diff --git a/.daggerignore b/.daggerignore
new file mode 100644
index 00000000..af35429b
--- /dev/null
+++ b/.daggerignore
@@ -0,0 +1,3 @@
+vendor
+hack
+cmd/dagger/dagger
diff --git a/dagger/pipeline.go b/dagger/pipeline.go
index a9fee6df..1ace8113 100644
--- a/dagger/pipeline.go
+++ b/dagger/pipeline.go
@@ -1,17 +1,20 @@
 package dagger
 
 import (
+	"bytes"
 	"context"
 	"encoding/json"
 	"errors"
 	"fmt"
 	"io/fs"
+	"path"
 	"strings"
 
 	"github.com/docker/distribution/reference"
 	bk "github.com/moby/buildkit/client"
 	"github.com/moby/buildkit/client/llb"
 	dockerfilebuilder "github.com/moby/buildkit/frontend/dockerfile/builder"
+	"github.com/moby/buildkit/frontend/dockerfile/dockerignore"
 	bkgw "github.com/moby/buildkit/frontend/gateway/client"
 	bkpb "github.com/moby/buildkit/solver/pb"
 	"github.com/rs/zerolog/log"
@@ -20,6 +23,10 @@ import (
 	"dagger.io/go/dagger/compiler"
 )
 
+const (
+	daggerignoreFilename = ".daggerignore"
+)
+
 // An execution pipeline
 type Pipeline struct {
 	name   string
@@ -257,11 +264,50 @@ func (p *Pipeline) Local(ctx context.Context, op *compiler.Value, st llb.State)
 	if err != nil {
 		return st, err
 	}
-	var include []string
-	if inc := op.Get("include"); inc.Exists() {
-		if err := inc.Decode(&include); err != nil {
+
+	// daggerignore processing
+	// buildkit related setup
+	daggerignoreState := llb.Local(
+		dir,
+		llb.SessionID(p.s.SessionID()),
+		llb.FollowPaths([]string{daggerignoreFilename}),
+		llb.SharedKeyHint(dir+"-"+daggerignoreFilename),
+		llb.WithCustomName(p.vertexNamef("Try loading %s", path.Join(dir, daggerignoreFilename))),
+	)
+	ref, err := p.s.Solve(ctx, daggerignoreState)
+	if err != nil {
+		return st, err
+	}
+
+	// try to read file
+	var daggerignore []byte
+	// bool in case file is empty
+	ignorefound := true
+	daggerignore, err = ref.ReadFile(ctx, bkgw.ReadRequest{
+		Filename: daggerignoreFilename,
+	})
+	// hack for string introspection because !errors.Is(err, os.ErrNotExist) does not work, same for fs
+	if err != nil {
+		if !strings.Contains(err.Error(), ".daggerignore: no such file or directory") {
 			return st, err
 		}
+		ignorefound = false
+	}
+
+	// parse out excludes, works even if file does not exist
+	var excludes []string
+	excludes, err = dockerignore.ReadAll(bytes.NewBuffer(daggerignore))
+	if err != nil {
+		return st, fmt.Errorf("%w failed to parse daggerignore", err)
+	}
+
+	// log out patterns if file exists
+	if ignorefound {
+		log.
+			Ctx(ctx).
+			Debug().
+			Str("patterns", fmt.Sprint(excludes)).
+			Msg("daggerignore exclude patterns")
 	}
 	// FIXME: Remove the `Copy` and use `Local` directly.
 	//
@@ -275,7 +321,8 @@ func (p *Pipeline) Local(ctx context.Context, op *compiler.Value, st llb.State)
 		llb.Copy(
 			llb.Local(
 				dir,
-				llb.FollowPaths(include),
+				// llb.FollowPaths(include),
+				llb.ExcludePatterns(excludes),
 				llb.WithCustomName(p.vertexNamef("Local %s [transfer]", dir)),
 
