diff --git a/bin/run.js b/bin/run.js
index daa3a38de..8fd0e4b23 100755
--- a/bin/run.js
+++ b/bin/run.js
@@ -1,5 +1,5 @@
 #!/usr/bin/env node
-import { runCLI } from "../dist/index.js";
+import { runCLI } from "../dist/cli/index.js";
 
 // Disable Clack spinners and animations in non-interactive environments.
 // Clack only checks the CI env var, so we set it when stdin/stdout aren't TTYs.
diff --git a/infra/build.ts b/infra/build.ts
new file mode 100644
index 000000000..0d9e3d459
--- /dev/null
+++ b/infra/build.ts
@@ -0,0 +1,56 @@
+import { watch } from "node:fs";
+import chalk from "chalk";
+
+const runBuild = async () => {
+  const result = await Bun.build({
+    entrypoints: ["./src/cli/index.ts"],
+    outdir: "./dist/cli",
+    target: "node",
+    format: "esm",
+    sourcemap: "inline",
+  });
+
+  if (!result.success) {
+    console.error(chalk.red.bold("\n✗ Build failed\n"));
+    for (const log of result.logs) {
+      console.error(chalk.red(`  ${log}`));
+    }
+    process.exit(1);
+  }
+
+  return result;
+};
+
+const formatOutput = (outputs: { path: string }[]) => {
+  return outputs.map((o) => chalk.cyan(o.path)).join("\n  ");
+};
+
+if (process.argv.includes("--watch")) {
+  console.log(chalk.yellow("Watching for changes..."));
+
+  const changeHandler = async (event: "rename" | "change", filename: string | null) => {
+    const time = new Date().toLocaleTimeString();
+    console.log(chalk.dim(`[${time}]`), chalk.gray(`${filename} ${event}d`));
+
+    const result = await runBuild();
+    console.log(
+      chalk.green(`  ✓ Rebuilt`),
+      chalk.dim(`→`),
+      formatOutput(result.outputs)
+    );
+  };
+
+  await runBuild();
+
+  for (const dir of ["./src"]) {
+    watch(dir, { recursive: true }, changeHandler);
+  }
+
+  // Keep process alive
+  await new Promise(() => {});
+} else {
+  const result = await runBuild();
+  console.log(chalk.green.bold(`\n✓ Build complete\n`));
+  console.log(chalk.dim("  Output:"));
+  console.log(`  ${formatOutput(result.outputs)}\n`);
+}
diff --git a/package.json b/package.json
index 13b3a794f..7fc0b3588 100644
--- a/package.json
+++ b/package.json
@@ -11,11 +11,12 @@
     "bin"
   ],
   "scripts": {
-    "build": "rm -rf dist && bun build src/cli/index.ts --outdir dist --target node --format esm --sourcemap=inline && cp -r templates dist/",
+    "build": "bun run clean && cp -r templates dist/ && bun run infra/build.ts",
+    "build:watch": "bun run clean && cp -r templates dist/ && bun run infra/build.ts --watch",
     "typecheck": "tsc --noEmit",
     "dev": "./bin/dev.ts",
     "start": "./bin/run.js",
-    "clean": "rm -rf dist",
+    "clean": "rm -rf dist && mkdir -p dist",
     "lint": "biome check src tests",
     "lint:fix": "biome check --write src tests",
     "test": "vitest run",
diff --git a/src/core/config.ts b/src/core/config.ts
index 2f7b7c10b..7ec86e197 100644
--- a/src/core/config.ts
+++ b/src/core/config.ts
@@ -8,7 +8,7 @@ import {
 } from "@/core/project/schema.js";
 
 // After bundling, import.meta.url points to dist/cli/index.js
-// Templates are copied to dist/cli/templates/
+// Templates are copied to dist/templates/
 const __dirname = dirname(fileURLToPath(import.meta.url));
 
 export function getBase44GlobalDir(): string {
@@ -20,7 +20,7 @@ export function getAuthFilePath(): string {
 }
 
 export function getTemplatesDir(): string {
-  return join(__dirname, "templates");
+  return join(__dirname, "../templates");
 }
 
 export function getTemplatesIndexPath(): string {
diff --git a/tests/cli/testkit/CLITestkit.ts b/tests/cli/testkit/CLITestkit.ts
index 81f041745..d32c8357d 100644
--- a/tests/cli/testkit/CLITestkit.ts
+++ b/tests/cli/testkit/CLITestkit.ts
@@ -9,7 +9,7 @@ import type { CLIResult } from "./CLIResultMatcher.js";
 import { CLIResultMatcher } from "./CLIResultMatcher.js";
 
 const __dirname = dirname(fileURLToPath(import.meta.url));
-const DIST_INDEX_PATH = join(__dirname, "../../../dist/index.js");
+const DIST_INDEX_PATH = join(__dirname, "../../../dist/cli/index.js");
 
 /** Type for CLIContext */
 interface CLIContext {