diff --git a/packages/cli/__tests__/compile-stylex-folder-test.js b/packages/cli/__tests__/compile-stylex-folder-test.js
index 0680f5c75..207890d44 100644
--- a/packages/cli/__tests__/compile-stylex-folder-test.js
+++ b/packages/cli/__tests__/compile-stylex-folder-test.js
@@ -258,6 +258,11 @@ describe('cache mechanism works as expected', () => {
       copiedNodeModules: false,
     },
   };
+
+  beforeAll(async () => {
+    await fs.rm(cachePath, { recursive: true, force: true });
+  });
+
   beforeEach(() => {
     writeSpy = jest.spyOn(cacheModule, 'writeCache');
   });
@@ -350,7 +355,8 @@ describe('cache mechanism works as expected', () => {
 
 describe('CLI works with a custom cache path', () => {
   let writeSpy;
-  const customCachePath = path.join(__dirname, '__custom_cache__');
+  const projectRoot = path.resolve(__dirname, '../../../');
+  const customCachePath = path.join(projectRoot, '__custom_cache__');
   const config: TransformConfig = {
     input: path.resolve('./source'),
     output: path.resolve('./src'),
@@ -392,31 +398,21 @@ describe('CLI works with a custom cache path', () => {
   test('uses the custom cache path for caching', async () => {
     await compileDirectory(config);
 
-    const customFilePath = path.join(config.input, 'index.js');
-
-    const cacheFilePath = path.join(
-      customCachePath,
-      path.relative(config.input, customFilePath) + '.json',
-    );
-
-    expect(
-      await fs
-        .access(customCachePath)
-        .then(() => true)
-        .catch(() => false),
-    ).toBe(true);
-    expect(
-      await fs
-        .access(cacheFilePath)
-        .then(() => true)
-        .catch(() => false),
-    ).toBe(true);
+    const cacheFiles = await fs.readdir(customCachePath);
+    expect(cacheFiles.length).toEqual(3);
 
-    const cacheData = JSON.parse(await fs.readFile(cacheFilePath, 'utf-8'));
-    expect(cacheData).toHaveProperty('inputHash');
-    expect(cacheData).toHaveProperty('outputHash');
-    expect(cacheData).toHaveProperty('collectedCSS');
+    for (const cacheFile of cacheFiles) {
+      const cacheFilePath = path.join(customCachePath, cacheFile);
+      const cacheContent = JSON.parse(
+        await fs.readFile(cacheFilePath, 'utf-8'),
+      );
+      expect(cacheContent).toHaveProperty('inputHash');
+      expect(cacheContent).toHaveProperty('outputHash');
+      expect(cacheContent).toHaveProperty('collectedCSS');
+      expect(cacheContent).toHaveProperty('configHash');
+    }
   });
+
   test('skips transformation when cache is valid', async () => {
     await compileDirectory(config);
 
diff --git a/packages/cli/src/cache.js b/packages/cli/src/cache.js
index 2d9daa0d6..f2a43e26f 100644
--- a/packages/cli/src/cache.js
+++ b/packages/cli/src/cache.js
@@ -17,8 +17,25 @@ export function getDefaultCachePath() {
   return path.join('node_modules', '.stylex-cache');
 }
 
+async function findProjectRoot(startDir = __dirname) {
+  let currentDir = path.resolve(startDir);
+  while (currentDir !== path.parse(currentDir).root) {
+    const packageJsonPath = path.join(currentDir, 'package.json');
+    try {
+      await fs.access(packageJsonPath);
+      return currentDir;
+    } catch (error) {
+      currentDir = path.dirname(currentDir);
+    }
+  }
+  throw new Error('Project root not found');
+}
+
 export async function getCacheFilePath(cachePath, filePath) {
-  const fileName = filePath.replace(/[\\/]/g, '__');
+  const projectRoot = await findProjectRoot(filePath);
+  const absoluteFilePath = path.resolve(filePath);
+  const relativePath = path.relative(projectRoot, absoluteFilePath);
+  const fileName = relativePath.replace(/[\\/]/g, '__');
   return path.join(cachePath, `${fileName}.json`);
 }