diff --git a/web-common/src/features/entity-management/AddAssetButton.svelte b/web-common/src/features/entity-management/AddAssetButton.svelte
index 6feb6693af7..49630a071f3 100644
--- a/web-common/src/features/entity-management/AddAssetButton.svelte
+++ b/web-common/src/features/entity-management/AddAssetButton.svelte
@@ -23,6 +23,7 @@
   import { directoryState } from "../file-explorer/directory-store";
   import { createResourceFile } from "../file-explorer/new-files";
   import { addSourceModal } from "../sources/modal/add-source-visibility";
+  import CreateExploreDialog from "./CreateExploreDialog.svelte";
   import { removeLeadingSlash } from "./entity-mappers";
   import {
     useDirectoryNamesInDirectory,
@@ -34,7 +35,6 @@
     resourceIconMapping,
   } from "./resource-icon-mapping";
   import { ResourceKind, useFilteredResources } from "./resource-selectors";
-  import CreateExploreDialog from "./CreateExploreDialog.svelte";
 
   let active = false;
   let showExploreDialog = false;
diff --git a/web-common/src/features/entity-management/WatchResourcesClient.ts b/web-common/src/features/entity-management/WatchResourcesClient.ts
index 3c2337834de..3f1245cef18 100644
--- a/web-common/src/features/entity-management/WatchResourcesClient.ts
+++ b/web-common/src/features/entity-management/WatchResourcesClient.ts
@@ -22,6 +22,7 @@ import { WatchRequestClient } from "@rilldata/web-common/runtime-client/watch-re
 import { get } from "svelte/store";
 import { connectorExplorerStore } from "../connectors/connector-explorer-store";
 import { sourceImportedPath } from "../sources/sources-store";
+import { isLeafResource } from "./dag-utils";
 
 export class WatchResourcesClient {
   public readonly client: WatchRequestClient<V1WatchResourcesResponse>;
@@ -34,7 +35,7 @@ export class WatchResourcesClient {
     this.client.on("reconnect", () => this.invalidateAllRuntimeQueries());
   }
 
-  private handleWatchResourceResponse(res: V1WatchResourcesResponse) {
+  private async handleWatchResourceResponse(res: V1WatchResourcesResponse) {
     // Log resource status to the browser console during e2e tests. Currently, our e2e tests make assertions
     // based on these logs. However, the e2e tests really should make UI-based assertions.
     if (import.meta.env.VITE_PLAYWRIGHT_TEST) {
@@ -185,7 +186,8 @@ export class WatchResourcesClient {
             // If it's a new source, show the "Source imported successfully" modal
             const isNewSource =
               res.name.kind === ResourceKind.Source &&
-              res.resource.meta.specVersion === "1";
+              res.resource.meta.specVersion === "1" &&
+              (await isLeafResource(res.resource, this.instanceId)); // Protects against existing projects reconciling anew
             if (isNewSource) {
               const filePath = res.resource?.meta?.filePaths?.[0] as string;
               sourceImportedPath.set(filePath);
diff --git a/web-common/src/features/entity-management/dag-utils.ts b/web-common/src/features/entity-management/dag-utils.ts
new file mode 100644
index 00000000000..005e1e16368
--- /dev/null
+++ b/web-common/src/features/entity-management/dag-utils.ts
@@ -0,0 +1,21 @@
+import {
+  getRuntimeServiceListResourcesQueryKey,
+  runtimeServiceListResources,
+  type V1Resource,
+} from "@rilldata/web-common/runtime-client";
+import { queryClient } from "../../lib/svelte-query/globalQueryClient";
+
+export async function isLeafResource(resource: V1Resource, instanceId: string) {
+  const allResources = await queryClient.fetchQuery({
+    queryKey: getRuntimeServiceListResourcesQueryKey(instanceId, undefined),
+    queryFn: () => runtimeServiceListResources(instanceId, undefined),
+  });
+
+  if (!allResources || !allResources.resources) return false;
+
+  const hasDownstreamResource = allResources.resources.some((r: V1Resource) =>
+    r.meta?.refs?.some((ref) => ref.name === resource.meta?.name?.name),
+  );
+
+  return !hasDownstreamResource;
+}
diff --git a/web-common/src/features/welcome/ProjectCards.svelte b/web-common/src/features/welcome/ProjectCards.svelte
index 8b8b76fc263..192343b5f80 100644
--- a/web-common/src/features/welcome/ProjectCards.svelte
+++ b/web-common/src/features/welcome/ProjectCards.svelte
@@ -1,4 +1,5 @@
 <script lang="ts">
+  import AddCircleOutline from "@rilldata/web-common/components/icons/AddCircleOutline.svelte";
   import Subheading from "@rilldata/web-common/components/typography/Subheading.svelte";
   import Card from "../../components/card/Card.svelte";
   import CardDescription from "../../components/card/CardDescription.svelte";
@@ -9,11 +10,12 @@
     BehaviourEventMedium,
   } from "../../metrics/service/BehaviourEventTypes";
   import { MetricsEventSpace } from "../../metrics/service/MetricsTypes";
-  import { createRuntimeServiceUnpackExample } from "../../runtime-client";
+  import {
+    createRuntimeServiceUnpackEmpty,
+    createRuntimeServiceUnpackExample,
+  } from "../../runtime-client";
   import { runtime } from "../../runtime-client/runtime-store";
   import { EMPTY_PROJECT_TITLE } from "./constants";
-  import AddCircleOutline from "@rilldata/web-common/components/icons/AddCircleOutline.svelte";
-  import { createRuntimeServiceUnpackEmpty } from "../../runtime-client";
 
   const unpackExampleProject = createRuntimeServiceUnpackExample();
   const unpackEmptyProject = createRuntimeServiceUnpackEmpty();