diff --git a/apps/api/src/api/tool_instances.py b/apps/api/src/api/tool_instances.py
index 579eaa4..4dd95f2 100644
--- a/apps/api/src/api/tool_instances.py
+++ b/apps/api/src/api/tool_instances.py
@@ -258,6 +258,21 @@ async def create_instance(
         else:
             repo_path = repo.path
 
+        # Verify cloned repo has files
+        if data.clone_mode == "clone" and repo_path:
+            try:
+                repo_contents = os.listdir(repo_path)
+                if not repo_contents or (len(repo_contents) == 1 and repo_contents[0] == ".git"):
+                    logger.error("Cloned repository at %s appears empty", repo_path)
+                    raise RuntimeError("Cloned repository is empty")
+                logger.info("Verified cloned repo at %s has %d items", repo_path, len(repo_contents))
+            except Exception as exc:
+                logger.exception("Failed to verify cloned repository: %s", exc)
+                raise HTTPException(
+                    status_code=status.HTTP_500_INTERNAL_SERVER_ERROR,
+                    detail=f"Cloned repository verification failed: {exc}"
+                )
+
         # Create new local branch if requested
         if data.clone_mode == "clone" and data.new_branch:
             try:
@@ -325,6 +340,37 @@ services:
                 "PROJECT_ID": str(project_id),
             }
             compose_content = render_compose_template(tool_type.compose_template, variables)
+            
+            # Safety check: for clone mode, ensure repo is mounted in compose file
+            if data.clone_mode == "clone" and repo_path:
+                import yaml
+                compose_data = yaml.safe_load(compose_content)
+                repo_mounted = False
+                if compose_data and "services" in compose_data:
+                    for svc in compose_data["services"].values():
+                        volumes = svc.get("volumes", [])
+                        for vol in volumes:
+                            vol_str = str(vol)
+                            if repo_path in vol_str:
+                                repo_mounted = True
+                                break
+                        if repo_mounted:
+                            break
+                
+                if not repo_mounted:
+                    logger.warning(
+                        "Compose template for tool type %s does not mount repo path; adding default mount",
+                        tool_type.name,
+                    )
+                    # Add default mount to first service
+                    if compose_data and "services" in compose_data:
+                        for svc in compose_data["services"].values():
+                            if "volumes" not in svc:
+                                svc["volumes"] = []
+                            svc["volumes"].append(f"{repo_path}:/workspace")
+                            break
+                        compose_content = yaml.dump(compose_data, default_flow_style=False)
+            
             write_compose_file(instance_dir, compose_content)
 
         # Create database record