diff --git a/crates/next-core/src/next_client/transforms.rs b/crates/next-core/src/next_client/transforms.rs
index 8800e2332d0d29..d4535342344670 100644
--- a/crates/next-core/src/next_client/transforms.rs
+++ b/crates/next-core/src/next_client/transforms.rs
@@ -48,6 +48,7 @@ pub async fn get_next_client_transforms_rules(
     }
 
     let dynamic_io_enabled = *next_config.enable_dynamic_io().await?;
+    let cache_kinds = next_config.cache_kinds();
     let mut is_app_dir = false;
 
     match context_ty {
@@ -74,6 +75,7 @@ pub async fn get_next_client_transforms_rules(
                 ActionsTransform::Client,
                 enable_mdx_rs,
                 dynamic_io_enabled,
+                cache_kinds,
             ));
         }
         ClientContextType::Fallback | ClientContextType::Other => {}
diff --git a/crates/next-core/src/next_config.rs b/crates/next-core/src/next_config.rs
index 95363a6b7b52dc..ad32a711c63dda 100644
--- a/crates/next-core/src/next_config.rs
+++ b/crates/next-core/src/next_config.rs
@@ -1,6 +1,7 @@
 use std::collections::HashSet;
 
 use anyhow::{bail, Context, Result};
+use rustc_hash::FxHashSet;
 use serde::{Deserialize, Deserializer, Serialize};
 use serde_json::Value as JsonValue;
 use turbo_tasks::{trace::TraceRawVcs, FxIndexMap, RcStr, ResolvedVc, TaskInput, Vc};
@@ -39,6 +40,9 @@ struct CustomRoutes {
 #[turbo_tasks::value(transparent)]
 pub struct ModularizeImports(FxIndexMap<String, ModularizeImportPackageConfig>);
 
+#[turbo_tasks::value(transparent)]
+pub struct CacheKinds(FxHashSet<String>);
+
 #[turbo_tasks::value(serialization = "custom", eq = "manual")]
 #[derive(Clone, Debug, Default, PartialEq, Serialize, Deserialize)]
 #[serde(rename_all = "camelCase")]
@@ -528,6 +532,7 @@ pub struct ExperimentalConfig {
     after: Option<bool>,
     amp: Option<serde_json::Value>,
     app_document_preloading: Option<bool>,
+    cache_handlers: Option<FxIndexMap<String, String>>,
     cache_life: Option<FxIndexMap<String, CacheLifeProfile>>,
     case_sensitive_routes: Option<bool>,
     cpus: Option<f64>,
@@ -1158,6 +1163,19 @@ impl NextConfig {
         Vc::cell(self.experimental.dynamic_io.unwrap_or(false))
     }
 
+    #[turbo_tasks::function]
+    pub fn cache_kinds(&self) -> Vc<CacheKinds> {
+        Vc::cell(
+            self.experimental
+                .cache_handlers
+                .clone()
+                .unwrap_or_default()
+                .keys()
+                .cloned()
+                .collect(),
+        )
+    }
+
     #[turbo_tasks::function]
     pub fn optimize_package_imports(&self) -> Vc<Vec<RcStr>> {
         Vc::cell(
diff --git a/crates/next-core/src/next_server/transforms.rs b/crates/next-core/src/next_server/transforms.rs
index b42d720c83ccaa..f12aa9352d39e1 100644
--- a/crates/next-core/src/next_server/transforms.rs
+++ b/crates/next-core/src/next_server/transforms.rs
@@ -55,6 +55,7 @@ pub async fn get_next_server_transforms_rules(
     }
 
     let dynamic_io_enabled = *next_config.enable_dynamic_io().await?;
+    let cache_kinds = next_config.cache_kinds();
     let mut is_app_dir = false;
 
     let is_server_components = match context_ty {
@@ -91,6 +92,7 @@ pub async fn get_next_server_transforms_rules(
                 ActionsTransform::Client,
                 mdx_rs,
                 dynamic_io_enabled,
+                cache_kinds,
             ));
 
             is_app_dir = true;
@@ -102,6 +104,7 @@ pub async fn get_next_server_transforms_rules(
                 ActionsTransform::Server,
                 mdx_rs,
                 dynamic_io_enabled,
+                cache_kinds,
             ));
 
             is_app_dir = true;
@@ -113,6 +116,7 @@ pub async fn get_next_server_transforms_rules(
                 ActionsTransform::Server,
                 mdx_rs,
                 dynamic_io_enabled,
+                cache_kinds,
             ));
 
