diff --git a/src/com/android/launcher3/CellLayout.java b/src/com/android/launcher3/CellLayout.java
index af37033..51ee47a 100644
--- a/src/com/android/launcher3/CellLayout.java
+++ b/src/com/android/launcher3/CellLayout.java
@@ -510,6 +510,9 @@
             canvas.save();
             canvas.translate(mTempLocation[0], mTempLocation[1]);
             bg.drawBackground(canvas, mFolderBgPaint);
+            if (!bg.isClipping) {
+                bg.drawBackgroundStroke(canvas, mFolderBgPaint);
+            }
             canvas.restore();
         }
 
@@ -529,11 +532,13 @@
 
         for (int i = 0; i < mFolderBackgrounds.size(); i++) {
             FolderIcon.PreviewBackground bg = mFolderBackgrounds.get(i);
-            cellToPoint(bg.delegateCellX, bg.delegateCellY, mTempLocation);
-            canvas.save();
-            canvas.translate(mTempLocation[0], mTempLocation[1]);
-            bg.drawBackgroundStroke(canvas, mFolderBgPaint);
-            canvas.restore();
+            if (bg.isClipping) {
+                cellToPoint(bg.delegateCellX, bg.delegateCellY, mTempLocation);
+                canvas.save();
+                canvas.translate(mTempLocation[0], mTempLocation[1]);
+                bg.drawBackgroundStroke(canvas, mFolderBgPaint);
+                canvas.restore();
+            }
         }
     }
 
diff --git a/src/com/android/launcher3/Workspace.java b/src/com/android/launcher3/Workspace.java
index bd5cd8a..7cceba4 100644
--- a/src/com/android/launcher3/Workspace.java
+++ b/src/com/android/launcher3/Workspace.java
@@ -219,7 +219,7 @@
     public static final int REORDER_TIMEOUT = 350;
     private final Alarm mFolderCreationAlarm = new Alarm();
     private final Alarm mReorderAlarm = new Alarm();
-    private FolderIcon.PreviewBackground mFolderCreateBg = new FolderIcon.PreviewBackground();
+    private FolderIcon.PreviewBackground mFolderCreateBg;
     private FolderIcon mDragOverFolderIcon = null;
     private boolean mCreateUserFolderOnDrop = false;
     private boolean mAddToExistingFolderOnDrop = false;
@@ -2878,7 +2878,9 @@
     }
 
     private void cleanupFolderCreation() {
-        mFolderCreateBg.animateToRest();
+        if (mFolderCreateBg != null) {
+            mFolderCreateBg.animateToRest();
+        }
         mFolderCreationAlarm.setOnAlarmListener(null);
         mFolderCreationAlarm.cancelAlarm();
     }
@@ -3182,6 +3184,8 @@
         int cellX;
         int cellY;
 
+        FolderIcon.PreviewBackground bg = new FolderIcon.PreviewBackground();
+
         public FolderCreationAlarmListener(CellLayout layout, int cellX, int cellY) {
             this.layout = layout;
             this.cellX = cellX;
@@ -3190,11 +3194,15 @@
             DeviceProfile grid = mLauncher.getDeviceProfile();
             BubbleTextView cell = (BubbleTextView) layout.getChildAt(cellX, cellY);
 
-            mFolderCreateBg.setup(getResources().getDisplayMetrics(), grid, null,
+            bg.setup(getResources().getDisplayMetrics(), grid, null,
                     cell.getMeasuredWidth(), cell.getPaddingTop());
+
+            // The full preview background should appear behind the icon
+            bg.isClipping = false;
         }
 
         public void onAlarm(Alarm alarm) {
+            mFolderCreateBg = bg;
             mFolderCreateBg.animateToAccept(layout, cellX, cellY);
             layout.clearDragOutlines();
             setDragMode(DRAG_MODE_CREATE_FOLDER);
diff --git a/src/com/android/launcher3/folder/FolderIcon.java b/src/com/android/launcher3/folder/FolderIcon.java
index a9b707f..b7e11f1 100644
--- a/src/com/android/launcher3/folder/FolderIcon.java
+++ b/src/com/android/launcher3/folder/FolderIcon.java
@@ -492,12 +492,16 @@
         canvas.restore();
     }
 
+    /**
+     * This object represents a FolderIcon preview background. It stores drawing / measurement
+     * information, handles drawing, and animation (accept state <--> rest state).
+     */
     public static class PreviewBackground {
         private float mScale = 1f;
         private float mColorMultiplier = 1f;
         private Path mClipPath = new Path();
         private int mStrokeWidth;
-        private View mInvalidateDeligate;
+        private View mInvalidateDelegate;
 
         public int previewSize;
         private int basePreviewOffsetX;
@@ -507,6 +511,10 @@
         public int delegateCellX;
         public int delegateCellY;
 
+        // When the PreviewBackground is drawn under an icon (for creating a folder) the border
+        // should not occlude the icon
+        public boolean isClipping = true;
+
         // Drawing / animation configurations
         private static final float ACCEPT_SCALE_FACTOR = 1.25f;
         private static final float ACCEPT_COLOR_MULTIPLIER = 1.5f;
@@ -519,9 +527,9 @@
 
         ValueAnimator mScaleAnimator;
 
-        public void setup(DisplayMetrics dm, DeviceProfile grid, View invalidateDeligate,
+        public void setup(DisplayMetrics dm, DeviceProfile grid, View invalidateDelegate,
                    int availableSpace, int topPadding) {
-            mInvalidateDeligate = invalidateDeligate;
+            mInvalidateDelegate = invalidateDelegate;
 
             final int previewSize = grid.folderIconSizePx;
             final int previewPadding = grid.folderIconPreviewPadding;
@@ -557,8 +565,8 @@
             mClipPath.reset();
             mClipPath.addCircle(radius, radius, radius, Path.Direction.CW);
 
-            if (mInvalidateDeligate != null) {
-                mInvalidateDeligate.invalidate();
+            if (mInvalidateDelegate != null) {
+                mInvalidateDelegate.invalidate();
             }
 
             if (mDrawingDelegate != null) {
@@ -566,8 +574,8 @@
             }
         }
 
-        void setInvalidateDeligate(View invalidateDeligate) {
-            mInvalidateDeligate = invalidateDeligate;
+        void setInvalidateDelegate(View invalidateDelegate) {
+            mInvalidateDelegate = invalidateDelegate;
             invalidate();
         }
 
@@ -742,7 +750,7 @@
 
     public void setFolderBackground(PreviewBackground bg) {
         mBackground = bg;
-        mBackground.setInvalidateDeligate(this);
+        mBackground.setInvalidateDelegate(this);
     }
 
     @Override