diff --git a/internal/provider/resource_docker_registry_image_funcs.go b/internal/provider/resource_docker_registry_image_funcs.go
index f1fd9a66..a007370d 100644
--- a/internal/provider/resource_docker_registry_image_funcs.go
+++ b/internal/provider/resource_docker_registry_image_funcs.go
@@ -20,9 +20,11 @@ import (
 	"strings"
 	"time"
 
+	"github.com/docker/cli/cli/command/image/build"
 	"github.com/docker/docker/api/types"
 	"github.com/docker/docker/api/types/container"
 	"github.com/docker/docker/client"
+	"github.com/docker/docker/pkg/fileutils"
 	"github.com/docker/go-units"
 	"github.com/hashicorp/terraform-plugin-sdk/v2/diag"
 	"github.com/hashicorp/terraform-plugin-sdk/v2/helper/schema"
@@ -245,9 +247,10 @@ func buildDockerRegistryImage(ctx context.Context, client *client.Client, buildO
 	if lastIndex := strings.LastIndexByte(buildContext, ':'); (lastIndex > -1) && (buildContext[lastIndex+1] != filepath.Separator) {
 		buildContext = buildContext[:lastIndex]
 	}
+
 	dockerContextTarPath, err := buildDockerImageContextTar(buildContext)
 	if err != nil {
-		return fmt.Errorf("unable to build context %v", err)
+		return fmt.Errorf("unable to build context: %v", err)
 	}
 	defer os.Remove(dockerContextTarPath)
 	dockerBuildContext, err := os.Open(dockerContextTarPath)
@@ -282,6 +285,16 @@ func buildDockerImageContextTar(buildContext string) (string, error) {
 		return "", fmt.Errorf("unable to read build context - %v", err.Error())
 	}
 
+	excludes, err := build.ReadDockerignore(buildContext)
+	if err != nil {
+		return "", fmt.Errorf("unable to read .dockerignore file - %v", err.Error())
+	}
+
+	pm, err := fileutils.NewPatternMatcher(excludes)
+	if err != nil {
+		return "", fmt.Errorf("unable to create pattern matcher from .dockerignore exlcudes - %v", err.Error())
+	}
+
 	tw := tar.NewWriter(tmpFile)
 	defer tw.Close()
 
@@ -291,6 +304,46 @@ func buildDockerImageContextTar(buildContext string) (string, error) {
 			return err
 		}
 
+		// if .dockerignore is present, ignore files from there
+		skip, err := pm.Matches(file)
+		if err != nil {
+			return err
+		}
+
+		// adapted from https://github.com/moby/moby/blob/v20.10.7/pkg/archive/archive.go#L851
+		if skip {
+			log.Printf("[DEBUG] Skipping file/dir from image build '%v'", file)
+			// If we want to skip this file and its a directory
+			// then we should first check to see if there's an
+			// excludes pattern (e.g. !dir/file) that starts with this
+			// dir. If so then we can't skip this dir.
+
+			// Its not a dir then so we can just return/skip.
+			if !info.IsDir() {
+				return nil
+			}
+
+			// No exceptions (!...) in patterns so just skip dir
+			if !pm.Exclusions() {
+				return filepath.SkipDir
+			}
+
+			dirSlash := file + string(filepath.Separator)
+
+			for _, pat := range pm.Patterns() {
+				if !pat.Exclusion() {
+					continue
+				}
+				if strings.HasPrefix(pat.String()+string(filepath.Separator), dirSlash) {
+					// found a match - so can't skip this dir
+					return nil
+				}
+			}
+
+			// No matching exclusion dir so just skip dir
+			return filepath.SkipDir
+		}
+
 		// create a new dir/file header
 		header, err := tar.FileInfoHeader(info, info.Name())
 		if err != nil {
diff --git a/internal/provider/resource_docker_registry_image_test.go b/internal/provider/resource_docker_registry_image_test.go
index 15c47494..b1b6a263 100644
--- a/internal/provider/resource_docker_registry_image_test.go
+++ b/internal/provider/resource_docker_registry_image_test.go
@@ -154,6 +154,59 @@ func TestAccDockerRegistryImageResource_buildAndKeep(t *testing.T) {
 	})
 }
 
