diff --git a/src/resolver/resolver.rs b/src/resolver/resolver.rs
index 1e45ac9687a1..6a7dfbcf6306 100644
--- a/src/resolver/resolver.rs
+++ b/src/resolver/resolver.rs
@@ -2445,9 +2445,9 @@ impl<'a> Resolver<'a> {
         }
     }
 
-    /// Bust the directory cache for the given path.
-    /// See `assertValidCacheKey` for requirements on the input
+    /// Bust the directory cache for the given path, which may end in a separator.
     pub fn bust_dir_cache(&mut self, path: &[u8]) -> bool {
+        let path = strings::without_trailing_slash_windows_path(path);
         Self::assert_valid_cache_key(path);
         let first_bust = self.fs_mut().fs.bust_entries_cache(path);
         let second_bust = self.dir_cache_mut().remove(path);
@@ -2469,10 +2469,7 @@ impl<'a> Resolver<'a> {
         specifier: &[u8],
     ) -> bool {
         if bun_paths::is_absolute(specifier) {
-            let dir = bun_paths::dirname_platform(specifier, bun_paths::Platform::AUTO);
-            let a = self.bust_dir_cache(dir);
-            let b = self.bust_dir_cache(specifier);
-            return a || b;
+            return self.bust_dir_cache_and_parent(specifier);
         }
 
         if !(specifier.starts_with(b"./") || specifier.starts_with(b"../")) {
@@ -2487,10 +2484,16 @@ impl<'a> Resolver<'a> {
             bun_paths::Platform::AUTO,
             specifier,
         );
-        let dir = bun_paths::dirname_platform(joined, bun_paths::Platform::AUTO);
+        self.bust_dir_cache_and_parent(joined)
+    }
+
+    fn bust_dir_cache_and_parent(&mut self, path: &[u8]) -> bool {
+        // Strip before taking the dirname: on Windows the dirname of `a\hello\` is `a\hello`.
+        let path = strings::without_trailing_slash_windows_path(path);
+        let dir = bun_paths::dirname_platform(path, bun_paths::Platform::AUTO);
 
         let a = self.bust_dir_cache(dir);
-        let b = self.bust_dir_cache(joined);
+        let b = self.bust_dir_cache(path);
         a || b
     }
 
diff --git a/test/bake/dev/bundle.test.ts b/test/bake/dev/bundle.test.ts
index 6c6d3657029c..80a63dd27c6b 100644
--- a/test/bake/dev/bundle.test.ts
+++ b/test/bake/dev/bundle.test.ts
@@ -99,6 +99,33 @@ devTest("importing a file before it is created", {
     await c.expectMessage("value: 456");
   },
 });
+// The dev server busts the resolver's directory cache after every failed
+// resolution. The cache keys derived from a specifier ending in a slash kept
+// that slash, which fails the resolver's cache key assertion in debug and ASAN
+// builds and took the whole dev server down instead of showing the error.
+devTest("importing a directory with a trailing slash before it is created", {
+  files: {
+    "index.html": emptyHtmlFile({
+      styles: [],
+      scripts: ["index.ts"],
+    }),
+    "index.ts": `
+      import { abc } from './second/';
+      console.log('value: ' + abc);
+    `,
+  },
+  async test(dev) {
+    await using c = await dev.client("/", {
+      errors: [`index.ts:1:21: error: Could not resolve: "./second/"`],
+    });
+
+    await c.expectReload(async () => {
+      await dev.write("index.ts", `console.log('value: ' + 789);`);
+    });
+
+    await c.expectMessage("value: 789");
+  },
+});
 devTest("default export same-scope handling", {
   files: {
     "index.html": emptyHtmlFile({
diff --git a/test/bundler/cli.test.ts b/test/bundler/cli.test.ts
index eaca7232abc3..2c0f3115279c 100644
--- a/test/bundler/cli.test.ts
+++ b/test/bundler/cli.test.ts
@@ -579,3 +579,57 @@ describe.concurrent("modules that fail to print", () => {
     expect(exitCode).toBe(1);
   });
 });
+
+describe.concurrent("bun build --watch", () => {
+  // Resolves once `needle` has been written to `stream`. The stream only ends
+  // early if the process dies, in which case the output so far (the crash
+  // report) is the error message.
+  async function outputUntil(stream: ReadableStream<Uint8Array>, needle: string): Promise<string> {
+    const reader = stream.getReader();
+    const decoder = new TextDecoder();
+    let output = "";
+    try {
+      while (!output.includes(needle)) {
+        const { value, done } = await reader.read();
+        if (done) throw new Error(`stream ended before ${JSON.stringify(needle)} appeared. Output:\n${output}`);
+        output += decoder.decode(value, { stream: true });
+      }
+    } finally {
+      reader.releaseLock();
+    }
+    return output;
+  }
+
+  // In watch mode every failed resolution busts the resolver's directory
+  // cache for the specifier. The cache keys derived from these specifiers
+  // ended in a separator, which fails the resolver's cache key assertion in
+  // debug and ASAN builds, so the process aborted instead of reporting the
+  // resolution error.
+  test.each([
+    ["relative import ending in a slash", (_dir: string) => "./missing/"],
+    ["absolute import ending in a slash", (dir: string) => join(dir, "missing") + "/"],
+    ["absolute import with a doubled separator", (dir: string) => dir + path.sep + path.sep + "missing"],
+  ])("reports an unresolvable %s and keeps watching", async (_kind, specifierFor) => {
+    using dir = tempDir("build-watch-trailing-slash", {});
+    const specifier = specifierFor(String(dir));
+    const entry = join(String(dir), "index.ts");
+    writeFileSync(entry, `import ${JSON.stringify(specifier)};\n`);
+
+    await using proc = Bun.spawn({
+      cmd: [bunExe(), "build", "--watch", "index.ts", "--outdir", "dist"],
+      env: bunEnv,
+      cwd: String(dir),
+      stdin: "ignore",
+      stdout: "pipe",
+      stderr: "pipe",
+    });
+
+    await outputUntil(proc.stderr, `error: Could not resolve: "${specifier}"`);
+    expect(proc.exitCode).toBeNull();
+
+    // The failed build left the watcher running: fixing the entry point rebuilds.
+    writeFileSync(entry, `console.log("fixed");\n`);
+    expect(await outputUntil(proc.stdout, "index.js")).toContain("Bundled 1 module");
+    expect(await Bun.file(join(String(dir), "dist", "index.js")).text()).toContain("fixed");
+  });
+});