list">
+    <!--v-if-->
+    <!--v-if-->
+    <!--v-if-->
+    <li class="item" data-test-id="breadcrumbs-item"><a href="/folder1" target="_blank" class="n8n-link"><span class="text"><span class="n8n-text size-medium regular">Folder 1</span></span></a></li>
+    <li class="separator" aria-hidden="true">/</li>
+    <li class="item" data-test-id="breadcrumbs-item"><a href="/folder2" target="_blank" class="n8n-link"><span class="text"><span class="n8n-text size-medium regular">Folder 2</span></span></a></li>
+    <li class="separator" aria-hidden="true">/</li>
+    <li class="item" data-test-id="breadcrumbs-item"><a href="/folder3" target="_blank" class="n8n-link"><span class="text"><span class="n8n-text size-medium regular">Folder 3</span></span></a></li>
+    <li class="separator" aria-hidden="true">/</li>
+    <li class="item current" data-test-id="breadcrumbs-item"><span class="n8n-text size-medium regular">Current</span></li>
+    <!--v-if-->
+  </ul>
+</div>"
+`;
diff --git a/packages/design-system/src/components/N8nBreadcrumbs/index.ts b/packages/design-system/src/components/N8nBreadcrumbs/index.ts
new file mode 100644
index 0000000000000..bded3b034bbcc
--- /dev/null
+++ b/packages/design-system/src/components/N8nBreadcrumbs/index.ts
@@ -0,0 +1,2 @@
+import Breadcrumbs from './Breadcrumbs.vue';
+export default Breadcrumbs;
diff --git a/packages/design-system/src/components/index.ts b/packages/design-system/src/components/index.ts
index 6b584b8e8e336..3d7d1fdc0b6ea 100644
--- a/packages/design-system/src/components/index.ts
+++ b/packages/design-system/src/components/index.ts
@@ -57,3 +57,4 @@ export { default as N8nUsersList } from './N8nUsersList';
 export { default as N8nResizeObserver } from './ResizeObserver';
 export { N8nKeyboardShortcut } from './N8nKeyboardShortcut';
 export { default as N8nIconPicker } from './N8nIconPicker';
+export { default as N8nBreadcrumbs } from './N8nBreadcrumbs';