             is_app_dir = true;
diff --git a/crates/next-core/src/next_shared/transforms/server_actions.rs b/crates/next-core/src/next_shared/transforms/server_actions.rs
index fce9dfe18c6582..c8a454239d3ddb 100644
--- a/crates/next-core/src/next_shared/transforms/server_actions.rs
+++ b/crates/next-core/src/next_shared/transforms/server_actions.rs
@@ -7,6 +7,7 @@ use turbopack::module_options::{ModuleRule, ModuleRuleEffect};
 use turbopack_ecmascript::{CustomTransformer, EcmascriptInputTransform, TransformContext};
 
 use super::module_rule_match_js_no_url;
+use crate::next_config::CacheKinds;
 
 #[derive(Debug)]
 pub enum ActionsTransform {
@@ -19,10 +20,12 @@ pub fn get_server_actions_transform_rule(
     transform: ActionsTransform,
     enable_mdx_rs: bool,
     dynamic_io_enabled: bool,
+    cache_kinds: Vc<CacheKinds>,
 ) -> ModuleRule {
     let transformer = EcmascriptInputTransform::Plugin(Vc::cell(Box::new(NextServerActions {
         transform,
         dynamic_io_enabled,
+        cache_kinds,
     }) as _));
     ModuleRule::new(
         module_rule_match_js_no_url(enable_mdx_rs),
@@ -37,6 +40,7 @@ pub fn get_server_actions_transform_rule(
 struct NextServerActions {
     transform: ActionsTransform,
     dynamic_io_enabled: bool,
+    cache_kinds: Vc<CacheKinds>,
 }
 
 #[async_trait]
@@ -49,6 +53,7 @@ impl CustomTransformer for NextServerActions {
                 is_react_server_layer: matches!(self.transform, ActionsTransform::Server),
                 dynamic_io_enabled: self.dynamic_io_enabled,
                 hash_salt: "".into(),
+                cache_kinds: self.cache_kinds.await?.clone_value(),
             },
             ctx.comments.clone(),
         );
diff --git a/crates/next-custom-transforms/src/transforms/server_actions.rs b/crates/next-custom-transforms/src/transforms/server_actions.rs
index c3916da3c1040c..8d82dd3abcf5e9 100644
--- a/crates/next-custom-transforms/src/transforms/server_actions.rs
+++ b/crates/next-custom-transforms/src/transforms/server_actions.rs
@@ -6,6 +6,7 @@ use std::{
 
 use hex::encode as hex_encode;
 use indoc::formatdoc;
+use rustc_hash::FxHashSet;
 use serde::Deserialize;
 use sha1::{Digest, Sha1};
 use swc_core::{
@@ -29,6 +30,7 @@ pub struct Config {
     pub is_react_server_layer: bool,
     pub dynamic_io_enabled: bool,
     pub hash_salt: String,
+    pub cache_kinds: FxHashSet<String>,
 }
 
 enum DirectiveLocation {
@@ -65,6 +67,10 @@ enum ServerActionsErrorKind {
         directive: String,
         expected_directive: String,
     },
+    UnknownCacheKind {
+        span: Span,
+        cache_kind: String,
+    },
     UseCacheWithoutDynamicIO {
         span: Span,
         directive: String,
@@ -311,7 +317,7 @@ impl<C: Comments> ServerActions<C> {
                 &mut is_action_fn,
                 &mut cache_kind,
                 &mut span,
-                self.config.dynamic_io_enabled,
+                &self.config,
             );
 
             if !self.config.is_react_server_layer {
@@ -1307,7 +1313,7 @@ impl<C: Comments> VisitMut for ServerActions<C> {
             &mut self.file_cache_kind,
             &mut self.has_action,
             &mut self.has_cache,
-            self.config.dynamic_io_enabled,
+            &self.config,
         );
 
         // If we're in a "use cache" file, collect all original IDs from export
@@ -2349,7 +2355,7 @@ fn remove_server_directive_index_in_module(
     file_cache_kind: &mut Option<String>,
     has_action: &mut bool,
     has_cache: &mut bool,
-    dynamic_io_enabled: bool,
+    config: &Config,
 ) {
     let mut is_directive = true;
 
