diff --git a/core/deployment/src/main/java/io/quarkus/deployment/dev/HotDeploymentConfigFileBuildStep.java b/core/deployment/src/main/java/io/quarkus/deployment/dev/HotDeploymentWatchedFileBuildStep.java
similarity index 89%
rename from core/deployment/src/main/java/io/quarkus/deployment/dev/HotDeploymentConfigFileBuildStep.java
rename to core/deployment/src/main/java/io/quarkus/deployment/dev/HotDeploymentWatchedFileBuildStep.java
index 9e5fa01ad8238..d4b832420f7cb 100644
--- a/core/deployment/src/main/java/io/quarkus/deployment/dev/HotDeploymentConfigFileBuildStep.java
+++ b/core/deployment/src/main/java/io/quarkus/deployment/dev/HotDeploymentWatchedFileBuildStep.java
@@ -10,10 +10,10 @@
 import io.quarkus.deployment.builditem.ServiceStartBuildItem;
 import io.quarkus.dev.testing.TestWatchedFiles;
 
-public class HotDeploymentConfigFileBuildStep {
+public class HotDeploymentWatchedFileBuildStep {
 
     @BuildStep
-    ServiceStartBuildItem setupConfigFileHotDeployment(List<HotDeploymentWatchedFileBuildItem> files,
+    ServiceStartBuildItem setupWatchedFileHotDeployment(List<HotDeploymentWatchedFileBuildItem> files,
             LaunchModeBuildItem launchModeBuildItem) {
         // TODO: this should really be an output of the RuntimeRunner
         RuntimeUpdatesProcessor processor = RuntimeUpdatesProcessor.INSTANCE;
diff --git a/core/deployment/src/main/java/io/quarkus/deployment/dev/RuntimeUpdatesProcessor.java b/core/deployment/src/main/java/io/quarkus/deployment/dev/RuntimeUpdatesProcessor.java
index 7f0765dad1be8..e58f35fbca804 100644
--- a/core/deployment/src/main/java/io/quarkus/deployment/dev/RuntimeUpdatesProcessor.java
+++ b/core/deployment/src/main/java/io/quarkus/deployment/dev/RuntimeUpdatesProcessor.java
@@ -874,6 +874,7 @@ Set<String> checkForFileChange(Function<DevModeContext.ModuleInfo, DevModeContex
             if (rootPaths.isEmpty() || outputPath == null) {
                 continue;
             }
+            Path outputDir = Paths.get(outputPath);
             final List<Path> roots = rootPaths.stream()
                     .filter(Files::exists)
                     .filter(Files::isReadable)
@@ -883,7 +884,6 @@ Set<String> checkForFileChange(Function<DevModeContext.ModuleInfo, DevModeContex
                 final Set<Path> seen = new HashSet<>(moduleResources);
                 try {
                     for (Path root : roots) {
-                        Path outputDir = Paths.get(outputPath);
                         //since the stream is Closeable, use a try with resources so the underlying iterator is closed
                         try (final Stream<Path> walk = Files.walk(root)) {
                             walk.forEach(path -> {
@@ -927,11 +927,13 @@ Set<String> checkForFileChange(Function<DevModeContext.ModuleInfo, DevModeContex
                 }
             }
 
-            for (Path root : roots) {
-                Path outputDir = Paths.get(outputPath);
-                for (String path : timestampSet.watchedFilePaths.keySet()) {
+            for (String path : timestampSet.watchedFilePaths.keySet()) {
+                boolean pathCurrentlyExisting = false;
+                boolean pathPreviouslyExisting = false;
+                for (Path root : roots) {
                     Path file = root.resolve(path);
                     if (file.toFile().exists()) {
+                        pathCurrentlyExisting = true;
                         try {
                             long value = Files.getLastModifiedTime(file).toMillis();
                             Long existing = timestampSet.watchedFileTimestamps.get(file);
@@ -967,13 +969,20 @@ Set<String> checkForFileChange(Function<DevModeContext.ModuleInfo, DevModeContex
