diff --git a/.changeset/fix-init-install-in-place.md b/.changeset/fix-init-install-in-place.md
new file mode 100644
index 00000000000..3da21318a54
--- /dev/null
+++ b/.changeset/fix-init-install-in-place.md
@@ -0,0 +1,5 @@
+---
+'@shopify/app': patch
+---
+
+Fix `shopify app init` leaving dangling `node_modules` symlinks on Windows when using `pnpm` (and similarly affected package managers). The scaffolded project is now moved to its final directory before dependencies are installed, so package-manager-managed symlinks/junctions resolve to the final location instead of the temporary scaffold path.
diff --git a/packages/app/src/cli/services/init/init.ts b/packages/app/src/cli/services/init/init.ts
index e4d0cc9e34b..de97889c1cb 100644
--- a/packages/app/src/cli/services/init/init.ts
+++ b/packages/app/src/cli/services/init/init.ts
@@ -27,6 +27,7 @@ import {
   mkdir,
   moveFile,
   readFile,
+  rmdir,
   writeFile,
 } from '@shopify/cli-kit/node/fs'
 import {joinPath, normalizePath} from '@shopify/cli-kit/node/path'
@@ -170,32 +171,52 @@ async function init(options: InitOptions) {
       })
     }
 
+    // Move the scaffolded template into its final directory BEFORE installing
+    // dependencies. pnpm (and other package managers) create absolute-path
+    // junctions/symlinks on Windows, so installing in the temp dir and then
+    // moving the tree orphans every link under node_modules/.pnpm/*.
+    let outputDirectoryCreated = false
+    tasks.push({
+      title: 'Preparing project directory',
+      task: async () => {
+        await ensureAppDirectoryIsAvailable(outputDirectory, hyphenizedName)
+        outputDirectoryCreated = true
+        await moveFile(templateScaffoldDir, outputDirectory)
+      },
+    })
+
     tasks.push(
       {
         title: `Installing dependencies with ${packageManager}`,
         task: async () => {
-          await getDeepInstallNPMTasks({from: templateScaffoldDir, packageManager})
+          await getDeepInstallNPMTasks({from: outputDirectory, packageManager})
         },
       },
       {
         title: 'Cleaning up',
         task: async () => {
-          await cleanup(templateScaffoldDir, packageManager)
+          await cleanup(outputDirectory, packageManager)
         },
       },
       {
         title: 'Initializing a Git repository...',
         task: async () => {
-          await initializeGitRepository(templateScaffoldDir)
+          await initializeGitRepository(outputDirectory)
         },
       },
     )
 
-    await renderTasks(tasks)
-
-    // Ensure the app directory is available before moving the template scaffold
-    await ensureAppDirectoryIsAvailable(outputDirectory, hyphenizedName)
-    await moveFile(templateScaffoldDir, outputDirectory)
+    try {
+      await renderTasks(tasks)
+    } catch (error) {
+      // If a task failed after the project was moved to its final directory,
+      // remove the partial project so the user isn't left with a half-baked
+      // scaffold (no node_modules, no cleanup, no git init).
+      if (outputDirectoryCreated) {
+        await rmdir(outputDirectory).catch(() => {})
+      }
+      throw error
+    }
   })
 
   let app: OrganizationApp