diff --git a/crates/icp-cli/src/operations/bundle.rs b/crates/icp-cli/src/operations/bundle.rs
index 386f6d13..c725ec8d 100644
--- a/crates/icp-cli/src/operations/bundle.rs
+++ b/crates/icp-cli/src/operations/bundle.rs
@@ -238,7 +238,8 @@ pub(crate) async fn create_bundle(
 ) -> Result<(), BundleError> {
     validate_canisters(&canisters)?;
     let canonical_project_dir = canonicalize(project_dir)?;
-    let canonical_sync_dirs = validate_source_paths(&canisters, &canonical_project_dir)?;
+    let canonical_sync_dirs =
+        validate_source_paths(project_dir, &canisters, &canonical_project_dir)?;
     validate_output_path(output, &canonical_sync_dirs)?;
 
     build_many_with_progress_bar(
@@ -769,10 +770,11 @@ fn validate_canisters(canisters: &[(PathBuf, Canister)]) -> Result<(), BundleErr
     Ok(())
 }
 
-/// Canonicalize every asset/plugin source path and confirm it lives inside the canonical
+/// Make every asset/plugin source path absolute and confirm it lives inside the
 /// project directory. Returns the canonical sync-directory paths for use in output-overlap
 /// detection.
 fn validate_source_paths(
+    project_dir: &Path,
     canisters: &[(PathBuf, Canister)],
     canonical_project_dir: &Path,
 ) -> Result<Vec<PathBuf>, BundleError> {
@@ -785,19 +787,21 @@ fn validate_source_paths(
                     if let Some(dirs) = &adapter.dirs {
                         for d in dirs {
                             let src = canister_path.join(d);
-                            let canon = canonicalize_within_project(
+                            let resolved = resolve_within_project(
                                 &src,
+                                project_dir,
                                 canonical_project_dir,
                                 &canister.name,
                             )?;
-                            canonical_sync_dirs.push(canon);
+                            canonical_sync_dirs.push(resolved);
                         }
                     }
                     if let Some(files) = &adapter.files {
                         for f in files {
                             let src = canister_path.join(f);
-                            canonicalize_within_project(
+                            resolve_within_project(
                                 &src,
+                                project_dir,
                                 canonical_project_dir,
                                 &canister.name,
                             )?;
@@ -810,6 +814,59 @@ fn validate_source_paths(
     Ok(canonical_sync_dirs)
 }
 
+/// Resolves a sync source path to its absolute location under the canonical
+/// project directory, rejecting paths that escape the project — without touching
+/// the filesystem.
+///
+/// Unlike [`canonicalize_within_project`], this performs no syscalls and does not
+/// require the path to exist. Sync directories are frequently produced by a
+/// canister's own build step (e.g. a frontend `dist` from `npm run build`), so
+/// they do not exist yet when this validation runs, before the build. Validating
+/// lexically keeps that feedback early instead of deferring it until after a
+/// potentially slow build.
+///
+/// Every canister path is rooted at `project_dir`, so the path's project-relative
+/// portion is recovered with `strip_prefix` and its `.`/`..` components resolved
+/// textually; a `..` that rises above the root — or an absolute/sibling path that
+/// `strip_prefix` rejects — is an escape. Symlinks are deliberately not resolved:
+/// the archive step records them verbatim (`follow_symlinks(false)`), and a
+/// not-yet-built directory cannot be a symlink anyway.
+fn resolve_within_project(
+    src: &Path,
+    project_dir: &Path,
+    canonical_project_dir: &Path,
+    canister: &str,
+) -> Result<PathBuf, BundleError> {
+    let escapes = || {
+        SourceEscapesProjectSnafu {
+            canister: canister.to_owned(),
+            path: src.to_path_buf(),
+            root: canonical_project_dir.to_path_buf(),
+        }
+        .build()
+    };
+
+    let project_dir = project_dir.strip_prefix(".").unwrap_or(project_dir);
+    let rel = src.strip_prefix(project_dir).map_err(|_| escapes())?;
+
+    let mut components: Vec<&str> = Vec::new();
+    for component in rel.components() {
+        match component {
+            Utf8Component::Normal(c) => components.push(c),
+            Utf8Component::CurDir => {}
+            // A `..` with nothing left to pop rises above the project root.
+            Utf8Component::ParentDir => {
+                components.pop().ok_or_else(escapes)?;
+            }
+            Utf8Component::RootDir | Utf8Component::Prefix(_) => return Err(escapes()),
+        }
+    }
+
+    let mut resolved = canonical_project_dir.to_path_buf();
+    resolved.extend(components);
+    Ok(resolved)
+}
+
 /// Refuse to write the bundle output into a directory we are about to recursively archive —
 /// otherwise the partial bundle file would be included in itself.
 fn validate_output_path(output: &Path, canonical_sync_dirs: &[PathBuf]) -> Result<(), BundleError> {
diff --git a/crates/icp-cli/tests/bundle_tests.rs b/crates/icp-cli/tests/bundle_tests.rs
index d693edbd..8a23d75b 100644
--- a/crates/icp-cli/tests/bundle_tests.rs
+++ b/crates/icp-cli/tests/bundle_tests.rs
@@ -523,6 +523,71 @@ fn bundle_rejects_source_outside_project() {
         .stderr(contains("my-canister").and(contains("outside the project directory")));
 }
 
