diff --git a/.changeset/rich-carrots-reflect.md b/.changeset/rich-carrots-reflect.md
new file mode 100644
index 0000000000..13a67bcd56
--- /dev/null
+++ b/.changeset/rich-carrots-reflect.md
@@ -0,0 +1,5 @@
+---
+'@backstage/cli': patch
+---
+
+Switched the Jest transform for YAML files to use a custom one available at `@backstage/cli/config/jestYamlTransform.js`.
diff --git a/packages/cli/config/jest.js b/packages/cli/config/jest.js
index a6cbdb9f05..8b6c37bda4 100644
--- a/packages/cli/config/jest.js
+++ b/packages/cli/config/jest.js
@@ -188,7 +188,7 @@ async function getProjectConfig(targetPath, displayName) {
       ],
       '\\.(bmp|gif|jpg|jpeg|png|frag|xml|svg|eot|woff|woff2|ttf)$':
         require.resolve('./jestFileTransform.js'),
-      '\\.(yaml)$': require.resolve('jest-transform-yaml'),
+      '\\.(yaml)$': require.resolve('./jestYamlTransform'),
     },
 
     // A bit more opinionated
diff --git a/packages/cli/config/jestYamlTransform.js b/packages/cli/config/jestYamlTransform.js
new file mode 100644
index 0000000000..2f04b94d8a
--- /dev/null
+++ b/packages/cli/config/jestYamlTransform.js
@@ -0,0 +1,38 @@
+/*
+ * Copyright 2022 The Backstage Authors
+ *
+ * Licensed under the Apache License, Version 2.0 (the "License");
+ * you may not use this file except in compliance with the License.
+ * You may obtain a copy of the License at
+ *
+ *     http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing, software
+ * distributed under the License is distributed on an "AS IS" BASIS,
+ * WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+ * See the License for the specific language governing permissions and
+ * limitations under the License.
+ */
+
+const yaml = require('yaml');
+
+function createTransformer(config) {
+  const process = source => {
+    const json = JSON.stringify(yaml.parse(source), null, 2);
+    return { code: `module.exports = ${json}`, map: null };
+  };
+
+  const getCacheKey = sourceText => {
+    return createHash('md5')
+      .update(sourceText)
+      .update(Buffer.alloc(1))
+      .update(JSON.stringify(config))
+      .update(Buffer.alloc(1))
+      .update('1') // increment whenever the transform logic in this file changes
+      .digest('hex');
+  };
+
+  return { process, getCacheKey };
+}
+
+module.exports = { createTransformer };
diff --git a/packages/cli/package.json b/packages/cli/package.json
index f7a446675d..93bf98e022 100644
--- a/packages/cli/package.json
+++ b/packages/cli/package.json
@@ -93,7 +93,6 @@
     "jest-css-modules": "^2.1.0",
     "jest-environment-jsdom": "^29.0.2",
     "jest-runtime": "^29.0.2",
-    "jest-transform-yaml": "^1.0.0",
     "json-schema": "^0.4.0",
     "lodash": "^4.17.21",
     "mini-css-extract-plugin": "^2.4.2",
diff --git a/yarn.lock b/yarn.lock
index e79d44a4f6..919949a804 100644
--- a/yarn.lock
+++ b/yarn.lock
@@ -3281,7 +3281,6 @@ __metadata:
     jest-css-modules: ^2.1.0
     jest-environment-jsdom: ^29.0.2
     jest-runtime: ^29.0.2
-    jest-transform-yaml: ^1.0.0
     json-schema: ^0.4.0
     lodash: ^4.17.21
     mini-css-extract-plugin: ^2.4.2
@@ -27371,15 +27370,6 @@ __metadata:
   languageName: node
   linkType: hard
 
-"jest-transform-yaml@npm:^1.0.0":
-  version: 1.0.0
-  resolution: "jest-transform-yaml@npm:1.0.0"
-  dependencies:
-    js-yaml: 4.1.0
-  checksum: 3bb1646c9fd08beb7d9f28a340bc28cebbc1aedb657c5f7809247423bfd39d99eccb8792a689876079133031281e95c56f2fadb93cdf1a142b74e9b9b7584595
-  languageName: node
-  linkType: hard
-
 "jest-util@npm:^29.0.3":
   version: 29.0.3
   resolution: "jest-util@npm:29.0.3"
@@ -27610,7 +27600,7 @@ __metadata:
   languageName: node
   linkType: hard
 
-"js-yaml@npm:4.1.0, js-yaml@npm:=4.1.0, js-yaml@npm:^4.0.0, js-yaml@npm:^4.1.0":
+"js-yaml@npm:=4.1.0, js-yaml@npm:^4.0.0, js-yaml@npm:^4.1.0":
   version: 4.1.0
   resolution: "js-yaml@npm:4.1.0"
   dependencies: