diff --git a/.changeset/ancient-ancestors-ascent.md b/.changeset/ancient-ancestors-ascent.md
new file mode 100644
index 000000000000..b2ca8b061809
--- /dev/null
+++ b/.changeset/ancient-ancestors-ascent.md
@@ -0,0 +1,5 @@
+---
+"@biomejs/biome": patch
+---
+
+Fixed [#7268](https://github.com/biomejs/biome/issues/7268): Files that are explicitly passed as CLI arguments are now correctly ignored if they reside in an ignored folder.
diff --git a/crates/biome_cli/src/execute/traverse.rs b/crates/biome_cli/src/execute/traverse.rs
index 85405ea03e73..28f7512a4f14 100644
--- a/crates/biome_cli/src/execute/traverse.rs
+++ b/crates/biome_cli/src/execute/traverse.rs
@@ -541,7 +541,7 @@ impl TraversalContext for TraversalOptions<'_, '_> {
                     project_key: self.project_key,
                     path: biome_path.clone(),
                     features: self.execution.to_feature(),
-                    ignore_kind: IgnoreKind::Path,
+                    ignore_kind: IgnoreKind::Ancestors,
                 })
                 .unwrap_or_else(|err| {
                     self.push_diagnostic(err.into());
diff --git a/crates/biome_cli/tests/cases/included_files.rs b/crates/biome_cli/tests/cases/included_files.rs
index e4f74e72c0e1..6ed630487d35 100644
--- a/crates/biome_cli/tests/cases/included_files.rs
+++ b/crates/biome_cli/tests/cases/included_files.rs
@@ -96,11 +96,10 @@ fn does_not_handle_included_files_if_overridden_by_ignore() {
 fn does_not_handle_files_in_ignored_folder() {
     let mut console = BufferConsole::default();
     let fs = MemoryFileSystem::default();
-    let file_path = Utf8Path::new("biome.json");
     fs.insert(
-        file_path.into(),
+        "biome.json".into(),
         r#"{
-  "files": { "includes": ["test.js", "!**/folder"] }
+  "files": { "includes": ["**/*.js", "!**/folder"] }
 }
 "#
         .as_bytes(),
diff --git a/crates/biome_cli/tests/commands/lint.rs b/crates/biome_cli/tests/commands/lint.rs
index 9cc890d66110..a9a734160715 100644
--- a/crates/biome_cli/tests/commands/lint.rs
+++ b/crates/biome_cli/tests/commands/lint.rs
@@ -1215,7 +1215,7 @@ fn include_files_in_symlinked_subdir() {
 
     #[cfg(target_os = "windows")]
     {
-        check_windows_symlink!(symlink_file(
+        check_windows_symlink!(symlink_dir(
             root_path.join("symlinked"),
             subroot_path.join("symlink")
         ));
@@ -1273,7 +1273,7 @@ fn ignore_file_in_subdir_in_symlinked_dir() {
 
     #[cfg(target_os = "windows")]
     {
-        check_windows_symlink!(symlink_file(
+        check_windows_symlink!(symlink_dir(
             root_path.join("symlinked"),
             subroot_path.join("symlink")
         ));
diff --git a/crates/biome_cli/tests/snapshots/main_cases_included_files/does_not_handle_files_in_ignored_folder.snap b/crates/biome_cli/tests/snapshots/main_cases_included_files/does_not_handle_files_in_ignored_folder.snap
index aa0ffc76c86d..260b3e865e26 100644
--- a/crates/biome_cli/tests/snapshots/main_cases_included_files/does_not_handle_files_in_ignored_folder.snap
+++ b/crates/biome_cli/tests/snapshots/main_cases_included_files/does_not_handle_files_in_ignored_folder.snap
@@ -6,7 +6,7 @@ expression: redactor(content)
 
 ```json
 {
-  "files": { "includes": ["test.js", "!**/folder"] }
+  "files": { "includes": ["**/*.js", "!**/folder"] }
 }
 ```
 
diff --git a/crates/biome_service/src/projects.rs b/crates/biome_service/src/projects.rs
index d5c0cd65e41f..97e6675cc42f 100644
--- a/crates/biome_service/src/projects.rs
+++ b/crates/biome_service/src/projects.rs
@@ -4,7 +4,7 @@ use crate::settings::Settings;
 use crate::workspace::{
     DocumentFileSource, FeatureName, FeaturesSupported, FileFeaturesResult, IgnoreKind,
 };
-use biome_fs::ConfigName;
+use biome_fs::{ConfigName, FileSystem};
 use camino::{Utf8Path, Utf8PathBuf};
 use papaya::HashMap;
 use rustc_hash::FxBuildHasher;
@@ -140,12 +140,15 @@ impl Projects {
 
