diff --git a/mopidy/utils/path.py b/mopidy/utils/path.py
index 5d99ac12..b276a027 100644
--- a/mopidy/utils/path.py
+++ b/mopidy/utils/path.py
@@ -47,21 +47,31 @@ def split_path(path):
             break
     return parts
 
-# pylint: disable = W0612
-# Unused variable 'dirnames'
 def find_files(path):
     if os.path.isfile(path):
         if not isinstance(path, unicode):
             path = path.decode('utf-8')
-        yield path
+        if not os.path.basename(path).startswith('.'):
+            yield path
     else:
         for dirpath, dirnames, filenames in os.walk(path):
+            # Filter out hidden folders by modifying dirnames in place.
+            for dirname in dirnames:
+                if dirname.startswith('.'):
+                    dirnames.remove(dirname)
+
             for filename in filenames:
+                # Skip hidden files.
+                if filename.startswith('.'):
+                    continue
+
                 filename = os.path.join(dirpath, filename)
                 if not isinstance(filename, unicode):
-                    filename = filename.decode('utf-8')
+                    try:
+                        filename = filename.decode('utf-8')
+                    except UnicodeDecodeError:
+                        filename = filename.decode('latin1')
                 yield filename
-# pylint: enable = W0612
 
 # FIXME replace with mock usage in tests.
 class Mtime(object):
diff --git a/tests/data/.blank.mp3 b/tests/data/.blank.mp3
new file mode 100644
index 00000000..ef159a70
Binary files /dev/null and b/tests/data/.blank.mp3 differ
diff --git a/tests/data/.hidden/.gitignore b/tests/data/.hidden/.gitignore
new file mode 100644
index 00000000..e69de29b
diff --git a/tests/utils/path_test.py b/tests/utils/path_test.py
index 19bae375..184970ae 100644
--- a/tests/utils/path_test.py
+++ b/tests/utils/path_test.py
@@ -156,6 +156,12 @@ class FindFilesTest(unittest.TestCase):
             self.assert_(is_unicode(name),
                 '%s is not unicode object' % repr(name))
 
+    def test_ignores_hidden_folders(self):
+        self.assertEqual(self.find('.hidden'), [])
+
+    def test_ignores_hidden_files(self):
+        self.assertEqual(self.find('.blank.mp3'), [])
+
 
 class MtimeTest(unittest.TestCase):
     def tearDown(self):