diff --git a/src/server/routes/events.ts b/src/server/routes/events.ts
index 6a72c63..c63b945 100644
--- a/src/server/routes/events.ts
+++ b/src/server/routes/events.ts
@@ -66,6 +66,7 @@ const eventsRoutes: FastifyPluginAsyncTypebox = async (fastify) => {
 
   // Set up file watcher for live updates
   let fileWatcher: FSWatcher | null = null
+  let closed = false
   const repoPath = fastify.config.repositoryPath
 
   // Debounced broadcast to avoid flooding on rapid file changes
@@ -82,6 +83,9 @@ const eventsRoutes: FastifyPluginAsyncTypebox = async (fastify) => {
       // Load gitignore patterns for filtering
       const ig = await loadGitignore(repoPath, fastify.log)
 
+      // Server may have shut down while we were scanning
+      if (closed) return
+
       fileWatcher = chokidar.watch(repoPath, {
         ignored: (filePath: string) => {
           // Get path relative to repo root for gitignore matching
@@ -121,11 +125,15 @@ const eventsRoutes: FastifyPluginAsyncTypebox = async (fastify) => {
     }
   }
 
-  // Start watching immediately (could optimize to start only when clients connect)
-  await startWatching()
+  // Start watching in the background to avoid blocking plugin registration.
+  // On large repos, loadGitignore can exceed Fastify's default plugin timeout.
+  startWatching().catch((err) => {
+    fastify.log.warn({ err }, 'Unexpected error starting file watcher')
+  })
 
   // Clean up on server close
   fastify.addHook('onClose', async () => {
+    closed = true
     // Close all active SSE connections
     fastify.log.info({ clients: activeConnections.size }, 'Closing active SSE connections')
     for (const connection of activeConnections) {
diff --git a/src/server/utils/gitignore.ts b/src/server/utils/gitignore.ts
index db52f93..6e0de43 100644
--- a/src/server/utils/gitignore.ts
+++ b/src/server/utils/gitignore.ts
@@ -2,7 +2,7 @@
  * Utilities for loading and parsing .gitignore files
  */
 import ignore, { type Ignore } from 'ignore'
-import { readdir, readFile, stat } from 'node:fs/promises'
+import { readdir, readFile } from 'node:fs/promises'
 import { dirname, join, relative, sep } from 'node:path'
 import type { FastifyBaseLogger } from 'fastify'
 
@@ -22,33 +22,24 @@ export async function findGitignoreFiles (dir: string, log?: Logger): Promise<st
 
   while (dirIndex < dirsToWalk.length) {
     const currentDir = dirsToWalk[dirIndex++]
-    let entries: string[]
     try {
-      entries = await readdir(currentDir)
-    } catch (err) {
-      log?.warn({ err, path: currentDir }, 'Failed to read directory while scanning for .gitignore files')
-      continue
-    }
-
-    for (const entry of entries) {
-      const fullPath = join(currentDir, entry)
+      const entries = await readdir(currentDir, { withFileTypes: true })
 
-      // Skip .git and node_modules for performance
-      if (entry === '.git' || entry === 'node_modules') continue
+      for (const entry of entries) {
+        // Skip .git and node_modules for performance
+        if (entry.name === '.git' || entry.name === 'node_modules') continue
 
-      if (entry === '.gitignore') {
-        gitignoreFiles.push(fullPath)
-        continue
-      }
+        if (entry.name === '.gitignore') {
+          gitignoreFiles.push(join(currentDir, entry.name))
+          continue
+        }
 
-      try {
-        const stats = await stat(fullPath)
-        if (stats.isDirectory()) {
-          dirsToWalk.push(fullPath)
+        if (entry.isDirectory()) {
+          dirsToWalk.push(join(currentDir, entry.name))
         }
-      } catch {
-        // Skip entries we can't stat (common for broken symlinks)
       }
+    } catch (err) {
+      log?.warn({ err, path: currentDir }, 'Failed to read directory while scanning for .gitignore files')
     }
   }