     pub fn is_ignored_by_top_level_config(
         &self,
+        fs: &dyn FileSystem,
         project_key: ProjectKey,
         path: &Utf8Path,
         ignore_kind: IgnoreKind,
     ) -> bool {
         match self.0.pin().get(&project_key) {
-            Some(project_data) => is_ignored_by_top_level_config(project_data, path, ignore_kind),
+            Some(project_data) => {
+                is_ignored_by_top_level_config(fs, project_data, path, ignore_kind)
+            }
             None => false,
         }
     }
@@ -153,6 +156,7 @@ impl Projects {
     #[inline]
     pub fn is_ignored(
         &self,
+        fs: &dyn FileSystem,
         project_key: ProjectKey,
         path: &Utf8Path,
         features: FeatureName,
@@ -164,7 +168,7 @@ impl Projects {
         };
 
         let is_ignored_by_top_level_config =
-            is_ignored_by_top_level_config(project_data, path, ignore_kind);
+            is_ignored_by_top_level_config(fs, project_data, path, ignore_kind);
 
         // If there are specific features enabled, but all of them ignore the
         // path, then we treat the path as ignored too.
@@ -181,6 +185,7 @@ impl Projects {
     #[inline(always)]
     pub fn get_file_features(
         &self,
+        fs: &dyn FileSystem,
         project_key: ProjectKey,
         path: &Utf8Path,
         features: FeatureName,
@@ -211,12 +216,7 @@ impl Projects {
             .is_some_and(|dir_path| dir_path == project_data.path)
         {
             // Never ignore Biome's top-level config file
-        } else if !settings.files.includes.is_included(path)
-            || project_data
-                .root_settings
-                .vcs_settings
-                .is_ignored(path, Some(project_data.path.as_path()))
-        {
+        } else if self.is_ignored(fs, project_key, path, features, IgnoreKind::Ancestors) {
             file_features.set_ignored_for_all_features();
         } else {
             for feature in features.iter() {
@@ -340,6 +340,7 @@ impl Projects {
 
 #[inline]
 fn is_ignored_by_top_level_config(
+    fs: &dyn FileSystem,
     project_data: &ProjectData,
     path: &Utf8Path,
     ignore_kind: IgnoreKind,
@@ -354,7 +355,22 @@ fn is_ignored_by_top_level_config(
             &project_data.root_settings.files.includes,
             |(_, settings)| &settings.files.includes,
         );
-    let is_included = includes.is_included(path);
+    let mut is_included = if fs.path_is_dir(path) {
+        includes.is_dir_included(path)
+    } else {
+        includes.is_file_included(path)
+    };
+
+    // If necessary, check all the ancestors too.
+    if ignore_kind == IgnoreKind::Ancestors {
+        for ancestor in path.ancestors().skip(1) {
+            if !is_included || ancestor == project_data.path {
+                break;
+            }
+
+            is_included = is_included && includes.is_dir_included(ancestor)
+        }
+    }
 
     let root_path = match ignore_kind {
         IgnoreKind::Ancestors => Some(project_data.path.as_path()),
diff --git a/crates/biome_service/src/settings.rs b/crates/biome_service/src/settings.rs
index 20131ce3ad7f..58a9c39e8da8 100644
--- a/crates/biome_service/src/settings.rs
+++ b/crates/biome_service/src/settings.rs
@@ -311,6 +311,8 @@ impl Settings {
 
     /// Returns whether the given `path` is ignored for the given `feature`,
     /// based on the current settings.
+    ///
+    /// `path` is expected to point to a file and not a directory.
     #[inline]
     pub fn is_path_ignored_for_feature(&self, path: &Utf8Path, feature: FeatureKind) -> bool {
         let feature_includes_files = match feature {
@@ -321,7 +323,11 @@ impl Settings {
             FeatureKind::Debug => return false,
         };
 
-        !feature_includes_files.is_included(path)
+        if is_dir(path) {
+            !feature_includes_files.is_dir_included(path)
+        } else {
+            !feature_includes_files.is_file_included(path)
+        }
     }
 }
 
