diff --git a/src/west/manifest.py b/src/west/manifest.py
index 0f8a3ed5..a6e0797e 100644
--- a/src/west/manifest.py
+++ b/src/west/manifest.py
@@ -33,6 +33,9 @@
 '''Names of the special "meta-projects", which are reserved and cannot
 be used to name a project in the manifest file.'''
 
+WEST_RESTRICTED_FOLDERS = ['west']
+'''Restricted folders that are used by "west" itself for "meta-projects"'''
+
 MANIFEST_SECTIONS = ['manifest', 'west']
 '''Sections in the manifest file'''
 
@@ -216,6 +219,15 @@ def _load(self, data, sections):
                                 format(name) +
                                 'be used to name a manifest project')
 
+            path = mp.get('path')
+            if path is not None:
+                path = os.path.normpath(path)
+                for restricted_path in WEST_RESTRICTED_FOLDERS:
+                    if os.path.commonpath([restricted_path, path]):
+                        self._malformed('the folder "{}" is restricted and '.
+                                        format(restricted_path) +
+                                        'cannot be used for local projects')
+
             # Validate the project remote.
             remote_name = mp.get('remote', default_remote_name)
             if remote_name is None:
@@ -227,7 +239,7 @@ def _load(self, data, sections):
             project = Project(name,
                               remotes_dict[remote_name],
                               defaults,
-                              path=mp.get('path'),
+                              path=path,
                               clone_depth=mp.get('clone-depth'),
                               revision=mp.get('revision'))
 
diff --git a/tests/west/manifest/invalid_restricted_project_normalized_path.yml b/tests/west/manifest/invalid_restricted_project_normalized_path.yml
new file mode 100644
index 00000000..b3dd1c2c
--- /dev/null
+++ b/tests/west/manifest/invalid_restricted_project_normalized_path.yml
@@ -0,0 +1,11 @@
+manifest:
+  defaults:
+    remote: testremote
+
+  remotes:
+    - name: testremote
+      url-base: https://example.com
+
+  projects:
+    - name: foo1
+      path: foo/../west
diff --git a/tests/west/manifest/invalid_restricted_project_path.yml b/tests/west/manifest/invalid_restricted_project_path.yml
new file mode 100644
index 00000000..9b04496d
--- /dev/null
+++ b/tests/west/manifest/invalid_restricted_project_path.yml
@@ -0,0 +1,11 @@
+manifest:
+  defaults:
+    remote: testremote
+
+  remotes:
+    - name: testremote
+      url-base: https://example.com
+
+  projects:
+    - name: foo1
+      path: west
diff --git a/tests/west/manifest/invalid_restricted_project_sub_path.yml b/tests/west/manifest/invalid_restricted_project_sub_path.yml
new file mode 100644
index 00000000..b62409fc
--- /dev/null
+++ b/tests/west/manifest/invalid_restricted_project_sub_path.yml
@@ -0,0 +1,11 @@
+manifest:
+  defaults:
+    remote: testremote
+
+  remotes:
+    - name: testremote
+      url-base: https://example.com
+
+  projects:
+    - name: foo1
+      path: west/foo
diff --git a/tests/west/manifest/test_manifest.py b/tests/west/manifest/test_manifest.py
index c7c5c7d8..750acbb9 100644
--- a/tests/west/manifest/test_manifest.py
+++ b/tests/west/manifest/test_manifest.py
@@ -127,6 +127,29 @@ def test_path():
     assert manifest.projects[0].path == 'sub/directory'
     assert manifest.projects[0].abspath == os.path.realpath('/west_top/sub/directory')
 
+def test_restricted_path():
+    # Projects are restricted from west/ folder, but folders containing west as
+    # part of path name, e.g. west-ext arte still allowed.
+    content = '''\
+    manifest:
+      remotes:
+        - name: testremote
+          url-base: https://example.com
+      projects:
+        - name: testproject
+          remote: testremote
+          path: west-ext
+        - name: testsubproject
+          remote: testremote
+          path: west-ext/sub
+    '''
+    with patch('west.util.west_topdir', return_value=os.path.realpath('/west_top')):
+        manifest = Manifest.from_data(yaml.safe_load(content))
+    assert manifest.projects[0].path == 'west-ext'
+    assert manifest.projects[0].abspath == os.path.realpath('/west_top/west-ext')
+    assert manifest.projects[1].path == 'west-ext/sub'
+    assert manifest.projects[1].abspath == os.path.realpath('/west_top/west-ext/sub')
+
 def test_sections():
     # Projects must be able to override their default paths.
     content_wrong_west = '''\