diff --git a/api/v1beta1/bucket_types.go b/api/v1beta1/bucket_types.go
index 9aebad62..d4a5c567 100644
--- a/api/v1beta1/bucket_types.go
+++ b/api/v1beta1/bucket_types.go
@@ -20,8 +20,6 @@ import (
 	"time"
 
 	"github.com/fluxcd/pkg/apis/meta"
-	"github.com/fluxcd/pkg/runtime/conditions"
-	apimeta "k8s.io/apimachinery/pkg/api/meta"
 	metav1 "k8s.io/apimachinery/pkg/apis/meta/v1"
 )
 
@@ -30,6 +28,11 @@ const (
 	BucketKind = "Bucket"
 )
 
+const (
+	GenericBucketProvider string = "generic"
+	AmazonBucketProvider  string = "aws"
+)
+
 // BucketSpec defines the desired state of an S3 compatible bucket
 type BucketSpec struct {
 	// The S3 compatible storage provider name, default ('generic').
@@ -79,11 +82,6 @@ type BucketSpec struct {
 	Suspend bool `json:"suspend,omitempty"`
 }
 
-const (
-	GenericBucketProvider string = "generic"
-	AmazonBucketProvider  string = "aws"
-)
-
 // BucketStatus defines the observed state of a bucket
 type BucketStatus struct {
 	// ObservedGeneration is the last observed generation.
@@ -115,45 +113,6 @@ const (
 	BucketOperationFailedReason string = "BucketOperationFailed"
 )
 
-// BucketProgressing resets the conditions of the Bucket to metav1.Condition of
-// type meta.ReadyCondition with status 'Unknown' and meta.ProgressingReason
-// reason and message. It returns the modified Bucket.
-func BucketProgressing(bucket Bucket) Bucket {
-	bucket.Status.ObservedGeneration = bucket.Generation
-	bucket.Status.URL = ""
-	bucket.Status.Conditions = []metav1.Condition{}
-	conditions.MarkUnknown(&bucket, meta.ReadyCondition, meta.ProgressingReason, "reconciliation in progress")
-	return bucket
-}
-
-// BucketReady sets the given Artifact and URL on the Bucket and sets the
-// meta.ReadyCondition to 'True', with the given reason and message. It returns
-// the modified Bucket.
-func BucketReady(bucket Bucket, artifact Artifact, url, reason, message string) Bucket {
-	bucket.Status.Artifact = &artifact
-	bucket.Status.URL = url
-	conditions.MarkTrue(&bucket, meta.ReadyCondition, reason, message)
-	return bucket
-}
-
-// BucketNotReady sets the meta.ReadyCondition on the Bucket to 'False', with
-// the given reason and message. It returns the modified Bucket.
-func BucketNotReady(bucket Bucket, reason, message string) Bucket {
-	conditions.MarkFalse(&bucket, meta.ReadyCondition, reason, message)
-	return bucket
-}
-
-// BucketReadyMessage returns the message of the metav1.Condition of type
-// meta.ReadyCondition with status 'True' if present, or an empty string.
-func BucketReadyMessage(bucket Bucket) string {
-	if c := apimeta.FindStatusCondition(bucket.Status.Conditions, meta.ReadyCondition); c != nil {
-		if c.Status == metav1.ConditionTrue {
-			return c.Message
-		}
-	}
-	return ""
-}
-
 // GetConditions returns the status conditions of the object.
 func (in Bucket) GetConditions() []metav1.Condition {
 	return in.Status.Conditions
diff --git a/api/v1beta1/condition_types.go b/api/v1beta1/condition_types.go
index 4077a2ab..1a9db62a 100644
--- a/api/v1beta1/condition_types.go
+++ b/api/v1beta1/condition_types.go
@@ -18,6 +18,22 @@ package v1beta1
 
 const SourceFinalizer = "finalizers.fluxcd.io"
 
+const (
+	// ArtifactUnavailableCondition indicates there is no Artifact available for the Source.
+	// This is a "negative polarity" or "abnormal-true" type, and is only present on the resource if it is True.
+	ArtifactUnavailableCondition string = "ArtifactUnavailable"
+
+	// ArtifactOutdatedCondition indicates the current Artifact of the Source is outdated.
+	// This is a "negative polarity" or "abnormal-true" type, and is only present on the resource if it is True.
+	ArtifactOutdatedCondition string = "ArtifactOutdated"
+
+	// FetchFailedCondition indicates a transient or persistent fetch failure of an upstream Source.
+	// If True, observations on the upstream Source revision may be impossible, and the Artifact available for the
+	// Source may be outdated.
+	// This is a "negative polarity" or "abnormal-true" type, and is only present on the resource if it is True.
+	FetchFailedCondition string = "FetchFailed"
+)
+
 const (
 	// URLInvalidReason represents the fact that a given source has an invalid URL.
 	URLInvalidReason string = "URLInvalid"
diff --git a/api/v1beta1/gitrepository_types.go b/api/v1beta1/gitrepository_types.go
index 9a232d63..3a1c71d0 100644
--- a/api/v1beta1/gitrepository_types.go
+++ b/api/v1beta1/gitrepository_types.go
@@ -34,15 +34,6 @@ const (
 )
 
 const (
-	// ArtifactUnavailableCondition indicates there is no Artifact available for the Source.
-	// This is a "negative polarity" or "abnormal-true" type, and is only present on the resource if it is True.
-	ArtifactUnavailableCondition string = "ArtifactUnavailable"
-
-	// CheckoutFailedCondition indicates a transient or persistent checkout failure. If True, observations on the
-	// upstream Source revision are not possible, and the Artifact available for the Source may be outdated.
-	// This is a "negative polarity" or "abnormal-true" type, and is only present on the resource if it is True.
-	CheckoutFailedCondition string = "CheckoutFailed"
-
 	// SourceVerifiedCondition indicates the integrity of the Source has been verified. If True, the integrity check
 	// succeeded. If False, it failed. The Condition is only present on the resource if the integrity has been verified.
 	SourceVerifiedCondition string = "SourceVerified"
@@ -51,10 +42,6 @@ const (
 	// exist, or does not have an Artifact.
 	// This is a "negative polarity" or "abnormal-true" type, and is only present on the resource if it is True.
 	IncludeUnavailableCondition string = "IncludeUnavailable"
-
-	// ArtifactOutdatedCondition indicates the current Artifact of the Source is outdated.
-	// This is a "negative polarity" or "abnormal-true" type, and is only present on the resource if it is True.
-	ArtifactOutdatedCondition string = "ArtifactOutdated"
 )
 
 // GitRepositorySpec defines the desired state of a Git repository.
diff --git a/controllers/artifact_matchers_test.go b/controllers/artifact_matchers_test.go
new file mode 100644
index 00000000..63ff81ce
--- /dev/null
+++ b/controllers/artifact_matchers_test.go
@@ -0,0 +1,67 @@
+/*
+Copyright 2021 The Flux authors
+
+Licensed under the Apache License, Version 2.0 (the "License");
+you may not use this file except in compliance with the License.
+You may obtain a copy of the License at
+
+    http://www.apache.org/licenses/LICENSE-2.0
+
+Unless required by applicable law or agreed to in writing, software
+distributed under the License is distributed on an "AS IS" BASIS,
+WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+See the License for the specific language governing permissions and
+limitations under the License.
+*/
+
+package controllers
+
+import (
+	"fmt"
+
+	sourcev1 "github.com/fluxcd/source-controller/api/v1beta1"
+	. "github.com/onsi/gomega"
+	"github.com/onsi/gomega/types"
+)
+
+// MatchArtifact returns a custom matcher to check equality of a v1beta1.Artifact, the timestamp and URL are ignored.
+func MatchArtifact(expected *sourcev1.Artifact) types.GomegaMatcher {
+	return &matchArtifact{
+		expected: expected,
+	}
+}
+
+type matchArtifact struct {
+	expected *sourcev1.Artifact
+}
+
+func (m matchArtifact) Match(actual interface{}) (success bool, err error) {
+	actualArtifact, ok := actual.(*sourcev1.Artifact)
+	if !ok {
+		return false, fmt.Errorf("actual should be a pointer to an Artifact")
+	}
+
+	if ok, _ := BeNil().Match(m.expected); ok {
+		return BeNil().Match(actual)
+	}
+
+	if ok, err = Equal(m.expected.Path).Match(actualArtifact.Path); !ok {
+		return ok, err
+	}
+	if ok, err = Equal(m.expected.Revision).Match(actualArtifact.Revision); !ok {
+		return ok, err
+	}
+	if ok, err = Equal(m.expected.Checksum).Match(actualArtifact.Checksum); !ok {
+		return ok, err
+	}
+
+	return ok, err
+}
+
+func (m matchArtifact) FailureMessage(actual interface{}) (message string) {
+	return fmt.Sprintf("expected\n\t%#v\nto match\n\t%#v\n", actual, m.expected)
+}
+
+func (m matchArtifact) NegatedFailureMessage(actual interface{}) (message string) {
+	return fmt.Sprintf("expected\n\t%#v\nto not match\n\t%#v\n", actual, m.expected)
+}
diff --git a/controllers/bucket_controller.go b/controllers/bucket_controller.go
index 82844eb5..78382aa5 100644
--- a/controllers/bucket_controller.go
+++ b/controllers/bucket_controller.go
@@ -18,24 +18,23 @@ package controllers
 
 import (
 	"context"
-	"crypto/sha1"
+	"crypto/sha256"
 	"fmt"
 	"os"
 	"path/filepath"
+	"sort"
 	"strings"
 	"time"
 
-	"github.com/go-logr/logr"
 	"github.com/minio/minio-go/v7"
 	"github.com/minio/minio-go/v7/pkg/credentials"
 	"github.com/minio/minio-go/v7/pkg/s3utils"
+	"golang.org/x/sync/errgroup"
+	"golang.org/x/sync/semaphore"
 	corev1 "k8s.io/api/core/v1"
-	apimeta "k8s.io/apimachinery/pkg/api/meta"
 	metav1 "k8s.io/apimachinery/pkg/apis/meta/v1"
-	"k8s.io/apimachinery/pkg/runtime"
 	"k8s.io/apimachinery/pkg/types"
-	kuberecorder "k8s.io/client-go/tools/record"
-	"k8s.io/client-go/tools/reference"
+	kerrors "k8s.io/apimachinery/pkg/util/errors"
 	ctrl "sigs.k8s.io/controller-runtime"
 	"sigs.k8s.io/controller-runtime/pkg/client"
 	"sigs.k8s.io/controller-runtime/pkg/controller"
@@ -43,8 +42,10 @@ import (
 	"sigs.k8s.io/controller-runtime/pkg/predicate"
 
 	"github.com/fluxcd/pkg/apis/meta"
+	"github.com/fluxcd/pkg/runtime/conditions"
+	helper "github.com/fluxcd/pkg/runtime/controller"
 	"github.com/fluxcd/pkg/runtime/events"
-	"github.com/fluxcd/pkg/runtime/metrics"
+	"github.com/fluxcd/pkg/runtime/patch"
 	"github.com/fluxcd/pkg/runtime/predicates"
 
 	sourcev1 "github.com/fluxcd/source-controller/api/v1beta1"
@@ -59,11 +60,10 @@ import (
 // BucketReconciler reconciles a Bucket object
 type BucketReconciler struct {
 	client.Client
-	Scheme                *runtime.Scheme
-	Storage               *Storage
-	EventRecorder         kuberecorder.EventRecorder
-	ExternalEventRecorder *events.Recorder
-	MetricsRecorder       *metrics.Recorder
+	helper.Events
+	helper.Metrics
+
+	Storage *Storage
 }
 
 type BucketReconcilerOptions struct {
@@ -82,403 +82,496 @@ func (r *BucketReconciler) SetupWithManagerAndOptions(mgr ctrl.Manager, opts Buc
 		Complete(r)
 }
 
-func (r *BucketReconciler) Reconcile(ctx context.Context, req ctrl.Request) (ctrl.Result, error) {
+func (r *BucketReconciler) Reconcile(ctx context.Context, req ctrl.Request) (result ctrl.Result, retErr error) {
 	start := time.Now()
 	log := ctrl.LoggerFrom(ctx)
 
