diff --git a/e2e/tests-dfx/rust.bash b/e2e/tests-dfx/rust.bash
index e09e5d79dc..bcb00dfb19 100644
--- a/e2e/tests-dfx/rust.bash
+++ b/e2e/tests-dfx/rust.bash
@@ -45,7 +45,10 @@ teardown() {
 
 @test "rust canister can have nonstandard target dir location" {
     dfx_new_rust
-    CARGO_TARGET_DIR="$(echo -ne '\x81')"
+    # We used to set CARGO_TARGET_DIR="$(echo -ne '\x81')"
+    # But since rust 1.69, `cargo metadata` returns
+    #   error: path contains invalid UTF-8 characters
+    CARGO_TARGET_DIR="custom-target"
     export CARGO_TARGET_DIR
     dfx_start
     assert_command dfx deploy