diff --git a/packages/cli/src/create/__tests__/command.spec.ts b/packages/cli/src/create/__tests__/command.spec.ts
new file mode 100644
index 0000000000..89c9fdb05e
--- /dev/null
+++ b/packages/cli/src/create/__tests__/command.spec.ts
@@ -0,0 +1,100 @@
+import fs from 'node:fs';
+import os from 'node:os';
+import path from 'node:path';
+
+import { afterEach, beforeEach, describe, expect, it, vi } from 'vitest';
+
+const { mockRunCommand } = vi.hoisted(() => ({
+  mockRunCommand: vi.fn(),
+}));
+
+vi.mock('../../../binding/index.js', () => ({
+  runCommand: mockRunCommand,
+}));
+
+const { runCommandAndDetectProjectDir } = await import('../command.js');
+
+const tempDirs: string[] = [];
+
+function makeTempDir() {
+  const dir = fs.mkdtempSync(path.join(os.tmpdir(), 'vp-create-command-'));
+  tempDirs.push(dir);
+  return dir;
+}
+
+describe('runCommandAndDetectProjectDir', () => {
+  beforeEach(() => {
+    mockRunCommand.mockReset();
+  });
+
+  afterEach(() => {
+    for (const dir of tempDirs.splice(0)) {
+      fs.rmSync(dir, { recursive: true, force: true });
+    }
+  });
+
+  it('detects a project created in the current directory', async () => {
+    mockRunCommand.mockResolvedValueOnce({
+      exitCode: 0,
+      pathAccesses: {
+        'package.json': { write: true },
+      },
+    });
+
+    const result = await runCommandAndDetectProjectDir({
+      command: 'node',
+      args: ['create.js'],
+      cwd: '/tmp/workspace',
+      envs: {},
+    });
+
+    expect(result).toEqual({ exitCode: 0, projectDir: '.' });
+  });
+
+  it('prefers a generated child directory over the current directory', async () => {
+    mockRunCommand.mockResolvedValueOnce({
+      exitCode: 0,
+      pathAccesses: {
+        'package.json': { write: true },
+        'my-app/package.json': { write: true },
+      },
+    });
+
+    const result = await runCommandAndDetectProjectDir({
+      command: 'node',
+      args: ['create.js'],
+      cwd: '/tmp/workspace',
+      envs: {},
+    });
+
+    expect(result).toEqual({ exitCode: 0, projectDir: 'my-app' });
+  });
+
+  it('returns the parent directory when the project is created at that parent root', async () => {
+    const cwd = makeTempDir();
+    mockRunCommand.mockResolvedValueOnce({
+      exitCode: 0,
+      pathAccesses: {
+        'package.json': { write: true },
+      },
+    });
+
+    const result = await runCommandAndDetectProjectDir(
+      {
+        command: 'node',
+        args: ['create.js'],
+        cwd,
+        envs: {},
+      },
+      'apps',
+    );
+
+    expect(result).toEqual({ exitCode: 0, projectDir: 'apps' });
+    expect(mockRunCommand).toHaveBeenCalledWith({
+      binName: 'node',
+      args: ['create.js'],
+      envs: {},
+      cwd: path.join(cwd, 'apps'),
+    });
+  });
+});
diff --git a/packages/cli/src/create/command.ts b/packages/cli/src/create/command.ts
index 0083c60b55..778d84f2af 100644
--- a/packages/cli/src/create/command.ts
+++ b/packages/cli/src/create/command.ts
@@ -38,6 +38,7 @@ export async function runCommandAndDetectProjectDir(
   // Detect project directory from path accesses
   // Find the closest directory containing package.json relative to cwd
   let projectDir: string | undefined;
+  let currentDirPackageJsonWritten = false;
   let minDepth = Infinity;
 
   for (const [filePath, pathAccess] of Object.entries(result.pathAccesses)) {
@@ -50,8 +51,9 @@ export async function runCommandAndDetectProjectDir(
       // Extract directory from package.json path
       const dir = path.dirname(filePath);
 
-      // Skip if it's the current directory
+      // Defer current directory until after checking for a generated child directory.
       if (dir === '.' || dir === '') {
+        currentDirPackageJsonWritten = true;
         continue;
       }
       // Skip if this is an existing directory (created before the command ran)
@@ -70,6 +72,10 @@ export async function runCommandAndDetectProjectDir(
     }
   }
 
+  if (!projectDir && currentDirPackageJsonWritten) {
+    projectDir = '.';
+  }
+
   // If parentDir is provided, join it with the project directory
   if (parentDir && projectDir) {
     projectDir = path.join(parentDir, projectDir);