-	var bucket sourcev1.Bucket
-	if err := r.Get(ctx, req.NamespacedName, &bucket); err != nil {
+	// Fetch the Bucket
+	obj := &sourcev1.Bucket{}
+	if err := r.Get(ctx, req.NamespacedName, obj); err != nil {
 		return ctrl.Result{}, client.IgnoreNotFound(err)
 	}
 
 	// Record suspended status metric
-	defer r.recordSuspension(ctx, bucket)
+	r.RecordSuspend(ctx, obj, obj.Spec.Suspend)
 
-	// Add our finalizer if it does not exist
-	if !controllerutil.ContainsFinalizer(&bucket, sourcev1.SourceFinalizer) {
-		controllerutil.AddFinalizer(&bucket, sourcev1.SourceFinalizer)
-		if err := r.Update(ctx, &bucket); err != nil {
-			log.Error(err, "unable to register finalizer")
-			return ctrl.Result{}, err
-		}
-	}
-
-	// Examine if the object is under deletion
-	if !bucket.ObjectMeta.DeletionTimestamp.IsZero() {
-		return r.reconcileDelete(ctx, bucket)
-	}
-
-	// Return early if the object is suspended.
-	if bucket.Spec.Suspend {
+	// Return early if the object is suspended
+	if obj.Spec.Suspend {
 		log.Info("Reconciliation is suspended for this object")
 		return ctrl.Result{}, nil
 	}
 
-	// record reconciliation duration
-	if r.MetricsRecorder != nil {
-		objRef, err := reference.GetReference(r.Scheme, &bucket)
-		if err != nil {
-			return ctrl.Result{}, err
+	// Initialize the patch helper
+	patchHelper, err := patch.NewHelper(obj, r.Client)
+	if err != nil {
+		return ctrl.Result{}, err
+	}
+
+	// Always attempt to patch the object and status after each reconciliation
+	defer func() {
+		// Record the value of the reconciliation request, if any
+		if v, ok := meta.ReconcileAnnotationValue(obj.GetAnnotations()); ok {
+			obj.Status.SetLastHandledReconcileRequest(v)
 		}
-		defer r.MetricsRecorder.RecordDuration(*objRef, start)
-	}
 
-	// set initial status
-	if resetBucket, ok := r.resetStatus(bucket); ok {
-		bucket = resetBucket
-		if err := r.updateStatus(ctx, req, bucket.Status); err != nil {
-			log.Error(err, "unable to update status")
-			return ctrl.Result{Requeue: true}, err
+		// Summarize the Ready condition based on abnormalities that may have been observed
+		conditions.SetSummary(obj,
+			meta.ReadyCondition,
+			conditions.WithConditions(
+				sourcev1.ArtifactOutdatedCondition,
+				sourcev1.FetchFailedCondition,
+				sourcev1.ArtifactUnavailableCondition,
+			),
+			conditions.WithNegativePolarityConditions(
+				sourcev1.ArtifactOutdatedCondition,
+				sourcev1.FetchFailedCondition,
+				sourcev1.ArtifactUnavailableCondition,
+			),
+		)
+
+		// Patch the object, ignoring conflicts on the conditions owned by this controller
+		patchOpts := []patch.Option{
+			patch.WithOwnedConditions{
+				Conditions: []string{
+					sourcev1.ArtifactOutdatedCondition,
+					sourcev1.FetchFailedCondition,
+					sourcev1.ArtifactUnavailableCondition,
+					meta.ReadyCondition,
+					meta.ReconcilingCondition,
+					meta.StalledCondition,
+				},
+			},
 		}
-		r.recordReadiness(ctx, bucket)
+
+		// Determine if the resource is still being reconciled, or if it has stalled, and record this observation
+		if retErr == nil && (result.IsZero() || !result.Requeue) {
+			// We are no longer reconciling
+			conditions.Delete(obj, meta.ReconcilingCondition)
+
+			// We have now observed this generation
+			patchOpts = append(patchOpts, patch.WithStatusObservedGeneration{})
+
+			readyCondition := conditions.Get(obj, meta.ReadyCondition)
+			switch readyCondition.Status {
+			case metav1.ConditionFalse:
+				// As we are no longer reconciling and the end-state is not ready, the reconciliation has stalled
+				conditions.MarkStalled(obj, readyCondition.Reason, readyCondition.Message)
+			case metav1.ConditionTrue:
+				// As we are no longer reconciling and the end-state is ready, the reconciliation is no longer stalled
+				conditions.Delete(obj, meta.StalledCondition)
+			}
+		}
+
+		// Finally, patch the resource
+		if err := patchHelper.Patch(ctx, obj, patchOpts...); err != nil {
+			retErr = kerrors.NewAggregate([]error{retErr, err})
+		}
+
+		// Always record readiness and duration metrics
+		r.Metrics.RecordReadiness(ctx, obj)
+		r.Metrics.RecordDuration(ctx, obj, start)
+	}()
+
+	// Add finalizer first if not exist to avoid the race condition between init and delete
+	if !controllerutil.ContainsFinalizer(obj, sourcev1.SourceFinalizer) {
+		controllerutil.AddFinalizer(obj, sourcev1.SourceFinalizer)
+		return ctrl.Result{Requeue: true}, nil
 	}
 
-	// record the value of the reconciliation request, if any
-	// TODO(hidde): would be better to defer this in combination with
-	//   always patching the status sub-resource after a reconciliation.
-	if v, ok := meta.ReconcileAnnotationValue(bucket.GetAnnotations()); ok {
-		bucket.Status.SetLastHandledReconcileRequest(v)
+	// Examine if the object is under deletion
+	if !obj.ObjectMeta.DeletionTimestamp.IsZero() {
+		return r.reconcileDelete(ctx, obj)
 	}
 
-	// purge old artifacts from storage
-	if err := r.gc(bucket); err != nil {
-		log.Error(err, "unable to purge old artifacts")
-	}
-
-	// reconcile bucket by downloading its content
-	reconciledBucket, reconcileErr := r.reconcile(ctx, *bucket.DeepCopy())
-
-	// update status with the reconciliation result
-	if err := r.updateStatus(ctx, req, reconciledBucket.Status); err != nil {
-		log.Error(err, "unable to update status")
-		return ctrl.Result{Requeue: true}, err
-	}
-
-	// if reconciliation failed, record the failure and requeue immediately
-	if reconcileErr != nil {
-		r.event(ctx, reconciledBucket, events.EventSeverityError, reconcileErr.Error())
-		r.recordReadiness(ctx, reconciledBucket)
-		return ctrl.Result{Requeue: true}, reconcileErr
-	}
-
-	// emit revision change event
-	if bucket.Status.Artifact == nil || reconciledBucket.Status.Artifact.Revision != bucket.Status.Artifact.Revision {
-		r.event(ctx, reconciledBucket, events.EventSeverityInfo, sourcev1.BucketReadyMessage(reconciledBucket))
-	}
-	r.recordReadiness(ctx, reconciledBucket)
-
-	log.Info(fmt.Sprintf("Reconciliation finished in %s, next run in %s",
-		time.Now().Sub(start).String(),
-		bucket.GetRequeueAfter().String(),
-	))
-
-	return ctrl.Result{RequeueAfter: bucket.GetRequeueAfter()}, nil
+	// Reconcile actual object
+	return r.reconcile(ctx, obj)
 }
 
-func (r *BucketReconciler) reconcile(ctx context.Context, bucket sourcev1.Bucket) (sourcev1.Bucket, error) {
-	s3Client, err := r.auth(ctx, bucket)
-	if err != nil {
-		err = fmt.Errorf("auth error: %w", err)
-		return sourcev1.BucketNotReady(bucket, sourcev1.AuthenticationFailedReason, err.Error()), err
+// reconcile steps through the actual reconciliation tasks for the object, it returns early on the first step that
+// produces an error.
+func (r *BucketReconciler) reconcile(ctx context.Context, obj *sourcev1.Bucket) (ctrl.Result, error) {
+	// Mark the resource as under reconciliation
+	conditions.MarkReconciling(obj, meta.ProgressingReason, "")
+
+	// Reconcile the storage data
+	if result, err := r.reconcileStorage(ctx, obj); err != nil || result.IsZero() {
+		return result, err
 	}
 
-	// create tmp dir
-	tempDir, err := os.MkdirTemp("", bucket.Name)
+	// Create temp working dir
+	tmpDir, err := os.MkdirTemp("", fmt.Sprintf("%s-%s-%s-", obj.Kind, obj.Namespace, obj.Name))
 	if err != nil {
-		err = fmt.Errorf("tmp dir error: %w", err)
-		return sourcev1.BucketNotReady(bucket, sourcev1.StorageOperationFailedReason, err.Error()), err
+		r.Eventf(ctx, obj, events.EventSeverityError, sourcev1.StorageOperationFailedReason, "Failed to create temporary directory: %s", err)
+		return ctrl.Result{}, err
 	}
-	defer os.RemoveAll(tempDir)
+	defer os.RemoveAll(tmpDir)
 
-	ctxTimeout, cancel := context.WithTimeout(ctx, bucket.Spec.Timeout.Duration)
+	// Reconcile the source from upstream
+	var artifact sourcev1.Artifact
+	if result, err := r.reconcileSource(ctx, obj, &artifact, tmpDir); err != nil || result.IsZero() {
+		return ctrl.Result{RequeueAfter: obj.GetRequeueAfter()}, err
+	}
+
+	// Reconcile the artifact to storage
+	if result, err := r.reconcileArtifact(ctx, obj, artifact, tmpDir); err != nil || result.IsZero() {
+		return result, err
+	}
+
+	return ctrl.Result{RequeueAfter: obj.GetRequeueAfter()}, nil
+}
+
+// reconcileStorage ensures the current state of the storage matches the desired and previously observed state.
+//
+// All artifacts for the resource except for the current one are garbage collected from the storage.
+// If the artifact in the Status object of the resource disappeared from storage, it is removed from the object.
+// If the object does not have an artifact in its Status object, a v1beta1.ArtifactUnavailableCondition is set.
+// If the hostname of the URLs on the object do not match the current storage server hostname, they are updated.
+//
+// The caller should assume a failure if an error is returned, or the Result is zero.
+func (r *BucketReconciler) reconcileStorage(ctx context.Context, obj *sourcev1.Bucket) (ctrl.Result, error) {
+	// Garbage collect previous advertised artifact(s) from storage
+	_ = r.garbageCollect(ctx, obj)
+
+	// Determine if the advertised artifact is still in storage
+	if artifact := obj.GetArtifact(); artifact != nil && !r.Storage.ArtifactExist(*artifact) {
+		obj.Status.Artifact = nil
+		obj.Status.URL = ""
+	}
+
+	// Record that we do not have an artifact
+	if obj.GetArtifact() == nil {
+		conditions.MarkTrue(obj, sourcev1.ArtifactUnavailableCondition, "NoArtifact", "No artifact for resource in storage")
+		return ctrl.Result{Requeue: true}, nil
+	}
+	conditions.Delete(obj, sourcev1.ArtifactUnavailableCondition)
+
+	// Always update URLs to ensure hostname is up-to-date
+	// TODO(hidde): we may want to send out an event only if we notice the URL has changed
+	r.Storage.SetArtifactURL(obj.GetArtifact())
+	obj.Status.URL = r.Storage.SetHostname(obj.Status.URL)
+
+	return ctrl.Result{RequeueAfter: obj.GetRequeueAfter()}, nil
+}
+
+// reconcileSource ensures the upstream bucket can be reached and downloaded using the declared configuration, and
+// observes its state.
+//
+// The bucket contents are downloaded to the given dir using the defined configuration, while taking ignore rules into
+// account. In case of an error during the download process (including transient errors), it records
+// v1beta1.FetchFailedCondition=True and returns early.
+// On a successful download, it removes v1beta1.FetchFailedCondition, and compares the current revision of HEAD to
+// the artifact on the object, and records v1beta1.ArtifactOutdatedCondition if they differ.
+// If the download was successful, the given artifact pointer is set to a new artifact with the available metadata.
+//
+// The caller should assume a failure if an error is returned, or the Result is zero.
+func (r *BucketReconciler) reconcileSource(ctx context.Context, obj *sourcev1.Bucket, artifact *sourcev1.Artifact, dir string) (ctrl.Result, error) {
+	// Attempt to retrieve secret if one is configured
+	var secret *corev1.Secret
+	if obj.Spec.SecretRef != nil {
+		secret = &corev1.Secret{}
+		name := types.NamespacedName{
+			Namespace: obj.GetNamespace(),
+			Name:      obj.Spec.SecretRef.Name,
+		}
+		if err := r.Client.Get(ctx, name, secret); err != nil {
+			conditions.MarkTrue(obj, sourcev1.FetchFailedCondition, sourcev1.AuthenticationFailedReason,
+				"Failed to get secret '%s': %s", name.String(), err.Error())
+			r.Eventf(ctx, obj, events.EventSeverityError, sourcev1.AuthenticationFailedReason,
+				"Failed to get secret '%s': %s", name.String(), err.Error())
+			// Return error as the world as observed may change
+			return ctrl.Result{}, err
+		}
+	}
+
+	// Build the client with the configuration from the object and secret
+	s3Client, err := r.buildClient(obj, secret)
+	if err != nil {
+		conditions.MarkTrue(obj, sourcev1.FetchFailedCondition, sourcev1.BucketOperationFailedReason,
+			"Failed to construct S3 client: %s", err.Error())
+		r.Eventf(ctx, obj, events.EventSeverityError, sourcev1.BucketOperationFailedReason,
+			"Failed to construct S3 client: %s", err.Error())
+		// Return error as the contents of the secret may change
+		return ctrl.Result{}, err
+	}
+
+	// Confirm bucket exists
+	ctxTimeout, cancel := context.WithTimeout(ctx, obj.Spec.Timeout.Duration)
 	defer cancel()
-
-	exists, err := s3Client.BucketExists(ctxTimeout, bucket.Spec.BucketName)
+	exists, err := s3Client.BucketExists(ctxTimeout, obj.Spec.BucketName)
 	if err != nil {
-		return sourcev1.BucketNotReady(bucket, sourcev1.BucketOperationFailedReason, err.Error()), err
+		conditions.MarkTrue(obj, sourcev1.FetchFailedCondition, sourcev1.BucketOperationFailedReason, "Failed to verify existence of bucket '%s': %s", obj.Spec.BucketName, err.Error())
+		return ctrl.Result{}, err
 	}
 	if !exists {
-		err = fmt.Errorf("bucket '%s' not found", bucket.Spec.BucketName)
-		return sourcev1.BucketNotReady(bucket, sourcev1.BucketOperationFailedReason, err.Error()), err
+		conditions.MarkTrue(obj, sourcev1.FetchFailedCondition, sourcev1.BucketOperationFailedReason,
+			"Bucket '%s' does not exist", obj.Spec.BucketName)
+		r.Eventf(ctx, obj, events.EventSeverityError, sourcev1.BucketOperationFailedReason,
+			"Bucket '%s' does not exist", obj.Spec.BucketName)
+		return ctrl.Result{}, fmt.Errorf("bucket '%s' does not exist", obj.Spec.BucketName)
 	}
 
