diff --git a/src/Tasks/Microsoft.NET.Build.Tasks/targets/Microsoft.NET.Sdk.DefaultItems.targets b/src/Tasks/Microsoft.NET.Build.Tasks/targets/Microsoft.NET.Sdk.DefaultItems.targets
index 5d73e4d03ce3..db6ddd456520 100644
--- a/src/Tasks/Microsoft.NET.Build.Tasks/targets/Microsoft.NET.Sdk.DefaultItems.targets
+++ b/src/Tasks/Microsoft.NET.Build.Tasks/targets/Microsoft.NET.Sdk.DefaultItems.targets
@@ -37,8 +37,9 @@ Copyright (c) .NET Foundation. All rights reserved.
     <DefaultItemExcludes>$(DefaultItemExcludes);$(BaseIntermediateOutputPath)/**</DefaultItemExcludes>
     <!-- Exclude PublishDir to prevent published artifacts from being included in subsequent builds/publishes. 
          While in most cases PublishDir is contained within BaseOutputPath or BaseIntermediateOutputPath,
-         this is by no means required, so we should protect against this happening here. -->
-    <DefaultItemExcludes Condition="'$(PublishDir)' != ''">$(DefaultItemExcludes);$(PublishDir)/**</DefaultItemExcludes>
+         this is by no means required, so we should protect against this happening here.
+         Guard against PublishDir being the project directory (e.g. 'dotnet publish -o .') which would exclude all source files. -->
+    <DefaultItemExcludes Condition="'$(PublishDir)' != '' And '$([MSBuild]::NormalizePath($(MSBuildProjectDirectory), $(PublishDir)))' != '$([MSBuild]::NormalizePath($(MSBuildProjectDirectory)))'">$(DefaultItemExcludes);$(PublishDir)/**</DefaultItemExcludes>
 
     <!-- Various files that should generally always be ignored -->
     <DefaultItemExcludes>$(DefaultItemExcludes);**/*.user</DefaultItemExcludes>
diff --git a/test/Microsoft.NET.Build.Tests/GivenThereAreDefaultItems.cs b/test/Microsoft.NET.Build.Tests/GivenThereAreDefaultItems.cs
index d9fb34f84b41..dc398b67df48 100644
--- a/test/Microsoft.NET.Build.Tests/GivenThereAreDefaultItems.cs
+++ b/test/Microsoft.NET.Build.Tests/GivenThereAreDefaultItems.cs
@@ -883,6 +883,32 @@ public void It_excludes_items_in_publish_directory()
             noneItems.Should().NotContain(item => item.Contains("appsettings.json"));
         }
 
+        [Fact]
+        public void It_does_not_exclude_source_files_when_publish_dir_is_project_root()
+        {
+            Action<GetValuesCommand> setup = getValuesCommand =>
+            {
+                WriteFile(Path.Combine(getValuesCommand.ProjectRootPath, "Code", "Class1.cs"),
+                    "public class Class1 {}");
+            };
+
+            Action<XDocument> projectChanges = project =>
+            {
+                var ns = project.Root.Name.Namespace;
+
+                var propertyGroup = new XElement(ns + "PropertyGroup");
+                project.Root.Add(propertyGroup);
+                // PublishDir set to the project directory itself (simulates 'dotnet publish -o .')
+                propertyGroup.Add(new XElement(ns + "PublishDir", ".\\"));
+            };
+
+            var compileItems = GivenThatWeWantToBuildALibrary.GetValuesFromTestLibrary(Log, _testAssetsManager, "Compile", setup, projectChanges: projectChanges);
+
+            RemoveGeneratedCompileItems(compileItems);
+
+            compileItems.Should().BeEquivalentTo(new[] { Path.Combine("Code", "Class1.cs"), "Helper.cs" });
+        }
+
         void RemoveGeneratedCompileItems(List<string> compileItems)
         {
             //  Remove auto-generated compile items.