diff --git a/pkg/config/config.go b/pkg/config/config.go
index 3fd013ad..964d02de 100644
--- a/pkg/config/config.go
+++ b/pkg/config/config.go
@@ -595,6 +595,18 @@ func (c *Config) discoverRecursivePackages(ctx context.Context) error {
 			subPkgLog := pkgLog.With().Str("sub-package", subPkg).Logger()
 			subPkgCtx := subPkgLog.WithContext(pkgCtx)
 
+			if len(conf.Exclude) > 0 {
+				p := pathlib.NewPath(subPkg)
+				relativePath, err := p.RelativeToStr(pkgPath)
+				if err != nil {
+					return fmt.Errorf("failed to get path for %s relative to %s: %w", subPkg, pkgPath, err)
+				}
+				if conf.ExcludePath(relativePath.String()) {
+					subPkgLog.Info().Msg("subpackage is excluded")
+					continue
+				}
+			}
+
 			subPkgLog.Debug().Msg("adding sub-package config")
 			if err := c.addSubPkgConfig(subPkgCtx, subPkg, pkgPath); err != nil {
 				subPkgLog.Err(err).Msg("failed to add sub-package config")
diff --git a/pkg/config/config_test.go b/pkg/config/config_test.go
index ffe4a7b0..2e151e07 100644
--- a/pkg/config/config_test.go
+++ b/pkg/config/config_test.go
@@ -980,6 +980,33 @@ packages:
                     recursive: true
                     with-expecter: false
 with-expecter: false
+`,
+		},
+		{
+			name: "test with excluded subpackage",
+			cfgYaml: `
+with-expecter: False
+dir: foobar
+packages:
+  github.com/vektra/mockery/v2/pkg/fixtures/example_project/pkg_with_subpkgs/subpkg2:
+    config:
+      recursive: True
+      with-expecter: True
+      all: True
+      exclude:
+        - subpkg3
+`,
+			wantCfgMap: `dir: foobar
+packages:
+    github.com/vektra/mockery/v2/pkg/fixtures/example_project/pkg_with_subpkgs/subpkg2:
+        config:
+            all: true
+            dir: foobar
+            exclude:
+                - subpkg3
+            recursive: true
+            with-expecter: true
+with-expecter: false
 `,
 		},
 	}