diff --git a/packages/rstack/src/fmt/cli.ts b/packages/rstack/src/fmt/cli.ts
index 7b1dd4d3..55af2173 100644
--- a/packages/rstack/src/fmt/cli.ts
+++ b/packages/rstack/src/fmt/cli.ts
@@ -288,6 +288,17 @@ const runFmtCLI = async (args: string[]): Promise<void> => {
     }
 
     const cacheDirPath = cacheLocation ? path.resolve(cwd, cacheLocation) : undefined;
+    if (cacheDirPath) {
+      const cacheDirPrefix = cacheDirPath.endsWith(path.sep)
+        ? cacheDirPath
+        : `${cacheDirPath}${path.sep}`;
+      if (cwd === cacheDirPath || cwd.startsWith(cacheDirPrefix)) {
+        throw new Error(
+          'The --cache-location directory cannot be the current working directory or an ancestor.',
+        );
+      }
+    }
+
     const config = await loadFmtConfig(cwd);
     const files = await discoverFmtFiles({
       cwd,
diff --git a/packages/rstack/tests/cli/fmt/index.test.ts b/packages/rstack/tests/cli/fmt/index.test.ts
index 265b14ca..289789a7 100644
--- a/packages/rstack/tests/cli/fmt/index.test.ts
+++ b/packages/rstack/tests/cli/fmt/index.test.ts
@@ -230,6 +230,16 @@ test.each(['relative', 'absolute'] as const)('uses a %s custom cache location',
   expect(existsSync(path.join(projectPath, '.rstack'))).toBe(false);
 });
 
+test.each(['.', '..'])('rejects a custom cache location at %s', (cacheLocation) => {
+  const result = runFmt(['--cache-location', cacheLocation, '.']);
+
+  expect(result.status).toBe(2);
+  expect(result.stdout).toBe('');
+  expect(result.stderr).toContain(
+    'The --cache-location directory cannot be the current working directory or an ancestor.',
+  );
+});
+
 test('excludes the custom cache directory from formatting', () => {
   const cacheLocation = 'custom-cache';
   writeProjectFile('index.ts', 'const value = 1;\n');