 	// Look for file with ignore rules first
-	// NB: S3 has flat filepath keys making it impossible to look
-	// for files in "subdirectories" without building up a tree first.
-	path := filepath.Join(tempDir, sourceignore.IgnoreFile)
-	if err := s3Client.FGetObject(ctxTimeout, bucket.Spec.BucketName, sourceignore.IgnoreFile, path, minio.GetObjectOptions{}); err != nil {
+	path := filepath.Join(dir, sourceignore.IgnoreFile)
+	if err := s3Client.FGetObject(ctxTimeout, obj.Spec.BucketName, sourceignore.IgnoreFile, path, minio.GetObjectOptions{}); err != nil {
 		if resp, ok := err.(minio.ErrorResponse); ok && resp.Code != "NoSuchKey" {
-			return sourcev1.BucketNotReady(bucket, sourcev1.BucketOperationFailedReason, err.Error()), err
+			conditions.MarkTrue(obj, sourcev1.FetchFailedCondition, sourcev1.BucketOperationFailedReason,
+				"Failed to get '%s' file: %s", sourceignore.IgnoreFile, err.Error())
+			r.Eventf(ctx, obj, events.EventSeverityError, sourcev1.BucketOperationFailedReason,
+				"Failed to get '%s' file: %s", sourceignore.IgnoreFile, err.Error())
+			return ctrl.Result{}, err
 		}
 	}
 	ps, err := sourceignore.ReadIgnoreFile(path, nil)
 	if err != nil {
-		return sourcev1.BucketNotReady(bucket, sourcev1.BucketOperationFailedReason, err.Error()), err
+		conditions.MarkTrue(obj, sourcev1.FetchFailedCondition, sourcev1.BucketOperationFailedReason,
+			"Failed to read '%s' file: %s", sourceignore.IgnoreFile, err.Error())
+		r.Eventf(ctx, obj, events.EventSeverityError, sourcev1.BucketOperationFailedReason,
+			"Failed to read '%s' file: %s", sourceignore.IgnoreFile, err.Error())
+		return ctrl.Result{}, err
 	}
 	// In-spec patterns take precedence
-	if bucket.Spec.Ignore != nil {
-		ps = append(ps, sourceignore.ReadPatterns(strings.NewReader(*bucket.Spec.Ignore), nil)...)
+	if obj.Spec.Ignore != nil {
+		ps = append(ps, sourceignore.ReadPatterns(strings.NewReader(*obj.Spec.Ignore), nil)...)
 	}
 	matcher := sourceignore.NewMatcher(ps)
 
-	// download bucket content
-	for object := range s3Client.ListObjects(ctxTimeout, bucket.Spec.BucketName, minio.ListObjectsOptions{
+	// Build up an index of object keys and their etags
+	// As the keys define the paths and the etags represent a change in file contents, this should be sufficient to
+	// detect both structural and file changes
+	index := map[string]string{}
+	for object := range s3Client.ListObjects(ctxTimeout, obj.Spec.BucketName, minio.ListObjectsOptions{
 		Recursive: true,
 		UseV1:     s3utils.IsGoogleEndpoint(*s3Client.EndpointURL()),
 	}) {
-		if object.Err != nil {
-			err = fmt.Errorf("listing objects from bucket '%s' failed: %w", bucket.Spec.BucketName, object.Err)
-			return sourcev1.BucketNotReady(bucket, sourcev1.BucketOperationFailedReason, err.Error()), err
+		if err = object.Err; err != nil {
+			conditions.MarkTrue(obj, sourcev1.FetchFailedCondition, sourcev1.BucketOperationFailedReason,
+				"Failed to list objects from bucket '%s': %s", obj.Spec.BucketName, err.Error())
+			r.Eventf(ctx, obj, events.EventSeverityError, sourcev1.BucketOperationFailedReason,
+				"Failed to list objects from bucket '%s': %s", obj.Spec.BucketName, err.Error())
+			return ctrl.Result{}, err
 		}
 
+		// Ignore directories and the .sourceignore file
 		if strings.HasSuffix(object.Key, "/") || object.Key == sourceignore.IgnoreFile {
 			continue
 		}
-
+		// Ignore matches
 		if matcher.Match(strings.Split(object.Key, "/"), false) {
 			continue
 		}
-
-		localPath := filepath.Join(tempDir, object.Key)
-		err := s3Client.FGetObject(ctxTimeout, bucket.Spec.BucketName, object.Key, localPath, minio.GetObjectOptions{})
-		if err != nil {
-			err = fmt.Errorf("downloading object from bucket '%s' failed: %w", bucket.Spec.BucketName, err)
-			return sourcev1.BucketNotReady(bucket, sourcev1.BucketOperationFailedReason, err.Error()), err
-		}
+		index[object.Key] = object.ETag
 	}
 
-	revision, err := r.checksum(tempDir)
+	// Calculate revision checksum from the collected index values
+	revision, err := r.revision(index)
 	if err != nil {
-		return sourcev1.BucketNotReady(bucket, sourcev1.StorageOperationFailedReason, err.Error()), err
+		err = fmt.Errorf("failed to calculate revision for index: %w", err)
+		return ctrl.Result{}, err
 	}
 
-	// return early on unchanged revision
-	artifact := r.Storage.NewArtifactFor(bucket.Kind, bucket.GetObjectMeta(), revision, fmt.Sprintf("%s.tar.gz", revision))
-	if apimeta.IsStatusConditionTrue(bucket.Status.Conditions, meta.ReadyCondition) && bucket.GetArtifact().HasRevision(artifact.Revision) {
-		if artifact.URL != bucket.GetArtifact().URL {
-			r.Storage.SetArtifactURL(bucket.GetArtifact())
-			bucket.Status.URL = r.Storage.SetHostname(bucket.Status.URL)
+	if !obj.GetArtifact().HasRevision(revision) {
+		// Mark observations about the revision on the object
+		conditions.MarkTrue(obj, sourcev1.ArtifactOutdatedCondition, "NewRevision",
+			"New upstream revision '%s'", revision)
+
+		// Download the files in parallel, but with a limited number of workers
+		group, groupCtx := errgroup.WithContext(ctx)
+		group.Go(func() error {
+			const workers = 4
+			sem := semaphore.NewWeighted(workers)
+			for key := range index {
+				k := key
+				if err := sem.Acquire(groupCtx, 1); err != nil {
+					return err
+				}
+				group.Go(func() error {
+					defer sem.Release(1)
+					localPath := filepath.Join(dir, k)
+					if err := s3Client.FGetObject(ctxTimeout, obj.Spec.BucketName, k, localPath, minio.GetObjectOptions{}); err != nil {
+						return fmt.Errorf("failed to get '%s' file: %w", k, err)
+					}
+					return nil
+				})
+			}
+			return nil
+		})
+		if err = group.Wait(); err != nil {
+			conditions.MarkTrue(obj, sourcev1.FetchFailedCondition, sourcev1.BucketOperationFailedReason,
+				"Download from bucket '%s' failed: %s", obj.Spec.BucketName, err)
+			r.Eventf(ctx, obj, events.EventSeverityError, sourcev1.BucketOperationFailedReason,
+				"Download from bucket '%s' failed: %s", obj.Spec.BucketName, err)
+			return ctrl.Result{}, err
 		}
-		return bucket, nil
+		r.Eventf(ctx, obj, events.EventSeverityInfo, sourcev1.BucketOperationSucceedReason,
+			"Downloaded %d files from bucket '%s' revision '%s'", len(index), obj.Spec.BucketName, revision)
+	}
+	conditions.Delete(obj, sourcev1.FetchFailedCondition)
+
+	// Create potential new artifact
+	*artifact = r.Storage.NewArtifactFor(obj.Kind, obj, revision, fmt.Sprintf("%s.tar.gz", revision))
+	return ctrl.Result{RequeueAfter: obj.GetRequeueAfter()}, nil
+}
+
+// reconcileArtifact archives a new artifact to the storage, if the current observation on the object does not match the
+// given data.
+//
+// The inspection of the given data to the object is differed, ensuring any stale observations as
+// v1beta1.ArtifactUnavailableCondition and v1beta1.ArtifactOutdatedCondition are always deleted.
+// If the given artifact does not differ from the object's current, it returns early.
+// On a successful archive, the artifact in the status of the given object is set, and the symlink in the storage is
+// updated to its path.
+//
+// The caller should assume a failure if an error is returned, or the Result is zero.
+func (r *BucketReconciler) reconcileArtifact(ctx context.Context, obj *sourcev1.Bucket, artifact sourcev1.Artifact, dir string) (ctrl.Result, error) {
+	// Always restore the Ready condition in case it got removed due to a transient error
+	defer func() {
+		if obj.GetArtifact() != nil {
+			conditions.Delete(obj, sourcev1.ArtifactUnavailableCondition)
+		}
+		if obj.GetArtifact().HasRevision(artifact.Revision) {
+			conditions.Delete(obj, sourcev1.ArtifactOutdatedCondition)
+			conditions.MarkTrue(obj, meta.ReadyCondition, meta.SucceededReason,
+				"Stored artifact for revision '%s'", artifact.Revision)
+		}
+	}()
+
+	// The artifact is up-to-date
+	if obj.GetArtifact().HasRevision(artifact.Revision) {
+		ctrl.LoggerFrom(ctx).Info(fmt.Sprintf("Already up to date, current revision '%s'", artifact.Revision))
+		return ctrl.Result{RequeueAfter: obj.GetRequeueAfter()}, nil
 	}
 