@@ -2375,19 +2381,30 @@ fn remove_server_directive_index_in_module(
                 // `use cache` or `use cache: foo`
                 if value == "use cache" || value.starts_with("use cache: ") {
                     if is_directive {
-                        if !dynamic_io_enabled {
+                        if !config.dynamic_io_enabled {
                             emit_error(ServerActionsErrorKind::UseCacheWithoutDynamicIO {
                                 span: *span,
                                 directive: value.to_string(),
                             });
                         }
 
-                        *file_cache_kind = Some(if value == "use cache" {
-                            "default".into()
+                        if value == "use cache" {
+                            *file_cache_kind = Some("default".into());
                         } else {
                             // Slice the value after "use cache: "
-                            value.split_at("use cache: ".len()).1.into()
-                        });
+                            let cache_kind_str: String =
+                                value.split_at("use cache: ".len()).1.into();
+
+                            if !config.cache_kinds.contains(&cache_kind_str) {
+                                emit_error(ServerActionsErrorKind::UnknownCacheKind {
+                                    span: *span,
+                                    cache_kind: cache_kind_str.clone(),
+                                });
+                            }
+
+                            *file_cache_kind = Some(cache_kind_str)
+                        }
+
                         *has_cache = true;
                         return false;
                     } else {
@@ -2488,7 +2505,7 @@ fn remove_server_directive_index_in_fn(
     is_action_fn: &mut bool,
     cache_kind: &mut Option<String>,
     action_span: &mut Option<Span>,
-    dynamic_io_enabled: bool,
+    config: &Config,
 ) {
     let mut is_directive = true;
 
@@ -2520,19 +2537,28 @@ fn remove_server_directive_index_in_fn(
                 });
             } else if value == "use cache" || value.starts_with("use cache: ") {
                 if is_directive {
-                    if !dynamic_io_enabled {
+                    if !config.dynamic_io_enabled {
                         emit_error(ServerActionsErrorKind::UseCacheWithoutDynamicIO {
                             span: *span,
                             directive: value.to_string(),
                         });
                     }
 
-                    *cache_kind = Some(if value == "use cache" {
-                        "default".into()
+                    if value == "use cache" {
+                        *cache_kind = Some("default".into());
                     } else {
                         // Slice the value after "use cache: "
-                        value.split_at("use cache: ".len()).1.into()
-                    });
+                        let cache_kind_str: String = value.split_at("use cache: ".len()).1.into();
+
+                        if !config.cache_kinds.contains(&cache_kind_str) {
+                            emit_error(ServerActionsErrorKind::UnknownCacheKind {
+                                span: *span,
+                                cache_kind: cache_kind_str.clone(),
+                            });
+                        }
+
+                        *cache_kind = Some(cache_kind_str);
+                    };
                     return false;
                 } else {
                     emit_error(ServerActionsErrorKind::MisplacedDirective {
@@ -2891,6 +2917,14 @@ fn emit_error(error_kind: ServerActionsErrorKind) {
                 "#
             },
         ),
+        ServerActionsErrorKind::UnknownCacheKind { span, cache_kind } => (
+            span,
+            formatdoc! {
+                r#"
+                    Unknown cache kind "{cache_kind}". Please configure a cache handler for this kind in the experimental "cacheHandlers" object in your Next.js config.
+                "#
+            },
+        ),
         ServerActionsErrorKind::UseCacheWithoutDynamicIO { span, directive } => (
             span,
             formatdoc! {
diff --git a/crates/next-custom-transforms/tests/errors.rs b/crates/next-custom-transforms/tests/errors.rs
index eaf15623992bae..7bee850a1c62eb 100644
--- a/crates/next-custom-transforms/tests/errors.rs
+++ b/crates/next-custom-transforms/tests/errors.rs
@@ -1,4 +1,4 @@
-use std::path::PathBuf;
+use std::{iter::FromIterator, path::PathBuf};
 
