diff --git a/requirements_test_all.txt b/requirements_test_all.txt
index 990848d5c56..d3e9ae51a60 100644
--- a/requirements_test_all.txt
+++ b/requirements_test_all.txt
@@ -202,8 +202,5 @@ wakeonlan==1.0.0
 # homeassistant.components.cloud
 warrant==0.6.1
 
-# homeassistant.components.folder_watcher
-watchdog==0.8.3
-
 # homeassistant.components.sensor.yahoo_finance
 yahoo-finance==1.4.0
diff --git a/script/gen_requirements_all.py b/script/gen_requirements_all.py
index fa39c307f18..d5bb2701e9b 100755
--- a/script/gen_requirements_all.py
+++ b/script/gen_requirements_all.py
@@ -91,7 +91,6 @@ TEST_REQUIREMENTS = (
     'yahoo-finance',
     'pythonwhois',
     'wakeonlan',
-    'watchdog',
     'vultr'
 )
 
diff --git a/tests/components/test_folder_watcher.py b/tests/components/test_folder_watcher.py
index 587d8b7ad6d..16ec7a58a02 100644
--- a/tests/components/test_folder_watcher.py
+++ b/tests/components/test_folder_watcher.py
@@ -1,64 +1,56 @@
 """The tests for the folder_watcher component."""
-import unittest
-from unittest.mock import MagicMock
+from unittest.mock import Mock, patch
 import os
 
 from homeassistant.components import folder_watcher
-from homeassistant.setup import setup_component
-from tests.common import get_test_home_assistant
-
-CWD = os.path.join(os.path.dirname(__file__))
-FILE = 'file.txt'
+from homeassistant.setup import async_setup_component
+from tests.common import MockDependency
 
 
-class TestFolderWatcher(unittest.TestCase):
-    """Test the file_watcher component."""
+async def test_invalid_path_setup(hass):
+    """Test that a invalid path is not setup."""
+    assert not await async_setup_component(
+        hass, folder_watcher.DOMAIN, {
+            folder_watcher.DOMAIN: {
+                    folder_watcher.CONF_FOLDER: 'invalid_path'
+            }
+        })
 
-    def setup_method(self, method):
-        """Set up things to be run when tests are started."""
-        self.hass = get_test_home_assistant()
-        self.hass.config.whitelist_external_dirs = set((CWD))
 
-    def teardown_method(self, method):
-        """Stop everything that was started."""
-        self.hass.stop()
+async def test_valid_path_setup(hass):
+    """Test that a valid path is setup."""
+    cwd = os.path.join(os.path.dirname(__file__))
+    hass.config.whitelist_external_dirs = set((cwd))
+    with patch.object(folder_watcher, 'Watcher'):
+        assert await async_setup_component(
+            hass, folder_watcher.DOMAIN, {
+                folder_watcher.DOMAIN: {folder_watcher.CONF_FOLDER: cwd}
+            })
 
-    def test_invalid_path_setup(self):
-        """Test that a invalid path is not setup."""
-        config = {
-            folder_watcher.DOMAIN: [{
-                folder_watcher.CONF_FOLDER: 'invalid_path'
-                }]
-        }
-        self.assertFalse(
-            setup_component(self.hass, folder_watcher.DOMAIN, config))
 
-    def test_valid_path_setup(self):
-        """Test that a valid path is setup."""
-        config = {
-            folder_watcher.DOMAIN: [{folder_watcher.CONF_FOLDER: CWD}]
-        }
+@MockDependency('watchdog', 'events')
+def test_event(mock_watchdog):
+    """Check that HASS events are fired correctly on watchdog event."""
+    class MockPatternMatchingEventHandler:
+        """Mock base class for the pattern matcher event handler."""
 
-        self.assertTrue(setup_component(
-            self.hass, folder_watcher.DOMAIN, config))
+        def __init__(self, patterns):
+            pass
 
-    def test_event(self):
-        """Check that HASS events are fired correctly on watchdog event."""
-        from watchdog.events import FileModifiedEvent
-
-        # Cant use setup_component as need to retrieve Watcher object.
-        w = folder_watcher.Watcher(CWD,
-                                   folder_watcher.DEFAULT_PATTERN,
-                                   self.hass)
-        w.startup(None)
-
-        self.hass.bus.fire = MagicMock()
-
-        # Trigger a fake filesystem event through the Watcher Observer emitter.
-        (emitter,) = w._observer.emitters
-        emitter.queue_event(FileModifiedEvent(FILE))
-
-        # Wait for the event to propagate.
-        self.hass.block_till_done()
-
-        assert self.hass.bus.fire.called
+    mock_watchdog.events.PatternMatchingEventHandler = \
+        MockPatternMatchingEventHandler
+    hass = Mock()
+    handler = folder_watcher.create_event_handler(['*'], hass)
+    handler.on_created(Mock(
+        is_directory=False,
+        src_path='/hello/world.txt',
+        event_type='created'
+    ))
+    assert hass.bus.fire.called
+    assert hass.bus.fire.mock_calls[0][1][0] == folder_watcher.DOMAIN
+    assert hass.bus.fire.mock_calls[0][1][1] == {
+        'event_type': 'created',
+        'path': '/hello/world.txt',
+        'file': 'world.txt',
+        'folder': '/hello',
+    }