diff --git a/Help/command/add_custom_command.rst b/Help/command/add_custom_command.rst
index c184a96d6c..77357c0eee 100644
--- a/Help/command/add_custom_command.rst
+++ b/Help/command/add_custom_command.rst
@@ -269,6 +269,8 @@ The options are:
   source tree is mentioned as an absolute source file path elsewhere
   in the current directory.
 
+  The output file path may not contain ``<`` or ``>`` characters.
+
   .. versionadded:: 3.20
     Arguments to ``OUTPUT`` may use a restricted set of
     :manual:`generator expressions <cmake-generator-expressions(7)>`.
@@ -280,6 +282,10 @@ The options are:
     considered private unless they are listed in a non-private file set.
     See policy :policy:`CMP0154`.
 
+  .. versionchanged:: 3.30
+    The output file path may now use ``#`` characters, except
+    when using the :generator:`Borland Makefiles` generator.
+
 ``USES_TERMINAL``
   .. versionadded:: 3.2
 
diff --git a/Source/cmLocalGenerator.cxx b/Source/cmLocalGenerator.cxx
index 22daa0e111..1440771d4d 100644
--- a/Source/cmLocalGenerator.cxx
+++ b/Source/cmLocalGenerator.cxx
@@ -4403,7 +4403,12 @@ void CreateGeneratedSource(cmLocalGenerator& lg, const std::string& output,
   }
 
   // Make sure the output file name has no invalid characters.
-  std::string::size_type pos = output.find_first_of("#<>");
+  const bool hashNotAllowed = lg.GetState()->UseBorlandMake();
+  std::string::size_type pos = output.find_first_of("<>");
+  if (pos == std::string::npos && hashNotAllowed) {
+    pos = output.find_first_of('#');
+  }
+
   if (pos != std::string::npos) {
     lg.GetCMakeInstance()->IssueMessage(
       MessageType::FATAL_ERROR,
diff --git a/Tests/CustomCommand/CMakeLists.txt b/Tests/CustomCommand/CMakeLists.txt
index d46ee08d11..c145907a1b 100644
--- a/Tests/CustomCommand/CMakeLists.txt
+++ b/Tests/CustomCommand/CMakeLists.txt
@@ -588,3 +588,12 @@ add_custom_target(drive_mac_fw ALL DEPENDS mac_fw.txt)
 # Test empty COMMANDs are omitted
 add_executable(empty_command empty_command.cxx)
 add_custom_command(TARGET empty_command POST_BUILD COMMAND $<0:date>)
+
+# Test OUTPUT allows filenames containing "#" on generators that support this
+if(NOT CMAKE_GENERATOR MATCHES "Borland Makefiles")
+  add_custom_target(file_with_hash ALL DEPENDS "${PROJECT_BINARY_DIR}/hash#in#name.txt")
+  add_custom_command(
+    OUTPUT "${PROJECT_BINARY_DIR}/hash#in#name.txt"
+    COMMAND ${CMAKE_COMMAND} -E touch "${PROJECT_BINARY_DIR}/hash#in#name.txt"
+  )
+endif()
diff --git a/Tests/RunCMake/add_custom_command/BadByproduct-stderr.txt b/Tests/RunCMake/add_custom_command/BadByproduct-stderr.txt
index 547fb1c33f..5741ae5276 100644
--- a/Tests/RunCMake/add_custom_command/BadByproduct-stderr.txt
+++ b/Tests/RunCMake/add_custom_command/BadByproduct-stderr.txt
@@ -1,9 +1,3 @@
-CMake Error at BadByproduct.cmake:2 \(add_custom_command\):
-  BYPRODUCTS containing a "#" is not allowed.
-Call Stack \(most recent call first\):
-  CMakeLists.txt:3 \(include\)
-
-
 CMake Error at BadByproduct.cmake:3 \(add_custom_command\):
   BYPRODUCTS containing a "<" is not allowed.
 Call Stack \(most recent call first\):
@@ -17,7 +11,7 @@ Call Stack \(most recent call first\):
 
 (
 CMake Error at BadByproduct.cmake:5 \(add_custom_command\):
-  BYPRODUCTS containing a "#" is not allowed.
+  BYPRODUCTS containing a ">" is not allowed.
 Call Stack \(most recent call first\):
   CMakeLists.txt:3 \(include\)
 
