diff --git a/packages/web/server/lib/terminal/runtime.js b/packages/web/server/lib/terminal/runtime.js
index 03de97f9..1c764985 100644
--- a/packages/web/server/lib/terminal/runtime.js
+++ b/packages/web/server/lib/terminal/runtime.js
@@ -503,7 +503,10 @@ export function createTerminalRuntime({
       }
 
       try {
-        await fs.promises.access(cwd);
+        const stats = await fs.promises.stat(cwd);
+        if (!stats.isDirectory()) {
+          return res.status(400).json({ error: 'Invalid working directory' });
+        }
       } catch {
         return res.status(400).json({ error: 'Invalid working directory' });
       }
diff --git a/packages/web/server/lib/terminal/runtime.test.js b/packages/web/server/lib/terminal/runtime.test.js
index 326e1b4b..e3b771c7 100644
--- a/packages/web/server/lib/terminal/runtime.test.js
+++ b/packages/web/server/lib/terminal/runtime.test.js
@@ -5,8 +5,23 @@ import { describe, expect, it } from 'vitest';
 
 import { createTerminalRuntime } from './runtime.js';
 
-function createRuntime(server) {
-  const app = {
+function createResponse() {
+  return {
+    statusCode: 200,
+    body: null,
+    status(code) {
+      this.statusCode = code;
+      return this;
+    },
+    json(payload) {
+      this.body = payload;
+      return this;
+    },
+  };
+}
+
+function createRuntime(server, overrides = {}) {
+  const app = overrides.app ?? {
     post() {},
     get() {},
     delete() {},
@@ -27,10 +42,47 @@ function createRuntime(server) {
     TERMINAL_INPUT_WS_HEARTBEAT_INTERVAL_MS: 30_000,
     TERMINAL_INPUT_WS_REBIND_WINDOW_MS: 1_000,
     TERMINAL_INPUT_WS_MAX_REBINDS_PER_WINDOW: 3,
+    ...overrides,
   });
 }
 
 describe('terminal runtime', () => {
+  it('rejects regular files as terminal working directories', async () => {
+    const postRoutes = new Map();
+    const app = {
+      post(route, ...handlers) {
+        postRoutes.set(route, handlers.at(-1));
+      },
+      get() {},
+      delete() {},
+    };
+    const server = new EventEmitter();
+    const runtime = createRuntime(server, {
+      app,
+      fs: {
+        promises: {
+          stat: async () => ({ isDirectory: () => false }),
+        },
+      },
+      uiAuthController: { enabled: false },
+      buildAugmentedPath: () => '',
+      TERMINAL_INPUT_WS_HEARTBEAT_INTERVAL_MS: 1000,
+      TERMINAL_INPUT_WS_REBIND_WINDOW_MS: 1000,
+    });
+
+    try {
+      const createRoute = postRoutes.get('/api/terminal/create');
+      const res = createResponse();
+
+      await createRoute({ body: { cwd: '/tmp/not-a-directory' } }, res);
+
+      expect(res.statusCode).toBe(400);
+      expect(res.body).toEqual({ error: 'Invalid working directory' });
+    } finally {
+      await runtime.shutdown();
+    }
+  });
+
   it('removes its websocket upgrade listener on shutdown', async () => {
     const server = new EventEmitter();
     const runtime = createRuntime(server);