-	// create artifact dir
-	err = r.Storage.MkdirAll(artifact)
-	if err != nil {
-		err = fmt.Errorf("mkdir dir error: %w", err)
-		return sourcev1.BucketNotReady(bucket, sourcev1.StorageOperationFailedReason, err.Error()), err
+	// Ensure target path exists and is a directory
+	if f, err := os.Stat(dir); err != nil {
+		err = fmt.Errorf("failed to stat target path: %w", err)
+		return ctrl.Result{}, err
+	} else if !f.IsDir() {
+		err = fmt.Errorf("invalid target path: '%s' is not a directory", dir)
+		return ctrl.Result{}, err
 	}
 
-	// acquire lock
+	// Ensure artifact directory exists and acquire lock
+	if err := r.Storage.MkdirAll(artifact); err != nil {
+		err = fmt.Errorf("failed to create artifact directory: %w", err)
+		return ctrl.Result{}, err
+	}
 	unlock, err := r.Storage.Lock(artifact)
 	if err != nil {
-		err = fmt.Errorf("unable to acquire lock: %w", err)
-		return sourcev1.BucketNotReady(bucket, sourcev1.StorageOperationFailedReason, err.Error()), err
+		err = fmt.Errorf("failed to acquire lock for artifact: %w", err)
+		return ctrl.Result{}, err
 	}
 	defer unlock()
 
-	// archive artifact and check integrity
-	if err := r.Storage.Archive(&artifact, tempDir, nil); err != nil {
-		err = fmt.Errorf("storage archive error: %w", err)
-		return sourcev1.BucketNotReady(bucket, sourcev1.StorageOperationFailedReason, err.Error()), err
+	// Archive directory to storage
+	if err := r.Storage.Archive(&artifact, dir, nil); err != nil {
+		r.Eventf(ctx, obj, events.EventSeverityError, sourcev1.StorageOperationFailedReason,
+			"Unable to archive artifact to storage: %s", err)
+		return ctrl.Result{}, err
 	}
+	r.Events.EventWithMetaf(ctx, obj, map[string]string{
+		"revision": artifact.Revision,
+		"checksum": artifact.Checksum,
+	}, events.EventSeverityInfo, "NewArtifact", "Stored artifact for revision '%s'", artifact.Revision)
 
-	// update latest symlink
+	// Record it on the object
+	obj.Status.Artifact = artifact.DeepCopy()
+
+	// Update symlink on a "best effort" basis
 	url, err := r.Storage.Symlink(artifact, "latest.tar.gz")
 	if err != nil {
-		err = fmt.Errorf("storage symlink error: %w", err)
-		return sourcev1.BucketNotReady(bucket, sourcev1.StorageOperationFailedReason, err.Error()), err
+		r.Events.Eventf(ctx, obj, events.EventSeverityError, sourcev1.StorageOperationFailedReason,
+			"Failed to update status URL symlink: %s", err)
 	}
-
-	message := fmt.Sprintf("Fetched revision: %s", artifact.Revision)
-	return sourcev1.BucketReady(bucket, artifact, url, sourcev1.BucketOperationSucceedReason, message), nil
+	if url != "" {
+		obj.Status.URL = url
+	}
+	return ctrl.Result{RequeueAfter: obj.GetRequeueAfter()}, nil
 }
 
-func (r *BucketReconciler) reconcileDelete(ctx context.Context, bucket sourcev1.Bucket) (ctrl.Result, error) {
-	if err := r.gc(bucket); err != nil {
-		r.event(ctx, bucket, events.EventSeverityError,
-			fmt.Sprintf("garbage collection for deleted resource failed: %s", err.Error()))
+// reconcileDelete handles the deletion of an object. It first garbage collects all artifacts for the object from the
+// artifact storage, if successful, the finalizer is removed from the object.
+func (r *BucketReconciler) reconcileDelete(ctx context.Context, obj *sourcev1.Bucket) (ctrl.Result, error) {
+	// Garbage collect the resource's artifacts
+	if err := r.garbageCollect(ctx, obj); err != nil {
 		// Return the error so we retry the failed garbage collection
 		return ctrl.Result{}, err
 	}
 
-	// Record deleted status
-	r.recordReadiness(ctx, bucket)
-
-	// Remove our finalizer from the list and update it
-	controllerutil.RemoveFinalizer(&bucket, sourcev1.SourceFinalizer)
-	if err := r.Update(ctx, &bucket); err != nil {
-		return ctrl.Result{}, err
-	}
+	// Remove our finalizer from the list
+	controllerutil.RemoveFinalizer(obj, sourcev1.SourceFinalizer)
 
 	// Stop reconciliation as the object is being deleted
 	return ctrl.Result{}, nil
 }
 
-func (r *BucketReconciler) auth(ctx context.Context, bucket sourcev1.Bucket) (*minio.Client, error) {
-	opt := minio.Options{
-		Region: bucket.Spec.Region,
-		Secure: !bucket.Spec.Insecure,
-	}
-
-	if bucket.Spec.SecretRef != nil {
-		secretName := types.NamespacedName{
-			Namespace: bucket.GetNamespace(),
-			Name:      bucket.Spec.SecretRef.Name,
-		}
-
-		var secret corev1.Secret
-		if err := r.Get(ctx, secretName, &secret); err != nil {
-			return nil, fmt.Errorf("credentials secret error: %w", err)
-		}
-
-		accesskey := ""
-		secretkey := ""
-		if k, ok := secret.Data["accesskey"]; ok {
-			accesskey = string(k)
-		}
-		if k, ok := secret.Data["secretkey"]; ok {
-			secretkey = string(k)
-		}
-		if accesskey == "" || secretkey == "" {
-			return nil, fmt.Errorf("invalid '%s' secret data: required fields 'accesskey' and 'secretkey'", secret.Name)
-		}
-		opt.Creds = credentials.NewStaticV4(accesskey, secretkey, "")
-	} else if bucket.Spec.Provider == sourcev1.AmazonBucketProvider {
-		opt.Creds = credentials.NewIAM("")
-	}
-
-	if opt.Creds == nil {
-		return nil, fmt.Errorf("no bucket credentials found")
-	}
-
-	return minio.New(bucket.Spec.Endpoint, &opt)
-}
-
-// checksum calculates the SHA1 checksum of the given root directory.
-// It traverses the given root directory and calculates the checksum for any found file, and returns the SHA1 sum of the
-// list with relative file paths and their checksums.
-func (r *BucketReconciler) checksum(root string) (string, error) {
-	sum := sha1.New()
-	if err := filepath.Walk(root, func(path string, info os.FileInfo, err error) error {
-		if err != nil {
+// garbageCollect performs a garbage collection for the given v1beta1.Bucket. It removes all but the current
+// artifact except for when the deletion timestamp is set, which will result in the removal of all artifacts for the
+// resource.
+func (r *BucketReconciler) garbageCollect(ctx context.Context, obj *sourcev1.Bucket) error {
+	if !obj.DeletionTimestamp.IsZero() {
+		if err := r.Storage.RemoveAll(r.Storage.NewArtifactFor(obj.Kind, obj.GetObjectMeta(), "", "*")); err != nil {
+			r.Eventf(ctx, obj, events.EventSeverityError, "GarbageCollectionFailed",
+				"Garbage collection for deleted resource failed: %s", err)
 			return err
 		}
-		if !info.Mode().IsRegular() {
-			return nil
-		}
-		data, err := os.ReadFile(path)
-		if err != nil {
-			return err
-		}
-		relPath, err := filepath.Rel(root, path)
-		if err != nil {
-			return err
-		}
-		sum.Write([]byte(fmt.Sprintf("%x  %s\n", sha1.Sum(data), relPath)))
+		obj.Status.Artifact = nil
+		// TODO(hidde): we should only push this event if we actually garbage collected something
+		r.Eventf(ctx, obj, events.EventSeverityInfo, "GarbageCollectionSucceeded",
+			"Garbage collected artifacts for deleted resource")
 		return nil
-	}); err != nil {
-		return "", err
 	}
-	return fmt.Sprintf("%x", sum.Sum(nil)), nil
-}
-
-// resetStatus returns a modified v1beta1.Bucket and a boolean indicating
-// if the status field has been reset.
-func (r *BucketReconciler) resetStatus(bucket sourcev1.Bucket) (sourcev1.Bucket, bool) {
-	// We do not have an artifact, or it does no longer exist
-	if bucket.GetArtifact() == nil || !r.Storage.ArtifactExist(*bucket.GetArtifact()) {
-		bucket = sourcev1.BucketProgressing(bucket)
-		bucket.Status.Artifact = nil
-		return bucket, true
-	}
-	if bucket.Generation != bucket.Status.ObservedGeneration {
-		return sourcev1.BucketProgressing(bucket), true
-	}
-	return bucket, false
-}
-
-// gc performs a garbage collection for the given v1beta1.Bucket.
-// It removes all but the current artifact except for when the
-// deletion timestamp is set, which will result in the removal of
-// all artifacts for the resource.
-func (r *BucketReconciler) gc(bucket sourcev1.Bucket) error {
-	if !bucket.DeletionTimestamp.IsZero() {
-		return r.Storage.RemoveAll(r.Storage.NewArtifactFor(bucket.Kind, bucket.GetObjectMeta(), "", "*"))
-	}
-	if bucket.GetArtifact() != nil {
-		return r.Storage.RemoveAllButCurrent(*bucket.GetArtifact())
+	if obj.GetArtifact() != nil {
+		if err := r.Storage.RemoveAllButCurrent(*obj.GetArtifact()); err != nil {
+			r.Eventf(ctx, obj, events.EventSeverityError, "GarbageCollectionFailed", "Garbage collection of old artifacts failed: %s", err)
+			return err
+		}
+		// TODO(hidde): we should only push this event if we actually garbage collected something
+		r.Eventf(ctx, obj, events.EventSeverityInfo, "GarbageCollectionSucceeded", "Garbage collected old artifacts")
 	}
 	return nil
 }
 
-// event emits a Kubernetes event and forwards the event to notification controller if configured
-func (r *BucketReconciler) event(ctx context.Context, bucket sourcev1.Bucket, severity, msg string) {
-	log := logr.FromContext(ctx)
-	if r.EventRecorder != nil {
-		r.EventRecorder.Eventf(&bucket, "Normal", severity, msg)
+// buildClient constructs a minio.Client with the data from the given object and secret.
+// It returns an error if the given Secret does not have the required fields, or if there is no credential handler
+// configured.
+func (r *BucketReconciler) buildClient(obj *sourcev1.Bucket, secret *corev1.Secret) (*minio.Client, error) {
+	opts := minio.Options{
+		Region: obj.Spec.Region,
+		Secure: !obj.Spec.Insecure,
 	}
-	if r.ExternalEventRecorder != nil {
-		objRef, err := reference.GetReference(r.Scheme, &bucket)
-		if err != nil {
-			log.Error(err, "unable to send event")
-			return
+	if secret != nil {
+		var accessKey, secretKey string
+		if k, ok := secret.Data["accesskey"]; ok {
+			accessKey = string(k)
 		}
+		if k, ok := secret.Data["secretkey"]; ok {
+			secretKey = string(k)
+		}
+		if accessKey == "" || secretKey == "" {
+			return nil, fmt.Errorf("invalid '%s' secret data: required fields 'accesskey' and 'secretkey'", secret.Name)
+		}
+		opts.Creds = credentials.NewStaticV4(accessKey, secretKey, "")
+	} else if obj.Spec.Provider == sourcev1.AmazonBucketProvider {
+		opts.Creds = credentials.NewIAM("")
+	}
 