 use next_custom_transforms::transforms::{
     disallow_re_export_all_in_page::disallow_re_export_all_in_page,
@@ -11,6 +11,7 @@ use next_custom_transforms::transforms::{
     },
     strip_page_exports::{next_transform_strip_page_exports, ExportFilter},
 };
+use rustc_hash::FxHashSet;
 use swc_core::{
     common::{FileName, Mark},
     ecma::{
@@ -187,6 +188,7 @@ fn react_server_actions_server_errors(input: PathBuf) {
                         is_react_server_layer: true,
                         dynamic_io_enabled: true,
                         hash_salt: "".into(),
+                        cache_kinds: FxHashSet::default(),
                     },
                     tr.comments.as_ref().clone(),
                 ),
@@ -226,6 +228,7 @@ fn react_server_actions_client_errors(input: PathBuf) {
                         is_react_server_layer: false,
                         dynamic_io_enabled: true,
                         hash_salt: "".into(),
+                        cache_kinds: FxHashSet::default(),
                     },
                     tr.comments.as_ref().clone(),
                 ),
@@ -283,6 +286,7 @@ fn use_cache_not_allowed(input: PathBuf) {
                         is_react_server_layer: true,
                         dynamic_io_enabled: false,
                         hash_salt: "".into(),
+                        cache_kinds: FxHashSet::from_iter(["x".into()]),
                     },
                     tr.comments.as_ref().clone(),
                 ),
diff --git a/crates/next-custom-transforms/tests/errors/server-actions/server-graph/16/input.js b/crates/next-custom-transforms/tests/errors/server-actions/server-graph/16/input.js
new file mode 100644
index 00000000000000..be374144ada15d
--- /dev/null
+++ b/crates/next-custom-transforms/tests/errors/server-actions/server-graph/16/input.js
@@ -0,0 +1,5 @@
+'use cache: x'
+
+export async function foo() {
+  return 'data'
+}
diff --git a/crates/next-custom-transforms/tests/errors/server-actions/server-graph/16/output.js b/crates/next-custom-transforms/tests/errors/server-actions/server-graph/16/output.js
new file mode 100644
index 00000000000000..fd8981f7b00a23
--- /dev/null
+++ b/crates/next-custom-transforms/tests/errors/server-actions/server-graph/16/output.js
@@ -0,0 +1,11 @@
+/* __next_internal_action_entry_do_not_use__ {"803128060c414d59f8552e4788b846c0d2b7f74743":"$$RSC_SERVER_CACHE_0"} */ import { registerServerReference } from "private-next-rsc-server-reference";
+import { encryptActionBoundArgs, decryptActionBoundArgs } from "private-next-rsc-action-encryption";
+import { cache as $$cache__ } from "private-next-rsc-cache-wrapper";
+export var $$RSC_SERVER_CACHE_0 = $$cache__("x", "803128060c414d59f8552e4788b846c0d2b7f74743", 0, async function foo() {
+    return 'data';
+});
+Object.defineProperty($$RSC_SERVER_CACHE_0, "name", {
+    "value": "foo",
+    "writable": false
+});
+export var foo = registerServerReference($$RSC_SERVER_CACHE_0, "803128060c414d59f8552e4788b846c0d2b7f74743", null);
diff --git a/crates/next-custom-transforms/tests/errors/server-actions/server-graph/16/output.stderr b/crates/next-custom-transforms/tests/errors/server-actions/server-graph/16/output.stderr
new file mode 100644
index 00000000000000..9bfb78fcee2da1
--- /dev/null
+++ b/crates/next-custom-transforms/tests/errors/server-actions/server-graph/16/output.stderr
@@ -0,0 +1,6 @@
+  x Unknown cache kind "x". Please configure a cache handler for this kind in the experimental "cacheHandlers" object in your Next.js config.
+  | 
+   ,-[input.js:1:1]
+ 1 | 'use cache: x'
+   : ^^^^^^^^^^^^^^
+   `----
diff --git a/crates/next-custom-transforms/tests/errors/server-actions/server-graph/17/input.js b/crates/next-custom-transforms/tests/errors/server-actions/server-graph/17/input.js
new file mode 100644
index 00000000000000..583e0663a9a77c
--- /dev/null
+++ b/crates/next-custom-transforms/tests/errors/server-actions/server-graph/17/input.js
@@ -0,0 +1,5 @@
+export async function foo() {
+  'use cache: x'
+
+  return 'data'
+}
diff --git a/crates/next-custom-transforms/tests/errors/server-actions/server-graph/17/output.js b/crates/next-custom-transforms/tests/errors/server-actions/server-graph/17/output.js
new file mode 100644
index 00000000000000..fd8981f7b00a23
--- /dev/null
+++ b/crates/next-custom-transforms/tests/errors/server-actions/server-graph/17/output.js
@@ -0,0 +1,11 @@
+/* __next_internal_action_entry_do_not_use__ {"803128060c414d59f8552e4788b846c0d2b7f74743":"$$RSC_SERVER_CACHE_0"} */ import { registerServerReference } from "private-next-rsc-server-reference";
+import { encryptActionBoundArgs, decryptActionBoundArgs } from "private-next-rsc-action-encryption";
+import { cache as $$cache__ } from "private-next-rsc-cache-wrapper";
+export var $$RSC_SERVER_CACHE_0 = $$cache__("x", "803128060c414d59f8552e4788b846c0d2b7f74743", 0, async function foo() {
+    return 'data';
+});
+Object.defineProperty($$RSC_SERVER_CACHE_0, "name", {
+    "value": "foo",
+    "writable": false
+});
+export var foo = registerServerReference($$RSC_SERVER_CACHE_0, "803128060c414d59f8552e4788b846c0d2b7f74743", null);
diff --git a/crates/next-custom-transforms/tests/errors/server-actions/server-graph/17/output.stderr b/crates/next-custom-transforms/tests/errors/server-actions/server-graph/17/output.stderr
new file mode 100644
index 00000000000000..fa0d10e3839946
--- /dev/null
+++ b/crates/next-custom-transforms/tests/errors/server-actions/server-graph/17/output.stderr
@@ -0,0 +1,7 @@
+  x Unknown cache kind "x". Please configure a cache handler for this kind in the experimental "cacheHandlers" object in your Next.js config.
+  | 
+   ,-[input.js:2:1]
+ 1 | export async function foo() {
+ 2 |   'use cache: x'
+   :   ^^^^^^^^^^^^^^
+   `----
diff --git a/crates/next-custom-transforms/tests/fixture.rs b/crates/next-custom-transforms/tests/fixture.rs
index 4275d58e3825f0..27e0203fdb7a2e 100644
--- a/crates/next-custom-transforms/tests/fixture.rs
+++ b/crates/next-custom-transforms/tests/fixture.rs
@@ -1,5 +1,6 @@
 use std::{
     env::current_dir,
+    iter::FromIterator,
     path::{Path, PathBuf},
 };
 
