diff --git a/packages/cli/src/create/__tests__/prompts.spec.ts b/packages/cli/src/create/__tests__/prompts.spec.ts
index 89b91546a1..ebd4b6d8d2 100644
--- a/packages/cli/src/create/__tests__/prompts.spec.ts
+++ b/packages/cli/src/create/__tests__/prompts.spec.ts
@@ -2,9 +2,19 @@ import fs from 'node:fs';
 import os from 'node:os';
 import path from 'node:path';
 
-import { afterEach, describe, expect, it } from 'vitest';
+import { afterEach, beforeEach, describe, expect, it, vi } from 'vitest';
 
-import { isTargetDirAvailable, suggestAvailableTargetDir } from '../prompts.js';
+const { mockSelect } = vi.hoisted(() => ({
+  mockSelect: vi.fn(),
+}));
+
+vi.mock('@voidzero-dev/vite-plus-prompts', () => ({
+  isCancel: () => false,
+  select: mockSelect,
+}));
+
+const { checkProjectDirExists, isTargetDirAvailable, suggestAvailableTargetDir } =
+  await import('../prompts.js');
 
 const tempDirs: string[] = [];
 
@@ -21,11 +31,23 @@ function makeTempDir() {
 }
 
 describe('target directory helpers', () => {
+  beforeEach(() => {
+    mockSelect.mockReset();
+  });
+
   it('reports missing directories as available', () => {
     const cwd = makeTempDir();
     expect(isTargetDirAvailable(path.join(cwd, 'new-project'))).toBe(true);
   });
 
+  it('reports empty directories as available', () => {
+    const cwd = makeTempDir();
+    const targetDir = path.join(cwd, 'empty-project');
+    fs.mkdirSync(targetDir);
+
+    expect(isTargetDirAvailable(targetDir)).toBe(true);
+  });
+
   it('reports non-empty directories as unavailable', () => {
     const cwd = makeTempDir();
     const targetDir = path.join(cwd, 'existing-project');
@@ -35,6 +57,15 @@ describe('target directory helpers', () => {
     expect(isTargetDirAvailable(targetDir)).toBe(false);
   });
 
+  it('reports a symlink to an empty directory as unavailable', () => {
+    const cwd = makeTempDir();
+    const linkedDir = makeTempDir();
+    const targetDir = path.join(cwd, 'new-project');
+    fs.symlinkSync(linkedDir, targetDir, process.platform === 'win32' ? 'junction' : 'dir');
+
+    expect(isTargetDirAvailable(targetDir)).toBe(false);
+  });
+
   it('suggests a different target directory when the default already exists', () => {
     const cwd = makeTempDir();
     fs.mkdirSync(path.join(cwd, 'fate-template'), { recursive: true });
@@ -42,4 +73,104 @@ describe('target directory helpers', () => {
 
