diff --git a/pkg/backend/filestate/backend.go b/pkg/backend/filestate/backend.go
index 644dbb106896..d5da7f3cf715 100644
--- a/pkg/backend/filestate/backend.go
+++ b/pkg/backend/filestate/backend.go
@@ -340,8 +340,37 @@ func (b *localBackend) DoesProjectExist(ctx context.Context, projectName string)
 	return false, nil
 }
 
+// Confirm the specified stack's project doesn't contradict the Pulumi.yaml of the current project. If the CWD
+// is not in a Pulumi project, does not contradict. If the project name in Pulumi.yaml is "foo", a stack with a
+// name of bar/foo should not work.
+func currentProjectContradictsWorkspace(stack localBackendReference) bool {
+	if stack.project == "" {
+		return false
+	}
+
+	projPath, err := workspace.DetectProjectPath()
+	if err != nil {
+		return false
+	}
+
+	if projPath == "" {
+		return false
+	}
+
+	proj, err := workspace.LoadProject(projPath)
+	if err != nil {
+		return false
+	}
+
+	return proj.Name.String() != stack.project.String()
+}
+
 func (b *localBackend) CreateStack(ctx context.Context, stackRef backend.StackReference,
 	opts interface{}) (backend.Stack, error) {
+	localStackRef, is := stackRef.(localBackendReference)
+	if !is {
+		return nil, fmt.Errorf("bad stack reference type")
+	}
 
 	err := b.Lock(ctx, stackRef)
 	if err != nil {
@@ -349,9 +378,13 @@ func (b *localBackend) CreateStack(ctx context.Context, stackRef backend.StackRe
 	}
 	defer b.Unlock(ctx, stackRef)
 
+	if currentProjectContradictsWorkspace(localStackRef) {
+		return nil, fmt.Errorf("provided project name %q doesn't match Pulumi.yaml", localStackRef.project)
+	}
+
 	contract.Requiref(opts == nil, "opts", "local stacks do not support any options")
 
-	stackName := stackRef.FullyQualifiedName()
+	stackName := localStackRef.FullyQualifiedName()
 	if stackName == "" {
 		return nil, errors.New("invalid empty stack name")
 	}
@@ -373,14 +406,19 @@ func (b *localBackend) CreateStack(ctx context.Context, stackRef backend.StackRe
 		return nil, err
 	}
 
-	stack := newStack(stackRef, file, nil, b)
+	stack := newStack(localStackRef, file, nil, b)
 	fmt.Printf("Created stack '%s'\n", stack.Ref())
 
 	return stack, nil
 }
 
 func (b *localBackend) GetStack(ctx context.Context, stackRef backend.StackReference) (backend.Stack, error) {
-	stackName := stackRef.FullyQualifiedName()
+	localStackRef, is := stackRef.(localBackendReference)
+	if !is {
+		return nil, fmt.Errorf("bad stack reference type")
+	}
+
+	stackName := localStackRef.FullyQualifiedName()
 	snapshot, path, err := b.getStack(ctx, stackName)
 
 	switch {
@@ -389,7 +427,7 @@ func (b *localBackend) GetStack(ctx context.Context, stackRef backend.StackRefer
 	case err != nil:
 		return nil, err
 	default:
-		return newStack(stackRef, path, snapshot, b), nil
+		return newStack(localStackRef, path, snapshot, b), nil
 	}
 }
 
@@ -596,6 +634,15 @@ func (b *localBackend) apply(
 	events chan<- engine.Event) (*deploy.Plan, sdkDisplay.ResourceChanges, result.Result) {
 
 	stackRef := stack.Ref()
+	localStackRef, is := stackRef.(localBackendReference)
+	if !is {
+		return nil, nil, result.Error("bad stack reference type")
+	}
+
+	if currentProjectContradictsWorkspace(localStackRef) {
+		return nil, nil, result.Errorf("provided project name %q doesn't match Pulumi.yaml", localStackRef.project)
+	}
+
 	stackName := stackRef.FullyQualifiedName()
 	actionLabel := backend.ActionLabel(kind, opts.DryRun)
 
diff --git a/pkg/backend/filestate/backend_test.go b/pkg/backend/filestate/backend_test.go
index 2dd609324c3e..f3a55be89547 100644
--- a/pkg/backend/filestate/backend_test.go
+++ b/pkg/backend/filestate/backend_test.go
@@ -10,6 +10,7 @@ import (
 	"testing"
 
