diff --git a/action/pipeline/validate.go b/action/pipeline/validate.go
index 81729aa1..641fdc65 100644
--- a/action/pipeline/validate.go
+++ b/action/pipeline/validate.go
@@ -107,7 +107,7 @@ func (c *Config) ValidateLocal(client compiler.Engine) error {
 	logrus.Tracef("compiling pipeline %s", path)
 
 	// compile the object into a pipeline
-	p, _, err := client.CompileLite(path, c.Template, false, c.TemplateFiles)
+	p, _, err := client.CompileLite(path, c.Template, false)
 	if err != nil {
 		return err
 	}
diff --git a/action/pipeline/validate_test.go b/action/pipeline/validate_test.go
index 2be7011c..74c4c1f1 100644
--- a/action/pipeline/validate_test.go
+++ b/action/pipeline/validate_test.go
@@ -284,7 +284,7 @@ func TestPipeline_Config_ValidateLocal(t *testing.T) {
 	for _, test := range tests {
 		isLocal := len(test.config.TemplateFiles) > 0
 
-		err := test.config.ValidateLocal(client.WithLocal(isLocal))
+		err := test.config.ValidateLocal(client.WithLocal(isLocal).WithLocalTemplates(test.config.TemplateFiles))
 
 		if test.failure {
 			if err == nil {
diff --git a/command/pipeline/exec.go b/command/pipeline/exec.go
index 1ccf6631..4cd5daee 100644
--- a/command/pipeline/exec.go
+++ b/command/pipeline/exec.go
@@ -11,6 +11,7 @@ import (
 	"github.com/go-vela/cli/action/pipeline"
 	"github.com/go-vela/cli/internal"
 	"github.com/go-vela/server/compiler/native"
+	"github.com/go-vela/server/util"
 	"github.com/go-vela/types/constants"
 
 	"github.com/urfave/cli/v2"
@@ -94,6 +95,12 @@ var CommandExec = &cli.Command{
 			Aliases: []string{"v"},
 			Usage:   "provide list of local volumes to mount",
 		},
+		&cli.IntFlag{
+			EnvVars: []string{"VELA_MAX_TEMPLATE_DEPTH", "MAX_TEMPLATE_DEPTH"},
+			Name:    "max-template-depth",
+			Usage:   "set the maximum depth for nested templates",
+			Value:   3,
+		},
 
 		// Repo Flags
 
@@ -184,6 +191,9 @@ func exec(c *cli.Context) error {
 		return err
 	}
 
+	// set the max template depth using provided configuration (max of 5)
+	client.TemplateDepth = util.MinInt(c.Int("max-template-depth"), 5)
+
 	// execute the exec call for the pipeline configuration
 	//
 	// https://pkg.go.dev/github.com/go-vela/cli/action/pipeline?tab=doc#Config.Exec
diff --git a/command/pipeline/validate.go b/command/pipeline/validate.go
index 1741d058..40a16468 100644
--- a/command/pipeline/validate.go
+++ b/command/pipeline/validate.go
@@ -12,8 +12,10 @@ import (
 	"github.com/go-vela/cli/internal"
 	"github.com/go-vela/cli/internal/client"
 	"github.com/go-vela/types/constants"
+	"github.com/sirupsen/logrus"
 
 	"github.com/go-vela/server/compiler/native"
+	"github.com/go-vela/server/util"
 
 	"github.com/urfave/cli/v2"
 )
@@ -80,6 +82,12 @@ var CommandValidate = &cli.Command{
 			Name:    "template-file",
 			Usage:   "enables using a local template file for expansion",
 		},
+		&cli.IntFlag{
+			EnvVars: []string{"VELA_MAX_TEMPLATE_DEPTH", "MAX_TEMPLATE_DEPTH"},
+			Name:    "max-template-depth",
+			Usage:   "set the maximum depth for nested templates",
+			Value:   3,
+		},
 		&cli.BoolFlag{
 			EnvVars: []string{"VELA_REMOTE", "PIPELINE_REMOTE"},
 			Name:    "remote",
@@ -120,6 +128,8 @@ EXAMPLES:
     $ {{.HelpName}} --template
   8. Validate a local template pipeline with expanding steps
     $ {{.HelpName}} --template --template-file name:/path/to/file
+  9. Validate a local, nested template pipeline with custom template depth.
+    $ {{.HelpName}} --template --template-file name:/path/to/file name:/path/to/file --max-template-depth 2
 DOCUMENTATION:
 
