diff --git a/src/main/resources/assets/opencomputers/loot/OpenOS/bin/sh.lua b/src/main/resources/assets/opencomputers/loot/OpenOS/bin/sh.lua
index 2bab3714c..a625e7ece 100644
--- a/src/main/resources/assets/opencomputers/loot/OpenOS/bin/sh.lua
+++ b/src/main/resources/assets/opencomputers/loot/OpenOS/bin/sh.lua
@@ -6,6 +6,7 @@ local process = require("process")
 local shell = require("shell")
 local term = require("term")
 local text = require("text")
+local unicode = require("unicode")
 
 local function expand(value)
   local result = value:gsub("%$(%w+)", os.getenv):gsub("%$%b{}",
@@ -148,74 +149,66 @@ end
 local args, options = shell.parse(...)
 local history = {}
 
-local lastSearch
-
-local function drawPrompt()
-  local foreground = component.gpu.setForeground(0xFF0000)
-  term.write(expand(os.getenv("PS1") or "$ "))
-  component.gpu.setForeground(foreground)
-end
-
-local function getMatchingPrograms(pattern)
-  local res = {}
-  for dir in string.gmatch(os.getenv("PATH"), "[a-zA-Z0-9/.]+") do
-    for file in fs.list(dir) do
-      if string.match(file, "^" .. pattern .. "(.+)[.]lua") then
-        res[#res+1] = file:match("(.+).lua")
-      end
-    end
-  end
-  return res
-end
-
-local function getMatchingFiles(pattern)
-  local res = {}
-  local dir = fs.isDirectory(pattern) and pattern or fs.path(pattern) or "/"
-  local name = (dir == pattern) and "" or fs.name(pattern) or ""
-  for file in fs.list(dir) do
-    if string.match(file, "^" .. name) then
-      res[#res+1] = file
-    end
-  end
-  return res
-end
-
-local function hintHandler(line)
-  local base, space, after = string.match(line, "(.+)(%s)(.+)")
-  local searchProgram = not base
-  if not base then
-    base = ""
-    after = line or ""
-  end
-  if searchProgram then
-    local matches
-    if after:find("[/.]") == 1 then
-      matches = getMatchingFiles(after)
-      if #matches == 1 then
-        lastSearch = ""
-        local ret = base .. (space or "") .. after .. matches[1]:gsub(after:match("[/]*(%w+)$"),"",1)
-        return ret:gsub("[^/]$","%1 ")
-      end
-    else
-      matches = getMatchingPrograms(after)
-      if #matches == 1 then
-        lastSearch = ""
-        return matches[1] .. " "
-      end
-    end
-    
-    if lastSearch == line then return matches end
+local function getMatchingPrograms(baseName)
+  local result = {}
+  -- TODO only matching files with .lua extension for now, might want to
+  --      extend this to other extensions at some point? env var? file attrs?
+  if not baseName or #baseName == 0 then
+    baseName = "^(.*)%.lua$"
   else
-    local matches = getMatchingFiles(after)
-    
-    for k in ipairs(matches)do
-      local ret = base .. space .. after .. (matches[k]):gsub(after:match("[/]*(%w+)$") or "","",1)
-      matches[k] = ret:gsub("[^/]$","%1 "):gsub("/$","")
-    end
-    
-    return matches
+    baseName = "^(" .. baseName .. ".*)%.lua$"
   end
-  lastSearch = line
+  for basePath in string.gmatch(os.getenv("PATH"), "[^:]+") do
+    for file in fs.list(basePath) do
+      local match = file:match(baseName)
+      if match then
+        table.insert(result, match)
+      end
+    end
+  end
+  return result
+end
+
+local function getMatchingFiles(baseName)
+  local result, basePath = {}
+  -- note: we strip the trailing / to make it easier to navigate through
+  -- directories using tab completion (since entering the / will then serve
+  -- as the intention to go into the currently hinted one).
+  if fs.isDirectory(baseName) then
+    basePath = baseName
+    baseName = "^(.-)/?$"
+  else
+    basePath = fs.path(baseName) or "/"
+    baseName = "^(" .. fs.name(baseName) .. ".-)/?$"
+  end
+  for file in fs.list(basePath) do
+    local match = file:match(baseName)
+    if match then
+      table.insert(result, fs.concat(basePath, match))
+    end
+  end
+  return result
+end
+
+local function hintHandler(line, cursor)
+  local line = unicode.sub(line, 1, cursor - 1)
+  if not line or #line < 1 then
+    return nil
+  end
+  local result
+  local prefix, partial = string.match(line, "^(.+%s)(.+)$")
+  local searchInPath = not prefix and not line:find("/")
+  if searchInPath then
+    -- first part and no path, look for programs in the $PATH
+    result = getMatchingPrograms(line)
+  else -- just look normal files
+    result = getMatchingFiles(partial or line)
+  end
+  for i = 1, #result do
+    result[i] = (prefix or "") .. result[i] .. (searchInPath and " " or "")
+  end
+  table.sort(result)
+  return result
 end
 
 if #args == 0 and (io.input() == io.stdin or options.i) and not options.c then
@@ -228,7 +221,9 @@ if #args == 0 and (io.input() == io.stdin or options.i) and not options.c then
       term.clear()
     end
     while term.isAvailable() do
-      drawPrompt()
+      local foreground = component.gpu.setForeground(0xFF0000)
+      term.write(expand(os.getenv("PS1") or "$ "))
+      component.gpu.setForeground(foreground)
       local command = term.read(history, nil, hintHandler)
       if not command then
         term.write("exit\n")
diff --git a/src/main/resources/assets/opencomputers/loot/OpenOS/lib/term.lua b/src/main/resources/assets/opencomputers/loot/OpenOS/lib/term.lua
index 27092c9e7..8428c2563 100644
--- a/src/main/resources/assets/opencomputers/loot/OpenOS/lib/term.lua
+++ b/src/main/resources/assets/opencomputers/loot/OpenOS/lib/term.lua
@@ -101,16 +101,22 @@ function term.isAvailable()
   return component.isAvailable("gpu") and component.isAvailable("screen")
 end
 
