Bruce,
thanks. I compacted as you suggested but still could not create a new
subfolder in my default identity. I actually already have 3 identities, each
with a different email address. I am able to create subfolders in the other
two identities but not in my main/default identity. I am using Mcafee spam
killer.

If i create a new identity to replace my default identity, how do i import
my old folders.

Thanks for your help,
Jonathan
"Bruce Hagen" wrote:

First, compact your folders. Click on Outlook Express at the top of the
folder tree so no folders are open. Then: FileWork Offline (or double click
Working Online in the Status Bar). FileFolderCompact all folders. Don't
touch anything until the compacting is completed.

If still no joy, you may have a damaged identity. File | Identity | Add New
Identity. Create a new one and test it. If all is well, you can import your
messages from the old identity and delete it.
--
Bruce Hagen
MS MVP - Outlook Express
~IB-CA~

How to Create and Use Identities in Outlook Express
http://support.microsoft.com/?kbid=209169

"tilden" wrote in message
...
In the past I have created many folders in the inbox. Today, the process
would not work. After selecting file/folder/new the hour galss came on but
no new folder appeared. I also tried the ctrl+shift+E but that did not
work
either. Each of the above actions were tried when the "inbox" icon was
highlighted. I was able to delete an old unused foler in my inbox,
thinking
that maybe there is a limit to the number of folders you can have.
Any suggestions??

I am using XP.

Thanks for your help.