                             throw new UncheckedIOException(e);
                         }
                     } else {
-                        timestampSet.watchedFileTimestamps.put(file, 0L);
-                        Path target = outputDir.resolve(path);
-                        try {
-                            FileUtil.deleteDirectory(target);
-                        } catch (IOException e) {
-                            throw new UncheckedIOException(e);
-                        }
+                        Long prevValue = timestampSet.watchedFileTimestamps.put(file, 0L);
+                        pathPreviouslyExisting = pathPreviouslyExisting || (prevValue != null && prevValue > 0);
+                    }
+                }
+                if (!pathCurrentlyExisting) {
+                    if (pathPreviouslyExisting) {
+                        ret.add(path);
+                    }
+
+                    Path target = outputDir.resolve(path);
+                    try {
+                        FileUtil.deleteIfExists(target);
+                    } catch (IOException e) {
+                        throw new UncheckedIOException(e);
                     }
                 }
             }
@@ -1011,7 +1020,12 @@ Set<String> checkForFileChange(Function<DevModeContext.ModuleInfo, DevModeContex
                             throw new UncheckedIOException(e);
                         }
                     } else {
-                        timestampSet.watchedFileTimestamps.put(watchedFile, 0L);
+
+                        Long prevValue = timestampSet.watchedFileTimestamps.put(watchedFile, 0L);
+
+                        if (prevValue != null && prevValue > 0) {
+                            ret.add(watchedFilePath);
+                        }
                     }
                 }
             }
diff --git a/core/deployment/src/main/java/io/quarkus/deployment/util/FileUtil.java b/core/deployment/src/main/java/io/quarkus/deployment/util/FileUtil.java
index 9916dd8092978..711072d50b166 100644
--- a/core/deployment/src/main/java/io/quarkus/deployment/util/FileUtil.java
+++ b/core/deployment/src/main/java/io/quarkus/deployment/util/FileUtil.java
@@ -13,10 +13,29 @@
 
 public class FileUtil {
 
+    public static void deleteIfExists(final Path path) throws IOException {
+        BasicFileAttributes attributes;
+        try {
+            attributes = Files.readAttributes(path, BasicFileAttributes.class);
+        } catch (IOException ignored) {
+            // Files.isDirectory is also simply returning when any IOException occurs, same behaviour is fine
+            return;
+        }
+        if (attributes.isDirectory()) {
+            deleteDirectoryIfExists(path);
+        } else if (attributes.isRegularFile()) {
+            Files.deleteIfExists(path);
+        }
+    }
+
     public static void deleteDirectory(final Path directory) throws IOException {
         if (!Files.isDirectory(directory)) {
             return;
         }
+        deleteDirectoryIfExists(directory);
+    }
+
+    private static void deleteDirectoryIfExists(final Path directory) throws IOException {
         Files.walkFileTree(directory, new SimpleFileVisitor<Path>() {
             @Override
             public FileVisitResult visitFile(Path file, BasicFileAttributes attrs) throws IOException {
diff --git a/integration-tests/maven/src/test/java/io/quarkus/maven/it/DevMojoIT.java b/integration-tests/maven/src/test/java/io/quarkus/maven/it/DevMojoIT.java
index f8c7e7f4b2d3d..b92b59023c098 100644
--- a/integration-tests/maven/src/test/java/io/quarkus/maven/it/DevMojoIT.java