     expect(suggestAvailableTargetDir('fate-template', cwd)).not.toBe('fate-template');
   });
+
+  it('clears a regular target directory while preserving its .git directory', async () => {
+    const cwd = makeTempDir();
+    const targetDir = path.join(cwd, 'existing-project');
+    fs.mkdirSync(path.join(targetDir, '.git'), { recursive: true });
+    fs.mkdirSync(path.join(targetDir, 'src'));
+    fs.writeFileSync(path.join(targetDir, '.git', 'config'), 'keep');
+    fs.writeFileSync(path.join(targetDir, 'src', 'main.ts'), 'remove');
+    fs.writeFileSync(path.join(targetDir, 'package.json'), '{}');
+    mockSelect.mockResolvedValue('yes');
+
+    await checkProjectDirExists(targetDir, true);
+
+    expect(fs.readdirSync(targetDir)).toEqual(['.git']);
+    expect(fs.readFileSync(path.join(targetDir, '.git', 'config'), 'utf8')).toBe('keep');
+  });
+
+  it('removes a target symlink without deleting files in the linked directory', async () => {
+    const cwd = makeTempDir();
+    const linkedDir = makeTempDir();
+    const targetDir = path.join(cwd, 'new-project');
+    const sentinel = path.join(linkedDir, 'keep.txt');
+    fs.writeFileSync(sentinel, 'keep');
+    fs.symlinkSync(linkedDir, targetDir, process.platform === 'win32' ? 'junction' : 'dir');
+    mockSelect.mockResolvedValue('yes');
+
+    await checkProjectDirExists(targetDir, true);
+
+    expect(fs.existsSync(sentinel)).toBe(true);
+    expect(fs.lstatSync(targetDir, { throwIfNoEntry: false })).toBeUndefined();
+    expect(mockSelect).toHaveBeenCalledWith({
+      message: `Target path "${targetDir}" is a symbolic link. Please choose how to proceed:`,
+      options: [
+        { label: 'Cancel operation', value: 'no' },
+        { label: 'Remove symbolic link and continue', value: 'yes' },
+      ],
+    });
+  });
+
+  it('removes a target symlink with a trailing separator without deleting linked files', async () => {
+    const cwd = makeTempDir();
+    const linkedDir = makeTempDir();
+    const targetDir = path.join(cwd, 'new-project');
+    const targetDirWithSeparator = `${targetDir}${path.sep}`;
+    const sentinel = path.join(linkedDir, 'keep.txt');
+    fs.writeFileSync(sentinel, 'keep');
+    fs.symlinkSync(linkedDir, targetDir, process.platform === 'win32' ? 'junction' : 'dir');
+    mockSelect.mockResolvedValue('yes');
+
+    expect(isTargetDirAvailable(targetDirWithSeparator)).toBe(false);
+
+    await checkProjectDirExists(targetDirWithSeparator, true);
+
+    expect(fs.existsSync(sentinel)).toBe(true);
+    expect(fs.lstatSync(targetDir, { throwIfNoEntry: false })).toBeUndefined();
+    expect(mockSelect).toHaveBeenCalledWith({
+      message: `Target path "${targetDir}" is a symbolic link. Please choose how to proceed:`,
+      options: [
+        { label: 'Cancel operation', value: 'no' },
+        { label: 'Remove symbolic link and continue', value: 'yes' },
+      ],
+    });
+  });
+
+  it('recognizes and removes a dangling target symlink', async () => {
+    const cwd = makeTempDir();
+    const targetDir = path.join(cwd, 'new-project');
+    fs.symlinkSync(
+      path.join(cwd, 'missing-directory'),
+      targetDir,
+      process.platform === 'win32' ? 'junction' : 'dir',
+    );
+    mockSelect.mockResolvedValue('yes');
+
+    expect(isTargetDirAvailable(targetDir)).toBe(false);
+
+    await checkProjectDirExists(targetDir, true);
+
+    expect(fs.lstatSync(targetDir, { throwIfNoEntry: false })).toBeUndefined();
+  });
+
+  it('recognizes and removes an existing file at the target path', async () => {
+    const cwd = makeTempDir();
+    const targetPath = path.join(cwd, 'new-project');
+    fs.writeFileSync(targetPath, 'remove');
+    mockSelect.mockResolvedValue('yes');
+
+    expect(isTargetDirAvailable(targetPath)).toBe(false);
+
+    await checkProjectDirExists(targetPath, true);
+
+    expect(fs.existsSync(targetPath)).toBe(false);
+    expect(mockSelect).toHaveBeenCalledWith({
+      message: `Target path "${targetPath}" already exists. Please choose how to proceed:`,
+      options: [
+        { label: 'Cancel operation', value: 'no' },
+        { label: 'Remove existing path and continue', value: 'yes' },
+      ],
+    });
+  });
 });
diff --git a/packages/cli/src/create/prompts.ts b/packages/cli/src/create/prompts.ts
index 861c430362..82f288efb5 100644
--- a/packages/cli/src/create/prompts.ts
+++ b/packages/cli/src/create/prompts.ts
@@ -85,27 +85,58 @@ export function suggestAvailableTargetDir(defaultTargetDir: string, cwd: string)
   return suggestedTargetDir;
 }
 
