diff --git a/esphome/espidf/toolchain.py b/esphome/espidf/toolchain.py
index 2fef3faf8d..c622a2dd36 100644
--- a/esphome/espidf/toolchain.py
+++ b/esphome/espidf/toolchain.py
@@ -14,6 +14,7 @@ from esphome.const import CONF_FRAMEWORK, CONF_SOURCE
 from esphome.core import CORE, EsphomeError
 from esphome.espidf.framework import check_esp_idf_install, get_framework_env
 from esphome.espidf.size_summary import print_summary
+from esphome.helpers import add_git_ceiling_directory
 
 _LOGGER = logging.getLogger(__name__)
 
@@ -82,6 +83,11 @@ def _get_idf_env(version: str | None = None) -> dict[str, str]:
             env_cache[version] |= get_framework_env(
                 *_get_esphome_esp_idf_paths(version)
             )
+
+        # Cap git's repo search at the config directory so ESP-IDF's
+        # `git describe` for the app version can't error out on an
+        # uninitialized or corrupt git repo in a parent directory.
+        add_git_ceiling_directory(env_cache[version], CORE.config_dir)
     return env_cache[version]
 
 
diff --git a/esphome/helpers.py b/esphome/helpers.py
index 733474c9c9..ef7e2d0b93 100644
--- a/esphome/helpers.py
+++ b/esphome/helpers.py
@@ -1,5 +1,6 @@
 from __future__ import annotations
 
+from collections.abc import MutableMapping
 from contextlib import suppress
 import ipaddress
 import logging
@@ -374,6 +375,26 @@ def is_ha_addon():
     return get_bool_env("ESPHOME_IS_HA_ADDON")
 
 
+def add_git_ceiling_directory(env: MutableMapping[str, str], directory: Path) -> None:
+    """Add ``directory`` to ``env``'s ``GIT_CEILING_DIRECTORIES`` list.
+
+    Git stops walking up the directory tree to find a repository once it reaches
+    a ceiling directory, so this caps the search at ``directory`` (the ESPHome
+    project root). Without it, an uninitialized or corrupt git repo in a parent
+    directory makes the ``git describe`` that build toolchains run for the app
+    version error out and fail the whole build.
+
+    ``GIT_CEILING_DIRECTORIES`` is an ``os.pathsep``-joined list of absolute
+    paths; any existing entries are preserved and duplicates are skipped.
+    """
+    ceiling = str(directory)
+    existing = env.get("GIT_CEILING_DIRECTORIES", "")
+    parts = existing.split(os.pathsep) if existing else []
+    if ceiling not in parts:
+        parts.append(ceiling)
+        env["GIT_CEILING_DIRECTORIES"] = os.pathsep.join(parts)
+
+
 def rmtree(path: Path | str) -> None:
     """Remove a directory tree, handling read-only files on Windows.
 
diff --git a/esphome/platformio/toolchain.py b/esphome/platformio/toolchain.py
index c81420e6ca..c97df812e3 100644
--- a/esphome/platformio/toolchain.py
+++ b/esphome/platformio/toolchain.py
@@ -7,6 +7,7 @@ import sys
 
 from esphome.const import CONF_COMPILE_PROCESS_LIMIT, CONF_ESPHOME, KEY_CORE
 from esphome.core import CORE, EsphomeError
+from esphome.helpers import add_git_ceiling_directory
 from esphome.util import FlashImage, run_external_process
 
 _LOGGER = logging.getLogger(__name__)
@@ -53,6 +54,10 @@ def run_platformio_cli(*args, **kwargs) -> str | int:
     os.environ.setdefault("PYTHONWARNINGS", "ignore::SyntaxWarning")
     # Increase uv retry count to handle transient network errors (default is 3)
     os.environ.setdefault("UV_HTTP_RETRIES", "10")
+    # Cap git's repo search at the config directory so the framework's build
+    # scripts running `git describe` for the app version can't error out on an
+    # uninitialized or corrupt git repo in a parent directory.
+    add_git_ceiling_directory(os.environ, CORE.config_dir)
     # Strip the Windows extended-length path prefix from sys.executable so it
     # doesn't propagate into PlatformIO's $PYTHONEXE and break SCons-emitted
     # command lines run through cmd.exe.
diff --git a/tests/unit_tests/test_espidf_toolchain.py b/tests/unit_tests/test_espidf_toolchain.py
index 8849ea8bc8..b2309439f9 100644
--- a/tests/unit_tests/test_espidf_toolchain.py
+++ b/tests/unit_tests/test_espidf_toolchain.py
@@ -150,6 +150,20 @@ def test_get_idedata_regenerates_on_corrupted_cache(setup_core: Path) -> None:
     assert result == {"cxx_path": "regen"}
 
