diff --git a/src/spec-node/dockerCompose.ts b/src/spec-node/dockerCompose.ts
index 8093464cc..a4e582d32 100644
--- a/src/spec-node/dockerCompose.ts
+++ b/src/spec-node/dockerCompose.ts
@@ -19,6 +19,7 @@ import { Mount, parseMount } from '../spec-configuration/containerFeaturesConfig
 import path from 'path';
 import { getDevcontainerMetadata, getImageBuildInfoFromDockerfile, getImageBuildInfoFromImage, getImageMetadataFromContainer, ImageBuildInfo, lifecycleCommandOriginMapFromMetadata, mergeConfiguration, MergedDevContainerConfig } from './imageMetadata';
 import { ensureDockerfileHasFinalStageName } from './dockerfileUtils';
+import { copyDockerIgnoreFileIfExists } from './dockerignoreUtils';
 import { randomUUID } from 'crypto';
 
 const projectLabel = 'com.docker.compose.project';
@@ -162,12 +163,13 @@ export async function buildAndExtendDockerCompose(configWithRaw: SubstitutedConf
 	// determine base imageName for generated features build stage(s)
 	let baseName = 'dev_container_auto_added_stage_label';
 	let dockerfile: string | undefined;
+	let sourceDockerfilePath: string | undefined;
 	let imageBuildInfo: ImageBuildInfo;
 	const serviceInfo = getBuildInfoForService(composeService, cliHost.path, localComposeFiles);
 	if (serviceInfo.build) {
 		const { context, dockerfilePath, target } = serviceInfo.build;
-		const resolvedDockerfilePath = cliHost.path.isAbsolute(dockerfilePath) ? dockerfilePath : path.resolve(context, dockerfilePath);
-		const originalDockerfile = (await cliHost.readFile(resolvedDockerfilePath)).toString();
+		sourceDockerfilePath = cliHost.path.isAbsolute(dockerfilePath) ? dockerfilePath : path.resolve(context, dockerfilePath);
+		const originalDockerfile = (await cliHost.readFile(sourceDockerfilePath)).toString();
 		dockerfile = originalDockerfile;
 		if (target) {
 			// Explictly set build target for the dev container build features on that
@@ -214,6 +216,9 @@ export async function buildAndExtendDockerCompose(configWithRaw: SubstitutedConf
 		let finalDockerfileContent = `${featureBuildInfo.dockerfilePrefixContent}${dockerfile}\n${featureBuildInfo.dockerfileContent}`;
 		const finalDockerfilePath = cliHost.path.join(featureBuildInfo?.dstFolder, 'Dockerfile-with-features');
 		await cliHost.writeFile(finalDockerfilePath, Buffer.from(finalDockerfileContent));
+		if (sourceDockerfilePath) {
+			await copyDockerIgnoreFileIfExists(cliHost, sourceDockerfilePath, finalDockerfilePath);
+		}
 		buildOverrideContent += `      dockerfile: ${finalDockerfilePath}\n`;
 		if (serviceInfo.build?.target) {
 			// Replace target. (Only when set because it is only supported with Docker Compose file version 3.4 and later.)
diff --git a/src/spec-node/dockerignoreUtils.ts b/src/spec-node/dockerignoreUtils.ts
new file mode 100644
index 000000000..566e084f6
--- /dev/null
+++ b/src/spec-node/dockerignoreUtils.ts
@@ -0,0 +1,16 @@
+/*---------------------------------------------------------------------------------------------
+ *  Copyright (c) Microsoft Corporation. All rights reserved.
+ *  Licensed under the MIT License. See License.txt in the project root for license information.
+ *--------------------------------------------------------------------------------------------*/
+
+import { CLIHost } from '../spec-common/cliHost';
+
+export async function copyDockerIgnoreFileIfExists(cliHost: CLIHost, sourceDockerfilePath: string, targetDockerfilePath: string) {
+	const sourceDockerIgnorePath = `${sourceDockerfilePath}.dockerignore`;
+	if (!(await cliHost.isFile(sourceDockerIgnorePath))) {
+		return;
+	}
+
+	const targetDockerIgnorePath = `${targetDockerfilePath}.dockerignore`;
+	await cliHost.writeFile(targetDockerIgnorePath, await cliHost.readFile(sourceDockerIgnorePath));
+}
diff --git a/src/spec-node/singleContainer.ts b/src/spec-node/singleContainer.ts
index 1c3669f74..041f4d494 100644
--- a/src/spec-node/singleContainer.ts
+++ b/src/spec-node/singleContainer.ts
@@ -13,6 +13,7 @@ import { LogLevel, Log, makeLog } from '../spec-utils/log';
 import { extendImage, getExtendImageBuildInfo, updateRemoteUserUID } from './containerFeatures';
 import { getDevcontainerMetadata, getImageBuildInfoFromDockerfile, getImageMetadataFromContainer, ImageMetadataEntry, lifecycleCommandOriginMapFromMetadata, mergeConfiguration, MergedDevContainerConfig } from './imageMetadata';
 import { ensureDockerfileHasFinalStageName, generateMountCommand } from './dockerfileUtils';
+import { copyDockerIgnoreFileIfExists } from './dockerignoreUtils';
 
 export const hostFolderLabel = 'devcontainer.local_folder'; // used to label containers created from a workspace/folder
 export const configFileLabel = 'devcontainer.config_file';
@@ -161,6 +162,7 @@ async function buildAndExtendImage(buildParams: DockerResolverParameters, config
 		let finalDockerfileContent = `${featureBuildInfo.dockerfilePrefixContent}${dockerfile}\n${featureBuildInfo.dockerfileContent}`;
 		finalDockerfilePath = cliHost.path.join(featureBuildInfo?.dstFolder, 'Dockerfile-with-features');
 		await cliHost.writeFile(finalDockerfilePath, Buffer.from(finalDockerfileContent));
+		await copyDockerIgnoreFileIfExists(cliHost, dockerfilePath, finalDockerfilePath);
 
