diff --git a/tests/test_token_plugins.py b/tests/test_token_plugins.py
index e1b967b7..1e8e7e5b 100644
--- a/tests/test_token_plugins.py
+++ b/tests/test_token_plugins.py
@@ -60,6 +60,37 @@ def test_simple(self):
         self.assertEqual(result[0], "remote_host")
         self.assertEqual(result[1], "remote_port")
 
+    def test_dir_with_files(self):
+        mock_file1 = MagicMock()
+        mock_file1.is_file.return_value = True
+        mock_file1.is_dir.return_value = False
+        mock_file1.open.return_value.__enter__.return_value.readlines.return_value = ["testhost1: remote_host1:remote_port1"]
+
+        mock_file2 = MagicMock()
+        mock_file2.is_file.return_value = True
+        mock_file2.is_dir.return_value = False
+        mock_file2.open.return_value.__enter__.return_value.readlines.return_value = ["testhost2: remote_host2:remote_port2"]
+
+        mock_dir = MagicMock()
+        mock_dir.is_dir.return_value = True
+        mock_dir.is_file.return_value = False
+
+        mock_source_dir = MagicMock()
+        mock_source_dir.is_dir.return_value = True
+        mock_source_dir.iterdir.return_value = [mock_file1, mock_file2, mock_dir]
+
+        with patch("websockify.token_plugins.Path") as mock_path:
+            mock_path.return_value = mock_source_dir
+            plugin = ReadOnlyTokenFile('configdir')
+            result1 = plugin.lookup('testhost1')
+            result2 = plugin.lookup('testhost2')
+
+        mock_path.assert_called_once_with('configdir')
+        self.assertIsNotNone(result1)
+        self.assertIsNotNone(result2)
+        self.assertEqual(result1, ["remote_host1", "remote_port1"])
+        self.assertEqual(result2, ["remote_host2", "remote_port2"])
+
     def test_tabs(self):
         mock_source_file = MagicMock()
         mock_source_file.is_dir.return_value = False
diff --git a/websockify/token_plugins.py b/websockify/token_plugins.py
index d582032f..a0c17012 100644
--- a/websockify/token_plugins.py
+++ b/websockify/token_plugins.py
@@ -45,7 +45,7 @@ def __init__(self, *args, **kwargs):
     def _load_targets(self):
         source = Path(self.source)
         if source.is_dir():
-            cfg_files = [file for file in source if file.is_file()]
+            cfg_files = [file for file in source.iterdir() if file.is_file()]
         else:
             cfg_files = [source]