+++ b/integration-tests/maven/src/test/java/io/quarkus/maven/it/DevMojoIT.java
@@ -927,6 +927,25 @@ public void testThatNewResourcesAreServed() throws MavenInvocationException, IOE
                 .until(() -> DevModeTestUtils.getHttpResponse("/lorem.txt", 404));
     }
 
+    @Test
+    public void testThatConfigFileDeletionsAreDetected() throws MavenInvocationException, IOException {
+        testDir = initProject("projects/dev-mode-file-deletion");
+        runAndCheck();
+
+        await()
+                .pollDelay(100, TimeUnit.MILLISECONDS)
+                .atMost(1, TimeUnit.MINUTES)
+                .until(() -> DevModeTestUtils.getHttpResponse("/app/hello/greetings").contains("Bonjour"));
+
+        File source = new File(testDir, "src/main/resources/application.properties");
+        FileUtils.delete(source);
+
+        await()
+                .pollDelay(100, TimeUnit.MILLISECONDS)
+                .atMost(1, TimeUnit.MINUTES)
+                .until(() -> DevModeTestUtils.getHttpResponse("/app/hello/greetings").contains("Guten Morgen"));
+    }
+
     @Test
     public void testThatMultipleResourceDirectoriesAreSupported() throws MavenInvocationException, IOException {
         testDir = initProject("projects/dev-mode-multiple-resource-dirs");
diff --git a/integration-tests/maven/src/test/resources-filtered/projects/dev-mode-file-deletion/pom.xml b/integration-tests/maven/src/test/resources-filtered/projects/dev-mode-file-deletion/pom.xml
new file mode 100644
index 0000000000000..bab60d0fcaeaf
--- /dev/null
+++ b/integration-tests/maven/src/test/resources-filtered/projects/dev-mode-file-deletion/pom.xml
@@ -0,0 +1,69 @@
+<?xml version="1.0"?>
+<project xsi:schemaLocation="http://maven.apache.org/POM/4.0.0 https://maven.apache.org/xsd/maven-4.0.0.xsd" xmlns="http://maven.apache.org/POM/4.0.0"
+    xmlns:xsi="http://www.w3.org/2001/XMLSchema-instance">
+  <modelVersion>4.0.0</modelVersion>
+  <groupId>org.acme</groupId>
+  <artifactId>acme</artifactId>
+  <version>1.0-SNAPSHOT</version>
+  <properties>
+    <quarkus.platform.group-id>io.quarkus</quarkus.platform.group-id>
+    <quarkus.platform.artifact-id>quarkus-bom</quarkus.platform.artifact-id>
+    <quarkus.platform.version>@project.version@</quarkus.platform.version>
+    <quarkus-plugin.version>@project.version@</quarkus-plugin.version>
+    <maven.compiler.source>11</maven.compiler.source>
+    <project.build.sourceEncoding>UTF-8</project.build.sourceEncoding>
+    <maven.compiler.target>11</maven.compiler.target>
+  </properties>
+  <dependencyManagement>
+    <dependencies>
+      <!-- insert managed dependencies here -->
+      <dependency>
+        <groupId>${quarkus.platform.group-id}</groupId>
+        <artifactId>${quarkus.platform.artifact-id}</artifactId>
+        <version>${quarkus.platform.version}</version>
+        <type>pom</type>
+        <scope>import</scope>
+      </dependency>
+    </dependencies>
+  </dependencyManagement>
+  <dependencies>
+    <!-- insert test dependencies here -->
+    <dependency>
+      <groupId>io.quarkus</groupId>
+      <artifactId>quarkus-resteasy</artifactId>
+    </dependency>
+    <dependency>
+      <groupId>io.quarkus</groupId>
+      <artifactId>quarkus-junit5</artifactId>
+      <scope>test</scope>
+    </dependency>
+    <dependency>
+      <groupId>io.rest-assured</groupId>
+      <artifactId>rest-assured</artifactId>
+      <scope>test</scope>
+    </dependency>
+  </dependencies>
+  <build>
+    <resources>
+      <resource>
+        <directory>src/main/resources</directory>
+      </resource>
+    </resources>
+    <plugins>
+      <plugin>
+        <groupId>io.quarkus</groupId>