 				// Without hint, multiple `llb.Local` operations on the
diff --git a/tests/ignore/main.cue b/tests/ignore/main.cue
new file mode 100644
index 00000000..6f071151
--- /dev/null
+++ b/tests/ignore/main.cue
@@ -0,0 +1,41 @@
+package test
+
+import (
+	"dagger.io/alpine"
+	"dagger.io/dagger"
+	"dagger.io/llb"
+)
+
+TestData: dagger.#Artifact
+
+_expected: """
+	/src/b.txt
+	
+	/src/foo:
+	bar.txt
+	
+	"""
+
+TestIgnore: {
+	string
+	#compute: [
+		llb.#Load & {from: alpine.#Image},
+		llb.#Exec & {
+			args: ["sh", "-c", "ls /src/* > /out.txt"]
+			mount: "/src": from: TestData
+		},
+		llb.#Export & {source: "/out.txt"},
+		llb.#Exec & {
+			args: [
+				"sh",
+				"-ec",
+				"""
+				cat > /test.txt << EOF
+				\(_expected)
+				EOF
+				test "$(cat /out.txt)" = "$(cat /test.txt)"
+				""",
+			]
+		},
+	]
+}
diff --git a/tests/ignore/testdata/.daggerignore b/tests/ignore/testdata/.daggerignore
new file mode 100644
index 00000000..a68c1832
--- /dev/null
+++ b/tests/ignore/testdata/.daggerignore
@@ -0,0 +1,2 @@
+a.txt
+*/*.json
diff --git a/tests/ignore/testdata/a.txt b/tests/ignore/testdata/a.txt
new file mode 100644
index 00000000..e69de29b
diff --git a/tests/ignore/testdata/b.txt b/tests/ignore/testdata/b.txt
new file mode 100644
index 00000000..e69de29b
diff --git a/tests/ignore/testdata/foo/bar.txt b/tests/ignore/testdata/foo/bar.txt
new file mode 100644
index 00000000..e69de29b
diff --git a/tests/ignore/testdata/foo/cow.json b/tests/ignore/testdata/foo/cow.json
new file mode 100644
index 00000000..e69de29b
diff --git a/tests/stdlib/file/file.cue b/tests/stdlib/file/file.cue
index 6139446b..6cdeef89 100644
--- a/tests/stdlib/file/file.cue
+++ b/tests/stdlib/file/file.cue
@@ -1,7 +1,7 @@
 package f
 
 import (
-	"dagger.io/dagger"
+	"dagger.io/llb"
 	"dagger.io/alpine"
 	"dagger.io/file"
 )
@@ -15,8 +15,8 @@ TestCreate: {
 	}
 
 	test: #compute: [
-		dagger.#Load & {from: alpine.#Image},
-		dagger.#Exec & {
+		llb.#Load & {from: alpine.#Image},
+		llb.#Exec & {
 			args: [
 				"sh",
 				"-ec",
@@ -38,8 +38,8 @@ TestRead: {
 		from:     alpine.#Image & {version: "3.10.6"}
 	}
 	test: #compute: [
-		dagger.#Load & {from: alpine.#Image},
-		dagger.#Exec & {
+		llb.#Load & {from: alpine.#Image},
+		llb.#Exec & {
 			args: [
 				"sh",
 				"-ec",
@@ -64,8 +64,8 @@ TestRead2: {
 	}
 
 	test: #compute: [
-		dagger.#Load & {from: alpine.#Image},
-		dagger.#Exec & {
+		llb.#Load & {from: alpine.#Image},
+		llb.#Exec & {
 			args: [
 				"sh",
 				"-ec",
@@ -101,23 +101,6 @@ TestAppend: {
 	new: read.contents
 
 	test: new & "hello worldfoo bar"
-
-	//test: #compute: [
-	//dagger.#Load & {from: alpine.#Image},
-	//dagger.#Exec & {
-	//args: [
-	//"sh",
-	//"-ec",
-	//"""
-	//test "$(cat /file.txt)" = "hello worldfoo bar"
-	//""",
-	//]
-	//mount: "/file.txt": {
-	//from: append
-	//path: "/file.txt"
-	//}
-	//},
-	//]
 }
 
 TestGlob: {
diff --git a/tests/test.sh b/tests/test.sh
index 35a56593..ce5d936a 100755
--- a/tests/test.sh
+++ b/tests/test.sh
@@ -247,6 +247,11 @@ test::dockerbuild() {
       "$dagger" "${DAGGER_BINARY_ARGS[@]}" compute --input-dir TestData="$d"/dockerbuild/testdata "$d"/dockerbuild
 }
 
+test::daggerignore() {
+  test::one "Dagger Ignore" --exit=0 \
+      "$dagger" "${DAGGER_BINARY_ARGS[@]}" compute --input-dir TestData="$d"/ignore/testdata "$d"/ignore
+}
+
 test::all(){
   local dagger="$1"
 
@@ -264,6 +269,7 @@ test::all(){
   test::input "$dagger"
   test::subdir "$dagger"
   test::dockerbuild "$dagger"
+  test::daggerignore "$dagger"
 
   test::stdlib "$dagger"
 }