diff --git a/internal/fs/fs.go b/internal/fs/fs.go
index 583fe7d1e3..dab25a6441 100644
--- a/internal/fs/fs.go
+++ b/internal/fs/fs.go
@@ -37,6 +37,10 @@ func Exists(path string) bool {
 }
 
 func FindDown(dir, filename string) []string {
+	return FindDownWithExcludes(dir, filename, []string{})
+}
+
+func FindDownWithExcludes(dir, filename string, excludePatterns []string) []string {
 	var result []string
 
 	filepath.Walk(dir, func(path string, info os.FileInfo, err error) error {
@@ -45,9 +49,14 @@ func FindDown(dir, filename string) []string {
 		}
 		if info.IsDir() {
 			name := info.Name()
+			// Always exclude node_modules and dot directories
 			if name == "node_modules" || strings.HasPrefix(name, ".") {
 				return filepath.SkipDir
 			}
+			// Check custom exclude patterns
+			if shouldExclude(name, excludePatterns) {
+				return filepath.SkipDir
+			}
 		}
 		if !info.IsDir() && info.Name() == filename {
 			result = append(result, path)
@@ -57,3 +66,22 @@ func FindDown(dir, filename string) []string {
 
 	return result
 }
+
+// shouldExclude checks if a directory name matches any of the exclude patterns
+func shouldExclude(name string, patterns []string) bool {
+	for _, pattern := range patterns {
+		// Support glob patterns
+		matched, err := filepath.Match(pattern, name)
+		if err != nil {
+			// If pattern is invalid, try exact match as fallback
+			if name == pattern {
+				return true
+			}
+			continue
+		}
+		if matched {
+			return true
+		}
+	}
+	return false
+}
diff --git a/internal/fs/fs_test.go b/internal/fs/fs_test.go
new file mode 100644
index 0000000000..4904810fbe
--- /dev/null
+++ b/internal/fs/fs_test.go
@@ -0,0 +1,170 @@
+package fs_test
+
+import (
+	"os"
+	"path/filepath"
+	"strings"
+	"testing"
+
+	"github.com/sst/sst/v3/internal/fs"
+	"github.com/stretchr/testify/assert"
+	"github.com/stretchr/testify/require"
+)
+
+func TestFindDown_WithExcludePatterns(t *testing.T) {
+	tests := []struct {
+		name             string
+		setupDirs        []string
+		setupFiles       []string
+		searchFile       string
+		excludePatterns  []string
+		expectedCount    int
+		shouldContain    []string
+		shouldNotContain []string
+	}{
+		{
+			name:             "basic - no excludes",
+			setupDirs:        []string{"src", "lib"},
+			setupFiles:       []string{"src/package.json", "lib/package.json"},
+			searchFile:       "package.json",
+			excludePatterns:  []string{},
+			expectedCount:    2,
+			shouldContain:    []string{"src/package.json", "lib/package.json"},
+			shouldNotContain: []string{},
+		},
+		{
+			name:             "exclude node_modules",
+			setupDirs:        []string{"src", "node_modules", "node_modules/lib"},
+			setupFiles:       []string{"src/package.json", "node_modules/package.json", "node_modules/lib/package.json"},
+			searchFile:       "package.json",
+			excludePatterns:  []string{"node_modules"},
+			expectedCount:    1,
+			shouldContain:    []string{"src/package.json"},
+			shouldNotContain: []string{"node_modules"},
+		},
+		{
+			name:             "exclude external directory",
+			setupDirs:        []string{"src", "external", "external/submodule"},
+			setupFiles:       []string{"src/package.json", "external/package.json", "external/submodule/package.json"},
+			searchFile:       "package.json",
+			excludePatterns:  []string{"external"},
+			expectedCount:    1,
+			shouldContain:    []string{"src/package.json"},
+			shouldNotContain: []string{"external"},
+		},
+		{
+			name:             "exclude multiple patterns",
+			setupDirs:        []string{"src", "external", "vendor", "lib"},
+			setupFiles:       []string{"src/package.json", "external/package.json", "vendor/package.json", "lib/package.json"},
+			searchFile:       "package.json",
+			excludePatterns:  []string{"external", "vendor"},
+			expectedCount:    2,
+			shouldContain:    []string{"src/package.json", "lib/package.json"},
+			shouldNotContain: []string{"external", "vendor"},
+		},
+		{
+			name:             "exclude with glob pattern",
+			setupDirs:        []string{"src", "test-fixtures", "test-data", "lib"},
+			setupFiles:       []string{"src/package.json", "test-fixtures/package.json", "test-data/package.json", "lib/package.json"},
+			searchFile:       "package.json",
+			excludePatterns:  []string{"test-*"},
+			expectedCount:    2,
+			shouldContain:    []string{"src/package.json", "lib/package.json"},
+			shouldNotContain: []string{"test-fixtures", "test-data"},
+		},
+		{
+			name:             "exclude nested directories",
