Existing reasoning datasets saturate and fail to test abstract, multi-step problems, especially pathfinding and complex rule constraint satisfaction.We introduce SPaRC (Spatial Pathfinding Reasoning Challenge), a dataset of 1,000 2D grid pathfinding puzzles to evaluate spatial and rule-based reasoning, requiring stepby-step planning with arithmetic and geometric rules.Humans achieve near-perfect accuracy (98.0%; 94.5% on hard puzzles), while the best reasoning models, such as o4-mini, struggle (15.8%; 1.1% on hard puzzles).Models often generate invalid paths (>50% of puzzles for o4-mini), and reasoning tokens reveal they make errors in navigation and spatial logic.Unlike humans, who take longer on hard puzzles, models fail to scale test-time compute with difficulty.Allowing models to make multiple solution attempts improves accuracy, suggesting potential for better spatial reasoning with improved training and efficient test-time scaling methods.SPaRC can be used as a window into models' spatial reasoning limitations and drive research toward new methods that excel in abstract, multi-step problem-solving.