diff --git a/app/Livewire/Project/Application/General.php b/app/Livewire/Project/Application/General.php
index 46a459fe2..c84de9d8d 100644
--- a/app/Livewire/Project/Application/General.php
+++ b/app/Livewire/Project/Application/General.php
@@ -521,7 +521,7 @@ public function instantSave()
         }
     }
 
-    public function loadComposeFile($isInit = false, $showToast = true)
+    public function loadComposeFile($isInit = false, $showToast = true, ?string $restoreBaseDirectory = null, ?string $restoreDockerComposeLocation = null)
     {
         try {
             $this->authorize('update', $this->application);
@@ -530,7 +530,7 @@ public function loadComposeFile($isInit = false, $showToast = true)
                 return;
             }
 
-            ['parsedServices' => $this->parsedServices, 'initialDockerComposeLocation' => $this->initialDockerComposeLocation] = $this->application->loadComposeFile($isInit);
+            ['parsedServices' => $this->parsedServices, 'initialDockerComposeLocation' => $this->initialDockerComposeLocation] = $this->application->loadComposeFile($isInit, $restoreBaseDirectory, $restoreDockerComposeLocation);
             if (is_null($this->parsedServices)) {
                 $showToast && $this->dispatch('error', 'Failed to parse your docker-compose file. Please check the syntax and try again.');
 
@@ -831,13 +831,22 @@ public function submit($showToaster = true)
             if ($this->buildPack === 'dockercompose' &&
                 ($oldDockerComposeLocation !== $this->dockerComposeLocation ||
                  $oldBaseDirectory !== $this->baseDirectory)) {
-                $compose_return = $this->loadComposeFile(showToast: false);
+                // Pass original values to loadComposeFile so it can restore them on failure
+                // The finally block in Application::loadComposeFile will save these original
+                // values if validation fails, preventing invalid paths from being persisted
+                $compose_return = $this->loadComposeFile(
+                    isInit: false,
+                    showToast: false,
+                    restoreBaseDirectory: $oldBaseDirectory,
+                    restoreDockerComposeLocation: $oldDockerComposeLocation
+                );
                 if ($compose_return instanceof \Livewire\Features\SupportEvents\Event) {
-                    // Restore original values - don't persist invalid data
+                    // Validation failed - restore original values to component properties
                     $this->baseDirectory = $oldBaseDirectory;
                     $this->dockerComposeLocation = $oldDockerComposeLocation;
-                    $this->application->base_directory = $oldBaseDirectory;
-                    $this->application->docker_compose_location = $oldDockerComposeLocation;
+                    // The model was saved by loadComposeFile's finally block with original values
+                    // Refresh to sync component with database state
+                    $this->application->refresh();
 
                     return;
                 }
diff --git a/app/Models/Application.php b/app/Models/Application.php
index 6e920f8e6..7bddce32b 100644
--- a/app/Models/Application.php
+++ b/app/Models/Application.php
@@ -1511,9 +1511,11 @@ public function parse(int $pull_request_id = 0, ?int $preview_id = null)
         }
     }
 
-    public function loadComposeFile($isInit = false)
+    public function loadComposeFile($isInit = false, ?string $restoreBaseDirectory = null, ?string $restoreDockerComposeLocation = null)
     {
-        $initialDockerComposeLocation = $this->docker_compose_location;
+        // Use provided restore values or capture current values as fallback
+        $initialDockerComposeLocation = $restoreDockerComposeLocation ?? $this->docker_compose_location;
+        $initialBaseDirectory = $restoreBaseDirectory ?? $this->base_directory;
         if ($isInit && $this->docker_compose_raw) {
             return;
         }
@@ -1580,6 +1582,7 @@ public function loadComposeFile($isInit = false)
             throw new \RuntimeException($e->getMessage());
         } finally {
             $this->docker_compose_location = $initialDockerComposeLocation;
+            $this->base_directory = $initialBaseDirectory;
             $this->save();
             $commands = collect([
                 "rm -rf /tmp/{$uuid}",