@@ -933,15 +939,22 @@ impl Includes {
         current_globs.extend(globs.into());
     }
 
-    /// Returns whether the given `path` is included.
+    /// Returns whether the given `file_path` is included.
+    ///
+    /// `file_path` must point to an ordinary file. If it is a directory, you
+    /// should use [Self::is_dir_included()] instead.
     #[inline]
-    pub fn is_included(&self, path: &Utf8Path) -> bool {
-        self.is_unset()
-            || if is_dir(path) {
-                self.matches_directory_with_exceptions(path)
-            } else {
-                self.matches_with_exceptions(path)
-            }
+    pub fn is_file_included(&self, file_path: &Utf8Path) -> bool {
+        self.is_unset() || self.matches_with_exceptions(file_path)
+    }
+
+    /// Returns whether the given `dir_path` is included.
+    ///
+    /// `file_path` must point to a directory. If it is a file, you should use
+    /// [Self::is_file_included()] instead.
+    #[inline]
+    pub fn is_dir_included(&self, dir_path: &Utf8Path) -> bool {
+        self.is_unset() || self.matches_directory_with_exceptions(dir_path)
     }
 
     /// Returns `true` is no globs are set.
diff --git a/crates/biome_service/src/workspace.rs b/crates/biome_service/src/workspace.rs
index 1dc6a8d1f1d2..332f5276be3f 100644
--- a/crates/biome_service/src/workspace.rs
+++ b/crates/biome_service/src/workspace.rs
@@ -1212,7 +1212,7 @@ pub struct PathIsIgnoredParams {
     /// Controls how to ignore check should be done
     pub ignore_kind: IgnoreKind,
 }
-#[derive(Debug, Default, serde::Serialize, serde::Deserialize)]
+#[derive(Debug, Default, Eq, PartialEq, serde::Serialize, serde::Deserialize)]
 #[cfg_attr(feature = "schema", derive(schemars::JsonSchema))]
 #[serde(rename_all = "camelCase")]
 pub enum IgnoreKind {
diff --git a/crates/biome_service/src/workspace/server.rs b/crates/biome_service/src/workspace/server.rs
index 788869f3d1b4..c7e9f68010bc 100644
--- a/crates/biome_service/src/workspace/server.rs
+++ b/crates/biome_service/src/workspace/server.rs
@@ -574,10 +574,12 @@ impl WorkspaceServer {
                     return Ok(!scan_kind.is_project());
                 }
 
-                if self
-                    .projects
-                    .is_ignored_by_top_level_config(project_key, &path, ignore_kind)
-                {
+                if self.projects.is_ignored_by_top_level_config(
+                    self.fs.as_ref(),
+                    project_key,
+                    &path,
+                    ignore_kind,
+                ) {
                     return Ok(true); // Nobody cares about ignored paths.
                 }
 
@@ -606,6 +608,7 @@ impl WorkspaceServer {
                         IgnoreKind::Path => !path.is_required_during_scan(),
                         IgnoreKind::Ancestors => path.parent().is_none_or(|folder_path| {
                             self.projects.is_ignored_by_top_level_config(
+                                self.fs.as_ref(),
                                 project_key,
                                 folder_path,
                                 ignore_kind,
@@ -629,6 +632,7 @@ impl WorkspaceServer {
                                 IgnoreKind::Path => false,
                                 IgnoreKind::Ancestors => path.parent().is_none_or(|folder_path| {
                                     self.projects.is_ignored_by_top_level_config(
+                                        self.fs.as_ref(),
                                         project_key,
                                         folder_path,
                                         ignore_kind,
@@ -637,6 +641,7 @@ impl WorkspaceServer {
                             }
                         } else {
                             self.projects.is_ignored_by_top_level_config(
+                                self.fs.as_ref(),
                                 project_key,
                                 &path,
                                 ignore_kind,
@@ -967,6 +972,7 @@ impl Workspace for WorkspaceServer {
         let capabilities = self.features.get_capabilities(language);
 
         self.projects.get_file_features(
+            self.fs.as_ref(),
             params.project_key,
             &params.path,
             params.features,
@@ -988,6 +994,7 @@ impl Workspace for WorkspaceServer {
         };
 
         Ok(self.projects.is_ignored(
+            self.fs.as_ref(),
             params.project_key,
             &params.path,
             params.features,