 	"github.com/stretchr/testify/assert"
+	"github.com/stretchr/testify/require"
 	user "github.com/tweekmonster/luser"
 
 	"github.com/pulumi/pulumi/pkg/v3/backend"
@@ -565,3 +566,58 @@ func TestCanRenameStack(t *testing.T) {
 	assert.Equal(t, "testproj/b", newBStack.String())
 	assert.FileExists(t, path.Join(tmpDir, ".pulumi", "stacks", "testproj", "b.json"))
 }
+
+func chdir(t *testing.T, dir string) {
+	cwd, err := os.Getwd()
+	require.NoError(t, err)
+	require.NoError(t, os.Chdir(dir)) // Set directory
+	t.Cleanup(func() {
+		require.NoError(t, os.Chdir(cwd)) // Restore directory
+		restoredDir, err := os.Getwd()
+		require.NoError(t, err)
+		require.Equal(t, cwd, restoredDir)
+	})
+}
+
+//nolint:paralleltest // mutates cwd
+func TestProjectNameMustMatch(t *testing.T) {
+	// Login to a temp dir filestate backend
+	tmpDir := t.TempDir()
+	b, err := New(cmdutil.Diag(), "file://"+filepath.ToSlash(tmpDir))
+	require.NoError(t, err)
+	ctx := context.Background()
+
+	// Create a new project
+	projectDir := t.TempDir()
+	pyaml := filepath.Join(projectDir, "Pulumi.yaml")
+	err = os.WriteFile(pyaml, []byte("name: my-project\nruntime: test"), 0600)
+	require.NoError(t, err)
+
+	chdir(t, projectDir)
+
+	// Create a new non-project stack
+	aRef, err := b.ParseStackReference("a")
+	assert.NoError(t, err)
+	assert.Equal(t, "a", aRef.String())
+	aStack, err := b.CreateStack(ctx, aRef, nil)
+	assert.NoError(t, err)
+	assert.Equal(t, "a", aStack.Ref().String())
+	assert.FileExists(t, path.Join(tmpDir, ".pulumi", "stacks", "a.json"))
+
+	// Create a new project stack with the wrong project name
+	bRef, err := b.ParseStackReference("not-my-project/b")
+	assert.NoError(t, err)
+	assert.Equal(t, "not-my-project/b", bRef.String())
+	bStack, err := b.CreateStack(ctx, bRef, nil)
+	assert.Error(t, err)
+	assert.Nil(t, bStack)
+
+	// Create a new project stack with the right project name
+	cRef, err := b.ParseStackReference("my-project/c")
+	assert.NoError(t, err)
+	assert.Equal(t, "my-project/c", cRef.String())
+	cStack, err := b.CreateStack(ctx, cRef, nil)
+	assert.NoError(t, err)
+	assert.Equal(t, "my-project/c", cStack.Ref().String())
+	assert.FileExists(t, path.Join(tmpDir, ".pulumi", "stacks", "my-project", "c.json"))
+}
diff --git a/pkg/backend/filestate/stack.go b/pkg/backend/filestate/stack.go
index 5829543008a4..ae15e2d13d58 100644
--- a/pkg/backend/filestate/stack.go
+++ b/pkg/backend/filestate/stack.go
@@ -38,13 +38,13 @@ type Stack interface {
 
 // localStack is a local stack descriptor.
 type localStack struct {
-	ref      backend.StackReference // the stack's reference (qualified name).
-	path     string                 // a path to the stack's checkpoint file on disk.
-	snapshot *deploy.Snapshot       // a snapshot representing the latest deployment state.
-	b        *localBackend          // a pointer to the backend this stack belongs to.
+	ref      localBackendReference // the stack's reference (qualified name).
+	path     string                // a path to the stack's checkpoint file on disk.
+	snapshot *deploy.Snapshot      // a snapshot representing the latest deployment state.
+	b        *localBackend         // a pointer to the backend this stack belongs to.
 }
 
-func newStack(ref backend.StackReference, path string, snapshot *deploy.Snapshot, b *localBackend) Stack {
+func newStack(ref localBackendReference, path string, snapshot *deploy.Snapshot, b *localBackend) Stack {
 	return &localStack{
 		ref:      ref,
 		path:     path,