diff --git a/.changeset/mean-pumpkins-search.md b/.changeset/mean-pumpkins-search.md
new file mode 100644
index 0000000000..ddaea98b9e
--- /dev/null
+++ b/.changeset/mean-pumpkins-search.md
@@ -0,0 +1,25 @@
+---
+'@backstage/plugin-todo-backend': patch
+---
+
+Add support to exclude certain folders in `todo` plugin.
+
+You can add function by configuring your own exclusion logic, for example:
+
+```ts
+import {
+  TodoScmReader,
+  createTodoParser,
+} from '@backstage/plugin-todo-backend';
+
+// ...
+
+const todoReader = TodoScmReader.fromConfig(config, {
+  logger,
+  reader,
+  filePathFilter: (filePath: string): boolean => {
+      ...
+      YOUR LOGIC HERE
+  },
+});
+```
diff --git a/plugins/todo-backend/api-report.md b/plugins/todo-backend/api-report.md
index ac8b2ce957..71094e03f8 100644
--- a/plugins/todo-backend/api-report.md
+++ b/plugins/todo-backend/api-report.md
@@ -131,6 +131,7 @@ export type TodoScmReaderOptions = {
   reader: UrlReader;
   integrations: ScmIntegrations;
   parser?: TodoParser;
+  filePathFilter?: (filePath: string) => boolean;
 };
 
 // @public (undocumented)
diff --git a/plugins/todo-backend/src/lib/TodoReader/TodoScmReader.test.ts b/plugins/todo-backend/src/lib/TodoReader/TodoScmReader.test.ts
index 9675a285e0..3e074f78a6 100644
--- a/plugins/todo-backend/src/lib/TodoReader/TodoScmReader.test.ts
+++ b/plugins/todo-backend/src/lib/TodoReader/TodoScmReader.test.ts
@@ -189,4 +189,91 @@ describe('TodoScmReader', () => {
       'Failed to parse TODO in https://github.com/o/r/catalog-info.yaml at my-file.sh, Error: failed to parse',
     );
   });
+
+  it('should not filter out exclude folders', async () => {
+    const reader = mockReader();
+    const filePathFilter = jest.fn(() => true);
+
+    const todoReader = new TodoScmReader({
+      logger: getVoidLogger(),
+      reader,
+      integrations: ScmIntegrations.fromConfig(new ConfigReader({})),
+      filePathFilter,
+    });
+    reader.readTree.mockResolvedValueOnce({
+      files: async () => [
+        {
+          content: async () => Buffer.from('// TODO: my-todo', 'utf8'),
+          path: 'my-folder/my-file.js',
+        },
+      ],
+    } as ReadTreeResponse);
+    await expect(
+      todoReader.readTodos({
+        url: 'https://github.com/backstage/backstage/catalog-info.yaml',
+      }),
+    ).resolves.toEqual({
+      items: [
+        {
+          text: 'my-todo',
+          tag: 'TODO',
+          lineNumber: 1,
+          repoFilePath: 'my-folder/my-file.js',
+          viewUrl:
+            'https://github.com/backstage/backstage/my-folder/my-file.js#L1',
+        },
+      ],
+    });
+    expect(reader.readTree).toHaveBeenCalledTimes(1);
+    expect(reader.readTree).toHaveBeenCalledWith(
+      'https://github.com/backstage/backstage/catalog-info.yaml',
+      {
+        etag: undefined,
+        filter: expect.any(Function),
+      },
+    );
+    // Filter function should filter out exclude folders
+    const filterFunc = reader.readTree.mock.calls[0][1]!.filter!;
+    expect(filterFunc('my-file.js')).toBe(true);
+    expect(filterFunc('my-folder/my-file.js')).toBe(true);
+  });
+
+  it('should  filter out exclude folders', async () => {
+    const reader = mockReader();
+    const filePathFilter = jest.fn(() => false);
+
+    const todoReader = new TodoScmReader({
+      logger: getVoidLogger(),
+      reader,
+      integrations: ScmIntegrations.fromConfig(new ConfigReader({})),
+      filePathFilter,
+    });
+    reader.readTree.mockResolvedValueOnce({
+      files: async () => [
+        {
+          content: async () => Buffer.from('// TODO: my-todo', 'utf8'),
+          path: '',
+        },
+      ],
+    } as ReadTreeResponse);
+    await expect(
+      todoReader.readTodos({
+        url: 'https://github.com/backstage/backstage/catalog-info.yaml',
+      }),
+    ).resolves.toEqual({
+      items: [],
+    });
+    expect(reader.readTree).toHaveBeenCalledTimes(1);
+    expect(reader.readTree).toHaveBeenCalledWith(
+      'https://github.com/backstage/backstage/catalog-info.yaml',
+      {
+        etag: undefined,
+        filter: expect.any(Function),
+      },
+    );
+    // Filter function should filter out exclude folders
+    const filterFunc = reader.readTree.mock.calls[0][1]!.filter!;
+    expect(filterFunc('my-file.js')).toBe(false);
+    expect(filterFunc('my-folder/my-file.js')).toBe(false);
+  });
 });
diff --git a/plugins/todo-backend/src/lib/TodoReader/TodoScmReader.ts b/plugins/todo-backend/src/lib/TodoReader/TodoScmReader.ts
index 19890a8d23..2696f0d54b 100644
--- a/plugins/todo-backend/src/lib/TodoReader/TodoScmReader.ts
+++ b/plugins/todo-backend/src/lib/TodoReader/TodoScmReader.ts
@@ -47,6 +47,7 @@ export type TodoScmReaderOptions = {
   reader: UrlReader;
   integrations: ScmIntegrations;
   parser?: TodoParser;
+  filePathFilter?: (filePath: string) => boolean;
 };
 
 type CacheItem = {
@@ -60,6 +61,7 @@ export class TodoScmReader implements TodoReader {
   private readonly reader: UrlReader;
   private readonly parser: TodoParser;
   private readonly integrations: ScmIntegrations;
+  private readonly filePathFilter: (filePath: string) => boolean;
 
   private readonly cache = new Map<string, CacheItem>();
   private readonly inFlightReads = new Map<string, Promise<CacheItem>>();
@@ -79,6 +81,7 @@ export class TodoScmReader implements TodoReader {
     this.reader = options.reader;
     this.parser = options.parser ?? createTodoParser();
     this.integrations = options.integrations;
+    this.filePathFilter = options.filePathFilter ?? (() => true);
   }
 
   async readTodos(options: ReadTodosOptions): Promise<ReadTodosResult> {
@@ -111,6 +114,7 @@ export class TodoScmReader implements TodoReader {
     etag?: string,
   ): Promise<CacheItem> {
     const { url } = options;
+    const filePathFilter = this.filePathFilter;
     const tree = await this.reader.readTree(url, {
       etag,
       filter(filePath, info) {
@@ -121,7 +125,8 @@ export class TodoScmReader implements TodoReader {
         return (
           !filePath.startsWith('.') &&
           !filePath.includes('/.') &&
-          !excludedExtensions.includes(extname)
+          !excludedExtensions.includes(extname) &&
+          filePathFilter(filePath)
         );
       },
     });