diff --git a/dagger/pipeline.go b/dagger/pipeline.go
index 1741ca49..f0ca2999 100644
--- a/dagger/pipeline.go
+++ b/dagger/pipeline.go
@@ -234,7 +234,7 @@ func (p *Pipeline) Subdir(ctx context.Context, op *compiler.Value, st llb.State)
 	if err != nil {
 		return st, err
 	}
-	return st.File(
+	return llb.Scratch().File(
 		llb.Copy(
 			st,
 			dir,
diff --git a/tests/ops.bats b/tests/ops.bats
index f3f6be81..83fce481 100644
--- a/tests/ops.bats
+++ b/tests/ops.bats
@@ -207,6 +207,9 @@ setup() {
     run "$DAGGER" compute "$TESTDIR"/ops/subdir/simple
     assert_success
     assert_line '{"hello":"world"}'
+
+    run "$DAGGER" compute "$TESTDIR"/ops/subdir/error
+    assert_failure
 }
 
 @test "op.#DockerBuild" {
diff --git a/tests/ops/subdir/error/main.cue b/tests/ops/subdir/error/main.cue
new file mode 100644
index 00000000..9fb09742
--- /dev/null
+++ b/tests/ops/subdir/error/main.cue
@@ -0,0 +1,31 @@
+package main
+
+import "dagger.io/dagger/op"
+
+hello: {
+	string
+
+	#up: [
+		op.#FetchContainer & {
+			ref: "alpine"
+		},
+		op.#Exec & {
+			args: ["mkdir", "-p", "/tmp/foo"]
+		},
+		op.#Exec & {
+			args: ["sh", "-c", "echo -n world > /tmp/foo/hello"]
+		},
+		op.#Subdir & {
+			dir: "/tmp/foo"
+		},
+		// Should FAIL
+		op.#Exec & {
+			always: true
+			args: ["ls"]
+		},
+		op.#Export & {
+			source: "./hello"
+			format: "string"
+		},
+	]
+}
diff --git a/tests/ops/subdir/simple/main.cue b/tests/ops/subdir/simple/main.cue
index 1cb98ffb..0fde946f 100644
--- a/tests/ops/subdir/simple/main.cue
+++ b/tests/ops/subdir/simple/main.cue
@@ -19,7 +19,7 @@ hello: {
 			dir: "/tmp/foo"
 		},
 		op.#Export & {
-			source: "/hello"
+			source: "./hello"
 			format: "string"
 		},
 	]