+        <artifactId>quarkus-maven-plugin</artifactId>
+        <version>${quarkus-plugin.version}</version>
+        <executions>
+          <execution>
+            <goals>
+              <goal>generate-code</goal>
+              <goal>generate-code-tests</goal>
+              <goal>build</goal>
+            </goals>
+          </execution>
+        </executions>
+      </plugin>
+    </plugins>
+  </build>
+</project>
diff --git a/integration-tests/maven/src/test/resources-filtered/projects/dev-mode-file-deletion/src/main/java/org/acme/HelloResource.java b/integration-tests/maven/src/test/resources-filtered/projects/dev-mode-file-deletion/src/main/java/org/acme/HelloResource.java
new file mode 100644
index 0000000000000..dacee899bd8f4
--- /dev/null
+++ b/integration-tests/maven/src/test/resources-filtered/projects/dev-mode-file-deletion/src/main/java/org/acme/HelloResource.java
@@ -0,0 +1,28 @@
+package org.acme;
+
+import org.eclipse.microprofile.config.inject.ConfigProperty;
+
+import javax.ws.rs.GET;
+import javax.ws.rs.Path;
+import javax.ws.rs.Produces;
+import javax.ws.rs.core.MediaType;
+
+@Path("/hello")
+public class HelloResource {
+
+    @ConfigProperty(name = "greeting", defaultValue = "Guten Morgen")
+    String greeting;
+
+    @GET
+    @Produces(MediaType.TEXT_PLAIN)
+    public String hello() {
+        return "hello";
+    }
+
+    @GET
+    @Path("/greetings")
+    @Produces(MediaType.TEXT_PLAIN)
+    public String greetings() {
+        return greeting;
+    }
+}
diff --git a/integration-tests/maven/src/test/resources-filtered/projects/dev-mode-file-deletion/src/main/java/org/acme/MyApplication.java b/integration-tests/maven/src/test/resources-filtered/projects/dev-mode-file-deletion/src/main/java/org/acme/MyApplication.java
new file mode 100644
index 0000000000000..2b41cd0385afb
--- /dev/null
+++ b/integration-tests/maven/src/test/resources-filtered/projects/dev-mode-file-deletion/src/main/java/org/acme/MyApplication.java
@@ -0,0 +1,9 @@
+package org.acme;
+
+import javax.ws.rs.ApplicationPath;
+import javax.ws.rs.core.Application;
+
+@ApplicationPath("/app")
+public class MyApplication extends Application {
+
+}
diff --git a/integration-tests/maven/src/test/resources-filtered/projects/dev-mode-file-deletion/src/main/resources/META-INF/resources/index.html b/integration-tests/maven/src/test/resources-filtered/projects/dev-mode-file-deletion/src/main/resources/META-INF/resources/index.html
new file mode 100644
index 0000000000000..c09bb5c96b869
--- /dev/null
+++ b/integration-tests/maven/src/test/resources-filtered/projects/dev-mode-file-deletion/src/main/resources/META-INF/resources/index.html
@@ -0,0 +1,156 @@
+<!DOCTYPE html>
+<html lang="en">
+<head>
+    <meta charset="UTF-8">
+    <title>acme - 1.0-SNAPSHOT</title>
+    <style>
+        h1, h2, h3, h4, h5, h6 {
+            margin-bottom: 0.5rem;
+            font-weight: 400;
+            line-height: 1.5;
+        }
+
+        h1 {
+            font-size: 2.5rem;
+        }
+
+        h2 {
+            font-size: 2rem
+        }
+
+        h3 {
+            font-size: 1.75rem
+        }
+
+        h4 {
+            font-size: 1.5rem
+        }
+
+        h5 {
+            font-size: 1.25rem
+        }
+
+        h6 {
+            font-size: 1rem
+        }
+
+        .lead {
+            font-weight: 300;
+            font-size: 2rem;
+        }
+
+        .banner {
+            font-size: 2.7rem;
+            margin: 0;
+            padding: 2rem 1rem;
+            background-color: #00A1E2;
+            color: white;
+        }
+
+        body {
+            margin: 0;
