diff --git a/CHANGELOG.md b/CHANGELOG.md
index 7ed3919..a1716c2 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -6,6 +6,15 @@ The format is based on Keep a Changelog, and this project follows Semantic Versi
 
 ## [Unreleased]
 
+### Added
+
+- `copilot-specs.cacheGitignoreBehavior` setting for controlling `.copilot-specs-cache/` `.gitignore` updates: automatic, prompt first, or disabled.
+
+### Changed
+
+- Cache `.gitignore` setup now checks Git before editing `.gitignore`, so paths already ignored through repository, global, or other Git ignore configuration are left alone.
+- Prompted cache `.gitignore` choices are remembered per workspace folder.
+
 ## [0.1.12] - 2026-03-05
 
 ### Changed
diff --git a/package.json b/package.json
index b0a6186..b79ebc4 100644
--- a/package.json
+++ b/package.json
@@ -444,6 +444,21 @@
           ],
           "default": "feature",
           "description": "Default spec template to use when creating a new spec."
+        },
+        "copilot-specs.cacheGitignoreBehavior": {
+          "type": "string",
+          "enum": [
+            "auto",
+            "prompt",
+            "disabled"
+          ],
+          "enumDescriptions": [
+            "Add .copilot-specs-cache/ to workspace .gitignore files automatically when Git does not already ignore it.",
+            "Ask before adding .copilot-specs-cache/ to each workspace folder's .gitignore, and remember the answer for that folder.",
+            "Never add .copilot-specs-cache/ to .gitignore files."
+          ],
+          "default": "auto",
+          "description": "Controls whether Copilot Specs adds .copilot-specs-cache/ to workspace .gitignore files."
         }
       }
     }
diff --git a/src/extension.ts b/src/extension.ts
index 5469c30..1cea3c1 100644
--- a/src/extension.ts
+++ b/src/extension.ts
@@ -71,8 +71,8 @@ import {
   listSkillFiles,
   listInstructionRulesFiles,
   listPromptFiles,
-  ensureGitignoreEntry,
 } from "./utils/fileSystem.js";
+import { ensureCacheGitignoreEntries } from "./utils/cacheGitignore.js";
 import { Task } from "./models/index.js";
 import { HookEventName } from "./models/index.js";
 
@@ -83,8 +83,8 @@ export function activate(context: vscode.ExtensionContext): void {
   initTemplates(extensionPath);
   initHooks(extensionPath);
 
-  // Ensure cache directory is gitignored
-  void ensureGitignoreEntry(".copilot-specs-cache/");
+  // Ensure cache directory is gitignored when configured and not already ignored by Git
+  void ensureCacheGitignoreEntries(context);
   // ── Providers ───────────────────────────────────────────────────────────────
 
