diff --git a/.changeset/yellow-panthers-decide.md b/.changeset/yellow-panthers-decide.md
new file mode 100644
index 0000000000..a8bf76a17d
--- /dev/null
+++ b/.changeset/yellow-panthers-decide.md
@@ -0,0 +1,5 @@
+---
+'@backstage/repo-tools': patch
+---
+
+Avoid generating API reports for packages with `backstage.inline` set.
diff --git a/packages/repo-tools/src/commands/api-reports/api-extractor.ts b/packages/repo-tools/src/commands/api-reports/api-extractor.ts
index 122f04cc7e..7bd026c773 100644
--- a/packages/repo-tools/src/commands/api-reports/api-extractor.ts
+++ b/packages/repo-tools/src/commands/api-reports/api-extractor.ts
@@ -1232,6 +1232,9 @@ export async function categorizePackageDirs(packageDirs: string[]) {
           if (!role) {
             return; // Ignore packages without roles
           }
+          if (pkgJson?.backstage?.inline) {
+            return; // Ignore inline packages
+          }
           if (role === 'cli') {
             cliPackageDirs.push(dir);
           } else if (role !== 'frontend' && role !== 'backend') {