-		if err := r.ExternalEventRecorder.Eventf(*objRef, nil, severity, severity, msg); err != nil {
-			log.Error(err, "unable to send event")
-			return
+	return minio.New(obj.Spec.Endpoint, &opts)
+}
+
+// revision calculates the SHA256 checksum of the given string map.
+// The keys are sorted to ensure a stable order, and the SHA256 sum is then calculated for the string representations of
+// the key/value pairs, each pair written on a newline. The sum result is returned as a string.
+func (r *BucketReconciler) revision(list map[string]string) (string, error) {
+	keyIndex := make([]string, 0, len(list))
+	for k := range list {
+		keyIndex = append(keyIndex, k)
+	}
+	sort.Strings(keyIndex)
+	sum := sha256.New()
+	for _, k := range keyIndex {
+		if _, err := sum.Write([]byte(fmt.Sprintf("%s  %s\n", k, list[k]))); err != nil {
+			return "", err
 		}
 	}
-}
-
-func (r *BucketReconciler) recordReadiness(ctx context.Context, bucket sourcev1.Bucket) {
-	log := logr.FromContext(ctx)
-	if r.MetricsRecorder == nil {
-		return
-	}
-	objRef, err := reference.GetReference(r.Scheme, &bucket)
-	if err != nil {
-		log.Error(err, "unable to record readiness metric")
-		return
-	}
-	if rc := apimeta.FindStatusCondition(bucket.Status.Conditions, meta.ReadyCondition); rc != nil {
-		r.MetricsRecorder.RecordCondition(*objRef, *rc, !bucket.DeletionTimestamp.IsZero())
-	} else {
-		r.MetricsRecorder.RecordCondition(*objRef, metav1.Condition{
-			Type:   meta.ReadyCondition,
-			Status: metav1.ConditionUnknown,
-		}, !bucket.DeletionTimestamp.IsZero())
-	}
-}
-
-func (r *BucketReconciler) recordSuspension(ctx context.Context, bucket sourcev1.Bucket) {
-	if r.MetricsRecorder == nil {
-		return
-	}
-	log := logr.FromContext(ctx)
-
-	objRef, err := reference.GetReference(r.Scheme, &bucket)
-	if err != nil {
-		log.Error(err, "unable to record suspended metric")
-		return
-	}
-
-	if !bucket.DeletionTimestamp.IsZero() {
-		r.MetricsRecorder.RecordSuspend(*objRef, false)
-	} else {
-		r.MetricsRecorder.RecordSuspend(*objRef, bucket.Spec.Suspend)
-	}
-}
-
-func (r *BucketReconciler) updateStatus(ctx context.Context, req ctrl.Request, newStatus sourcev1.BucketStatus) error {
-	var bucket sourcev1.Bucket
-	if err := r.Get(ctx, req.NamespacedName, &bucket); err != nil {
-		return err
-	}
-
-	patch := client.MergeFrom(bucket.DeepCopy())
-	bucket.Status = newStatus
-
-	return r.Status().Patch(ctx, &bucket, patch)
+	return fmt.Sprintf("%x", sum.Sum(nil)), nil
 }
diff --git a/controllers/bucket_controller_test.go b/controllers/bucket_controller_test.go
index 01ff20d8..3ae96f77 100644
--- a/controllers/bucket_controller_test.go
+++ b/controllers/bucket_controller_test.go
@@ -17,59 +17,632 @@ limitations under the License.
 package controllers
 
 import (
+	"context"
+	"crypto/md5"
+	"fmt"
+	"net/http"
+	"net/http/httptest"
+	"net/url"
 	"os"
+	"path"
 	"path/filepath"
+	"strings"
 	"testing"
+	"time"
+
+	"github.com/go-logr/logr"
+	. "github.com/onsi/gomega"
+	corev1 "k8s.io/api/core/v1"
+	apierrors "k8s.io/apimachinery/pkg/api/errors"
+	metav1 "k8s.io/apimachinery/pkg/apis/meta/v1"
+	ctrl "sigs.k8s.io/controller-runtime"
+	"sigs.k8s.io/controller-runtime/pkg/client"
+	fakeclient "sigs.k8s.io/controller-runtime/pkg/client/fake"
+	"sigs.k8s.io/controller-runtime/pkg/log"
+
+	"github.com/fluxcd/pkg/apis/meta"
+	"github.com/fluxcd/pkg/runtime/conditions"
+
+	sourcev1 "github.com/fluxcd/source-controller/api/v1beta1"
 )
 
-func TestBucketReconciler_checksum(t *testing.T) {
+func TestBucketReconciler_Reconcile(t *testing.T) {
+	g := NewWithT(t)
+
+	s3Server := newS3Server("test-bucket")
+	s3Server.Objects = []*s3MockObject{
+		{
+			Key:          "test.yaml",
+			Content:      []byte("test"),
+			ContentType:  "text/plain",
+			LastModified: time.Now(),
+		},
+	}
+	s3Server.Start()
+	defer s3Server.Stop()
+
+	g.Expect(s3Server.HTTPAddress()).ToNot(BeEmpty())
+	u, err := url.Parse(s3Server.HTTPAddress())
+	g.Expect(err).NotTo(HaveOccurred())
+
+	secret := &corev1.Secret{
+		ObjectMeta: metav1.ObjectMeta{
+			GenerateName: "bucket-reconcile-",
+			Namespace:    "default",
+		},
+		Data: map[string][]byte{
+			"accesskey": []byte("key"),
+			"secretkey": []byte("secret"),
+		},
+	}
+	g.Expect(testEnv.Create(ctx, secret)).To(Succeed())
+	defer testEnv.Delete(ctx, secret)
+
+	obj := &sourcev1.Bucket{
+		ObjectMeta: metav1.ObjectMeta{
+			GenerateName: "bucket-reconcile-",
+			Namespace:    "default",
+		},
+		Spec: sourcev1.BucketSpec{
+			Provider:   "generic",
+			BucketName: s3Server.BucketName,
+			Endpoint:   u.Host,
+			Insecure:   true,
+			Interval:   metav1.Duration{Duration: interval},
+			Timeout:    &metav1.Duration{Duration: timeout},
+			SecretRef: &meta.LocalObjectReference{
+				Name: secret.Name,
+			},
+		},
+	}
+	g.Expect(testEnv.Create(ctx, obj)).To(Succeed())
+
+	key := client.ObjectKey{Name: obj.Name, Namespace: obj.Namespace}
+
+	// Wait for finalizer to be set
+	g.Eventually(func() bool {
+		if err := testEnv.Get(ctx, key, obj); err != nil {
+			return false
+		}
+		return len(obj.Finalizers) > 0
+	}, timeout).Should(BeTrue())
+
+	// Wait for Bucket to be Ready
+	g.Eventually(func() bool {
+		if err := testEnv.Get(ctx, key, obj); err != nil {
+			return false
+		}
+		if !conditions.IsReady(obj) || obj.Status.Artifact == nil {
+			return false
+		}
+		readyCondition := conditions.Get(obj, meta.ReadyCondition)
+		return obj.Generation == readyCondition.ObservedGeneration &&
+			obj.Generation == obj.Status.ObservedGeneration
+	}, timeout).Should(BeTrue())
+
+	g.Expect(testEnv.Delete(ctx, obj)).To(Succeed())
+
+	// Wait for Bucket to be deleted
+	g.Eventually(func() bool {
+		if err := testEnv.Get(ctx, key, obj); err != nil {
+			return apierrors.IsNotFound(err)
+		}
+		return false
+	}, timeout).Should(BeTrue())
+}
+
+func TestBucketReconciler_reconcileStorage(t *testing.T) {
 	tests := []struct {
-		name       string
-		beforeFunc func(root string)
-		want       string
-		wantErr    bool
+		name             string
+		beforeFunc       func(obj *sourcev1.Bucket, storage *Storage) error
+		want             ctrl.Result
+		wantErr          bool
+		assertArtifact   *sourcev1.Artifact
+		assertConditions []metav1.Condition
+		assertPaths      []string
 	}{
 		{
-			name: "empty root",
-			want: "da39a3ee5e6b4b0d3255bfef95601890afd80709",
+			name: "garbage collects",
+			beforeFunc: func(obj *sourcev1.Bucket, storage *Storage) error {
+				revisions := []string{"a", "b", "c"}
+				for n := range revisions {
+					v := revisions[n]
+					obj.Status.Artifact = &sourcev1.Artifact{
+						Path:     fmt.Sprintf("/reconcile-storage/%s.txt", v),
+						Revision: v,
+					}
+					if err := testStorage.MkdirAll(*obj.Status.Artifact); err != nil {
+						return err
+					}
+					if err := testStorage.AtomicWriteFile(obj.Status.Artifact, strings.NewReader(v), 0644); err != nil {
+						return err
+					}
+				}
+				testStorage.SetArtifactURL(obj.Status.Artifact)
+				return nil
+			},
+			assertArtifact: &sourcev1.Artifact{
+				Path:     "/reconcile-storage/c.txt",
+				Revision: "c",
+				Checksum: "2e7d2c03a9507ae265ecf5b5356885a53393a2029d241394997265a1a25aefc6",
+				URL:      testStorage.Hostname + "/reconcile-storage/c.txt",
+			},
+			assertPaths: []string{
+				"/reconcile-storage/c.txt",
+				"!/reconcile-storage/b.txt",
+				"!/reconcile-storage/a.txt",
+			},
 		},
 		{
-			name: "with file",
-			beforeFunc: func(root string) {
-				mockFile(root, "a/b/c.txt", "a dummy string")
+			name: "notices missing artifact in storage",
+			beforeFunc: func(obj *sourcev1.Bucket, storage *Storage) error {
+				obj.Status.Artifact = &sourcev1.Artifact{
+					Path:     fmt.Sprintf("/reconcile-storage/invalid.txt"),
+					Revision: "d",
+				}
+				testStorage.SetArtifactURL(obj.Status.Artifact)
+				return nil
+			},
+			want: ctrl.Result{Requeue: true},
+			assertPaths: []string{
+				"!/reconcile-storage/invalid.txt",
+			},
+			assertConditions: []metav1.Condition{
+				*conditions.TrueCondition(sourcev1.ArtifactUnavailableCondition, "NoArtifact", "No artifact for resource in storage"),
 			},
-			want: "309a5e6e96b4a7eea0d1cfaabf1be8ec1c063fa0",
 		},
 		{
-			name: "with file in different path",
-			beforeFunc: func(root string) {
-				mockFile(root, "a/b.txt", "a dummy string")
+			name: "updates hostname on diff from current",
+			beforeFunc: func(obj *sourcev1.Bucket, storage *Storage) error {
+				obj.Status.Artifact = &sourcev1.Artifact{
+					Path:     fmt.Sprintf("/reconcile-storage/hostname.txt"),
+					Revision: "f",
+					Checksum: "3b9c358f36f0a31b6ad3e14f309c7cf198ac9246e8316f9ce543d5b19ac02b80",
+					URL:      "http://outdated.com/reconcile-storage/hostname.txt",
+				}
+				if err := testStorage.MkdirAll(*obj.Status.Artifact); err != nil {
+					return err
+				}
+				if err := testStorage.AtomicWriteFile(obj.Status.Artifact, strings.NewReader("file"), 0644); err != nil {
+					return err
+				}
+				return nil
+			},
+			assertPaths: []string{
+				"/reconcile-storage/hostname.txt",
+			},
+			assertArtifact: &sourcev1.Artifact{
+				Path:     "/reconcile-storage/hostname.txt",
+				Revision: "f",
+				Checksum: "3b9c358f36f0a31b6ad3e14f309c7cf198ac9246e8316f9ce543d5b19ac02b80",
+				URL:      testStorage.Hostname + "/reconcile-storage/hostname.txt",
 			},
-			want: "e28c62b5cc488849950c4355dddc5523712616d4",
 		},
 	}
 	for _, tt := range tests {
 		t.Run(tt.name, func(t *testing.T) {
-			root, err := os.MkdirTemp("", "bucket-checksum-")
-			if err != nil {
-				t.Fatal(err)
+			g := NewWithT(t)
+
+			r := &BucketReconciler{
+				Storage: testStorage,
+			}
+
+			obj := &sourcev1.Bucket{
+				ObjectMeta: metav1.ObjectMeta{
+					GenerateName: "test-",
+				},
 			}
-			defer os.RemoveAll(root)
 			if tt.beforeFunc != nil {
-				tt.beforeFunc(root)
+				g.Expect(tt.beforeFunc(obj, testStorage)).To(Succeed())
 			}
-			got, err := (&BucketReconciler{}).checksum(root)
-			if (err != nil) != tt.wantErr {
-				t.Errorf("checksum() error = %v, wantErr %v", err, tt.wantErr)
-				return
+
+			got, err := r.reconcileStorage(context.TODO(), obj)
+			g.Expect(err != nil).To(Equal(tt.wantErr))
+			g.Expect(got).To(Equal(tt.want))
+
+			g.Expect(obj.Status.Artifact).To(MatchArtifact(tt.assertArtifact))
+			if tt.assertArtifact != nil && tt.assertArtifact.URL != "" {
+				g.Expect(obj.Status.Artifact.URL).To(Equal(tt.assertArtifact.URL))
 			}
-			if got != tt.want {
-				t.Errorf("checksum() got = %v, want %v", got, tt.want)
+			g.Expect(obj.Status.Conditions).To(conditions.MatchConditions(tt.assertConditions))
+
+			for _, p := range tt.assertPaths {
+				absoluteP := filepath.Join(testStorage.BasePath, p)
+				if !strings.HasPrefix(p, "!") {
+					g.Expect(absoluteP).To(BeAnExistingFile())
+					continue
+				}
+				g.Expect(absoluteP).NotTo(BeAnExistingFile())
 			}
 		})
 	}
 }
 
