diff --git a/graphql/codegen/src/__tests__/codegen/expand-targets.test.ts b/graphql/codegen/src/__tests__/codegen/expand-targets.test.ts
index 6d405cf4b..b1dbd34f4 100644
--- a/graphql/codegen/src/__tests__/codegen/expand-targets.test.ts
+++ b/graphql/codegen/src/__tests__/codegen/expand-targets.test.ts
@@ -2,7 +2,7 @@ import * as fs from 'node:fs';
 import * as os from 'node:os';
 import * as path from 'node:path';
 
-import { expandApiNamesToMultiTarget, expandSchemaDirToMultiTarget, removeStaleTargetDirs } from '../../core/generate';
+import { expandApiNamesToMultiTarget, expandSchemaDirToMultiTarget, removeStaleTargetDirs, GENERATED_SENTINEL } from '../../core/generate';
 
 describe('expandApiNamesToMultiTarget', () => {
   it('returns null for no apiNames', () => {
@@ -151,11 +151,25 @@ describe('removeStaleTargetDirs', () => {
     fs.rmSync(tempDir, { recursive: true, force: true });
   });
 
-  it('removes directories not in current target list', () => {
-    fs.mkdirSync(path.join(tempDir, 'admin'));
-    fs.mkdirSync(path.join(tempDir, 'auth'));
-    fs.mkdirSync(path.join(tempDir, 'public'));
-    fs.mkdirSync(path.join(tempDir, 'objects'));
+  /** Create a directory with the .generated sentinel (codegen output). */
+  function mkGeneratedDir(name: string) {
+    const dir = path.join(tempDir, name);
+    fs.mkdirSync(dir, { recursive: true });
+    fs.writeFileSync(path.join(dir, GENERATED_SENTINEL), 'generated by codegen\n');
+  }
+
+  /** Create a plain directory without the sentinel (hand-written code). */
+  function mkHandwrittenDir(name: string) {
+    const dir = path.join(tempDir, name);
+    fs.mkdirSync(dir, { recursive: true });
+    fs.writeFileSync(path.join(dir, 'index.ts'), 'export function hello() {}\n');
+  }
+
+  it('removes generated directories not in current target list', () => {
+    mkGeneratedDir('admin');
+    mkGeneratedDir('auth');
+    mkGeneratedDir('public');
+    mkGeneratedDir('objects');
 
     const removed = removeStaleTargetDirs(tempDir, ['admin', 'auth']);
 
@@ -166,8 +180,21 @@ describe('removeStaleTargetDirs', () => {
     expect(fs.existsSync(path.join(tempDir, 'objects'))).toBe(false);
   });
 
+  it('preserves hand-written directories even when not in target list', () => {
+    mkGeneratedDir('admin');
+    mkHandwrittenDir('config');
+    mkHandwrittenDir('utils');
+
+    const removed = removeStaleTargetDirs(tempDir, ['admin']);
+
+    expect(removed).toEqual([]);
+    expect(fs.existsSync(path.join(tempDir, 'admin'))).toBe(true);
+    expect(fs.existsSync(path.join(tempDir, 'config'))).toBe(true);
+    expect(fs.existsSync(path.join(tempDir, 'utils'))).toBe(true);
+  });
+
   it('preserves files (only removes directories)', () => {
-    fs.mkdirSync(path.join(tempDir, 'admin'));
+    mkGeneratedDir('admin');
     fs.writeFileSync(path.join(tempDir, 'index.ts'), 'export {}');
 
     const removed = removeStaleTargetDirs(tempDir, ['admin']);
@@ -182,19 +209,28 @@ describe('removeStaleTargetDirs', () => {
   });
 
   it('returns empty array when no stale directories exist', () => {
-    fs.mkdirSync(path.join(tempDir, 'admin'));
-    fs.mkdirSync(path.join(tempDir, 'auth'));
+    mkGeneratedDir('admin');
+    mkGeneratedDir('auth');
 
     const removed = removeStaleTargetDirs(tempDir, ['admin', 'auth']);
     expect(removed).toEqual([]);
   });
 
