diff --git a/.dagger/modules/e2e/client.dang b/.dagger/modules/e2e/client.dang
index bbe9115..38b5786 100644
--- a/.dagger/modules/e2e/client.dang
+++ b/.dagger/modules/e2e/client.dang
@@ -87,6 +87,10 @@ type ClientChecks {
   Regenerating a client whose package.json already points @dagger.io/dagger at a
   local bundle must preserve that dependency (not overwrite it with the engine
   version pin), and the emitted package.json must be pretty-printed.
+
+  Regeneration owns the `*.gen.ts` bindings and nothing else: hand-written files
+  in the client package survive, while bindings for a module that has left the
+  closure are pruned.
   """
   generateClientRespectsExistingCheck(ws: Workspace!): Void @check {
     let changes = typescriptSdk.generateClient(ws, module: fixtures.clientModule, path: fixtures.clientExisting)
@@ -101,6 +105,54 @@ type ClientChecks {
     )
     Asserts.stringContains(pkg, "\"name\": \"my-existing-client\"", "existing package name must be preserved")
 
+    # Report what was actually removed: this check has failed on a difference
+    # between a local-directory workspace and a git-loaded one, and the paths
+    # are the only way to tell which side of the split behaved differently.
+    let removed = "removed [" + changes.removedPaths.join(", ") + "]"
+    Asserts.assert(
+      Asserts.contains(changes.removedPaths, fixtures.clientExisting + "/main.ts") == false,
+      "regeneration removed a hand-written file from the client package: " + removed,
+    )
+    Asserts.stringContains(
+      changes.after.file(fixtures.clientExisting + "/main.ts").contents,
+      "hello from the user's own file",
+      "hand-written client code must survive regeneration",
+    )
+    Asserts.assert(
+      Asserts.contains(changes.removedPaths, fixtures.clientExisting + "/stale-dep.gen.ts"),
+      "regeneration should prune bindings for a module that left the closure: " + removed,
+    )
+
+    null
+  }
+
+  """
+  The ownership split must hold whatever the workspace is made of.
+
+  `Workspace.withNewDirectory` replaces the directory it writes when the
+  workspace is a local directory and merges into it when the workspace is
+  synthetic — the shape a git-loaded workspace has, which is how the Cloud
+  checks runner loads this repo. Pruning that leans on replace therefore stops
+  pruning in CI while still passing locally, so assert the resulting tree here
+  rather than the changeset's removals.
+  """
+  generateClientOnSyntheticWorkspaceCheck(ws: Workspace!): Void @check {
+    let synthetic = ws.directory("/").asWorkspace
+    let changes = typescriptSdk.generateClient(
+      synthetic,
+      module: fixtures.clientModule,
+      path: fixtures.clientExisting,
+    )
+    let entries = changes.after.directory(fixtures.clientExisting).entries
+    let kept = "kept [" + entries.join(", ") + "]"
+
+    Asserts.assert(Asserts.contains(entries, "main.ts"), "hand-written client code must survive: " + kept)
+    Asserts.assert(
+      Asserts.contains(entries, "stale-dep.gen.ts") == false,
+      "bindings for a module that left the closure must be pruned: " + kept,
+    )
+    Asserts.assert(Asserts.contains(entries, "dagger.gen.ts"), "regeneration must write the core bindings: " + kept)
+
     null
   }
 
diff --git a/.dagger/modules/e2e/fixtures/client/existing/main.ts b/.dagger/modules/e2e/fixtures/client/existing/main.ts
new file mode 100644
index 0000000..dbae443
--- /dev/null
+++ b/.dagger/modules/e2e/fixtures/client/existing/main.ts
@@ -0,0 +1,3 @@
+// Hand-written code living alongside the generated client. Regeneration must
+// leave it in place.
+export const greeting = "hello from the user's own file"
diff --git a/.dagger/modules/e2e/fixtures/client/existing/stale-dep.gen.ts b/.dagger/modules/e2e/fixtures/client/existing/stale-dep.gen.ts
new file mode 100644
index 0000000..03a2ac5
--- /dev/null
+++ b/.dagger/modules/e2e/fixtures/client/existing/stale-dep.gen.ts
@@ -0,0 +1,3 @@
+// Bindings for a module that has since left the client's closure. The SDK owns
+// the *.gen.ts set, so regeneration must prune this.
+export {}
diff --git a/.dagger/modules/e2e/init.dang b/.dagger/modules/e2e/init.dang
index b7cd63a..8bc4b15 100644
--- a/.dagger/modules/e2e/init.dang
+++ b/.dagger/modules/e2e/init.dang
@@ -200,6 +200,38 @@ type InitChecks {
     null
   }
 