+func TestBucketReconciler_reconcileSource(t *testing.T) {
+	tests := []struct {
+		name             string
+		bucketName       string
+		bucketObjects    []*s3MockObject
+		middleware       http.Handler
+		secret           *corev1.Secret
+		beforeFunc       func(obj *sourcev1.Bucket)
+		want             ctrl.Result
+		wantErr          bool
+		assertArtifact   sourcev1.Artifact
+		assertConditions []metav1.Condition
+	}{
+		{
+			name:       "reconciles source",
+			bucketName: "dummy",
+			bucketObjects: []*s3MockObject{
+				{
+					Key:          "test.txt",
+					Content:      []byte("test"),
+					ContentType:  "text/plain",
+					LastModified: time.Now(),
+				},
+			},
+			assertArtifact: sourcev1.Artifact{
+				Path:     "bucket/test-bucket/f0467900d3cede8323f3e61a1467f7cd370d1c0d942ff990a1a7be1eb1a231e8.tar.gz",
+				Revision: "f0467900d3cede8323f3e61a1467f7cd370d1c0d942ff990a1a7be1eb1a231e8",
+			},
+			assertConditions: []metav1.Condition{
+				*conditions.TrueCondition(sourcev1.ArtifactOutdatedCondition, "NewRevision", "New upstream revision 'f0467900d3cede8323f3e61a1467f7cd370d1c0d942ff990a1a7be1eb1a231e8'"),
+			},
+		},
+		// TODO(hidde): middleware for mock server
+		//{
+		//	name: "authenticates using secretRef",
+		//	bucketName: "dummy",
+		//},
+		{
+			name:       "observes non-existing secretRef",
+			bucketName: "dummy",
+			beforeFunc: func(obj *sourcev1.Bucket) {
+				obj.Spec.SecretRef = &meta.LocalObjectReference{
+					Name: "dummy",
+				}
+			},
+			wantErr: true,
+			assertConditions: []metav1.Condition{
+				*conditions.TrueCondition(sourcev1.FetchFailedCondition, sourcev1.AuthenticationFailedReason, "Failed to get secret '/dummy': secrets \"dummy\" not found"),
+			},
+		},
+		{
+			name:       "observes invalid secretRef",
+			bucketName: "dummy",
+			secret: &corev1.Secret{
+				ObjectMeta: metav1.ObjectMeta{
+					Name: "dummy",
+				},
+			},
+			beforeFunc: func(obj *sourcev1.Bucket) {
+				obj.Spec.SecretRef = &meta.LocalObjectReference{
+					Name: "dummy",
+				}
+			},
+			wantErr: true,
+			assertConditions: []metav1.Condition{
+				*conditions.TrueCondition(sourcev1.FetchFailedCondition, sourcev1.BucketOperationFailedReason, "Failed to construct S3 client: invalid 'dummy' secret data: required fields"),
+			},
+		},
+		{
+			name:       "observes non-existing bucket name",
+			bucketName: "dummy",
+			beforeFunc: func(obj *sourcev1.Bucket) {
+				obj.Spec.BucketName = "invalid"
+			},
+			wantErr: true,
+			assertConditions: []metav1.Condition{
+				*conditions.TrueCondition(sourcev1.FetchFailedCondition, sourcev1.BucketOperationFailedReason, "Bucket 'invalid' does not exist"),
+			},
+		},
+		{
+			name: "transient bucket name API failure",
+			beforeFunc: func(obj *sourcev1.Bucket) {
+				obj.Spec.Endpoint = "transient.example.com"
+				obj.Spec.BucketName = "unavailable"
+			},
+			wantErr: true,
+			assertConditions: []metav1.Condition{
+				*conditions.TrueCondition(sourcev1.FetchFailedCondition, sourcev1.BucketOperationFailedReason, "Failed to verify existence of bucket 'unavailable'"),
+			},
+		},
+		{
+			// TODO(hidde): test the lesser happy paths
+			name:       ".sourceignore",
+			bucketName: "dummy",
+			bucketObjects: []*s3MockObject{
+				{
+					Key:          ".sourceignore",
+					Content:      []byte("ignored/file.txt"),
+					ContentType:  "text/plain",
+					LastModified: time.Now(),
+				},
+				{
+					Key:          "ignored/file.txt",
+					Content:      []byte("ignored/file.txt"),
+					ContentType:  "text/plain",
+					LastModified: time.Now(),
+				},
+				{
+					Key:          "included/file.txt",
+					Content:      []byte("included/file.txt"),
+					ContentType:  "text/plain",
+					LastModified: time.Now(),
+				},
+			},
+			assertArtifact: sourcev1.Artifact{
+				Path:     "bucket/test-bucket/94992ae8fb8300723e970e304ea3414266cb414e364ba3f570bb09069f883100.tar.gz",
+				Revision: "94992ae8fb8300723e970e304ea3414266cb414e364ba3f570bb09069f883100",
+			},
+			assertConditions: []metav1.Condition{
+				*conditions.TrueCondition(sourcev1.ArtifactOutdatedCondition, "NewRevision", "New upstream revision '94992ae8fb8300723e970e304ea3414266cb414e364ba3f570bb09069f883100'"),
+			},
+		},
+	}
+	for _, tt := range tests {
+		t.Run(tt.name, func(t *testing.T) {
+			g := NewWithT(t)
+
+			builder := fakeclient.NewClientBuilder().WithScheme(testEnv.Scheme())
+			if tt.secret != nil {
+				builder.WithObjects(tt.secret)
+			}
+			r := &BucketReconciler{
+				Client:  builder.Build(),
+				Storage: testStorage,
+			}
+			tmpDir, err := os.MkdirTemp("", "reconcile-bucket-source-")
+			g.Expect(err).ToNot(HaveOccurred())
+			defer os.RemoveAll(tmpDir)
+
+			obj := &sourcev1.Bucket{
+				TypeMeta: metav1.TypeMeta{
+					Kind: sourcev1.BucketKind,
+				},
+				ObjectMeta: metav1.ObjectMeta{
+					Name: "test-bucket",
+				},
+				Spec: sourcev1.BucketSpec{
+					Timeout: &metav1.Duration{Duration: timeout},
+				},
+			}
+
+			var server *s3MockServer
+			if tt.bucketName != "" {
+				server = newS3Server(tt.bucketName)
+				server.Objects = tt.bucketObjects
+				server.Start()
+				defer server.Stop()
+
+				g.Expect(server.HTTPAddress()).ToNot(BeEmpty())
+				u, err := url.Parse(server.HTTPAddress())
+				g.Expect(err).NotTo(HaveOccurred())
+
+				obj.Spec.BucketName = tt.bucketName
+				obj.Spec.Endpoint = u.Host
+				// TODO(hidde): also test TLS
+				obj.Spec.Insecure = true
+			}
+			if tt.beforeFunc != nil {
+				tt.beforeFunc(obj)
+			}
+
+			artifact := &sourcev1.Artifact{}
+			got, err := r.reconcileSource(context.TODO(), obj, artifact, tmpDir)
+			g.Expect(err != nil).To(Equal(tt.wantErr))
+			g.Expect(got).To(Equal(tt.want))
+
+			g.Expect(artifact).To(MatchArtifact(tt.assertArtifact.DeepCopy()))
+			g.Expect(obj.Status.Conditions).To(conditions.MatchConditions(tt.assertConditions))
+		})
+	}
+}
+
+func TestBucketReconciler_reconcileArtifact(t *testing.T) {
+	// testChecksum is the checksum value of the artifacts created in this
+	// test.
+	const testChecksum = "4f4fb700ef54461cfa02571ae0db9a0dc1e0cdb5577484a6d75e68dc38e8acc1"
+
+	tests := []struct {
+		name             string
+		beforeFunc       func(t *WithT, obj *sourcev1.Bucket, artifact sourcev1.Artifact, dir string)
+		afterFunc        func(t *WithT, obj *sourcev1.Bucket, dir string)
+		want             ctrl.Result
+		wantErr          bool
+		assertConditions []metav1.Condition
+	}{
+		{
+			name: "Archiving artifact to storage makes Ready=True",
+			beforeFunc: func(t *WithT, obj *sourcev1.Bucket, artifact sourcev1.Artifact, dir string) {
+				obj.Spec.Interval = metav1.Duration{Duration: interval}
+			},
+			want: ctrl.Result{RequeueAfter: interval},
+			assertConditions: []metav1.Condition{
+				*conditions.TrueCondition(meta.ReadyCondition, meta.SucceededReason, "Stored artifact for revision 'existing'"),
+			},
+		},
+		{
+			name: "Up-to-date artifact should not update status",
+			beforeFunc: func(t *WithT, obj *sourcev1.Bucket, artifact sourcev1.Artifact, dir string) {
+				obj.Spec.Interval = metav1.Duration{Duration: interval}
+				obj.Status.Artifact = artifact.DeepCopy()
+			},
+			afterFunc: func(t *WithT, obj *sourcev1.Bucket, dir string) {
+				t.Expect(obj.Status.URL).To(BeEmpty())
+			},
+			want: ctrl.Result{RequeueAfter: interval},
+			assertConditions: []metav1.Condition{
+				*conditions.TrueCondition(meta.ReadyCondition, meta.SucceededReason, "Stored artifact for revision 'existing'"),
+			},
+		},
+		{
+			name: "Removes ArtifactUnavailableCondition after creating artifact",
+			beforeFunc: func(t *WithT, obj *sourcev1.Bucket, artifact sourcev1.Artifact, dir string) {
+				obj.Spec.Interval = metav1.Duration{Duration: interval}
+				conditions.MarkTrue(obj, sourcev1.ArtifactUnavailableCondition, "Foo", "")
+			},
+			want: ctrl.Result{RequeueAfter: interval},
+			assertConditions: []metav1.Condition{
+				*conditions.TrueCondition(meta.ReadyCondition, meta.SucceededReason, "Stored artifact for revision 'existing'"),
+			},
+		},
+		{
+			name: "Removes ArtifactOutdatedCondition after creating a new artifact",
+			beforeFunc: func(t *WithT, obj *sourcev1.Bucket, artifact sourcev1.Artifact, dir string) {
+				obj.Spec.Interval = metav1.Duration{Duration: interval}
+				conditions.MarkTrue(obj, sourcev1.ArtifactOutdatedCondition, "Foo", "")
+			},
+			want: ctrl.Result{RequeueAfter: interval},
+			assertConditions: []metav1.Condition{
+				*conditions.TrueCondition(meta.ReadyCondition, meta.SucceededReason, "Stored artifact for revision 'existing'"),
+			},
+		},
+		{
+			name: "Creates latest symlink to the created artifact",
+			beforeFunc: func(t *WithT, obj *sourcev1.Bucket, artifact sourcev1.Artifact, dir string) {
+				obj.Spec.Interval = metav1.Duration{Duration: interval}
+			},
+			afterFunc: func(t *WithT, obj *sourcev1.Bucket, dir string) {
+				localPath := testStorage.LocalPath(*obj.GetArtifact())
+				symlinkPath := filepath.Join(filepath.Dir(localPath), "latest.tar.gz")
+				targetFile, err := os.Readlink(symlinkPath)
+				t.Expect(err).NotTo(HaveOccurred())
+				t.Expect(localPath).To(Equal(targetFile))
+			},
+			want: ctrl.Result{RequeueAfter: interval},
+			assertConditions: []metav1.Condition{
+				*conditions.TrueCondition(meta.ReadyCondition, meta.SucceededReason, "Stored artifact for revision 'existing'"),
+			},
+		},
+		{
+			name: "Dir path deleted",
+			beforeFunc: func(t *WithT, obj *sourcev1.Bucket, artifact sourcev1.Artifact, dir string) {
+				t.Expect(os.RemoveAll(dir)).ToNot(HaveOccurred())
+			},
+			wantErr: true,
+		},
+		{
+			name: "Dir path is not a directory",
+			beforeFunc: func(t *WithT, obj *sourcev1.Bucket, artifact sourcev1.Artifact, dir string) {
+				// Remove the given directory and create a file for the same
+				// path.
+				t.Expect(os.RemoveAll(dir)).ToNot(HaveOccurred())
+				f, err := os.Create(dir)
+				defer f.Close()
+				t.Expect(err).ToNot(HaveOccurred())
+			},
+			afterFunc: func(t *WithT, obj *sourcev1.Bucket, dir string) {
+				t.Expect(os.RemoveAll(dir)).ToNot(HaveOccurred())
+			},
+			wantErr: true,
+		},
+	}
+
+	for _, tt := range tests {
+		t.Run(tt.name, func(t *testing.T) {
+			g := NewWithT(t)
+
+			r := &BucketReconciler{
+				Storage: testStorage,
+			}
+
+			tmpDir, err := os.MkdirTemp("", "reconcile-bucket-artifact-")
+			g.Expect(err).ToNot(HaveOccurred())
+			defer os.RemoveAll(tmpDir)
+
+			obj := &sourcev1.Bucket{
+				TypeMeta: metav1.TypeMeta{
+					Kind: sourcev1.BucketKind,
+				},
+				ObjectMeta: metav1.ObjectMeta{
