diff --git a/.changeset/pr-263.md b/.changeset/pr-263.md
new file mode 100644
index 00000000..97690060
--- /dev/null
+++ b/.changeset/pr-263.md
@@ -0,0 +1,5 @@
+---
+"@wdio/browserstack-service": patch
+---
+
+- Fixed `ETXTBSY: text file is busy, open '~/.browserstack/percy'` crashes on Linux when Percy is enabled.
diff --git a/packages/browserstack-service/src/launcher.ts b/packages/browserstack-service/src/launcher.ts
index a5829bc0..d9c95f02 100644
--- a/packages/browserstack-service/src/launcher.ts
+++ b/packages/browserstack-service/src/launcher.ts
@@ -515,11 +515,16 @@ export default class BrowserstackLauncherService implements Services.ServiceInst
             try {
                 const bestPlatformPercyCaps = getBestPlatformForPercySnapshot(capabilities as Capabilities.TestrunnerCapabilities)
                 this._percyBestPlatformCaps = bestPlatformPercyCaps as WebdriverIO.Capabilities
-                process.env[BROWSERSTACK_PERCY] = 'false'
-                await this.setupPercy(this._options, this._config, {
-                    projectName: this._projectName
-                })
-                this._updateBrowserStackPercyConfig()
+                // The CLI runs Percy from the same path; re-downloading over the running executable fails with ETXTBSY on Linux.
+                if (BrowserstackCLI.getInstance().isRunning()) {
+                    PercyLogger.debug('Percy is managed by the BrowserStack CLI, skipping service-side Percy setup')
+                } else {
+                    process.env[BROWSERSTACK_PERCY] = 'false'
+                    await this.setupPercy(this._options, this._config, {
+                        projectName: this._projectName
+                    })
+                    this._updateBrowserStackPercyConfig()
+                }
             } catch (err) {
                 PercyLogger.error(`Error while setting up Percy ${err}`)
             }
diff --git a/packages/browserstack-service/tests/launcher.test.ts b/packages/browserstack-service/tests/launcher.test.ts
index 9bbb24ac..f6216c7a 100644
--- a/packages/browserstack-service/tests/launcher.test.ts
+++ b/packages/browserstack-service/tests/launcher.test.ts
@@ -151,6 +151,32 @@ describe('onPrepare', () => {
         expect(service.browserstackLocal).toBeUndefined()
     })
 
+    it('does not start a service-side Percy when the CLI is running', async () => {
+        const isRunningSpy = vi.spyOn(BrowserstackCLI.getInstance(), 'isRunning').mockReturnValue(true)
+        const service = new BrowserstackLauncher({ testObservability: false, percy: true } as any, caps, config)
+        const setupPercySpy = vi.spyOn(service, 'setupPercy').mockResolvedValue(undefined)
+        try {
+            await service.onPrepare(config, caps)
+        } finally {
+            isRunningSpy.mockRestore()
+        }
+
+        expect(setupPercySpy).not.toHaveBeenCalled()
+    })
+
+    it('starts a service-side Percy when the CLI is not running', async () => {
+        const isRunningSpy = vi.spyOn(BrowserstackCLI.getInstance(), 'isRunning').mockReturnValue(false)
+        const service = new BrowserstackLauncher({ testObservability: false, percy: true } as any, caps, config)
+        const setupPercySpy = vi.spyOn(service, 'setupPercy').mockResolvedValue(undefined)
+        try {
+            await service.onPrepare(config, caps)
+        } finally {
+            isRunningSpy.mockRestore()
+        }
+
+        expect(setupPercySpy).toHaveBeenCalledTimes(1)
+    })
+
     it('should add the "app" property to a multiremote capability if no "bstack:options"', async () => {
         const options: BrowserstackConfig = { app: 'bs://<app-id>' }
         const service = new BrowserstackLauncher(options as any, caps, config)