diff --git a/internal/cli/files.go b/internal/cli/files.go
index 78d80aa..43af59e 100644
--- a/internal/cli/files.go
+++ b/internal/cli/files.go
@@ -205,6 +205,9 @@ func readRwxDirectoryEntries(paths []string, relativeTo string) ([]RwxDirectoryE
 			}
 
 			skipDirs := []string{".rwx/test-suites", ".mint/test-suites", ".rwx/downloads", ".mint/downloads"}
+			if relativeTo != "" {
+				skipDirs = append(skipDirs, "test-suites", "downloads")
+			}
 			if entry.IsDir() {
 				if slices.Contains(skipDirs, entry.Path) {
 					return filepath.SkipDir
diff --git a/internal/cli/files_test.go b/internal/cli/files_test.go
index 7aa0351..858e100 100644
--- a/internal/cli/files_test.go
+++ b/internal/cli/files_test.go
@@ -57,6 +57,39 @@ func TestReadRwxDirectoryEntries_SizeLimit(t *testing.T) {
 	})
 }
 
+func TestReadRwxDirectoryEntries_SkipsDownloads(t *testing.T) {
+	t.Run("excludes downloads directory from size calculation", func(t *testing.T) {
+		t.Chdir(t.TempDir())
+
+		rwxDir := ".rwx"
+		err := os.MkdirAll(rwxDir, 0755)
+		require.NoError(t, err)
+
+		// Write a small config file
+		smallContent := make([]byte, 1*1024*1024) // 1 MiB
+		err = os.WriteFile(filepath.Join(rwxDir, "config.yml"), smallContent, 0644)
+		require.NoError(t, err)
+
+		// Write a large file inside downloads that would push total over 5MiB
+		downloadsDir := filepath.Join(rwxDir, "downloads")
+		err = os.MkdirAll(downloadsDir, 0755)
+		require.NoError(t, err)
+
+		largeDownload := make([]byte, 6*1024*1024) // 6 MiB
+		err = os.WriteFile(filepath.Join(downloadsDir, "artifact.tar.gz"), largeDownload, 0644)
+		require.NoError(t, err)
+
+		// Should succeed because downloads directory is excluded
+		entries, err := cli.RwxDirectoryEntries(rwxDir)
+		require.NoError(t, err)
+
+		// Verify no entries from downloads directory are included
+		for _, entry := range entries {
+			require.NotContains(t, entry.Path, "downloads/")
+		}
+	})
+}
+
 func TestFindRunDefinitionFile(t *testing.T) {
 	t.Run("when file exists in pwd", func(t *testing.T) {
 		t.Chdir(t.TempDir())
diff --git a/internal/cli/service_run_test.go b/internal/cli/service_run_test.go
index 3714e96..ee1116e 100644
--- a/internal/cli/service_run_test.go
+++ b/internal/cli/service_run_test.go
@@ -561,7 +561,7 @@ func TestService_InitiatingRun(t *testing.T) {
 				s.mockAPI.MockInitiateRun = func(cfg api.InitiateRunConfig) (*api.InitiateRunResult, error) {
 					require.Len(t, cfg.TaskDefinitions, 1)
 					require.Equal(t, runConfig.MintFilePath, cfg.TaskDefinitions[0].Path)
-					require.Len(t, cfg.RwxDirectory, 9)
+					require.Len(t, cfg.RwxDirectory, 7)
 					require.Equal(t, ".", cfg.RwxDirectory[0].Path)
 					require.Equal(t, "mintdir-tasks.json", cfg.RwxDirectory[1].Path)
 					require.Equal(t, "mintdir-tasks.yml", cfg.RwxDirectory[2].Path)
@@ -569,8 +569,6 @@ func TestService_InitiatingRun(t *testing.T) {
 					require.Equal(t, "some/nested", cfg.RwxDirectory[4].Path)
 					require.Equal(t, "some/nested/path", cfg.RwxDirectory[5].Path)
 					require.Equal(t, "some/nested/path/tasks.yaml", cfg.RwxDirectory[6].Path)
-					require.Equal(t, "test-suites", cfg.RwxDirectory[7].Path)
-					require.Equal(t, "test-suites/config.yaml", cfg.RwxDirectory[8].Path)
 					require.True(t, cfg.UseCache)
 					receivedSpecifiedFileContent = cfg.TaskDefinitions[0].FileContents
 					receivedRwxDir = cfg.RwxDirectory
@@ -587,7 +585,7 @@ func TestService_InitiatingRun(t *testing.T) {
 
 				require.Equal(t, originalSpecifiedFileContent, receivedSpecifiedFileContent)
 				require.NotNil(t, receivedRwxDir)
-				require.Equal(t, 9, len(receivedRwxDir))
+				require.Equal(t, 7, len(receivedRwxDir))
 				require.Equal(t, ".", receivedRwxDir[0].Path)
 				require.Equal(t, "mintdir-tasks.json", receivedRwxDir[1].Path)
 				require.Equal(t, "mintdir-tasks.yml", receivedRwxDir[2].Path)
@@ -595,8 +593,6 @@ func TestService_InitiatingRun(t *testing.T) {
 				require.Equal(t, "some/nested", receivedRwxDir[4].Path)
 				require.Equal(t, "some/nested/path", receivedRwxDir[5].Path)
 				require.Equal(t, "some/nested/path/tasks.yaml", receivedRwxDir[6].Path)
-				require.Equal(t, "test-suites", receivedRwxDir[7].Path)
-				require.Equal(t, "test-suites/config.yaml", receivedRwxDir[8].Path)
 			})
 		})