+					GenerateName: "test-bucket-",
+					Generation:   1,
+					Namespace:    "default",
+				},
+				Spec: sourcev1.BucketSpec{
+					Timeout: &metav1.Duration{Duration: timeout},
+				},
+			}
+
+			artifact := testStorage.NewArtifactFor(obj.Kind, obj, "existing", "foo.tar.gz")
+			artifact.Checksum = testChecksum
+
+			if tt.beforeFunc != nil {
+				tt.beforeFunc(g, obj, artifact, tmpDir)
+			}
+
+			got, err := r.reconcileArtifact(logr.NewContext(ctx, log.NullLogger{}), obj, artifact, tmpDir)
+			g.Expect(err != nil).To(Equal(tt.wantErr))
+			g.Expect(got).To(Equal(tt.want))
+
+			// On error, artifact is empty. Check artifacts only on successful
+			// reconcile.
+			if !tt.wantErr {
+				g.Expect(obj.Status.Artifact).To(MatchArtifact(artifact.DeepCopy()))
+			}
+			g.Expect(obj.Status.Conditions).To(conditions.MatchConditions(tt.assertConditions))
+
+			if tt.afterFunc != nil {
+				tt.afterFunc(g, obj, tmpDir)
+			}
+		})
+	}
+}
+
+func TestBucketReconciler_revision(t *testing.T) {
+	tests := []struct {
+		name    string
+		list    map[string]string
+		want    string
+		wantErr bool
+	}{
+		{
+			name: "list with items",
+			list: map[string]string{
+				"one":   "one",
+				"two":   "two",
+				"three": "three",
+			},
+			want: "8afaa9c32d7c187e8acaeffe899226011001f67c095519cdd8b4c03487c5b8bc",
+		},
+		{
+			name: "list with items in different order",
+			list: map[string]string{
+				"three": "three",
+				"one":   "one",
+				"two":   "two",
+			},
+			want: "8afaa9c32d7c187e8acaeffe899226011001f67c095519cdd8b4c03487c5b8bc",
+		},
+		{
+			name: "empty list",
+			list: map[string]string{},
+			want: "e3b0c44298fc1c149afbf4c8996fb92427ae41e4649b934ca495991b7852b855",
+		},
+		{
+			name: "nil list",
+			list: nil,
+			want: "e3b0c44298fc1c149afbf4c8996fb92427ae41e4649b934ca495991b7852b855",
+		},
+	}
+	for _, tt := range tests {
+		t.Run(tt.name, func(t *testing.T) {
+			got, err := (&BucketReconciler{}).revision(tt.list)
+			if (err != nil) != tt.wantErr {
+				t.Errorf("revision() error = %v, wantErr %v", err, tt.wantErr)
+				return
+			}
+			if got != tt.want {
+				t.Errorf("revision() got = %v, want %v", got, tt.want)
+			}
+		})
+	}
+}
+
+// helpers
+
 func mockFile(root, path, content string) error {
 	filePath := filepath.Join(root, path)
 	if err := os.MkdirAll(filepath.Dir(filePath), os.ModePerm); err != nil {
@@ -80,3 +653,120 @@ func mockFile(root, path, content string) error {
 	}
 	return nil
 }
+
+type s3MockObject struct {
+	Key          string
+	LastModified time.Time
+	ContentType  string
+	Content      []byte
+}
+
+type s3MockServer struct {
+	srv *httptest.Server
+	mux *http.ServeMux
+
+	BucketName string
+	Objects    []*s3MockObject
+}
+
+func newS3Server(bucketName string) *s3MockServer {
+	s := &s3MockServer{BucketName: bucketName}
+	s.mux = http.NewServeMux()
+	s.mux.Handle(fmt.Sprintf("/%s/", s.BucketName), http.HandlerFunc(s.handler))
+
+	s.srv = httptest.NewUnstartedServer(s.mux)
+
+	return s
+}
+
+func (s *s3MockServer) Start() {
+	s.srv.Start()
+}
+
+func (s *s3MockServer) Stop() {
+	s.srv.Close()
+}
+
+func (s *s3MockServer) HTTPAddress() string {
+	return s.srv.URL
+}
+
+func (s *s3MockServer) handler(w http.ResponseWriter, r *http.Request) {
+	key := path.Base(r.URL.Path)
+
+	switch key {
+	case s.BucketName:
+		w.Header().Add("Content-Type", "application/xml")
+
+		if r.Method == http.MethodHead {
+			return
+		}
+
+		q := r.URL.Query()
+
+		if q["location"] != nil {
+			fmt.Fprint(w, `
+
+Europe
+			`)
+			return
+		}
+
+		contents := ""
+		for _, o := range s.Objects {
+			etag := md5.Sum(o.Content)
+			contents += fmt.Sprintf(`
+		
+			%s
+			%s
+			%d
+			"%b"
+			STANDARD
+		`, o.Key, o.LastModified.UTC().Format(time.RFC3339), len(o.Content), etag)
+		}
+
+		fmt.Fprintf(w, `
+
+
+	%s
+	
+	
+	%d
+	1000
+	false
+	%s
+
+		`, s.BucketName, len(s.Objects), contents)
+	default:
+		key, err := filepath.Rel("/"+s.BucketName, r.URL.Path)
+		if err != nil {
+			w.WriteHeader(500)
+			return
+		}
+
+		var found *s3MockObject
+		for _, o := range s.Objects {
+			if key == o.Key {
+				found = o
+			}
+		}
+		if found == nil {
+			w.WriteHeader(404)
+			return
+		}
+
+		etag := md5.Sum(found.Content)
+		lastModified := strings.Replace(found.LastModified.UTC().Format(time.RFC1123), "UTC", "GMT", 1)
+
+		w.Header().Add("Content-Type", found.ContentType)
+		w.Header().Add("Last-Modified", lastModified)
+		w.Header().Add("ETag", fmt.Sprintf("\"%b\"", etag))
+		w.Header().Add("Content-Length", fmt.Sprintf("%d", len(found.Content)))
+
+		if r.Method == http.MethodHead {
+			return
+		}
+
+		w.Write(found.Content)
+	}
+}
diff --git a/controllers/gitrepository_controller.go b/controllers/gitrepository_controller.go
index 7ba49dad..59a766e9 100644
--- a/controllers/gitrepository_controller.go
+++ b/controllers/gitrepository_controller.go
@@ -122,13 +122,13 @@ func (r *GitRepositoryReconciler) Reconcile(ctx context.Context, req ctrl.Reques
 			conditions.WithConditions(
 				sourcev1.IncludeUnavailableCondition,
 				sourcev1.SourceVerifiedCondition,
-				sourcev1.CheckoutFailedCondition,
+				sourcev1.FetchFailedCondition,
 				sourcev1.ArtifactOutdatedCondition,
 				sourcev1.ArtifactUnavailableCondition,
 			),
 			conditions.WithNegativePolarityConditions(
 				sourcev1.ArtifactUnavailableCondition,
-				sourcev1.CheckoutFailedCondition,
+				sourcev1.FetchFailedCondition,
 				sourcev1.SourceVerifiedCondition,
 				sourcev1.IncludeUnavailableCondition,
 				sourcev1.ArtifactOutdatedCondition,
@@ -140,7 +140,7 @@ func (r *GitRepositoryReconciler) Reconcile(ctx context.Context, req ctrl.Reques
 			patch.WithOwnedConditions{
 				Conditions: []string{
 					sourcev1.ArtifactUnavailableCondition,
-					sourcev1.CheckoutFailedCondition,
+					sourcev1.FetchFailedCondition,
 					sourcev1.IncludeUnavailableCondition,
 					sourcev1.ArtifactOutdatedCondition,
 					meta.ReadyCondition,
@@ -271,8 +271,8 @@ func (r *GitRepositoryReconciler) reconcileStorage(ctx context.Context, obj *sou
 // and observes its state.
 //
 // The repository is checked out to the given dir using the defined configuration, and in case of an error during the
-// checkout process (including transient errors), it records v1beta1.CheckoutFailedCondition=True and returns early.
-// On a successful checkout it removes v1beta1.CheckoutFailedCondition, and compares the current revision of HEAD to the
+// checkout process (including transient errors), it records v1beta1.FetchFailedCondition=True and returns early.
+// On a successful checkout it removes v1beta1.FetchFailedCondition, and compares the current revision of HEAD to the
 // artifact on the object, and records v1beta1.ArtifactOutdatedCondition if they differ.
 // If instructed, the signature of the commit is verified if and recorded as v1beta1.SourceVerifiedCondition. If the
 // signature can not be verified or the verification fails, the Condition=False and it returns early.
@@ -292,7 +292,7 @@ func (r *GitRepositoryReconciler) reconcileSource(ctx context.Context,
 		})
 		if err != nil {
 			ctrl.LoggerFrom(ctx).Error(err, fmt.Sprintf("Failed to get auth strategy for Git implementation '%s'", obj.Spec.GitImplementation))
-			conditions.MarkTrue(obj, sourcev1.CheckoutFailedCondition, sourcev1.AuthenticationFailedReason,
+			conditions.MarkTrue(obj, sourcev1.FetchFailedCondition, sourcev1.AuthenticationFailedReason,
 				"Failed to get auth strategy for Git implementation '%s': %s", obj.Spec.GitImplementation, err)
 			// Do not return error as recovery without changes is impossible
 			return ctrl.Result{}, nil
@@ -305,7 +305,7 @@ func (r *GitRepositoryReconciler) reconcileSource(ctx context.Context,
 		}
 		var secret corev1.Secret
 		if err = r.Client.Get(ctx, name, &secret); err != nil {
-			conditions.MarkTrue(obj, sourcev1.CheckoutFailedCondition, sourcev1.AuthenticationFailedReason,
+			conditions.MarkTrue(obj, sourcev1.FetchFailedCondition, sourcev1.AuthenticationFailedReason,
 				"Failed to get secret '%s': %s", name.String(), err.Error())
 			r.Eventf(ctx, obj, events.EventSeverityError, sourcev1.AuthenticationFailedReason,
 				"Failed to get secret '%s': %s", name.String(), err.Error())
@@ -316,7 +316,7 @@ func (r *GitRepositoryReconciler) reconcileSource(ctx context.Context,
 		// Configure strategy with secret
 		auth, err = authStrategy.Method(secret)
 		if err != nil {
-			conditions.MarkTrue(obj, sourcev1.CheckoutFailedCondition, sourcev1.AuthenticationFailedReason,
+			conditions.MarkTrue(obj, sourcev1.FetchFailedCondition, sourcev1.AuthenticationFailedReason,
 				"Failed to configure auth strategy for Git implementation '%s': %s", obj.Spec.GitImplementation, err)
 			r.Eventf(ctx, obj, events.EventSeverityError, sourcev1.AuthenticationFailedReason,
 				"Failed to configure auth strategy for Git implementation '%s': %s", obj.Spec.GitImplementation, err)
@@ -332,7 +332,7 @@ func (r *GitRepositoryReconciler) reconcileSource(ctx context.Context,
 	})
 	if err != nil {
 		ctrl.LoggerFrom(ctx).Error(err, fmt.Sprintf("Failed to configure checkout strategy for Git implementation '%s'", obj.Spec.GitImplementation))
-		conditions.MarkTrue(obj, sourcev1.CheckoutFailedCondition, sourcev1.GitOperationFailedReason,
+		conditions.MarkTrue(obj, sourcev1.FetchFailedCondition, sourcev1.GitOperationFailedReason,
 			"Failed to configure checkout strategy for Git implementation '%s': %s", obj.Spec.GitImplementation, err)
 		// Do not return err as recovery without changes is impossible
 		return ctrl.Result{}, nil
@@ -343,7 +343,7 @@ func (r *GitRepositoryReconciler) reconcileSource(ctx context.Context,
 	defer cancel()
 	commit, revision, err := checkoutStrategy.Checkout(gitCtx, dir, obj.Spec.URL, auth)
 	if err != nil {
-		conditions.MarkTrue(obj, sourcev1.CheckoutFailedCondition, sourcev1.GitOperationFailedReason,
+		conditions.MarkTrue(obj, sourcev1.FetchFailedCondition, sourcev1.GitOperationFailedReason,
 			"Failed to checkout and determine revision: %s", err)
 		r.Eventf(ctx, obj, events.EventSeverityError, sourcev1.GitOperationFailedReason,
 			"Failed to checkout and determine revision: %s", err)
@@ -352,7 +352,7 @@ func (r *GitRepositoryReconciler) reconcileSource(ctx context.Context,
 	}
 	r.Eventf(ctx, obj, events.EventSeverityInfo, sourcev1.GitOperationSucceedReason,
 		"Cloned repository '%s' and checked out revision '%s'", obj.Spec.URL, revision)
-	conditions.Delete(obj, sourcev1.CheckoutFailedCondition)
+	conditions.Delete(obj, sourcev1.FetchFailedCondition)
 