+func TestAccDockerRegistryImageResource_buildWithDockerignore(t *testing.T) {
+	pushOptions := createPushImageOptions("127.0.0.1:15000/tftest-dockerregistryimage-ignore:1.0")
+	wd, _ := os.Getwd()
+	context := strings.ReplaceAll((filepath.Join(wd, "..", "..", "scripts", "testing", "docker_registry_image_context_dockerignore")), "\\", "\\\\")
+
+	resource.Test(t, resource.TestCase{
+		PreCheck:          func() { testAccPreCheck(t) },
+		ProviderFactories: providerFactories,
+		Steps: []resource.TestStep{
+			{
+				Config: fmt.Sprintf(loadTestConfiguration(t, RESOURCE, "docker_registry_image", "testBuildDockerRegistryImageNoKeepConfig"), pushOptions.Registry, pushOptions.Name, context),
+				Check: resource.ComposeTestCheckFunc(
+					resource.TestCheckResourceAttrSet("docker_registry_image.foo", "sha256_digest"),
+				),
+			},
+			{
+				Config: fmt.Sprintf(loadTestConfiguration(t, RESOURCE, "docker_registry_image", "testBuildDockerRegistryImageNoKeepConfig"), pushOptions.Registry, pushOptions.Name, context),
+				Check: func(*terraform.State) error {
+					// we will modify the ignored file
+					f, err := os.OpenFile(context+"/empty_to_ignore", os.O_APPEND|os.O_CREATE|os.O_WRONLY, 0644)
+					if err != nil {
+						return fmt.Errorf("failed to open file: %w", err)
+					}
+					defer f.Close()
+
+					_, err = f.WriteString("modify-me")
+					if err != nil {
+						return fmt.Errorf("failed to write to file: %w", err)
+					}
+					return nil
+				},
+			},
+			{
+				Config: fmt.Sprintf(loadTestConfiguration(t, RESOURCE, "docker_registry_image", "testBuildDockerRegistryImageNoKeepConfig"), pushOptions.Registry, pushOptions.Name, context),
+				Check: resource.ComposeTestCheckFunc(
+					resource.TestCheckResourceAttrSet("docker_registry_image.foo", "sha256_digest"),
+				),
+			},
+		},
+		CheckDestroy: resource.ComposeTestCheckFunc(
+			testDockerRegistryImageNotInRegistry(pushOptions),
+			func(*terraform.State) error {
+				// the 0 specifies the file will be empty afterwards
+				err := os.Truncate(context+"/empty_to_ignore", 0)
+				if err != nil {
+					return fmt.Errorf("failed to truncate the ignored file: %w", err)
+				}
+				return nil
+			},
+		),
+	})
+}
+
 func TestAccDockerRegistryImageResource_pushMissingImage(t *testing.T) {
 	resource.Test(t, resource.TestCase{
 		PreCheck:          func() { testAccPreCheck(t) },
diff --git a/scripts/testing/docker_registry_image_context_dockerignore/.dockerignore b/scripts/testing/docker_registry_image_context_dockerignore/.dockerignore
new file mode 100644
index 00000000..90fd1815
--- /dev/null
+++ b/scripts/testing/docker_registry_image_context_dockerignore/.dockerignore
@@ -0,0 +1 @@
+empty_to_ignore
\ No newline at end of file
diff --git a/scripts/testing/docker_registry_image_context_dockerignore/Dockerfile b/scripts/testing/docker_registry_image_context_dockerignore/Dockerfile
new file mode 100644
index 00000000..ef5380d1
--- /dev/null
+++ b/scripts/testing/docker_registry_image_context_dockerignore/Dockerfile
@@ -0,0 +1,2 @@
+FROM scratch
+COPY empty /empty
\ No newline at end of file
diff --git a/scripts/testing/docker_registry_image_context_dockerignore/empty b/scripts/testing/docker_registry_image_context_dockerignore/empty
new file mode 100644
index 00000000..e69de29b
diff --git a/scripts/testing/docker_registry_image_context_dockerignore/empty_to_ignore b/scripts/testing/docker_registry_image_context_dockerignore/empty_to_ignore
new file mode 100644
index 00000000..e69de29b