@@ -21,6 +22,7 @@ use next_custom_transforms::transforms::{
     strip_page_exports::{next_transform_strip_page_exports, ExportFilter},
     warn_for_edge_runtime::warn_for_edge_runtime,
 };
+use rustc_hash::FxHashSet;
 use serde::de::DeserializeOwned;
 use swc_core::{
     common::{comments::SingleThreadedComments, FileName, Mark, SyntaxContext},
@@ -416,6 +418,7 @@ fn server_actions_server_fixture(input: PathBuf) {
                         is_react_server_layer: true,
                         dynamic_io_enabled: true,
                         hash_salt: "".into(),
+                        cache_kinds: FxHashSet::from_iter(["x".into()]),
                     },
                     _tr.comments.as_ref().clone(),
                 ),
@@ -448,6 +451,7 @@ fn next_font_with_directive_fixture(input: PathBuf) {
                         is_react_server_layer: true,
                         dynamic_io_enabled: true,
                         hash_salt: "".into(),
+                        cache_kinds: FxHashSet::default(),
                     },
                     _tr.comments.as_ref().clone(),
                 ),
@@ -473,6 +477,7 @@ fn server_actions_client_fixture(input: PathBuf) {
                         is_react_server_layer: false,
                         dynamic_io_enabled: true,
                         hash_salt: "".into(),
+                        cache_kinds: FxHashSet::default(),
                     },
                     _tr.comments.as_ref().clone(),
                 ),
diff --git a/packages/next/src/build/swc/options.ts b/packages/next/src/build/swc/options.ts
index 4b5d3717657fae..1e90db96857ddf 100644
--- a/packages/next/src/build/swc/options.ts
+++ b/packages/next/src/build/swc/options.ts
@@ -65,6 +65,7 @@ function getBaseSWCOptions({
   serverReferenceHashSalt,
   bundleLayer,
   isDynamicIo,
+  cacheHandlers,
 }: {
   filename: string
   jest?: boolean
@@ -82,6 +83,7 @@ function getBaseSWCOptions({
   serverReferenceHashSalt: string
   bundleLayer?: WebpackLayerName
   isDynamicIo?: boolean
+  cacheHandlers?: ExperimentalConfig['cacheHandlers']
 }) {
   const isReactServerLayer = isWebpackServerOnlyLayer(bundleLayer)
   const isAppRouterPagesLayer = isWebpackAppPagesLayer(bundleLayer)
@@ -211,6 +213,7 @@ function getBaseSWCOptions({
             isReactServerLayer,
             dynamicIoEnabled: isDynamicIo,
             hashSalt: serverReferenceHashSalt,
+            cacheKinds: cacheHandlers ? Object.keys(cacheHandlers) : [],
           }
         : undefined,
     // For app router we prefer to bundle ESM,
@@ -355,6 +358,7 @@ export function getLoaderSWCOptions({
   serverReferenceHashSalt,
   bundleLayer,
   esm,
+  cacheHandlers,
 }: {
   filename: string
   development: boolean
@@ -379,6 +383,7 @@ export function getLoaderSWCOptions({
   serverComponents?: boolean
   serverReferenceHashSalt: string
   bundleLayer?: WebpackLayerName
+  cacheHandlers: ExperimentalConfig['cacheHandlers']
 }) {
   let baseOptions: any = getBaseSWCOptions({
     filename,
@@ -396,6 +401,7 @@ export function getLoaderSWCOptions({
     serverReferenceHashSalt,
     esm: !!esm,
     isDynamicIo,
+    cacheHandlers,
   })
   baseOptions.fontLoaders = {
     fontLoaders: ['next/font/local', 'next/font/google'],
diff --git a/packages/next/src/build/webpack/loaders/next-swc-loader.ts b/packages/next/src/build/webpack/loaders/next-swc-loader.ts
index 8b89aba6420478..bce034cfeb4108 100644
--- a/packages/next/src/build/webpack/loaders/next-swc-loader.ts
+++ b/packages/next/src/build/webpack/loaders/next-swc-loader.ts
@@ -142,6 +142,7 @@ async function loaderTransform(
     serverReferenceHashSalt,
     bundleLayer,
     esm,
+    cacheHandlers: nextConfig.experimental?.cacheHandlers,
   })
 
