diff --git a/src/ape/managers/project/types.py b/src/ape/managers/project/types.py
index 54c4e6bb69..8b73418ce1 100644
--- a/src/ape/managers/project/types.py
+++ b/src/ape/managers/project/types.py
@@ -86,7 +86,9 @@ def _check_needs_compiling(self, source_path: Path) -> bool:
         # ethpm_types strips trailing white space and ensures
         # a newline at the end so content so `splitlines()` works.
         # We need to do the same here for to prevent the endless recompiling bug.
-        content = f"{source_file.read_text('utf8').rstrip()}\n"
+        text = source_file.read_text("utf8").rstrip()
+        content = f"{text}\n" if text else ""
+
         checksum = compute_checksum(content.encode("utf8"), algorithm=cached_checksum.algorithm)
         return checksum != cached_checksum.hash  # Contents changed
 
@@ -129,7 +131,7 @@ def source_paths(self) -> List[Path]:
         compilers = self.compiler_manager.registered_compilers
         for extension in compilers:
             ext = extension.replace(".", "\\.")
-            pattern = rf"[\w|-]+{ext}"
+            pattern = rf"[\w|-|/]+{ext}"
             ext_files = get_all_files_in_directory(self.contracts_folder, pattern=pattern)
             files.extend(ext_files)
 
diff --git a/tests/functional/test_project.py b/tests/functional/test_project.py
index cc5c4b0b6f..a4505067bc 100644
--- a/tests/functional/test_project.py
+++ b/tests/functional/test_project.py
@@ -1,5 +1,6 @@
 import os
 import shutil
+import tempfile
 from pathlib import Path
 
 import pytest
@@ -172,6 +173,34 @@ def test_create_manifest_when_file_changed_with_cached_references_that_no_longer
     assert manifest
 
 
+def test_create_manifest_empty_files(compilers, mock_compiler, config, caplog):
+    """
+    Tests again a bug where empty contracts would infinitely compile.
+    """
+
+    with tempfile.TemporaryDirectory() as temp_dir:
+        base_dir = Path(temp_dir)
+        contracts = base_dir / "contracts"
+        contracts.mkdir()
+        file_1 = contracts / "foo.__mock__"
+        file_1.write_text("")
+
+        with config.using_project(base_dir) as proj:
+            compilers.registered_compilers[".__mock__"] = mock_compiler
+            manifest = proj.local_project.create_manifest(use_cache=False)
+            assert "foo" in manifest.contract_types
+            assert "foo.__mock__" in manifest.sources
+            assert "Compiling 'foo.__mock__'." in caplog.records[-1].message
+            caplog.clear()
+
+            # Ensure is not double compiled!
+            proj.local_project.create_manifest()
+            assert (
+                len(caplog.records) < 1
+                or "Compiling 'foo.__mock__'." not in caplog.records[-1].message
+            )
+
+
 def test_meta(temp_config, project):
     meta_config = {
         "meta": {