+  """
+  Init into a directory that already holds files should layer the starter onto
+  it, never replace it: a user running `dagger module init` inside an existing
+  project keeps their files, and so does the config the engine wrote at the
+  destination before calling the SDK.
+  """
+  initOverExistingCheck(ws: Workspace!): Void @check {
+    let changes = typescriptSdk.initModule(ws, name: "init-over-existing", path: fixtures.lookupModule)
+
+    Asserts.assert(
+      changes.removedPaths.length == 0,
+      "init removed existing files: " + changes.removedPaths.join(", "),
+    )
+    Asserts.stringContains(
+      changes.after.file(fixtures.lookupModule + "/index.ts").contents,
+      "export class LookupApp",
+      "init must leave the existing module source in place",
+    )
+    Asserts.stringContains(
+      changes.after.file(fixtures.lookupModule + "/dagger.json").contents,
+      "\"source\": \"typescript\"",
+      "init must leave the existing module config in place",
+    )
+    Asserts.stringContains(
+      changes.after.file(fixtures.lookupModule + "/src/index.ts").contents,
+      "export class InitOverExisting",
+      "init did not render the template into the existing directory",
+    )
+
+    null
+  }
+
   """
   Init flags should write configuration into the generated config files. By
   default, no config keys are written; the runtime decides which file the
diff --git a/README.md b/README.md
index a2a8479..f2e0ef9 100644
--- a/README.md
+++ b/README.md
@@ -54,9 +54,10 @@ dagger module init typescript my-module --runtime deno
 - `node` / `bun` → `package.json`, `tsconfig.json`
 - `deno` → `deno.json`
 
-If `package.json`, `tsconfig.json`, or `deno.json` already exist at the target
-path, init merges Dagger-required keys into them rather than overwriting — your
-scripts, path aliases, unstable flags, and other custom settings are preserved.
+Init never removes what is already at the target path. If `package.json`,
+`tsconfig.json`, or `deno.json` are there, it merges Dagger-required keys into
+them rather than overwriting — your scripts, path aliases, unstable flags, and
+other custom settings are preserved — and any other file is left untouched.
 
 The engine owns the module's config; the SDK only contributes the template and
 config files above. Run `dagger generate` afterwards to produce the generated
@@ -120,6 +121,10 @@ it resolves from any plain client session rather than only from a module
 runtime. If you point `@dagger.io/dagger` at a local bundle (e.g. `"./sdk"`),
 regeneration preserves that instead of resetting it to the version pin.
 
+Regeneration owns the `*.gen.ts` files and nothing else: bindings for a module
+that has left the closure are dropped, and your own files in the client
+directory are left alone.
+
 ## Generate SDK files and clients
 
 Regenerate every registered module and client in the workspace:
diff --git a/typescript-sdk.dang b/typescript-sdk.dang
index f5e63e5..37ad4a3 100644
--- a/typescript-sdk.dang
+++ b/typescript-sdk.dang
@@ -166,9 +166,10 @@ type TypescriptSdk {
 
   The engine resolves the destination `path` and owns the module's config; this
   function only returns the SDK-owned files to layer onto `path` — the rendered
-  template plus runtime-specific config. Files already at `path` are merged
-  into, not overwritten, so an existing package.json / tsconfig.json / deno.json
-  keeps its scripts, path aliases, and unstable flags.
+  template plus runtime-specific config. Files already at `path` are kept: an
+  existing package.json / tsconfig.json / deno.json is merged into rather than
+  overwritten, so it keeps its scripts, path aliases, and unstable flags, and
+  everything else there is left alone.
   """
   initModule(
     ws: Workspace!,
@@ -229,7 +230,30 @@ type TypescriptSdk {
       # `modPath` is workspace-root-relative, so anchor it: a relative workspace
       # path resolves from ws.cwd and would be prefixed again when initModule is
       # called directly from a subdirectory rather than driven by the engine.
-      ws.withNewDirectory("/" + modPath, templateSource).changes(ws)
+      #
+      # withNewDirectory replaces the directory it writes, so layer the starter
+      # onto what is already there: init must never remove a user's files, nor
+      # the config the engine wrote at `modPath` before calling us.
+      ws.withNewDirectory(
+        "/" + modPath,
+        existingDir(ws, modPath).withDirectory(".", templateSource),
+      ).changes(ws)
+    }
+  }
+
+  """
+  Existing contents of a workspace directory, empty when it does not exist yet.
+  """
+  let existingDir(ws: Workspace!, path: String!): Directory! {
+    if (path == ".") {
+      ws.directory("/")
+    } else {
+      let filtered = ws.directory("/", include: [path + "/**"])
+      if (filtered.exists(path)) {
+        filtered.directory(path)
+      } else {
+        directory
+      }
     }
   }
 