   const specProvider = new SpecProvider();
diff --git a/src/test/suite/cacheGitignore.test.ts b/src/test/suite/cacheGitignore.test.ts
new file mode 100644
index 0000000..99d6b32
--- /dev/null
+++ b/src/test/suite/cacheGitignore.test.ts
@@ -0,0 +1,59 @@
+import { execFile } from "node:child_process";
+import * as assert from "node:assert/strict";
+import * as fs from "node:fs/promises";
+import * as os from "node:os";
+import * as path from "node:path";
+import { promisify } from "node:util";
+
+import { isCachePathIgnoredByGit } from "../../utils/cacheGitignore.js";
+
+const execFileAsync = promisify(execFile);
+
+suite("cacheGitignore", () => {
+  test("detects cache path ignored by repository .gitignore", async () => {
+    const repo = await createGitRepo();
+    try {
+      await fs.writeFile(
+        path.join(repo, ".gitignore"),
+        ".copilot-specs-cache/\n",
+        "utf8",
+      );
+
+      assert.equal(await isCachePathIgnoredByGit(repo), true);
+    } finally {
+      await fs.rm(repo, { force: true, recursive: true });
+    }
+  });
+
+  test("detects cache path ignored through core.excludesFile", async () => {
+    const repo = await createGitRepo();
+    const excludesFile = path.join(repo, "global-ignore");
+    try {
+      await fs.writeFile(excludesFile, ".copilot-specs-cache/\n", "utf8");
+      await execFileAsync(
+        "git",
+        ["config", "core.excludesFile", excludesFile],
+        { cwd: repo },
+      );
+
+      assert.equal(await isCachePathIgnoredByGit(repo), true);
+    } finally {
+      await fs.rm(repo, { force: true, recursive: true });
+    }
+  });
+
+  test("returns false when Git does not ignore the cache path", async () => {
+    const repo = await createGitRepo();
+    try {
+      assert.equal(await isCachePathIgnoredByGit(repo), false);
+    } finally {
+      await fs.rm(repo, { force: true, recursive: true });
+    }
+  });
+});
+
+async function createGitRepo(): Promise<string> {
+  const repo = await fs.mkdtemp(path.join(os.tmpdir(), "copilot-specs-test-"));
+  await execFileAsync("git", ["init"], { cwd: repo });
+  return repo;
+}
diff --git a/src/utils/cacheGitignore.ts b/src/utils/cacheGitignore.ts
new file mode 100644
index 0000000..7734e10
--- /dev/null
+++ b/src/utils/cacheGitignore.ts
@@ -0,0 +1,114 @@
+import { execFile } from "node:child_process";
+import * as vscode from "vscode";
+
+import { ensureGitignoreEntry } from "./fileSystem.js";
+
+export const CACHE_GITIGNORE_ENTRY = ".copilot-specs-cache/";
+export const CACHE_GITIGNORE_PATH = ".copilot-specs-cache";
+
+export type CacheGitignoreBehavior = "auto" | "prompt" | "disabled";
+
+type RememberedCacheGitignoreChoice = "add" | "skip";
+
+const CACHE_GITIGNORE_BEHAVIOR_SETTING = "cacheGitignoreBehavior";
+const CACHE_GITIGNORE_CHOICE_KEY_PREFIX = "cacheGitignoreChoice";
+
+export function getCacheGitignoreBehavior(): CacheGitignoreBehavior {
+  const value = vscode.workspace
+    .getConfiguration("copilot-specs")
+    .get<string>(CACHE_GITIGNORE_BEHAVIOR_SETTING, "auto");
+
+  return isCacheGitignoreBehavior(value) ? value : "auto";
+}
+
+export async function ensureCacheGitignoreEntries(
+  context: vscode.ExtensionContext,
+): Promise<void> {
+  const behavior = getCacheGitignoreBehavior();
+  if (behavior === "disabled") {
+    return;
+  }
+
+  for (const folder of vscode.workspace.workspaceFolders ?? []) {
+    await ensureCacheGitignoreEntryForFolder(context, folder, behavior);
+  }
+}
+
+async function ensureCacheGitignoreEntryForFolder(
+  context: vscode.ExtensionContext,
+  folder: vscode.WorkspaceFolder,
+  behavior: CacheGitignoreBehavior,
+): Promise<void> {
+  if (await isCachePathIgnoredByGit(folder.uri.fsPath)) {
+    return;
+  }
+
+  if (behavior === "prompt") {
+    const rememberedChoice = context.workspaceState.get<
+      RememberedCacheGitignoreChoice
+    >(getChoiceKey(folder));
+
+    if (rememberedChoice === "skip") {
+      return;
+    }
+
+    if (rememberedChoice !== "add") {
+      const choice = await promptForCacheGitignoreEntry(folder);
+      if (choice === "Add") {
+        await context.workspaceState.update(getChoiceKey(folder), "add");
+      } else if (choice === "Don't Add") {
+        await context.workspaceState.update(getChoiceKey(folder), "skip");
+        return;
+      } else {
+        return;
+      }
+    }
+  }
+
+  await ensureGitignoreEntry(CACHE_GITIGNORE_ENTRY, folder.uri);
+}
+
+async function promptForCacheGitignoreEntry(
+  folder: vscode.WorkspaceFolder,
+): Promise<string | undefined> {
+  return vscode.window.showInformationMessage(
+    `Add ${CACHE_GITIGNORE_ENTRY} to ${folder.name}'s .gitignore?`,
+    "Add",
+    "Don't Add",
+  );
+}
+
+export async function isCachePathIgnoredByGit(cwd: string): Promise<boolean> {
+  const pathsToCheck = [CACHE_GITIGNORE_PATH, CACHE_GITIGNORE_ENTRY];
+
+  for (const pathToCheck of pathsToCheck) {
+    if (await isPathIgnoredByGit(cwd, pathToCheck)) {
+      return true;
+    }
+  }
+
+  return false;
+}
+
+function isPathIgnoredByGit(cwd: string, pathToCheck: string): Promise<boolean> {
+  return new Promise((resolve) => {
+    execFile(
+      "git",
+      ["check-ignore", "-q", "--", pathToCheck],
+      { cwd },
+      (error) => {
+        resolve(!error);
+      },
+    );
+  });
+}
+
+function getChoiceKey(folder: vscode.WorkspaceFolder): string {
+  return `${CACHE_GITIGNORE_CHOICE_KEY_PREFIX}:${folder.uri.toString()}`;
+}
+
+function isCacheGitignoreBehavior(
+  value: string,
+): value is CacheGitignoreBehavior {
+  return value === "auto" || value === "prompt" || value === "disabled";
+}
diff --git a/src/utils/fileSystem.ts b/src/utils/fileSystem.ts
index e3a6b14..5157697 100644
--- a/src/utils/fileSystem.ts
+++ b/src/utils/fileSystem.ts
@@ -50,8 +50,13 @@ export async function ensureDir(uri: vscode.Uri): Promise<void> {
 /**
  * Adds `entry` to the workspace .gitignore if not already present.
  */
-export async function ensureGitignoreEntry(entry: string): Promise<void> {
-  const uri = resolveWorkspacePath(".gitignore");
+export async function ensureGitignoreEntry(
+  entry: string,
+  workspaceUri?: vscode.Uri,
+): Promise<void> {
+  const uri = workspaceUri
+    ? vscode.Uri.joinPath(workspaceUri, ".gitignore")
+    : resolveWorkspacePath(".gitignore");
   if (!uri) {
     return;
   }