Finder 5.x
Apple replaced the MFS with the HFS (Hierarchical File System) in September 1985, as part of Finder 5.0 which was introduced along with the Mac's first hard drive, the Hard Disk 20. Nested folders were no longer an illusion, but rather a reflection of the data organization on the disk. Finder 5.0 also added several cosmetic changes to the look of the system's icons. More importantly, Finder 5.1 officially introduced the 800K double sided disk, doubling the previously supported disk capacity. Finder 5.4 added support for file system permissions in January 1987, as part of the AppleShare release.
Finder 5.x would support System 2.1 through 4.1.
Read more about this topic: Finder (software)