diff --git a/.changeset/vscode-cli-version-marker-packaging.md b/.changeset/vscode-cli-version-marker-packaging.md
new file mode 100644
index 00000000000..0e418c11a27
--- /dev/null
+++ b/.changeset/vscode-cli-version-marker-packaging.md
@@ -0,0 +1,5 @@
+---
+"kilo-code": patch
+---
+
+Stop shipping the local-only `.cli-version` build marker in packaged VSIX installs, which previously made production installs detect as local builds and inject a dev-only bwrap fallback.
diff --git a/packages/kilo-vscode/.vscodeignore b/packages/kilo-vscode/.vscodeignore
index b8e0d54b256..157f9841d78 100644
--- a/packages/kilo-vscode/.vscodeignore
+++ b/packages/kilo-vscode/.vscodeignore
@@ -25,6 +25,10 @@ AGENTS.md
 
 # Include bin/ directory for CLI binary (production)
 !bin/**
+# .cli-version is a local-source build marker written by local-bin.ts. It must
+# not ship in the VSIX, otherwise production installs are detected as local
+# builds and may inject a dev-only bwrap fallback (see ServerManager.localCli).
+bin/.cli-version
 
 # Include WAV assets used by extension-host notification playback
 !audio-wav/**