diff --git a/app/Livewire/Security/CloudInitScriptForm.php b/app/Livewire/Security/CloudInitScriptForm.php
index ff670cd4f..33beff334 100644
--- a/app/Livewire/Security/CloudInitScriptForm.php
+++ b/app/Livewire/Security/CloudInitScriptForm.php
@@ -36,7 +36,7 @@ protected function rules(): array
     {
         return [
             'name' => 'required|string|max:255',
-            'script' => 'required|string',
+            'script' => ['required', 'string', new \App\Rules\ValidCloudInitYaml],
         ];
     }
 
diff --git a/app/Livewire/Server/New/ByHetzner.php b/app/Livewire/Server/New/ByHetzner.php
index 7d828b12e..abbe4c379 100644
--- a/app/Livewire/Server/New/ByHetzner.php
+++ b/app/Livewire/Server/New/ByHetzner.php
@@ -157,7 +157,7 @@ protected function rules(): array
                 'selectedHetznerSshKeyIds.*' => 'integer',
                 'enable_ipv4' => 'required|boolean',
                 'enable_ipv6' => 'required|boolean',
-                'cloud_init_script' => 'nullable|string',
+                'cloud_init_script' => ['nullable', 'string', new \App\Rules\ValidCloudInitYaml],
                 'save_cloud_init_script' => 'boolean',
                 'cloud_init_script_name' => 'nullable|string|max:255',
                 'selected_cloud_init_script_id' => 'nullable|integer|exists:cloud_init_scripts,id',
diff --git a/app/Rules/ValidCloudInitYaml.php b/app/Rules/ValidCloudInitYaml.php
new file mode 100644
index 000000000..8116e1161
--- /dev/null
+++ b/app/Rules/ValidCloudInitYaml.php
@@ -0,0 +1,55 @@
+<?php
+
+namespace App\Rules;
+
+use Closure;
+use Illuminate\Contracts\Validation\ValidationRule;
+use Symfony\Component\Yaml\Exception\ParseException;
+use Symfony\Component\Yaml\Yaml;
+
+class ValidCloudInitYaml implements ValidationRule
+{
+    /**
+     * Run the validation rule.
+     *
+     * Validates that the cloud-init script is either:
+     * - Valid YAML format (for cloud-config)
+     * - Valid bash script (starting with #!)
+     * - Empty/null (optional field)
+     */
+    public function validate(string $attribute, mixed $value, Closure $fail): void
+    {
+        if (empty($value)) {
+            return;
+        }
+
+        $script = trim($value);
+
+        // If it's a bash script (starts with shebang), skip YAML validation
+        if (str_starts_with($script, '#!')) {
+            return;
+        }
+
+        // If it's a cloud-config file (starts with #cloud-config), validate YAML
+        if (str_starts_with($script, '#cloud-config')) {
+            // Remove the #cloud-config header and validate the rest as YAML
+            $yamlContent = preg_replace('/^#cloud-config\s*/m', '', $script, 1);
+
+            try {
+                Yaml::parse($yamlContent);
+            } catch (ParseException $e) {
+                $fail('The :attribute must be valid YAML format. Error: '.$e->getMessage());
+            }
+
+            return;
+        }
+
+        // If it doesn't start with #! or #cloud-config, try to parse as YAML
+        // (some users might omit the #cloud-config header)
+        try {
+            Yaml::parse($script);
+        } catch (ParseException $e) {
+            $fail('The :attribute must be either a valid bash script (starting with #!) or valid cloud-config YAML. YAML parse error: '.$e->getMessage());
+        }
+    }
+}
diff --git a/resources/views/livewire/security/cloud-init-script-form.blade.php b/resources/views/livewire/security/cloud-init-script-form.blade.php
index 1632b48d3..83bedffab 100644
--- a/resources/views/livewire/security/cloud-init-script-form.blade.php
+++ b/resources/views/livewire/security/cloud-init-script-form.blade.php
@@ -2,7 +2,7 @@
     <x-forms.input id="name" label="Script Name" helper="A descriptive name for this cloud-init script." required />
 
     <x-forms.textarea id="script" label="Script Content" rows="12"
-        helper="Enter your cloud-init script. Supports both bash scripts and cloud-config YAML format." required />
+        helper="Enter your cloud-init script. Supports cloud-config YAML format." required />
 