+			setupDirs:        []string{"src", "src/external", "src/external/deep", "lib"},
+			setupFiles:       []string{"src/package.json", "src/external/package.json", "src/external/deep/package.json", "lib/package.json"},
+			searchFile:       "package.json",
+			excludePatterns:  []string{"external"},
+			expectedCount:    2,
+			shouldContain:    []string{"src/package.json", "lib/package.json"},
+			shouldNotContain: []string{"external"},
+		},
+		{
+			name:             "existing node_modules still excluded by default",
+			setupDirs:        []string{"src", "node_modules"},
+			setupFiles:       []string{"src/package.json", "node_modules/package.json"},
+			searchFile:       "package.json",
+			excludePatterns:  []string{}, // No custom excludes
+			expectedCount:    1,
+			shouldContain:    []string{"src/package.json"},
+			shouldNotContain: []string{"node_modules"},
+		},
+		{
+			name:             "existing dotfiles still excluded by default",
+			setupDirs:        []string{"src", ".git", ".github"},
+			setupFiles:       []string{"src/package.json", ".git/package.json", ".github/package.json"},
+			searchFile:       "package.json",
+			excludePatterns:  []string{}, // No custom excludes
+			expectedCount:    1,
+			shouldContain:    []string{"src/package.json"},
+			shouldNotContain: []string{".git", ".github"},
+		},
+	}
+
+	for _, tt := range tests {
+		t.Run(tt.name, func(t *testing.T) {
+			tmpDir := t.TempDir()
+
+			// Setup directory structure
+			for _, dir := range tt.setupDirs {
+				err := os.MkdirAll(filepath.Join(tmpDir, dir), 0755)
+				require.NoError(t, err, "Failed to create directory: %s", dir)
+			}
+
+			// Create files
+			for _, file := range tt.setupFiles {
+				fullPath := filepath.Join(tmpDir, file)
+				f, err := os.Create(fullPath)
+				require.NoError(t, err, "Failed to create file: %s", file)
+				f.Close()
+			}
+
+			// Execute - this will fail until we implement the feature
+			results := fs.FindDownWithExcludes(tmpDir, tt.searchFile, tt.excludePatterns)
+
+			// Assert count
+			assert.Len(t, results, tt.expectedCount, "Expected %d results, got %d", tt.expectedCount, len(results))
+
+			// Assert contains expected paths
+			for _, expectedPath := range tt.shouldContain {
+				assert.True(t, containsPath(results, expectedPath),
+					"Results should contain path with: %s\nGot: %v", expectedPath, results)
+			}
+
+			// Assert does not contain excluded paths
+			for _, excludedPath := range tt.shouldNotContain {
+				assert.False(t, containsPath(results, excludedPath),
+					"Results should NOT contain path with: %s\nGot: %v", excludedPath, results)
+			}
+		})
+	}
+}
+
+// Helper to check if results contain a path ending with the given suffix
+func containsPath(results []string, pathSuffix string) bool {
+	for _, r := range results {
+		// Normalize both paths and check if result ends with the suffix
+		cleanResult := filepath.Clean(r)
+		cleanSuffix := filepath.Clean(pathSuffix)
+
+		// Check if it's a suffix match (e.g., "src/package.json" matches ".../src/package.json")
+		if strings.HasSuffix(cleanResult, string(filepath.Separator)+cleanSuffix) ||
+			strings.HasSuffix(cleanResult, cleanSuffix) {
+			return true
+		}
+
+		// Also check if pathSuffix is just a directory name component (for shouldNotContain checks)
+		if !strings.Contains(pathSuffix, string(filepath.Separator)) {
+			parts := strings.Split(cleanResult, string(filepath.Separator))
+			for _, part := range parts {
+				if part == pathSuffix {
+					return true
+				}
+			}
+		}
+	}
+	return false
+}
diff --git a/pkg/project/project.go b/pkg/project/project.go
index 218705c773..acb4e7db1d 100644
--- a/pkg/project/project.go
+++ b/pkg/project/project.go
@@ -35,6 +35,7 @@ type App struct {
 	Home      string                 `json:"home"`
 	Version   string                 `json:"version"`
 	Protect   bool                   `json:"protect"`
+	Exclude   []string               `json:"exclude"`
 	// Deprecated: Backend is now Home
 	Backend string `json:"backend"`
 	// Deprecated: RemovalPolicy is now Removal
diff --git a/pkg/project/run.go b/pkg/project/run.go
index 58f277c966..89edf050b2 100644
--- a/pkg/project/run.go
+++ b/pkg/project/run.go
@@ -527,7 +527,7 @@ loop:
 	complete.Finished = finished
 	complete.Errors = errors
 	complete.ImportDiffs = importDiffs
-	types.Generate(p.PathConfig(), complete.Links)
+	types.Generate(p.PathConfig(), complete.Links, p.app.Exclude)
 	defer bus.Publish(complete)
 
