diff --git a/src/hooks/rules-injector/rule-file-scanner.test.ts b/src/hooks/rules-injector/rule-file-scanner.test.ts
new file mode 100644
index 000000000..cadf4c3f1
--- /dev/null
+++ b/src/hooks/rules-injector/rule-file-scanner.test.ts
@@ -0,0 +1,42 @@
+import { afterEach, describe, expect, test } from "bun:test";
+import { existsSync, mkdirSync, rmSync, writeFileSync } from "node:fs";
+import { tmpdir } from "node:os";
+import { join } from "node:path";
+import { randomUUID } from "node:crypto";
+import { findRuleFilesRecursive } from "./rule-file-scanner";
+
+const createdDirectories: string[] = [];
+
+afterEach(() => {
+  for (const directory of createdDirectories.splice(0)) {
+    if (existsSync(directory)) {
+      rmSync(directory, { recursive: true, force: true });
+    }
+  }
+});
+
+describe("findRuleFilesRecursive", () => {
+  test("returns rule files outside excluded nested directories", () => {
+    // given
+    const temporaryDirectory = join(tmpdir(), `perf-d01-${randomUUID()}`);
+    createdDirectories.push(temporaryDirectory);
+
+    const rulesDirectory = join(temporaryDirectory, ".sisyphus", "rules");
+    mkdirSync(join(rulesDirectory, "node_modules", "fake"), { recursive: true });
+    mkdirSync(join(rulesDirectory, ".git"), { recursive: true });
+    writeFileSync(join(rulesDirectory, "foo.md"), "root rule");
+    writeFileSync(
+      join(rulesDirectory, "node_modules", "fake", "x.md"),
+      "ignored node_modules rule",
+    );
+    writeFileSync(join(rulesDirectory, ".git", "x.md"), "ignored git rule");
+
+    const results: string[] = [];
+
+    // when
+    findRuleFilesRecursive(rulesDirectory, results);
+
+    // then
+    expect(results).toEqual([join(rulesDirectory, "foo.md")]);
+  });
+});
diff --git a/src/hooks/rules-injector/rule-file-scanner.ts b/src/hooks/rules-injector/rule-file-scanner.ts
index ffd87d8a9..2cd853d07 100644
--- a/src/hooks/rules-injector/rule-file-scanner.ts
+++ b/src/hooks/rules-injector/rule-file-scanner.ts
@@ -1,5 +1,6 @@
 import { existsSync, readdirSync, realpathSync } from "node:fs";
 import { join } from "node:path";
+import { EXCLUDED_DIRS } from "../../shared";
 import { GITHUB_INSTRUCTIONS_PATTERN, RULE_EXTENSIONS } from "./constants";
 
 function isGitHubInstructionsDir(dir: string): boolean {
@@ -28,6 +29,7 @@ export function findRuleFilesRecursive(dir: string, results: string[]): void {
       const fullPath = join(dir, entry.name);
 
       if (entry.isDirectory()) {
+        if (EXCLUDED_DIRS.has(entry.name)) continue;
         findRuleFilesRecursive(fullPath, results);
       } else if (entry.isFile()) {
         if (isValidRuleFile(entry.name, dir)) {