   https://go-vela.github.io/docs/reference/cli/pipeline/validate/
@@ -186,6 +196,13 @@ func validate(c *cli.Context) error {
 	// set when user is sourcing templates from local machine
 	if len(p.TemplateFiles) != 0 {
 		client.WithLocal(true)
+		client.WithLocalTemplates(p.TemplateFiles)
+		client.TemplateDepth = c.Int("max-template-depth")
+	} else {
+		// set max template depth to minimum of 5 and provided value if local templates are not provided.
+		// This prevents users from spamming SCM
+		client.TemplateDepth = util.MinInt(c.Int("max-template-depth"), 5)
+		logrus.Debugf("no local template files provided, setting max template depth to %d", client.TemplateDepth)
 	}
 
 	// execute the validate local call for the pipeline configuration
diff --git a/go.mod b/go.mod
index ad44f2cb..7a6aba2f 100644
--- a/go.mod
+++ b/go.mod
@@ -11,7 +11,7 @@ require (
 	github.com/gin-gonic/gin v1.9.1
 	github.com/go-git/go-git/v5 v5.7.0
 	github.com/go-vela/sdk-go v0.20.0
-	github.com/go-vela/server v0.20.0
+	github.com/go-vela/server v0.20.1-0.20230725195029-acbb8f116c4e
 	github.com/go-vela/types v0.20.0
 	github.com/go-vela/worker v0.20.0
 	github.com/golang-jwt/jwt/v5 v5.0.0
diff --git a/go.sum b/go.sum
index 42a28ea8..6eaca274 100644
--- a/go.sum
+++ b/go.sum
@@ -158,8 +158,8 @@ github.com/go-playground/validator/v10 v10.14.0/go.mod h1:9iXMNT7sEkjXb0I+enO7QX
 github.com/go-task/slim-sprig v0.0.0-20210107165309-348f09dbbbc0 h1:p104kn46Q8WdvHunIJ9dAyjPVtrBPhSr3KT2yUst43I=
 github.com/go-vela/sdk-go v0.20.0 h1:+kM2sF/DKibzuHK/4XO0QeRkLgjorpuDkr//P95FhqQ=
 github.com/go-vela/sdk-go v0.20.0/go.mod h1:0cgibC9qs9/JheSsU1qHuAecY1njJDwPSE4XeD4gP7c=
-github.com/go-vela/server v0.20.0 h1:niU7Hg9/uJRaRuA2VR+Obq2sAbG8iw32esPgTBawZ/g=
-github.com/go-vela/server v0.20.0/go.mod h1:l6ToQGKLn9RP9Kcqwyq3JtgkFRhq1nlIKHq/mynkA+E=
+github.com/go-vela/server v0.20.1-0.20230725195029-acbb8f116c4e h1:KldHo5HQICJv5G9nTcNeuuiW9DDUzAIjptRH2X+9cFU=
+github.com/go-vela/server v0.20.1-0.20230725195029-acbb8f116c4e/go.mod h1:l6ToQGKLn9RP9Kcqwyq3JtgkFRhq1nlIKHq/mynkA+E=
 github.com/go-vela/types v0.20.0 h1:u/wHwc6ElVbIEI+q9TaVl9Iai1EoEr4Lwis6mikOte8=
 github.com/go-vela/types v0.20.0/go.mod h1:1ZSmKWX9MamKogwaIb53mzzRpZMV34mJFKiGfVFadFk=
 github.com/go-vela/worker v0.20.0 h1:hZuHTf6CGyKEJh5z9vEY2qFd9yRUxvLzMT2x0xUXG8o=