 
+def test_get_idf_env_sets_git_ceiling_directories(setup_core: Path) -> None:
+    """The IDF env caps git's upward search at the config directory.
+
+    This stops ESP-IDF's `git describe` from walking into an uninitialized or
+    corrupt git repo in a parent directory and failing the build.
+    """
+    toolchain._cache().env.clear()
+    # Set IDF_PATH so the framework-install branch is skipped.
+    with patch.dict(os.environ, {"IDF_PATH": str(setup_core)}):
+        env = toolchain._get_idf_env(version="5.5.4")
+    assert CORE.config_dir == setup_core
+    assert str(CORE.config_dir) in env["GIT_CEILING_DIRECTORIES"].split(os.pathsep)
+
+
 def test_get_core_framework_version_from_core_data():
     """The version is read from CORE.data when validation populated it."""
     from esphome.components.esp32.const import KEY_ESP32, KEY_IDF_VERSION
diff --git a/tests/unit_tests/test_helpers.py b/tests/unit_tests/test_helpers.py
index efc2d8e42a..70c4b90082 100644
--- a/tests/unit_tests/test_helpers.py
+++ b/tests/unit_tests/test_helpers.py
@@ -196,6 +196,33 @@ def test_is_ha_addon(monkeypatch, value, expected):
     assert actual == expected
 
 
+def test_add_git_ceiling_directory_sets_when_unset():
+    """An empty env gets GIT_CEILING_DIRECTORIES set to the directory."""
+    env: dict[str, str] = {}
+    directory = Path("/home/user/config")
+    helpers.add_git_ceiling_directory(env, directory)
+    assert env["GIT_CEILING_DIRECTORIES"] == str(directory)
+
+
+def test_add_git_ceiling_directory_appends_to_existing():
+    """An existing value is preserved and the new directory is appended."""
+    env = {"GIT_CEILING_DIRECTORIES": str(Path("/some/ceiling"))}
+    directory = Path("/home/user/config")
+    helpers.add_git_ceiling_directory(env, directory)
+    assert env["GIT_CEILING_DIRECTORIES"].split(os.pathsep) == [
+        str(Path("/some/ceiling")),
+        str(directory),
+    ]
+
+
+def test_add_git_ceiling_directory_skips_duplicate():
+    """A directory already in the list is not appended again."""
+    directory = Path("/home/user/config")
+    env = {"GIT_CEILING_DIRECTORIES": str(directory)}
+    helpers.add_git_ceiling_directory(env, directory)
+    assert env["GIT_CEILING_DIRECTORIES"] == str(directory)
+
+
 def test_walk_files(fixture_path):
     path = fixture_path / "helpers"
 
diff --git a/tests/unit_tests/test_platformio_toolchain.py b/tests/unit_tests/test_platformio_toolchain.py
index a37b19f584..568b43a259 100644
--- a/tests/unit_tests/test_platformio_toolchain.py
+++ b/tests/unit_tests/test_platformio_toolchain.py
@@ -304,6 +304,11 @@ def test_run_platformio_cli_sets_environment_variables(
         )
         assert "PLATFORMIO_LIBDEPS_DIR" in os.environ
         assert "PYTHONWARNINGS" in os.environ
+        # Caps git's upward search at the config dir so an uninitialized or
+        # corrupt parent git repo can't break the framework's `git describe`.
+        assert str(CORE.config_dir) in os.environ["GIT_CEILING_DIRECTORIES"].split(
+            os.pathsep
+        )
 
         # Check command was called correctly — runs PlatformIO as a subprocess
         # via the esphome.platformio.runner entry point.