diff --git a/test/system/070-build.bats b/test/system/070-build.bats
index 56da8ef32d..c85f42818e 100644
--- a/test/system/070-build.bats
+++ b/test/system/070-build.bats
@@ -668,6 +668,25 @@ EOF
     run_podman rmi -f build_test
 }
 
+# Regression test for #20259
+@test "podman build with ignore '*' and containerfile outside of build context" {
+    local tmpdir=$PODMAN_TMPDIR/build-test-$(random_string 10)
+    mkdir -p $tmpdir
+    mkdir -p $tmpdir/context
+
+    cat >$tmpdir/Containerfile <<EOF
+FROM scratch
+EOF
+
+    cat >$tmpdir/context/.containerignore <<EOF
+*
+EOF
+    run_podman build -t build_test -f $tmpdir/Containerfile $tmpdir/context
+
+    # Clean up
+    run_podman rmi -f build_test
+}
+
 @test "podman build - stdin test" {
     # Random workdir, and random string to verify build output
     workdir=/$(random_string 10)