+            font-family: -apple-system, system-ui, "Segoe UI", Roboto, "Helvetica Neue", Arial, sans-serif, "Apple Color Emoji", "Segoe UI Emoji", "Segoe UI Symbol", "Noto Color Emoji";
+        }
+
+        code {
+            font-family: SFMono-Regular, Menlo, Monaco, Consolas, "Liberation Mono", "Courier New", monospace;
+            font-size: 87.5%;
+            color: #e83e8c;
+            word-break: break-word;
+        }
+
+        .left-column {
+            padding: .75rem;
+            max-width: 75%;
+            min-width: 55%;
+        }
+
+        .right-column {
+            padding: .75rem;
+            max-width: 25%;
+        }
+
+        .container {
+            display: flex;
+            width: 100%;
+        }
+
+        li {
+            margin: 0.75rem;
+        }
+
+        .right-section {
+            margin-left: 1rem;
+            padding-left: 0.5rem;
+        }
+
+        .right-section h3 {
+            padding-top: 0;
+            font-weight: 200;
+        }
+
+        .right-section ul {
+            border-left: 0.3rem solid #00A1E2;
+            list-style-type: none;
+            padding-left: 0;
+        }
+
+    </style>
+</head>
+<body>
+
+<div class="banner lead">
+    Your new Cloud-Native application is ready!
+</div>
+
+<div class="container">
+    <div class="left-column">
+        <p class="lead"> Congratulations, you have created a new Quarkus application.</p>
+
+        <h2>Why do you see this?</h2>
+
+        <p>This page is served by Quarkus. The source is in
+            <code>src/main/resources/META-INF/resources/index.html</code>.</p>
+
+        <h2>What can I do from here?</h2>
+
+        <p>If not already done, run the application in <em>dev mode</em> using: <code>mvn compile quarkus:dev</code>.
+        </p>
+        <ul>
+            <li>Add REST resources, Servlets, functions and other services in <code>src/main/java</code>.</li>
+            <li>Your static assets are located in <code>src/main/resources/META-INF/resources</code>.</li>
+            <li>Configure your application in <code>src/main/resources/application.properties</code>.
+            </li>
+        </ul>
+
+        <h2>Do you like Quarkus?</h2>
+        <p>Go give it a star on <a href="https://github.com/quarkusio/quarkus">GitHub</a>.</p>
+
+        <h2>How do I get rid of this page?</h2>
+        <p>Just delete the <code>src/main/resources/META-INF/resources/index.html</code> file.</p>
+    </div>
+    <div class="right-column">
+        <div class="right-section">
+            <h3>Application</h3>
+            <ul>
+                <li>GroupId: org.acme</li>
+                <li>ArtifactId: acme</li>
+                <li>Version: 1.0-SNAPSHOT</li>
+                <li>Quarkus Version: 999-SNAPSHOT</li>
+            </ul>
+        </div>
+        <div class="right-section">
+            <h3>Next steps</h3>
+            <ul>
+                <!-- the url have been erased on purpose -->
+                <li><a href="#">Setup your IDE</a></li>
+                <li><a href="#">Getting started</a></li>
+                <li><a href="#">Documentation</a></li>
+            </ul>
+        </div>
+    </div>
+</div>
+
+
+</body>
+</html>
\ No newline at end of file
diff --git a/integration-tests/maven/src/test/resources-filtered/projects/dev-mode-file-deletion/src/main/resources/application.properties b/integration-tests/maven/src/test/resources-filtered/projects/dev-mode-file-deletion/src/main/resources/application.properties
new file mode 100644
index 0000000000000..acb0268bff21d
--- /dev/null
+++ b/integration-tests/maven/src/test/resources-filtered/projects/dev-mode-file-deletion/src/main/resources/application.properties
@@ -0,0 +1,2 @@
+# Configuration file
+greeting=Bonjour