diff --git a/src/ape/cli/arguments.py b/src/ape/cli/arguments.py
index ab18d9a4e5..99225ae279 100644
--- a/src/ape/cli/arguments.py
+++ b/src/ape/cli/arguments.py
@@ -109,7 +109,7 @@ def exclude_patterns(self) -> List[str]:
         return self.config_manager.get_config("compile").exclude or []
 
     def do_exclude(self, path: Union[Path, str]) -> bool:
-        name = path if isinstance(path, str) else path.name
+        name = path if isinstance(path, str) else str(path)
         if name not in self.exclude_list:
             self.exclude_list[name] = any(fnmatch(name, p) for p in self.exclude_patterns)
 
diff --git a/src/ape/utils/misc.py b/src/ape/utils/misc.py
index 977ce12825..b86a6692b1 100644
--- a/src/ape/utils/misc.py
+++ b/src/ape/utils/misc.py
@@ -33,7 +33,7 @@
 DEFAULT_TRANSACTION_TYPE = 0
 DEFAULT_MAX_RETRIES_TX = 20
 SOURCE_EXCLUDE_PATTERNS = (
-    ".cache",
+    "**/.cache/**",
     ".DS_Store",
     ".gitkeep",
     "**/.build/**/*.json",
diff --git a/tests/functional/test_cli.py b/tests/functional/test_cli.py
index 76b255c6d1..fe9c98a8e9 100644
--- a/tests/functional/test_cli.py
+++ b/tests/functional/test_cli.py
@@ -465,9 +465,17 @@ def test_contract_file_paths_handles_exclude(project_with_contract, runner, cont
     cfg = project_with_contract.config_manager.get_config("compile")
     failmsg = "Setup failed - missing exclude config (set in ape-config.yaml)."
     assert "*Excl*" in cfg.exclude, failmsg
+
+    # make a .cache file to show it is ignored.
+    cache_file = project_with_contract.contracts_folder / ".cache" / "thing.json"
+    cache_file.parent.mkdir(parents=True, exist_ok=True)
+    cache_file.write_text("FAILS IF LOADED")
+
     result = runner.invoke(contracts_paths_cmd, "contracts")
     assert "Exclude.json" not in result.output
     assert "ExcludeNested.json" not in result.output
+    # Ensure .cache always ignored!
+    assert ".cache" not in result.output
 
 
 @pytest.mark.parametrize("name", ("contracts/subdir", "subdir"))