diff --git a/Tests/RunCMake/add_custom_command/BadByproduct.cmake b/Tests/RunCMake/add_custom_command/BadByproduct.cmake
index cf00f5b852..4fe0b82843 100644
--- a/Tests/RunCMake/add_custom_command/BadByproduct.cmake
+++ b/Tests/RunCMake/add_custom_command/BadByproduct.cmake
@@ -1,8 +1,8 @@
 set(CMAKE_DISABLE_SOURCE_CHANGES ON)
-add_custom_command(OUTPUT a BYPRODUCTS "a#")
+
 add_custom_command(OUTPUT b BYPRODUCTS "a<")
 add_custom_command(OUTPUT c BYPRODUCTS "a>")
-add_custom_command(OUTPUT d BYPRODUCTS "$<CONFIG>/#")
+add_custom_command(OUTPUT d BYPRODUCTS "$<CONFIG>/$<ANGLE-R>")
 add_custom_command(OUTPUT e BYPRODUCTS ${CMAKE_CURRENT_SOURCE_DIR}/f)
 add_custom_command(OUTPUT f BYPRODUCTS "$<TARGET_PROPERTY:prop>")
 add_custom_command(OUTPUT h BYPRODUCTS "$<OUTPUT_CONFIG:h>")
diff --git a/Tests/RunCMake/add_custom_command/BadOutput-stderr.txt b/Tests/RunCMake/add_custom_command/BadOutput-stderr.txt
index 2e43568d4c..9d25949cb8 100644
--- a/Tests/RunCMake/add_custom_command/BadOutput-stderr.txt
+++ b/Tests/RunCMake/add_custom_command/BadOutput-stderr.txt
@@ -1,9 +1,3 @@
-CMake Error at BadOutput.cmake:2 \(add_custom_command\):
-  OUTPUT containing a "#" is not allowed.
-Call Stack \(most recent call first\):
-  CMakeLists.txt:3 \(include\)
-
-
 CMake Error at BadOutput.cmake:3 \(add_custom_command\):
   OUTPUT containing a "<" is not allowed.
 Call Stack \(most recent call first\):
@@ -17,7 +11,7 @@ Call Stack \(most recent call first\):
 
 (
 CMake Error at BadOutput.cmake:5 \(add_custom_command\):
-  OUTPUT containing a "#" is not allowed.
+  OUTPUT containing a ">" is not allowed.
 Call Stack \(most recent call first\):
   CMakeLists.txt:3 \(include\)
 
diff --git a/Tests/RunCMake/add_custom_command/BadOutput.cmake b/Tests/RunCMake/add_custom_command/BadOutput.cmake
index f04bdd16a8..0f6bd07382 100644
--- a/Tests/RunCMake/add_custom_command/BadOutput.cmake
+++ b/Tests/RunCMake/add_custom_command/BadOutput.cmake
@@ -1,8 +1,8 @@
 set(CMAKE_DISABLE_SOURCE_CHANGES ON)
-add_custom_command(OUTPUT "a#" COMMAND a)
+
 add_custom_command(OUTPUT "a<" COMMAND b)
 add_custom_command(OUTPUT "a>" COMMAND c)
-add_custom_command(OUTPUT "$<CONFIG>/#" COMMAND d)
+add_custom_command(OUTPUT "$<CONFIG>/$<ANGLE-R>" COMMAND d)
 add_custom_command(OUTPUT ${CMAKE_CURRENT_SOURCE_DIR}/e COMMAND f)
 add_custom_command(OUTPUT "$<TARGET_PROPERTY:prop>" COMMAND g)
 add_custom_command(OUTPUT "$<OUTPUT_CONFIG:h>" COMMAND h)
diff --git a/Tests/RunCMake/add_custom_target/BadByproduct-stderr.txt b/Tests/RunCMake/add_custom_target/BadByproduct-stderr.txt
index da9af49a03..b734ddd8ec 100644
--- a/Tests/RunCMake/add_custom_target/BadByproduct-stderr.txt
+++ b/Tests/RunCMake/add_custom_target/BadByproduct-stderr.txt
@@ -1,9 +1,3 @@
-CMake Error at BadByproduct.cmake:2 \(add_custom_target\):
-  BYPRODUCTS containing a "#" is not allowed.
-Call Stack \(most recent call first\):
-  CMakeLists.txt:3 \(include\)
-
-
 CMake Error at BadByproduct.cmake:3 \(add_custom_target\):
   BYPRODUCTS containing a "<" is not allowed.
 Call Stack \(most recent call first\):
@@ -17,7 +11,7 @@ Call Stack \(most recent call first\):
 
 (
 CMake Error at BadByproduct.cmake:5 \(add_custom_target\):
-  BYPRODUCTS containing a "#" is not allowed.
+  BYPRODUCTS containing a ">" is not allowed.
 Call Stack \(most recent call first\):
   CMakeLists.txt:3 \(include\)
 
diff --git a/Tests/RunCMake/add_custom_target/BadByproduct.cmake b/Tests/RunCMake/add_custom_target/BadByproduct.cmake
index c317b83544..d29c02f588 100644
--- a/Tests/RunCMake/add_custom_target/BadByproduct.cmake
+++ b/Tests/RunCMake/add_custom_target/BadByproduct.cmake
@@ -1,8 +1,8 @@
 set(CMAKE_DISABLE_SOURCE_CHANGES ON)
-add_custom_target(a BYPRODUCTS "a#" COMMAND b)
+
 add_custom_target(c BYPRODUCTS "a<" COMMAND d)
 add_custom_target(e BYPRODUCTS "a>" COMMAND f)
-add_custom_target(g BYPRODUCTS "$<CONFIG>/#" COMMAND h)
+add_custom_target(g BYPRODUCTS "$<CONFIG>/$<ANGLE-R>" COMMAND h)
 add_custom_target(i BYPRODUCTS ${CMAKE_CURRENT_SOURCE_DIR}/j COMMAND k)
 add_custom_target(l BYPRODUCTS "$<TARGET_PROPERTY:prop>" COMMAND m)
 add_custom_target(n BYPRODUCTS "$<OUTPUT_CONFIG:n>" COMMAND o)