diff --git a/graphify/extract.py b/graphify/extract.py
index 59d4f8283..9170cdf78 100644
--- a/graphify/extract.py
+++ b/graphify/extract.py
@@ -4245,9 +4245,12 @@ def extract(
 
     Args:
         paths: files to extract from
-        cache_root: explicit root for graphify-out/cache/ (overrides the
-            inferred common path prefix). Pass Path('.') when running on a
-            subdirectory so the cache stays at ./graphify-out/cache/.
+        cache_root: explicit root for graphify-out/cache/. Defaults to the
+            current working directory — the cache is an output, so it must
+            not land inside the analyzed source tree (#1774). The inferred
+            common path prefix of ``paths`` still anchors node ids and
+            symbol resolution; it just no longer decides where the cache
+            is written.
         parallel: if True and there are >= _PARALLEL_THRESHOLD uncached files,
             use ProcessPoolExecutor for multi-core extraction.
         max_workers: max subprocess count. Defaults to cpu_count (or the
@@ -4281,7 +4284,10 @@ def extract(
         root = cache_root
     root = root.resolve()
 
-    effective_root = cache_root or root
+    # #1774: the cache is an output, so it defaults to CWD — never the
+    # analyzed source tree. `root` (inferred above) still anchors node ids
+    # and symbol resolution; only the cache location diverges from it.
+    effective_root = cache_root if cache_root is not None else Path(".")
     total = len(paths)
 
     # Phase 1: separate cached hits from uncached work
diff --git a/tests/test_extract_cache_location.py b/tests/test_extract_cache_location.py
new file mode 100644
index 000000000..9da8722c0
--- /dev/null
+++ b/tests/test_extract_cache_location.py
@@ -0,0 +1,64 @@
+"""#1774 — extract() must never write its AST cache into the analyzed source tree.
+
+The cache is an output. When no cache_root is given it used to default to the
+inferred common parent of the input files — the source tree — so analyzing a
+read-only corpus (someone else's repo, a knowledge base) silently created
+graphify-out/cache/ inside it. It now defaults to the current working
+directory, matching cache_dir()'s own default; an explicit cache_root still
+wins.
+"""
+from __future__ import annotations
+
+from pathlib import Path
+
+import graphify.extract as ex
+from graphify.cache import load_cached
+
+
+def _make_corpus(base: Path) -> Path:
+    corpus = base / "corpus"
+    corpus.mkdir()
+    (corpus / "a.py").write_text("class Base:\n    def hello(self):\n        return 1\n")
+    (corpus / "b.py").write_text("from a import Base\n\nclass Sub(Base):\n    pass\n")
+    return corpus
+
+
+def test_default_cache_lands_in_cwd_not_source_tree(tmp_path, monkeypatch):
+    corpus = _make_corpus(tmp_path)
+    work = tmp_path / "work"
+    work.mkdir()
+    monkeypatch.chdir(work)
+
+    result = ex.extract([corpus / "a.py", corpus / "b.py"], parallel=False)
+
+    assert result["nodes"], "extraction should still produce nodes"
+    assert not (corpus / "graphify-out").exists(), (
+        "cache written into the analyzed source tree (#1774)"
+    )
+    assert (work / "graphify-out" / "cache").is_dir(), "cache should land under CWD"
+
+
+def test_default_cache_round_trips(tmp_path, monkeypatch):
+    corpus = _make_corpus(tmp_path)
+    work = tmp_path / "work"
+    work.mkdir()
+    monkeypatch.chdir(work)
+
+    ex.extract([corpus / "a.py"], parallel=False)
+    assert load_cached(corpus / "a.py", Path(".")) is not None, (
+        "second run should hit the CWD cache written by the first"
+    )
+
+
+def test_explicit_cache_root_still_wins(tmp_path, monkeypatch):
+    corpus = _make_corpus(tmp_path)
+    work = tmp_path / "work"
+    work.mkdir()
+    out = tmp_path / "out"
+    monkeypatch.chdir(work)
+
+    ex.extract([corpus / "a.py"], cache_root=out, parallel=False)
+
+    assert (out / "graphify-out" / "cache").is_dir()
+    assert not (corpus / "graphify-out").exists()
+    assert not (work / "graphify-out").exists()