-  it('removes all directories when target list is empty', () => {
-    fs.mkdirSync(path.join(tempDir, 'old-target'));
+  it('removes all generated directories when target list is empty', () => {
+    mkGeneratedDir('old-target');
 
     const removed = removeStaleTargetDirs(tempDir, []);
 
     expect(removed).toEqual(['old-target']);
     expect(fs.existsSync(path.join(tempDir, 'old-target'))).toBe(false);
   });
+
+  it('skips directories without sentinel', () => {
+    fs.mkdirSync(path.join(tempDir, 'empty-dir'));
+
+    const removed = removeStaleTargetDirs(tempDir, []);
+
+    expect(removed).toEqual([]);
+    expect(fs.existsSync(path.join(tempDir, 'empty-dir'))).toBe(true);
+  });
 });
diff --git a/graphql/codegen/src/core/generate.ts b/graphql/codegen/src/core/generate.ts
index 026d117f6..899019654 100644
--- a/graphql/codegen/src/core/generate.ts
+++ b/graphql/codegen/src/core/generate.ts
@@ -404,6 +404,12 @@ export async function generate(
     }
     allFilesWritten.push(...(writeResult.filesWritten ?? []));
 
+    // Drop sentinel so removeStaleTargetDirs knows this is a generated dir
+    fs.writeFileSync(
+      path.join(outputRoot, GENERATED_SENTINEL),
+      `generated by @constructive-io/graphql-codegen\n`,
+    );
+
     if (skillsToWrite.length > 0) {
       const skillsOutputDir = resolveSkillsOutputDir(config, outputRoot);
       const skillsWriteResult = await writeGeneratedFiles(skillsToWrite, skillsOutputDir, [], {
@@ -626,9 +632,13 @@ function applySharedPgpmDb(
   };
 }
 
+/** Sentinel file written into every generated target directory. */
+export const GENERATED_SENTINEL = '.generated';
+
 /**
  * Remove subdirectories in `outputRoot` that are not in `currentTargetNames`.
- * Useful for cleaning up stale target output before a fresh multi-target generate.
+ * Only removes directories that contain a `.generated` sentinel file — hand-written
+ * directories (e.g. `config/`, `utils/`) are preserved automatically.
  * Returns the list of directory names that were removed.
  */
 export function removeStaleTargetDirs(
@@ -643,7 +653,14 @@ export function removeStaleTargetDirs(
   const entries = fs.readdirSync(outputRoot, { withFileTypes: true });
   for (const entry of entries) {
     if (entry.isDirectory() && !currentTargets.has(entry.name)) {
-      fs.rmSync(path.join(outputRoot, entry.name), { recursive: true, force: true });
+      const dirPath = path.join(outputRoot, entry.name);
+      if (!fs.existsSync(path.join(dirPath, GENERATED_SENTINEL))) {
+        if (verbose) {
+          console.log(`Preserved non-generated directory: ${entry.name}`);
+        }
+        continue;
+      }
+      fs.rmSync(dirPath, { recursive: true, force: true });
       removed.push(entry.name);
       if (verbose) {
         console.log(`Removed stale target directory: ${entry.name}`);
diff --git a/graphql/codegen/src/index.ts b/graphql/codegen/src/index.ts
index a8a417da4..8bff0db6a 100644
--- a/graphql/codegen/src/index.ts
+++ b/graphql/codegen/src/index.ts
@@ -23,7 +23,7 @@ export { defineConfig } from './types/config';
 
 // Main generate function (orchestrates the entire pipeline)
 export type { GenerateOptions, GenerateResult, GenerateMultiOptions, GenerateMultiResult } from './core/generate';
-export { generate, generateMulti, expandApiNamesToMultiTarget, expandSchemaDirToMultiTarget, removeStaleTargetDirs } from './core/generate';
+export { generate, generateMulti, expandApiNamesToMultiTarget, expandSchemaDirToMultiTarget, removeStaleTargetDirs, GENERATED_SENTINEL } from './core/generate';
 
 // Config utilities
 export { findConfigFile, loadConfigFile } from './core/config';