 		// track additional build args to include below
 		for (const buildContext in featureBuildInfo.buildKitContexts) {
diff --git a/src/test/dockerignore.test.ts b/src/test/dockerignore.test.ts
new file mode 100644
index 000000000..34626d368
--- /dev/null
+++ b/src/test/dockerignore.test.ts
@@ -0,0 +1,124 @@
+import { assert } from 'chai';
+import { promises as fs } from 'fs';
+import * as os from 'os';
+import * as path from 'path';
+import { getCLIHost } from '../spec-common/cliHost';
+import { buildAndExtendDockerCompose } from '../spec-node/dockerCompose';
+import { nullLog } from '../spec-utils/log';
+import { testSubstitute } from './testUtils';
+
+describe('dockerignore handling', () => {
+	it('copies Dockerfile-specific dockerignore files next to generated compose Dockerfiles', async () => {
+		const root = await fs.mkdtemp(path.join(os.tmpdir(), 'dockerignore-compose-'));
+		const workspace = path.join(root, 'workspace');
+		const devcontainerDir = path.join(workspace, '.devcontainer', 'app');
+		const composeFile = path.join(devcontainerDir, 'docker-compose.yaml');
+		const dockerfile = path.join(devcontainerDir, 'dev.Dockerfile');
+		const sourceDockerIgnore = `${dockerfile}.dockerignore`;
+		const dockerIgnoreContent = '*\n!/app/requirements.txt\n';
+		let generatedFolder: string | undefined;
+
+		try {
+			await fs.mkdir(devcontainerDir, { recursive: true });
+			await fs.writeFile(dockerfile, 'FROM ubuntu:24.04\nRUN echo hello\n');
+			await fs.writeFile(sourceDockerIgnore, dockerIgnoreContent);
+			await fs.writeFile(composeFile, [
+				'services:',
+				'  app:',
+				'    build:',
+				'      context: ../..',
+				'      dockerfile: .devcontainer/app/dev.Dockerfile',
+				'',
+			].join('\n'));
+
+			const fakeDocker = path.join(root, 'fake-docker');
+			await fs.writeFile(fakeDocker, `#!/bin/sh
+set -eu
+mode=""
+for arg in "$@"; do
+	case "$arg" in
+		config) mode="config" ;;
+		build) mode="build" ;;
+	esac
+done
+if [ "$1" = "inspect" ]; then
+	printf '%s' '[{"Id":"img","Architecture":"amd64","Os":"linux","Config":{"User":"","Env":[],"Labels":{}}}]'
+	exit 0
+fi
+if [ "$1" = "compose" ] && [ "$mode" = "config" ]; then
+	cat <<'EOF'
+services:
+  app:
+    build:
+      context: ${workspace}
+      dockerfile: .devcontainer/app/dev.Dockerfile
+EOF
+	exit 0
+fi
+if [ "$1" = "compose" ] && [ "$mode" = "build" ]; then
+	exit 0
+fi
+printf 'unexpected %s\n' "$*" >&2
+exit 1
+`);
+			await fs.chmod(fakeDocker, 0o755);
+
+			const cliHost = await getCLIHost(workspace, async () => undefined, false);
+			const common = {
+				cliHost,
+				env: process.env,
+				output: nullLog,
+				package: { name: 'test', version: '0.0.0' },
+				persistedFolder: path.join(root, 'persisted'),
+				skipPersistingCustomizationsFromFeatures: false,
+				omitSyntaxDirective: false,
+			} as any;
+			const params = {
+				common,
+				dockerCLI: fakeDocker,
+				dockerComposeCLI: async () => ({ version: '2.20.0', cmd: fakeDocker, args: ['compose'] }),
+				dockerEnv: process.env,
+				isPodman: false,
+				buildKitVersion: undefined,
+				dockerEngineVersion: undefined,
+				isTTY: false,
+				buildPlatformInfo: { os: 'linux', arch: 'amd64' },
+				targetPlatformInfo: { os: 'linux', arch: 'amd64' },
+			} as any;
+			const config = { service: 'app' };
+
+			const result = await buildAndExtendDockerCompose(
+				{ config, raw: config, substitute: testSubstitute } as any,
+				'proj',
+				params,
+				[composeFile],
+				undefined,
+				[],
+				[],
+				false,
+				common.persistedFolder,
+				'docker-compose.devcontainer.build',
+				'',
+				{},
+				true,
+				undefined,
+				true
+			);
+
+			assert.lengthOf(result.additionalComposeOverrideFiles, 1);
+			const override = await fs.readFile(result.additionalComposeOverrideFiles[0], 'utf8');
+			const match = override.match(/dockerfile: (.+)/);
+			assert.isNotNull(match);
+			const generatedDockerfile = match![1].trim();
+			const generatedDockerIgnore = `${generatedDockerfile}.dockerignore`;
+
+			generatedFolder = path.dirname(generatedDockerfile);
+			assert.strictEqual(await fs.readFile(generatedDockerIgnore, 'utf8'), dockerIgnoreContent);
+		} finally {
+			await fs.rm(root, { recursive: true, force: true });
+			if (generatedFolder) {
+				await fs.rm(generatedFolder, { recursive: true, force: true });
+			}
+		}
+	});
+});