diff --git a/crates/wadm-types/src/validation.rs b/crates/wadm-types/src/validation.rs
index 81790ae8..12e3d343 100644
--- a/crates/wadm-types/src/validation.rs
+++ b/crates/wadm-types/src/validation.rs
@@ -8,6 +8,7 @@ use std::sync::OnceLock;
 use anyhow::{Context as _, Result};
 use regex::Regex;
 use serde::{Deserialize, Serialize};
+use serde_json::Value;
 
 use crate::{LinkProperty, Manifest, TraitProperty, LATEST_VERSION};
 
@@ -327,6 +328,7 @@ pub async fn validate_manifest(manifest: &Manifest) -> Result<Vec<ValidationFail
     );
     failures.extend(check_misnamed_interfaces(manifest));
     failures.extend(check_dangling_links(manifest));
+    failures.extend(check_source_config_on_components(manifest));
     Ok(failures)
 }
 
@@ -403,6 +405,33 @@ fn check_dangling_links(manifest: &Manifest) -> Vec<ValidationFailure> {
     failures
 }
 
+fn check_source_config_on_components(manifest: &Manifest) -> Vec<ValidationFailure> {
+    let forbidden_config_key = "source_config";
+    let mut failures = Vec::new();
+    let components = manifest.component_lookup();
+    let component_traits = components
+        .into_iter()
+        .filter_map(|(name, component)| match &component.traits {
+            Some(traits) => Some((name, traits)),
+            None => None,
+        });
+    for (name, traits) in component_traits {
+        for trait_ in traits {
+            if let TraitProperty::Custom(custom) = trait_.properties.clone() {
+                if let Some(_) = custom.get(forbidden_config_key) {
+                    failures.push(ValidationFailure::new(
+                        ValidationFailureLevel::Error,
+                        format!(
+                            "component [{name}] has source_config in one of its traits properties",
+                        ),
+                    ))
+                }
+            }
+        }
+    }
+    failures
+}
+
 #[cfg(test)]
 mod tests {
     use super::is_valid_manifest_name;
diff --git a/tests/fixtures/manifests/with-source-config-on-component.wadm.yaml b/tests/fixtures/manifests/with-source-config-on-component.wadm.yaml
new file mode 100644
index 00000000..ab76abe5
--- /dev/null
+++ b/tests/fixtures/manifests/with-source-config-on-component.wadm.yaml
@@ -0,0 +1,23 @@
+---
+apiVersion: core.oam.dev/v1beta1
+kind: Application
+metadata:
+  name: sample_application_with_source_config_on_component
+  annotations:
+    version: v0.0.1
+    description: Sample manifest that does not pass since it has a source_config on a component
+spec:
+  components:
+    - name: http-component
+      type: component
+      properties:
+        image: ghcr.io/wasmcloud/component-http-hello-world:0.1.0
+      traits:
+        - type: spreadscaler
+          properties:
+            instances: 1
+            # This is not allowed since 1.0.0 should error during validation
+            source_config:
+              - name: any_value
+                properties:
+                  SOME_OTHER_KEY: any_other_value
\ No newline at end of file
diff --git a/tests/validation.rs b/tests/validation.rs
index d7d960dc..dde0b00d 100644
--- a/tests/validation.rs
+++ b/tests/validation.rs
@@ -1,6 +1,6 @@
 use anyhow::{Context as _, Result};
 
-use wadm_types::validation::{validate_manifest_file, ValidationFailureLevel, ValidationOutput};
+use wadm_types::validation::{validate_manifest_file, ValidationFailure, ValidationFailureLevel, ValidationOutput};
 
 /// Ensure that valid YAML manifests are valid
 #[tokio::test]
@@ -120,3 +120,27 @@ async fn validate_policy() -> Result<()> {
     assert!(failures.valid(), "manifest is valid");
     Ok(())
 }
+
+#[tokio::test]
+async fn validate_source_config_on_component_errors() -> Result<()> {
+    let (_manifest, failures) = validate_manifest_file(
+        "./tests/fixtures/manifests/with-source-config-on-component.wadm.yaml",
+    )
+        .await
+        .context("failed to validate manifest")?;
+    assert!(!failures.is_empty(), "failures present, all errors");
+    let failures = failures.iter().collect::<Vec<_>>();
+    assert_eq!(failures.len(), 1, "expected one failure");
+    let ValidationFailure { level, msg, .. } = failures.get(0).expect("expected one failure");
+    assert_eq!(
+        *level,
+        ValidationFailureLevel::Error,
+        "expected error level"
+    );
+    assert_eq!(
+        msg,
+        "component [http-component] has source_config in one of its traits properties",
+        "expected error message, but was incorrect",
+    );
+    Ok(())
+}