+/// A plugin's synced directory is often an output of the canister's own build
+/// step (e.g. a frontend `dist` produced by `npm run build`), so it does not
+/// exist when bundling validates the sync sources, before the build. Validation
+/// must resolve sync paths lexically (no canonicalization) so a not-yet-built
+/// directory is accepted; the build then creates it before it is archived.
+#[test]
+fn bundle_accepts_synced_dir_created_by_build_step() {
+    let ctx = TestContext::new();
+    let project_dir = ctx.create_project_dir("icp");
+    let wasm_src = ctx.make_asset("example_icp_mo.wasm");
+
+    write(&project_dir.join("plugin.wasm"), b"\x00asm\x01\x00\x00\x00")
+        .expect("failed to write plugin wasm");
+
+    // `generated-assets` is created by the build step; it does not exist on disk
+    // before `icp project bundle` runs.
+    let pm = formatdoc! {r#"
+        canisters:
+          - name: my-canister
+            build:
+              steps:
+                - type: script
+                  commands:
+                    - mkdir -p generated-assets
+                    - printf hello > generated-assets/index.html
+                    - cp '{wasm_src}' "$ICP_WASM_OUTPUT_PATH"
+            sync:
+              steps:
+                - type: plugin
+                  path: plugin.wasm
+                  dirs:
+                    - generated-assets
+    "#};
+
+    write_string(&project_dir.join("icp.yaml"), &pm).expect("failed to write project manifest");
+
+    let bundle_path = project_dir.join("bundle.tar.gz");
+    ctx.icp()
+        .current_dir(&project_dir)
+        .args(["project", "bundle", "--output", bundle_path.as_str()])
+        .assert()
+        .success();
+
+    // The build-produced directory is archived under the plugin's `dirs/` area.
+    let bundle_bytes = fs::read(bundle_path.as_std_path()).expect("failed to read bundle");
+    let gz = GzDecoder::new(BufReader::new(bundle_bytes.as_slice()));
+    let mut archive = Archive::new(gz);
+    let mut found_asset = false;
+    for entry in archive.entries().expect("failed to read archive entries") {
+        let entry = entry.expect("failed to read archive entry");
+        let path = entry
+            .path()
+            .expect("failed to get entry path")
+            .to_string_lossy()
+            .into_owned();
+        if path == "plugins/my-canister/0/dirs/generated-assets/index.html" {
+            found_asset = true;
+        }
+    }
+    assert!(
+        found_asset,
+        "build-produced synced dir was not archived in the bundle"
+    );
+}
+
 /// Bundle a canister with two plugin sync steps and verify the archive layout: per-plugin
 /// wasm at `plugins/{canister}/{idx}.wasm`, preopened dirs at `plugins/{canister}/{idx}/dirs/`,
 /// input files at `plugins/{canister}/{idx}/files/`. Also verify the rewritten manifest