 	// Verify commit signature
 	if result, err := r.verifyCommitSignature(ctx, obj, commit); err != nil || result.IsZero() {
@@ -401,22 +401,21 @@ func (r *GitRepositoryReconciler) reconcileArtifact(ctx context.Context, obj *so
 
 	// Ensure target path exists and is a directory
 	if f, err := os.Stat(dir); err != nil {
-		ctrl.LoggerFrom(ctx).Error(err, "failed to stat source path")
+		err = fmt.Errorf("failed to stat target path: %w", err)
 		return ctrl.Result{}, err
 	} else if !f.IsDir() {
-		err := fmt.Errorf("source path '%s' is not a directory", dir)
-		ctrl.LoggerFrom(ctx).Error(err, "invalid target path")
+		err = fmt.Errorf("invalid target path: '%s' is not a directory", dir)
 		return ctrl.Result{}, err
 	}
 
 	// Ensure artifact directory exists and acquire lock
 	if err := r.Storage.MkdirAll(artifact); err != nil {
-		ctrl.LoggerFrom(ctx).Error(err, "failed to create artifact directory")
+		err = fmt.Errorf("failed to create artifact directory: %w", err)
 		return ctrl.Result{}, err
 	}
 	unlock, err := r.Storage.Lock(artifact)
 	if err != nil {
-		ctrl.LoggerFrom(ctx).Error(err, "failed to acquire lock for artifact")
+		err = fmt.Errorf("failed to acquire lock for artifact: %w", err)
 		return ctrl.Result{}, err
 	}
 	defer unlock()
diff --git a/controllers/gitrepository_controller_test.go b/controllers/gitrepository_controller_test.go
index 1966e486..fe70b3f3 100644
--- a/controllers/gitrepository_controller_test.go
+++ b/controllers/gitrepository_controller_test.go
@@ -220,7 +220,7 @@ func TestGitRepositoryReconciler_reconcileSource_authStrategy(t *testing.T) {
 			},
 			wantErr: true,
 			assertConditions: []metav1.Condition{
-				*conditions.TrueCondition(sourcev1.CheckoutFailedCondition, sourcev1.GitOperationFailedReason, "x509: certificate signed by unknown authority"),
+				*conditions.TrueCondition(sourcev1.FetchFailedCondition, sourcev1.GitOperationFailedReason, "x509: certificate signed by unknown authority"),
 			},
 		},
 		{
@@ -245,7 +245,7 @@ func TestGitRepositoryReconciler_reconcileSource_authStrategy(t *testing.T) {
 			},
 			wantErr: true,
 			assertConditions: []metav1.Condition{
-				*conditions.TrueCondition(sourcev1.CheckoutFailedCondition, sourcev1.GitOperationFailedReason, "Failed to checkout and determine revision: unable to clone '', error: Certificate"),
+				*conditions.TrueCondition(sourcev1.FetchFailedCondition, sourcev1.GitOperationFailedReason, "Failed to checkout and determine revision: unable to clone '', error: Certificate"),
 			},
 		},
 		{
@@ -306,7 +306,7 @@ func TestGitRepositoryReconciler_reconcileSource_authStrategy(t *testing.T) {
 			},
 			wantErr: true,
 			assertConditions: []metav1.Condition{
-				*conditions.TrueCondition(sourcev1.CheckoutFailedCondition, "AuthenticationFailed", "Failed to get secret '/non-existing': secrets \"non-existing\" not found"),
+				*conditions.TrueCondition(sourcev1.FetchFailedCondition, sourcev1.AuthenticationFailedReason, "Failed to get secret '/non-existing': secrets \"non-existing\" not found"),
 			},
 		},
 	}
@@ -1145,7 +1145,7 @@ func TestGitRepositoryReconciler_ConditionsUpdate(t *testing.T) {
 		{
 			name: "mixed failed conditions",
 			beforeFunc: func(obj *sourcev1.GitRepository) {
-				conditions.MarkTrue(obj, sourcev1.CheckoutFailedCondition, "Foo", "")
+				conditions.MarkTrue(obj, sourcev1.FetchFailedCondition, "Foo", "")
 				conditions.MarkTrue(obj, sourcev1.IncludeUnavailableCondition, "Foo", "")
 				conditions.MarkTrue(obj, sourcev1.SourceVerifiedCondition, "Foo", "")
 				conditions.MarkTrue(obj, sourcev1.ArtifactOutdatedCondition, "Foo", "")
@@ -1160,7 +1160,7 @@ func TestGitRepositoryReconciler_ConditionsUpdate(t *testing.T) {
 			name: "reconciling and failed conditions",
 			beforeFunc: func(obj *sourcev1.GitRepository) {
 				conditions.MarkTrue(obj, meta.ReconcilingCondition, "Foo", "")
-				conditions.MarkTrue(obj, sourcev1.CheckoutFailedCondition, "Foo", "")
+				conditions.MarkTrue(obj, sourcev1.FetchFailedCondition, "Foo", "")
 			},
 			want: ctrl.Result{RequeueAfter: interval},
 			assertConditions: []metav1.Condition{
@@ -1171,7 +1171,7 @@ func TestGitRepositoryReconciler_ConditionsUpdate(t *testing.T) {
 			name: "stalled and failed conditions",
 			beforeFunc: func(obj *sourcev1.GitRepository) {
 				conditions.MarkTrue(obj, meta.StalledCondition, "Foo", "")
-				conditions.MarkTrue(obj, sourcev1.CheckoutFailedCondition, "Foo", "")
+				conditions.MarkTrue(obj, sourcev1.FetchFailedCondition, "Foo", "")
 			},
 			want: ctrl.Result{RequeueAfter: interval},
 			assertConditions: []metav1.Condition{
diff --git a/controllers/suite_test.go b/controllers/suite_test.go
index 8dd32e35..3429e7df 100644
--- a/controllers/suite_test.go
+++ b/controllers/suite_test.go
@@ -29,11 +29,11 @@ import (
 	ctrl "sigs.k8s.io/controller-runtime"
 
 	"github.com/fluxcd/pkg/runtime/controller"
+	"github.com/fluxcd/pkg/runtime/testenv"
 	"github.com/fluxcd/pkg/testserver"
 
 	sourcev1 "github.com/fluxcd/source-controller/api/v1beta1"
 	// +kubebuilder:scaffold:imports
-	"github.com/fluxcd/pkg/runtime/testenv"
 )
 
 // These tests make use of plain Go using Gomega for assertions.
@@ -98,6 +98,15 @@ func TestMain(m *testing.M) {
 		panic(fmt.Sprintf("Failed to start GitRepositoryReconciler: %v", err))
 	}
 
+	if err := (&BucketReconciler{
+		Client:  testEnv,
+		Events:  testEventsH,
+		Metrics: testMetricsH,
+		Storage: testStorage,
+	}).SetupWithManager(testEnv); err != nil {
+		panic(fmt.Sprintf("Failed to start BucketReconciler: %v", err))
+	}
+
 	go func() {
 		fmt.Println("Starting the test environment")
 		if err := testEnv.Start(ctx); err != nil {
diff --git a/main.go b/main.go
index 0730bb94..71647e2f 100644
--- a/main.go
+++ b/main.go
@@ -25,13 +25,6 @@ import (
 	"strings"
 	"time"
 
-	"github.com/fluxcd/pkg/runtime/client"
-	helper "github.com/fluxcd/pkg/runtime/controller"
-	"github.com/fluxcd/pkg/runtime/events"
-	"github.com/fluxcd/pkg/runtime/leaderelection"
-	"github.com/fluxcd/pkg/runtime/logger"
-	"github.com/fluxcd/pkg/runtime/pprof"
-	"github.com/fluxcd/pkg/runtime/probes"
 	"github.com/go-logr/logr"
 	flag "github.com/spf13/pflag"
 	"helm.sh/helm/v3/pkg/getter"
@@ -41,6 +34,14 @@ import (
 	_ "k8s.io/client-go/plugin/pkg/client/auth/gcp"
 	ctrl "sigs.k8s.io/controller-runtime"
 
+	"github.com/fluxcd/pkg/runtime/client"
+	helper "github.com/fluxcd/pkg/runtime/controller"
+	"github.com/fluxcd/pkg/runtime/events"
+	"github.com/fluxcd/pkg/runtime/leaderelection"
+	"github.com/fluxcd/pkg/runtime/logger"
+	"github.com/fluxcd/pkg/runtime/pprof"
+	"github.com/fluxcd/pkg/runtime/probes"
+
 	sourcev1 "github.com/fluxcd/source-controller/api/v1beta1"
 	"github.com/fluxcd/source-controller/controllers"
 	// +kubebuilder:scaffold:imports
@@ -144,14 +145,14 @@ func main() {
 	probes.SetupChecks(mgr, setupLog)
 	pprof.SetupHandlers(mgr, setupLog)
 
-	eventsH := helper.MakeEvents(mgr, controllerName, eventRecorder)
-	metricsH := helper.MustMakeMetrics(mgr)
-
 	if storageAdvAddr == "" {
 		storageAdvAddr = determineAdvStorageAddr(storageAddr, setupLog)
 	}
 	storage := mustInitStorage(storagePath, storageAdvAddr, setupLog)
 
+	eventsH := helper.MakeEvents(mgr, controllerName, eventRecorder)
+	metricsH := helper.MustMakeMetrics(mgr)
+
 	if err = (&controllers.GitRepositoryReconciler{
 		Client:  mgr.GetClient(),
 		Events:  eventsH,
@@ -193,12 +194,10 @@ func main() {
 		os.Exit(1)
 	}
 	if err = (&controllers.BucketReconciler{
-		Client:                mgr.GetClient(),
-		Scheme:                mgr.GetScheme(),
-		Storage:               storage,
-		EventRecorder:         mgr.GetEventRecorderFor(controllerName),
-		ExternalEventRecorder: eventRecorder,
-		MetricsRecorder:       metricsH.MetricsRecorder,
+		Client:  mgr.GetClient(),
+		Events:  eventsH,
+		Metrics: metricsH,
+		Storage: storage,
 	}).SetupWithManagerAndOptions(mgr, controllers.BucketReconcilerOptions{
 		MaxConcurrentReconciles: concurrent,
 	}); err != nil {