diff --git a/README.md b/README.md
index 8a6e8cc0c04..aefc50db2c6 100644
--- a/README.md
+++ b/README.md
@@ -214,6 +214,9 @@ Use `<INSTANCE>:<FILENAME>` to specify a source or target inside an instance.
 #### `limactl delete`
 `limactl delete [--force] <INSTANCE>`: delete the instance
 
+#### `limactl factory-reset`
+`limactl factory-reset <INSTANCE>`: factory reset the instance
+
 #### `limactl edit`
 `limactl edit <INSTANCE>`: edit the instance
 
diff --git a/cmd/limactl/factory-reset.go b/cmd/limactl/factory-reset.go
new file mode 100644
index 00000000000..2295edacade
--- /dev/null
+++ b/cmd/limactl/factory-reset.go
@@ -0,0 +1,61 @@
+package main
+
+import (
+	"errors"
+	"os"
+	"path/filepath"
+	"strings"
+
+	"github.com/lima-vm/lima/pkg/store"
+	"github.com/sirupsen/logrus"
+	"github.com/spf13/cobra"
+)
+
+func newFactoryResetCommand() *cobra.Command {
+	var resetCommand = &cobra.Command{
+		Use:               "factory-reset INSTANCE",
+		Short:             "Factory reset an instance of Lima",
+		Args:              cobra.MaximumNArgs(1),
+		RunE:              factoryResetAction,
+		ValidArgsFunction: factoryResetBashComplete,
+	}
+	return resetCommand
+}
+
+func factoryResetAction(cmd *cobra.Command, args []string) error {
+	instName := DefaultInstanceName
+	if len(args) > 0 {
+		instName = args[0]
+	}
+
+	inst, err := store.Inspect(instName)
+	if err != nil {
+		if errors.Is(err, os.ErrNotExist) {
+			logrus.Infof("Instance %q not found", instName)
+			return nil
+		}
+		return err
+	}
+
+	stopInstanceForcibly(inst)
+
+	fi, err := os.ReadDir(inst.Dir)
+	if err != nil {
+		return err
+	}
+	for _, f := range fi {
+		path := filepath.Join(inst.Dir, f.Name())
+		if !strings.HasSuffix(path, ".yaml") && !strings.HasSuffix(path, ".yml") {
+			logrus.Infof("Removing %q", path)
+			if err := os.Remove(path); err != nil {
+				logrus.Error(err)
+			}
+		}
+	}
+	logrus.Infof("Instance %q has been factory reset", instName)
+	return nil
+}
+
+func factoryResetBashComplete(cmd *cobra.Command, args []string, toComplete string) ([]string, cobra.ShellCompDirective) {
+	return bashCompleteInstanceNames(cmd)
+}
diff --git a/cmd/limactl/main.go b/cmd/limactl/main.go
index 2281bec45cf..61fded29348 100644
--- a/cmd/limactl/main.go
+++ b/cmd/limactl/main.go
@@ -83,6 +83,7 @@ func newApp() *cobra.Command {
 		newShowSSHCommand(),
 		newDebugCommand(),
 		newEditCommand(),
+		newFactoryResetCommand(),
 	)
 	return rootCmd
 }