@@ -318,7 +342,8 @@ type TypescriptSdk {
     } else if (runtime == Runtime.BUN) {
       # The Dagger TypeScript runtime picks bun over node by spotting bun.lock,
       # so we emit an empty one for a fresh init. If the workspace already has
-      # one we leave it alone (overlay semantics via init's withDirectory).
+      # one we leave it alone: init layers the template onto the existing
+      # directory, so writing it here would truncate the user's lockfile.
       let nodeConfig = builder
         .withExec(["config-updator", "package-json", existingPrefix + "package.json", "/rendered/package.json"])
         .withExec(["config-updator", "tsconfig", existingPrefix + "tsconfig.json", "/rendered/tsconfig.json"])
@@ -524,6 +549,40 @@ type TypescriptSdk {
     }
   }
 
+  """
+  The `*.gen.ts` bindings sitting at `path`, by name.
+
+  Regeneration owns that set and nothing else: a module that has left the
+  closure must lose its file, while the user's own files at `path` stay.
+  """
+  let clientBindings(ws: Workspace!, path: String!): [String!]! {
+    existingDir(ws, path).entries.filter { entry => entry.trimSuffix(".gen.ts") != entry }
+  }
+
+  """
+  Baseline the freshly generated client is layered onto: the client directory as
+  it stands, minus the bindings regeneration is about to replace.
+  """
+  let existingClientBase(ws: Workspace!, path: String!): Directory! {
+    existingDir(ws, path).withoutFiles(clientBindings(ws, path))
+  }
+
+  """
+  The workspace with the bindings at `path` removed.
+
+  Pruning has to happen twice because withNewDirectory does not mean the same
+  thing for both kinds of workspace: it replaces the directory it writes when
+  the workspace is a local directory, and merges into it when the workspace is
+  loaded from git (how the Cloud checks runner loads it). Taking the bindings
+  out of the baseline covers the first, out of the workspace the second. The
+  baseline still reads from the untouched `ws`: reading it back out of the
+  pruned workspace comes up empty on a local directory, which would drop the
+  user's files.
+  """
+  let withoutClientBindings(ws: Workspace!, path: String!): Workspace! {
+    clientBindings(ws, path).reduce(ws) { pruned, entry => pruned.withoutFile("/" + path + "/" + entry) }
+  }
+
   """
   Generate a typed client for `module` and stage it at workspace-relative `path`.
 
@@ -546,7 +605,7 @@ type TypescriptSdk {
     path: String!,
   ): Changeset! {
     let modSrc = ws.moduleSource(module)
-    ws.withNewDirectory("/" + path, clientDirectory(
+    let generated = clientDirectory(
       modSrc.clientSchemaIntrospectionJSON.contents,
       modSrc.moduleOriginalName,
       modSrc.engineVersion,
@@ -557,7 +616,10 @@ type TypescriptSdk {
       modSrc.asString,
       modSrc.pin,
       existingClientConfig(ws, path)
-    )).changes(ws)
+    )
+    withoutClientBindings(ws, path)
+      .withNewDirectory("/" + path, existingClientBase(ws, path).withDirectory(".", generated))
+      .changes(ws)
   }
 
   """
@@ -610,7 +672,7 @@ type TypescriptSdk {
       .filter { client => inCwdScope(cwd, client.path) }
       .reduce(ws) { stagedWs, client =>
         let m = client.moduleSource
-        stagedWs.withNewDirectory("/" + client.path, clientDirectory(
+        let generated = clientDirectory(
           m.clientSchemaIntrospectionJSON.contents,
           m.moduleOriginalName,
           m.engineVersion,
@@ -621,7 +683,11 @@ type TypescriptSdk {
           m.asString,
           m.pin,
           existingClientConfig(ws, client.path)
-        ))
+        )
+        withoutClientBindings(stagedWs, client.path).withNewDirectory(
+          "/" + client.path,
+          existingClientBase(ws, client.path).withDirectory(".", generated),
+        )
       }
       .changes(ws)
   }