diff --git a/cargo-insta/tests/functional/main.rs b/cargo-insta/tests/functional/main.rs
index 267f8996..b0e10626 100644
--- a/cargo-insta/tests/functional/main.rs
+++ b/cargo-insta/tests/functional/main.rs
@@ -865,3 +865,133 @@ fn test_snapshot() {
         "Expected line 5 to be numbered as 5, but got:\n{combined_output}"
     );
 }
+
+#[test]
+fn test_snapshot_with_merge_conflict() {
+    // A snapshot file containing git merge conflict markers should be detected
+    // and handled gracefully - the test continues and creates a new pending snapshot.
+    let test_project = TestFiles::new()
+        .add_cargo_toml("test_merge_conflict")
+        .add_file(
+            "src/lib.rs",
+            r#"
+#[test]
+fn test_snapshot() {
+    insta::assert_snapshot!("Hello, world!");
+}
+"#
+            .to_string(),
+        )
+        .add_file(
+            "src/snapshots/test_merge_conflict__snapshot.snap",
+            r#"<<<<<<< HEAD
+---
+source: src/lib.rs
+expression: "\"Hello, world!\""
+---
+Hello, world!
+=======
+---
+source: src/lib.rs
+expression: "\"Hello, world!\""
+---
+Hello, world! (modified)
+>>>>>>> feature-branch
+"#
+            .to_string(),
+        )
+        .create_project();
+
+    // Run the test
+    let output = test_project
+        .insta_cmd()
+        .args(["test"])
+        .stderr(Stdio::piped())
+        .stdout(Stdio::piped())
+        .output()
+        .unwrap();
+
+    let stderr = String::from_utf8_lossy(&output.stderr);
+    let stdout = String::from_utf8_lossy(&output.stdout);
+
+    // Inner test passes (merge conflict is detected and handled gracefully)
+    assert!(
+        stdout.contains("test test_snapshot ... ok"),
+        "Expected inner test to pass, got:\n{stdout}"
+    );
+
+    // Warning about merge conflicts is shown
+    assert!(
+        stderr.contains("unresolved merge conflicts"),
+        "Expected merge conflict warning, got:\n{stderr}"
+    );
+
+    // A new snapshot is stored
+    assert!(
+        stderr.contains("stored new snapshot"),
+        "Expected new snapshot to be stored, got:\n{stderr}"
+    );
+}
+
+#[test]
+fn test_snapshot_with_merge_conflict_in_yaml() {
+    // Test case where the merge conflict occurs within the YAML metadata section.
+    // Conflict markers are detected before parsing, and the test continues gracefully.
+    let test_project = TestFiles::new()
+        .add_cargo_toml("test_merge_conflict_yaml")
+        .add_file(
+            "src/lib.rs",
+            r#"
+#[test]
+fn test_snapshot() {
+    insta::assert_snapshot!("Hello, world!");
+}
+"#
+            .to_string(),
+        )
+        .add_file(
+            "src/snapshots/test_merge_conflict_yaml__snapshot.snap",
+            r#"---
+source: src/lib.rs
+<<<<<<< HEAD
+expression: "\"Hello, world!\""
+=======
+expression: "\"Hello, world! (modified)\""
+>>>>>>> feature-branch
+---
+Hello, world!
+"#
+            .to_string(),
+        )
+        .create_project();
+
+    // Run the test
+    let output = test_project
+        .insta_cmd()
+        .args(["test"])
+        .stderr(Stdio::piped())
+        .stdout(Stdio::piped())
+        .output()
+        .unwrap();
+
+    let stderr = String::from_utf8_lossy(&output.stderr);
+    let stdout = String::from_utf8_lossy(&output.stdout);
+
+    // Inner test passes (merge conflict is detected and handled gracefully)
+    assert!(
+        stdout.contains("test test_snapshot ... ok"),
+        "Expected inner test to pass, got:\n{stdout}"
+    );
+
+    // Warning about merge conflicts is shown
+    assert!(
+        stderr.contains("unresolved merge conflicts"),
+        "Expected merge conflict warning, got:\n{stderr}"
+    );
+
+    // A new snapshot is stored
+    assert!(
+        stderr.contains("stored new snapshot"),
+        "Expected new snapshot to be stored, got:\n{stderr}"
+    );
+}
diff --git a/insta/src/runtime.rs b/insta/src/runtime.rs
index 519869eb..409ce973 100644
--- a/insta/src/runtime.rs
+++ b/insta/src/runtime.rs
@@ -351,7 +351,29 @@ impl<'a> SnapshotAssertionContext<'a> {
                     is_doctest,
                 );
                 if fs::metadata(&file).is_ok() {
-                    old_snapshot = Some(Snapshot::from_file(&file)?);
+                    // Check for merge conflicts before parsing (line-based detection
+                    // handles markers at any position and is more robust)
+                    let has_conflict = fs::read_to_string(&file)
+                        .map(|content| {
+                            content.lines().any(|line| {
+                                line.starts_with("<<<<<<<")
+                                    || line.starts_with("=======")
+                                    || line.starts_with(">>>>>>>")
+                            })
+                        })
+                        .unwrap_or(false);
+
+                    if has_conflict {
+                        elog!(
+                            "{}: Snapshot file has unresolved merge conflicts, \
+                             ignoring: {}",
+                            style("warning").yellow().bold(),
+                            file.display()
+                        );
+                        // old_snapshot stays None - treat as missing
+                    } else {
+                        old_snapshot = Some(Snapshot::from_file(&file)?);
+                    }
                 }
                 snapshot_name = Some(name);
                 snapshot_file = Some(file);