   const programmaticOptions = {
diff --git a/test/e2e/app-dir/use-cache-unknown-cache-kind/app/layout.tsx b/test/e2e/app-dir/use-cache-unknown-cache-kind/app/layout.tsx
new file mode 100644
index 00000000000000..888614deda3ba5
--- /dev/null
+++ b/test/e2e/app-dir/use-cache-unknown-cache-kind/app/layout.tsx
@@ -0,0 +1,8 @@
+import { ReactNode } from 'react'
+export default function Root({ children }: { children: ReactNode }) {
+  return (
+    <html>
+      <body>{children}</body>
+    </html>
+  )
+}
diff --git a/test/e2e/app-dir/use-cache-unknown-cache-kind/app/page.tsx b/test/e2e/app-dir/use-cache-unknown-cache-kind/app/page.tsx
new file mode 100644
index 00000000000000..7fa0f0ec81336a
--- /dev/null
+++ b/test/e2e/app-dir/use-cache-unknown-cache-kind/app/page.tsx
@@ -0,0 +1,5 @@
+'use cache: custom'
+
+export default async function Page() {
+  return <p>hello world</p>
+}
diff --git a/test/e2e/app-dir/use-cache-unknown-cache-kind/next.config.js b/test/e2e/app-dir/use-cache-unknown-cache-kind/next.config.js
new file mode 100644
index 00000000000000..ac4afcf4321968
--- /dev/null
+++ b/test/e2e/app-dir/use-cache-unknown-cache-kind/next.config.js
@@ -0,0 +1,10 @@
+/**
+ * @type {import('next').NextConfig}
+ */
+const nextConfig = {
+  experimental: {
+    dynamicIO: true,
+  },
+}
+
+module.exports = nextConfig
diff --git a/test/e2e/app-dir/use-cache-unknown-cache-kind/use-cache-unknown-cache-kind.test.ts b/test/e2e/app-dir/use-cache-unknown-cache-kind/use-cache-unknown-cache-kind.test.ts
new file mode 100644
index 00000000000000..499d03436220ac
--- /dev/null
+++ b/test/e2e/app-dir/use-cache-unknown-cache-kind/use-cache-unknown-cache-kind.test.ts
@@ -0,0 +1,155 @@
+import { nextTestSetup } from 'e2e-utils'
+import { NextConfig } from 'next'
+import {
+  assertHasRedbox,
+  assertNoRedbox,
+  getRedboxDescription,
+  getRedboxSource,
+  retry,
+} from 'next-test-utils'
+import stripAnsi from 'strip-ansi'
+
+const nextConfigWithCacheHandler: NextConfig = {
+  experimental: {
+    dynamicIO: true,
+    cacheHandlers: {
+      custom: require.resolve('next/dist/server/lib/cache-handlers/default'),
+    },
+  },
+}
+
+describe('use-cache-unknown-cache-kind', () => {
+  const { next, isNextStart, isTurbopack, skipped } = nextTestSetup({
+    files: __dirname,
+    skipStart: process.env.NEXT_TEST_MODE !== 'dev',
+    skipDeployment: true,
+  })
+
+  if (skipped) {
+    return
+  }
+
+  if (isNextStart) {
+    it('should fail the build with an error', async () => {
+      const { cliOutput } = await next.build()
+      const buildOutput = getBuildOutput(cliOutput)
+
+      if (isTurbopack) {
+        expect(buildOutput).toMatchInlineSnapshot(`
+          "Error: Turbopack build failed with 1 errors:
+          Page: {"type":"app","side":"server","page":"/page"}
+          ./app/page.tsx:1:1
+          Ecmascript file had an error
+          > 1 | 'use cache: custom'
+              | ^^^^^^^^^^^^^^^^^^^
+            2 |
+            3 | export default async function Page() {
+            4 |   return <p>hello world</p>
+
+          Unknown cache kind "custom". Please configure a cache handler for this kind in the experimental "cacheHandlers" object in your Next.js config.