 	if input.Command != "diff" {
diff --git a/pkg/types/python/python.go b/pkg/types/python/python.go
index 1275eec72d..193cf1e9b7 100644
--- a/pkg/types/python/python.go
+++ b/pkg/types/python/python.go
@@ -11,8 +11,8 @@ import (
 	"github.com/sst/sst/v3/pkg/project/common"
 )
 
-func Generate(root string, links common.Links) error {
-	projects := fs.FindDown(root, "pyproject.toml")
+func Generate(root string, links common.Links, exclude []string) error {
+	projects := fs.FindDownWithExcludes(root, "pyproject.toml", exclude)
 	files := []io.Writer{}
 	for _, project := range projects {
 		path := filepath.Join(filepath.Dir(project), "sst.pyi")
diff --git a/pkg/types/rails/rails.go b/pkg/types/rails/rails.go
index 00bbabd314..1933e3c1a2 100644
--- a/pkg/types/rails/rails.go
+++ b/pkg/types/rails/rails.go
@@ -10,9 +10,9 @@ import (
 	"github.com/sst/sst/v3/pkg/project/common"
 )
 
-func Generate(root string, links common.Links) error {
+func Generate(root string, links common.Links, exclude []string) error {
 	return nil
-	projects := fs.FindDown(root, "config.ru")
+	projects := fs.FindDownWithExcludes(root, "config.ru", exclude)
 	files := []io.Writer{}
 	for _, project := range projects {
 		// check if lib path exists
diff --git a/pkg/types/types.go b/pkg/types/types.go
index 36fd70cff6..10461df74a 100644
--- a/pkg/types/types.go
+++ b/pkg/types/types.go
@@ -10,17 +10,17 @@ import (
 	"github.com/sst/sst/v3/pkg/types/typescript"
 )
 
-type Generator = func(root string, complete common.Links) error
+type Generator = func(root string, complete common.Links, exclude []string) error
 
-func Generate(cfgPath string, complete common.Links) error {
+func Generate(cfgPath string, complete common.Links, exclude []string) error {
 	root := path.ResolveRootDir(cfgPath)
 	// gitroot, err := fs.FindUp(root, ".git")
 	// if err == nil {
 	// 	root = filepath.Dir(gitroot)
 	// }
-	slog.Info("generating types", "root", root)
+	slog.Info("generating types", "root", root, "exclude", exclude)
 	for _, generator := range All {
-		err := generator(root, complete)
+		err := generator(root, complete, exclude)
 		if err != nil {
 			return err
 		}
diff --git a/pkg/types/typescript/typescript.go b/pkg/types/typescript/typescript.go
index fb6abaf1dd..2d13d2c422 100644
--- a/pkg/types/typescript/typescript.go
+++ b/pkg/types/typescript/typescript.go
@@ -20,7 +20,7 @@ var mapping = map[string]string{
 	"serviceBindings":     "Service",
 }
 
-func Generate(root string, links common.Links) error {
+func Generate(root string, links common.Links, exclude []string) error {
 	cloudflareBindings := map[string]string{}
 	for name, link := range links {
 		for _, include := range link.Include {
@@ -46,7 +46,7 @@ func Generate(root string, links common.Links) error {
 		"export {}",
 	}, "\n"))
 
-	packageJsons := fs.FindDown(root, "package.json")
+	packageJsons := fs.FindDownWithExcludes(root, "package.json", exclude)
 	rootEnv := filepath.Join(root, "sst-env.d.ts")
 	for _, packageJson := range packageJsons {
 		packageJsonFile, err := os.Open(packageJson)