A critical component of any quantum error-correcting scheme is detection of errors by using an ancilla system. However, errors occurring in the ancilla can propagate onto the logical qubit, irreversibly corrupting the encoded information. We demonstrate a fault-tolerant error-detection scheme that suppresses spreading of ancilla errors by a factor of 5, while maintaining the assignment fidelity. The same method is used to prevent propagation of ancilla excitations, increasing the logical qubit dephasing time by an order of magnitude. Our approach is hardware-efficient, as it uses a single multilevel transmon ancilla and a cavity-encoded logical qubit, whose interaction is engineered in situ by using an off-resonant sideband drive. The results demonstrate that hardware-efficient approaches that exploit system-specific error models can yield advances toward fault-tolerant quantum computation.