+
+
+
+              at <unknown> (./app/page.tsx:1:1)"
+        `)
+      } else {
+        expect(buildOutput).toMatchInlineSnapshot(`
+          "
+          ./app/page.tsx
+          Error:   x Unknown cache kind "custom". Please configure a cache handler for this kind in the experimental "cacheHandlers" object in your Next.js config.
+            | 
+             ,-[1:1]
+           1 | 'use cache: custom'
+             : ^^^^^^^^^^^^^^^^^^^
+           2 | 
+           3 | export default async function Page() {
+           4 |   return <p>hello world</p>
+             \`----
+
+          Import trace for requested module:
+          ./app/page.tsx
+
+
+          > Build failed because of webpack errors
+          "
+        `)
+      }
+    })
+  } else {
+    it('should show a build error', async () => {
+      const browser = await next.browser('/')
+
+      await assertHasRedbox(browser)
+
+      const errorDescription = await getRedboxDescription(browser)
+      const errorSource = await getRedboxSource(browser)
+
+      expect(errorDescription).toBe('Failed to compile')
+
+      if (isTurbopack) {
+        expect(errorSource).toMatchInlineSnapshot(`
+            "./app/page.tsx:1:1
+            Ecmascript file had an error
+            > 1 | 'use cache: custom'
+                | ^^^^^^^^^^^^^^^^^^^
+              2 |
+              3 | export default async function Page() {
+              4 |   return <p>hello world</p>
+
+            Unknown cache kind "custom". Please configure a cache handler for this kind in the experimental "cacheHandlers" object in your Next.js config."
+          `)
+      } else {
+        expect(errorSource).toMatchInlineSnapshot(`
+            "./app/page.tsx
+            Error:   x Unknown cache kind "custom". Please configure a cache handler for this kind in the experimental "cacheHandlers" object in your Next.js config.
+              | 
+               ,-[1:1]
+             1 | 'use cache: custom'
+               : ^^^^^^^^^^^^^^^^^^^
+             2 | 
+             3 | export default async function Page() {
+             4 |   return <p>hello world</p>
+               \`----"
+          `)
+      }
+    })
+
+    it('should recover from the build error if the cache handler is defined', async () => {
+      const browser = await next.browser('/')
+
+      await assertHasRedbox(browser)
+
+      await next.patchFile(
+        'next.config.js',
+        `module.exports = ${JSON.stringify(nextConfigWithCacheHandler)}`,
+        () =>
+          retry(async () => {
+            expect(await browser.elementByCss('p').text()).toBe('hello world')
+            await assertNoRedbox(browser)
+          })
+      )
+    })
+  }
+})
+
+function getBuildOutput(cliOutput: string): string {
+  const lines: string[] = []
+  let skipLines = true
+
+  for (const line of cliOutput.split('\n')) {
+    if (!skipLines) {
+      if (line.includes('at turbopackBuild')) {
+        break
+      }
+
+      lines.push(stripAnsi(line))
+    } else if (
+      line.includes('Build error occurred') ||
+      line.includes('Failed to compile')
+    ) {
+      skipLines = false
+    }
+  }
+
+  return lines.join('\n')
+}