-function term.read(history, dobreak, hint, prompt)
+function term.read(history, dobreak, hint)
   checkArg(1, history, "table", "nil")
+  checkArg(3, hint, "function", "table", "nil")
   history = history or {}
   table.insert(history, "")
   local offset = term.getCursor() - 1
   local scrollX, scrollY = 0, #history - 1
   local cursorX = 1
 
-  local hintCache = (type(hint)=="table" and #hint > 1)and hint
-  local selectedHint = 0
+  if type(hint) == "table" then
+    local hintTable = hint
+    hint = function()
+      return hintTable
+    end
+  end
+  local hintCache, hintIndex
 
   local function getCursor()
     return cursorX, 1 + scrollY
@@ -121,6 +127,10 @@ function term.read(history, dobreak, hint, prompt)
     return history[cby]
   end
 
+  local function clearHint()
+    hintCache = nil
+  end
+
   local function setCursor(nbx, nby)
     local w, h = component.gpu.getResolution()
     local cx, cy = term.getCursor()
@@ -149,6 +159,7 @@ function term.read(history, dobreak, hint, prompt)
 
     cursorX = nbx
     term.setCursor(nbx - scrollX + offset, cy)
+    clearHint()
   end
 
   local function copyIfNecessary()
@@ -216,6 +227,7 @@ function term.read(history, dobreak, hint, prompt)
 
   local function delete()
     copyIfNecessary()
+    clearHint()
     local cbx, cby = getCursor()
     if cbx <= unicode.len(line()) then
       local cw = unicode.charWidth(unicode.sub(line(), cbx))
@@ -235,6 +247,7 @@ function term.read(history, dobreak, hint, prompt)
 
   local function insert(value)
     copyIfNecessary()
+    clearHint()
     local cx, cy = term.getCursor()
     local cbx, cby = getCursor()
     local w, h = component.gpu.getResolution()
@@ -250,61 +263,58 @@ function term.read(history, dobreak, hint, prompt)
     right(unicode.len(value))
   end
 
-  local function tab()
-    if not hintCache then
-      if type(hint) == "function" then
-        local h = hint(line())
-        if type(h) == "string" then
-          local _, cby = getCursor()
-          history[cby] = after
-        elseif type(h) == "table" and #h > 0 then
-          hintCache = h
-          selectedHint = 1
-          local _, cby = getCursor()
-          history[cby] = hintCache[selectedHint] or ""
-        end
+  local function tab(direction)
+    local cbx, cby = getCursor()
+    if not hintCache then -- hint is never nil, see onKeyDown
+      hintCache = hint(line(), cbx)
+      hintIndex = 0
+      if type(hintCache) == "string" then
+        hintCache = {hintCache}
+      end
+      if type(hintCache) ~= "table" or #hintCache < 1 then
+        hintCache = nil -- invalid hint
       end
-    else
-      selectedHint = (selectedHint+1)<=#hintCache and (selectedHint+1) or 1
-      local _, cby = getCursor()
-      history[cby] = hintCache[selectedHint] or ""
     end
-    redraw()
-    ende()
-  end
-
-  local function cleanHint()
-    if type(hint) ~= "table" then
-      hintCache = nil
+    if hintCache then
+      hintIndex = (hintIndex + direction + #hintCache - 1) % #hintCache + 1
+      history[cby] = tostring(hintCache[hintIndex])
+      -- because all other cases of the cursor being moved will result
+      -- in the hint cache getting invalidated we do that in setCursor,
+      -- so we have to back it up here to restore it after moving.
+      local savedCache = hintCache
+      redraw()
+      ende()
+      if #savedCache > 1 then -- stop if only one hint exists.
+        hintCache = savedCache
+      end
     end
   end
 
   local function onKeyDown(char, code)
     term.setCursorBlink(false)
     if code == keyboard.keys.back then
-      if left() then delete() end cleanHint()
+      if left() then delete() end
     elseif code == keyboard.keys.delete then
-      delete()cleanHint()
+      delete()
     elseif code == keyboard.keys.left then
       left()
     elseif code == keyboard.keys.right then
       right()
     elseif code == keyboard.keys.home then
-      home()cleanHint()
+      home()
     elseif code == keyboard.keys["end"] then
-      ende()cleanHint()
+      ende()
     elseif code == keyboard.keys.up then
       up()
     elseif code == keyboard.keys.down then
       down()
     elseif code == keyboard.keys.tab and hint then
-      tab()
+      tab(keyboard.isShiftDown() and -1 or 1)
     elseif code == keyboard.keys.enter then
       local cbx, cby = getCursor()
       if cby ~= #history then -- bring entry to front
         history[#history] = line()
         table.remove(history, cby)
-        cleanHint()
       end
       return true, history[#history] .. "\n"
     elseif keyboard.isControlDown() and code == keyboard.keys.d then
@@ -317,7 +327,6 @@ function term.read(history, dobreak, hint, prompt)
       return true, nil
     elseif not keyboard.isControl(char) then
       insert(unicode.char(char))
-      cleanHint()
     end
     term.setCursorBlink(true)
     term.setCursorBlink(true) -- force toggle to caret