+function describeExistingTarget(projectDirFullPath: string, stats: fs.Stats) {
+  if (stats.isSymbolicLink()) {
+    return {
+      description: `Target path "${projectDirFullPath}" is a symbolic link`,
+      removeLabel: 'Remove symbolic link and continue',
+    };
+  }
+  if (stats.isDirectory()) {
+    return {
+      description: `Target directory "${projectDirFullPath}" is not empty`,
+      removeLabel: 'Remove existing files and continue',
+    };
+  }
+  return {
+    description: `Target path "${projectDirFullPath}" already exists`,
+    removeLabel: 'Remove existing path and continue',
+  };
+}
+
+function stripTrailingPathSeparators(targetPath: string) {
+  const root = path.parse(targetPath).root;
+  let end = targetPath.length;
+  while (end > root.length && targetPath[end - 1] === path.sep) {
+    end--;
+  }
+  return targetPath.slice(0, end);
+}
+
 export async function checkProjectDirExists(projectDirFullPath: string, interactive?: boolean) {
-  if (isTargetDirAvailable(projectDirFullPath)) {
+  const targetPath = stripTrailingPathSeparators(projectDirFullPath);
+  const stats = fs.lstatSync(targetPath, { throwIfNoEntry: false });
+  if (!stats || (stats.isDirectory() && isEmpty(targetPath))) {
     return;
   }
+  const { description, removeLabel } = describeExistingTarget(targetPath, stats);
   if (!interactive) {
     prompts.log.info(
       'Use --directory to specify a different location or remove the directory first',
     );
-    cancelAndExit(`Target directory "${projectDirFullPath}" is not empty`, 1);
+    cancelAndExit(description, 1);
   }
 
-  // Handle directory if it exists and is not empty
+  // Handle an existing target that cannot be reused as-is.
   const overwrite = await prompts.select({
-    message: `Target directory "${projectDirFullPath}" is not empty. Please choose how to proceed:`,
+    message: `${description}. Please choose how to proceed:`,
     options: [
       {
         label: 'Cancel operation',
         value: 'no',
       },
       {
-        label: 'Remove existing files and continue',
+        label: removeLabel,
         value: 'yes',
       },
     ],
@@ -117,7 +148,7 @@ export async function checkProjectDirExists(projectDirFullPath: string, interact
 
   switch (overwrite) {
     case 'yes':
-      emptyDir(projectDirFullPath);
+      clearTargetPath(targetPath);
       break;
     case 'no':
       cancelAndExit();
@@ -129,20 +160,28 @@ function isEmpty(path: string) {
   return files.length === 0 || (files.length === 1 && files[0] === '.git');
 }
 
-function emptyDir(dir: string) {
-  if (!fs.existsSync(dir)) {
+function clearTargetPath(targetPath: string) {
+  const strippedTargetPath = stripTrailingPathSeparators(targetPath);
+  const stats = fs.lstatSync(strippedTargetPath, { throwIfNoEntry: false });
+  if (!stats) {
+    return;
+  }
+  if (!stats.isDirectory()) {
+    fs.rmSync(strippedTargetPath, { force: true });
     return;
   }
-  for (const file of fs.readdirSync(dir)) {
+  for (const file of fs.readdirSync(strippedTargetPath)) {
     if (file === '.git') {
       continue;
     }
-    fs.rmSync(path.resolve(dir, file), { recursive: true, force: true });
+    fs.rmSync(path.resolve(strippedTargetPath, file), { recursive: true, force: true });
   }
 }
 
 export function isTargetDirAvailable(projectDirFullPath: string) {
-  return !fs.existsSync(projectDirFullPath) || isEmpty(projectDirFullPath);
+  const targetPath = stripTrailingPathSeparators(projectDirFullPath);
+  const stats = fs.lstatSync(targetPath, { throwIfNoEntry: false });
+  return !stats || (stats.isDirectory() && isEmpty(targetPath));
 }
 
 function validateTargetDir(input?: string, cwd?: string): { directory: string; error?: string } {