diff --git a/.env.ci b/.env.ci
new file mode 100644
index 0000000..88cb36b
--- /dev/null
+++ b/.env.ci
@@ -0,0 +1 @@
+PIXI_PR_NUMBER=4875
diff --git a/tests/data/pixi_build/out-of-tree-source/out_of_tree_source/external.txt b/tests/data/pixi_build/out-of-tree-source/out_of_tree_source/external.txt
new file mode 100644
index 0000000..f2376e2
--- /dev/null
+++ b/tests/data/pixi_build/out-of-tree-source/out_of_tree_source/external.txt
@@ -0,0 +1 @@
+initial content
diff --git a/tests/data/pixi_build/out-of-tree-source/package/pixi.toml b/tests/data/pixi_build/out-of-tree-source/package/pixi.toml
new file mode 100644
index 0000000..b08034d
--- /dev/null
+++ b/tests/data/pixi_build/out-of-tree-source/package/pixi.toml
@@ -0,0 +1,18 @@
+[package]
+name = "out-of-tree-source"
+version = "1.0.0"
+
+[package.build]
+source = { path = "../out_of_tree_source" }
+
+[package.build.backend]
+channels = [
+  "https://prefix.dev/pixi-build-backends",
+  "https://prefix.dev/conda-forge",
+]
+name = "pixi-build-rattler-build"
+version = "*"
+
+[package.build.configuration]
+debug-dir = "{debug_dir}"
+extra-input-globs = ["external.txt"]
diff --git a/tests/data/pixi_build/out-of-tree-source/package/recipe.yaml b/tests/data/pixi_build/out-of-tree-source/package/recipe.yaml
new file mode 100644
index 0000000..6ca686c
--- /dev/null
+++ b/tests/data/pixi_build/out-of-tree-source/package/recipe.yaml
@@ -0,0 +1,6 @@
+package:
+  name: out-of-tree-source
+  version: 1.0.0
+
+source:
+  path: ../out_of_tree_source
diff --git a/tests/data/pixi_build/out-of-tree-source/pixi.toml b/tests/data/pixi_build/out-of-tree-source/pixi.toml
new file mode 100644
index 0000000..02a5a7f
--- /dev/null
+++ b/tests/data/pixi_build/out-of-tree-source/pixi.toml
@@ -0,0 +1,9 @@
+[workspace]
+channels = ["https://prefix.dev/conda-forge"]
+name = "out-of-tree-source"
+platforms = ["linux-64", "osx-arm64", "win-64"]
+preview = ["pixi-build"]
+version = "1.0.0"
+
+[dependencies]
+out-of-tree-source = { path = "package" }
diff --git a/tests/integration_python/test_build.py b/tests/integration_python/test_build.py
index 7531918..c663028 100644
--- a/tests/integration_python/test_build.py
+++ b/tests/integration_python/test_build.py
@@ -112,6 +112,80 @@ def test_source_change_trigger_rebuild(pixi: Path, simple_workspace: Workspace)
     assert conda_build_params.is_file()
 
 
+def test_out_of_tree_source_respects_cache(
+    pixi: Path, build_data: Path, tmp_pixi_workspace: Path
+) -> None:
+    """
+    Test that if you have an out-of-tree build with a something like
+
+    [package.build]
+    source = "some-dir"
+    That it rebuilds correctly when changed and does not rebuild when unchanged
+    """
+    project = "out-of-tree-source"
+    test_data = build_data.joinpath(project)
+    target_dir = tmp_pixi_workspace.joinpath(project)
+    copytree_with_local_backend(test_data, target_dir)
+
+    manifest_path = target_dir.joinpath("pixi.toml")
+    package_manifest_path = target_dir.joinpath("package", "pixi.toml")
+
+    package_manifest = tomllib.loads(package_manifest_path.read_text(encoding="utf-8"))
+    configuration = package_manifest["package"]["build"].setdefault("configuration", {})
+
+    debug_dir = target_dir.joinpath("debug_dir")
+    debug_dir.mkdir(parents=True, exist_ok=True)
+    configuration["debug-dir"] = str(debug_dir)
+
+    package_manifest_path.write_text(tomli_w.dumps(package_manifest), encoding="utf-8")
+
+    verify_cli_command(
+        [
+            pixi,
+            "install",
+            "-v",
+            "--manifest-path",
+            manifest_path,
+        ],
+    )
+
+    conda_build_params = debug_dir.joinpath("conda_outputs_params.json")
+    assert conda_build_params.is_file()
+
+    # Remove debug file to detect subsequent rebuilds
+    conda_build_params.unlink()
+
+    verify_cli_command(
+        [
+            pixi,
+            "install",
+            "-v",
+            "--manifest-path",
+            manifest_path,
+        ],
+    )
+
+    # Out-of-tree sources should be cached when unchanged
+    assert not conda_build_params.exists()
+
+    external_file = target_dir.joinpath("out_of_tree_source", "external.txt")
+    # Modifying the external source should trigger a rebuild
+    external_file.write_text("updated content", encoding="utf-8")
+
+    verify_cli_command(
+        [
+            pixi,
+            "install",
+            "-v",
+            "--manifest-path",
+            manifest_path,
+        ],
+    )
+
+    # And it should be back because the package has been rebuilt
+    assert conda_build_params.is_file()
+
+
 def test_project_model_change_trigger_rebuild(
     pixi: Path, simple_workspace: Workspace, dummy_channel_1: Path
 ) -> None: