diff --git a/build-logic/smoke-test/src/main/kotlin/datadog/buildlogic/smoketest/NestedGradleBuild.kt b/build-logic/smoke-test/src/main/kotlin/datadog/buildlogic/smoketest/NestedGradleBuild.kt
index 9219923e5fb..49fc7bcbb01 100644
--- a/build-logic/smoke-test/src/main/kotlin/datadog/buildlogic/smoketest/NestedGradleBuild.kt
+++ b/build-logic/smoke-test/src/main/kotlin/datadog/buildlogic/smoketest/NestedGradleBuild.kt
@@ -43,6 +43,8 @@ import javax.inject.Inject
  * from the root build can be forwarded via [projectJar]; each entry is passed as
  * `-P<propertyName>=<absolute-path>` and tracked as a task input so the nested build re-runs
  * when the upstream jar changes.
+ *
+ * The temporary Gradle user home is preserved when daemon shutdown cannot be confirmed.
  */
 @CacheableTask
 abstract class NestedGradleBuild @Inject constructor(
@@ -137,7 +139,11 @@ abstract class NestedGradleBuild @Inject constructor(
   @get:Input
   abstract val buildCacheEnabled: Property<Boolean>
 
-  /** Timeout, in seconds, for stopping the nested Gradle daemon after the build. */
+  /**
+   * Timeout, in seconds, applied separately to the `--stop` command and the subsequent daemon
+   * exit wait. The two waits can take up to twice this value in total. When unset, `--stop`
+   * waits indefinitely and daemon exit waits up to 30 seconds.
+   */
   @get:Input
   @get:Optional
   abstract val stopTimeoutSeconds: Property<Long>
@@ -356,6 +362,12 @@ abstract class NestedGradleBuild @Inject constructor(
   private fun createGradleUserHome(): File {
     val directory = temporaryDir.resolve("gradle-user-home")
     deleteGradleUserHome(directory)
+    if (directory.exists()) {
+      throw GradleException(
+        "Could not clean up existing nested Gradle user home: ${directory.absolutePath}. " +
+          "Check the preceding daemon shutdown and cleanup warnings.",
+      )
+    }
     if (!directory.mkdirs()) {
       throw GradleException(
         "Could not create nested Gradle user home: ${directory.absolutePath}",
@@ -364,6 +376,7 @@ abstract class NestedGradleBuild @Inject constructor(
     return directory
   }
 
+  // Gradle's internal log naming also drives buildSrc's GradleFixture.stopDaemonsIn.
   private fun findGradleDaemons(directory: File): List<ProcessHandle> =
     directory.resolve("daemon").walkTopDown()
       .filter { it.isFile && it.name.startsWith("daemon-") && it.name.endsWith(".out.log") }
diff --git a/build-logic/smoke-test/src/main/kotlin/datadog/buildlogic/smoketest/SmokeTestAppExtension.kt b/build-logic/smoke-test/src/main/kotlin/datadog/buildlogic/smoketest/SmokeTestAppExtension.kt
index 71175e894e0..92a9551d068 100644
--- a/build-logic/smoke-test/src/main/kotlin/datadog/buildlogic/smoketest/SmokeTestAppExtension.kt
+++ b/build-logic/smoke-test/src/main/kotlin/datadog/buildlogic/smoketest/SmokeTestAppExtension.kt
@@ -312,7 +312,7 @@ abstract class GradleAppSpec @Inject constructor() : ApplicationSpec() {
    */
   abstract val buildCacheEnabled: Property<Boolean>
 
-  /** Timeout, in seconds, for stopping the nested Gradle daemon after the build. */
+  /** Timeout, in seconds, for each shutdown wait. See [NestedGradleBuild.stopTimeoutSeconds]. */
   abstract val stopTimeoutSeconds: Property<Long>
 }
 
diff --git a/build-logic/smoke-test/src/test/kotlin/datadog/buildlogic/smoketest/SmokeTestAppPluginTest.kt b/build-logic/smoke-test/src/test/kotlin/datadog/buildlogic/smoketest/SmokeTestAppPluginTest.kt
index dee9db72e73..b1ee1333f8d 100644
--- a/build-logic/smoke-test/src/test/kotlin/datadog/buildlogic/smoketest/SmokeTestAppPluginTest.kt
+++ b/build-logic/smoke-test/src/test/kotlin/datadog/buildlogic/smoketest/SmokeTestAppPluginTest.kt
@@ -4,6 +4,8 @@ import datadog.buildlogic.smoketest.NestedGradleBuild.Companion.gradleExecutable
 import datadog.buildlogic.smoketest.NestedGradleBuild.Companion.isGradleDaemonCandidate
 import datadog.buildlogic.smoketest.NestedMavenBuild.Companion.mavenWrapperName
 import org.assertj.core.api.Assertions.assertThat
+import org.assertj.core.api.Assertions.assertThatThrownBy
+import org.gradle.api.GradleException
 import org.gradle.api.plugins.JavaPlugin
 import org.gradle.jvm.toolchain.JavaLanguageVersion
 import org.gradle.kotlin.dsl.apply
@@ -111,6 +113,32 @@ class SmokeTestAppPluginTest {
     }
   }
 
+  @Test
+  fun `nested Gradle build reports a user home retained after cleanup`() {
+    val project = ProjectBuilder.builder().build()
+    project.apply<JavaPlugin>()
+    val task = project.tasks.register("nestedBuild", NestedGradleBuild::class.java).get()
+    task.applicationDir.set(project.layout.projectDirectory)
+    task.applicationBuildDir.set(project.layout.buildDirectory.dir("application"))
+    // Resolve the toolchain before simulating interrupted cleanup.
+    task.javaLauncher.get()
+    val userHome = task.temporaryDir.resolve("gradle-user-home")
+    assertThat(userHome.mkdirs()).isTrue()
+
+    Thread.currentThread().interrupt()
+    try {
+      assertThatThrownBy { task.runNestedBuild() }
+        .isInstanceOf(GradleException::class.java)
+        .hasMessageContaining("Could not clean up existing nested Gradle user home:")
+        .hasMessageContaining(userHome.absolutePath)
+
+      assertThat(Thread.currentThread().isInterrupted).isTrue()
+      assertThat(userHome).exists()
+    } finally {
+      Thread.interrupted()
+    }
+  }
+
   @Test
   fun `applying the plugin creates the smokeTestApp extension`() {
     val project = ProjectBuilder.builder().build()