     <div class="flex justify-end gap-2">
         @if ($modal_mode)
diff --git a/tests/Unit/Rules/ValidCloudInitYamlTest.php b/tests/Unit/Rules/ValidCloudInitYamlTest.php
new file mode 100644
index 000000000..f3ea906af
--- /dev/null
+++ b/tests/Unit/Rules/ValidCloudInitYamlTest.php
@@ -0,0 +1,174 @@
+<?php
+
+use App\Rules\ValidCloudInitYaml;
+
+it('accepts valid cloud-config YAML with header', function () {
+    $rule = new ValidCloudInitYaml;
+    $valid = true;
+
+    $script = <<<'YAML'
+#cloud-config
+users:
+  - name: demo
+    groups: sudo
+    shell: /bin/bash
+packages:
+  - nginx
+  - git
+runcmd:
+  - echo "Hello World"
+YAML;
+
+    $rule->validate('script', $script, function ($message) use (&$valid) {
+        $valid = false;
+    });
+
+    expect($valid)->toBeTrue();
+});
+
+it('accepts valid cloud-config YAML without header', function () {
+    $rule = new ValidCloudInitYaml;
+    $valid = true;
+
+    $script = <<<'YAML'
+users:
+  - name: demo
+    groups: sudo
+packages:
+  - nginx
+YAML;
+
+    $rule->validate('script', $script, function ($message) use (&$valid) {
+        $valid = false;
+    });
+
+    expect($valid)->toBeTrue();
+});
+
+it('accepts valid bash script with shebang', function () {
+    $rule = new ValidCloudInitYaml;
+    $valid = true;
+
+    $script = <<<'BASH'
+#!/bin/bash
+apt update
+apt install -y nginx
+systemctl start nginx
+BASH;
+
+    $rule->validate('script', $script, function ($message) use (&$valid) {
+        $valid = false;
+    });
+
+    expect($valid)->toBeTrue();
+});
+
+it('accepts empty or null script', function () {
+    $rule = new ValidCloudInitYaml;
+    $valid = true;
+
+    $rule->validate('script', '', function ($message) use (&$valid) {
+        $valid = false;
+    });
+
+    expect($valid)->toBeTrue();
+
+    $rule->validate('script', null, function ($message) use (&$valid) {
+        $valid = false;
+    });
+
+    expect($valid)->toBeTrue();
+});
+
+it('rejects invalid YAML format', function () {
+    $rule = new ValidCloudInitYaml;
+    $valid = true;
+    $errorMessage = '';
+
+    $script = <<<'YAML'
+#cloud-config
+users:
+  - name: demo
+    groups: sudo
+  invalid_indentation
+packages:
+  - nginx
+YAML;
+
+    $rule->validate('script', $script, function ($message) use (&$valid, &$errorMessage) {
+        $valid = false;
+        $errorMessage = $message;
+    });
+
+    expect($valid)->toBeFalse();
+    expect($errorMessage)->toContain('YAML');
+});
+
+it('rejects script that is neither bash nor valid YAML', function () {
+    $rule = new ValidCloudInitYaml;
+    $valid = true;
+    $errorMessage = '';
+
+    $script = <<<'INVALID'
+this is not valid YAML
+  and has invalid indentation:
+    - item
+  without proper structure {
+INVALID;
+
+    $rule->validate('script', $script, function ($message) use (&$valid, &$errorMessage) {
+        $valid = false;
+        $errorMessage = $message;
+    });
+
+    expect($valid)->toBeFalse();
+    expect($errorMessage)->toContain('bash script');
+});
+
+it('accepts complex cloud-config with multiple sections', function () {
+    $rule = new ValidCloudInitYaml;
+    $valid = true;
+
+    $script = <<<'YAML'
+#cloud-config
+users:
+  - name: coolify
+    groups: sudo, docker
+    shell: /bin/bash
+    sudo: ['ALL=(ALL) NOPASSWD:ALL']
+    ssh_authorized_keys:
+      - ssh-rsa AAAAB3NzaC1yc2EAAAADAQABAAABAQ...
+
+packages:
+  - docker.io
+  - docker-compose
+  - git
+  - curl
+
+package_update: true
+package_upgrade: true
+
+runcmd:
+  - systemctl enable docker
+  - systemctl start docker
+  - usermod -aG docker coolify
+  - echo "Server setup complete"
+
+write_files:
+  - path: /etc/docker/daemon.json
+    content: |
+      {
+        "log-driver": "json-file",
+        "log-opts": {
+          "max-size": "10m",
+          "max-file": "3"
+        }
+      }
+YAML;
+
+    $rule->validate('script', $script, function ($message) use (&$valid) {
+        $valid = false;
+    });
+
+    expect($valid)->toBeTrue();
+});