diff --git a/.github/workflows/repo_tests.yaml b/.github/workflows/repo_tests.yaml
index dbea8d38..d3874746 100644
--- a/.github/workflows/repo_tests.yaml
+++ b/.github/workflows/repo_tests.yaml
@@ -75,6 +75,15 @@ jobs:
               fi
             description: (test for setup-node)
 
+          - repo: prawn-test-staging-rw/node-packages-failure-test
+            ref: main
+            post-init: |
+              if [ "${FAILED_NODE_PACKAGE_INSTALL}" != "true" ]; then
+                echo "::error::Node package install didn't fail"
+                exit 1
+              fi
+            description: (test for continuing on node package install failure)
+
           - repo: replayio/devtools
             ref: 730a9f0ddaafefc2a1a293d6924ce3910cd156ac
             description: (has trunk.yaml)
diff --git a/action.yaml b/action.yaml
index e5fe0ddd..1e74710c 100644
--- a/action.yaml
+++ b/action.yaml
@@ -223,6 +223,7 @@ runs:
       run: |
         if [ ! -e .trunk/trunk.yaml ]; then
           ${TRUNK_PATH:-trunk} init
+          echo "INITIALIZED_TRUNK=true" >>$GITHUB_ENV
         fi
 
     - name: Detect setup strategy
diff --git a/setup-env/action.yaml b/setup-env/action.yaml
index 92da70f6..2168de82 100644
--- a/setup-env/action.yaml
+++ b/setup-env/action.yaml
@@ -115,6 +115,27 @@ runs:
           hashFiles(env.HASH_GLOB) }}
 
     - name: Install ${{ env.PACKAGE_MANAGER }} packages
+      id: install_packages
       if: env.PACKAGE_MANAGER && (env.NODE_VERSION_FILE || env.RUN_INSTALL_NODE_PACKAGES)
       shell: bash
       run: ${{ env.INSTALL_CMD }}
+      continue-on-error: true
+
+    - name: Check for package install
+      if: env.PACKAGE_MANAGER && (env.NODE_VERSION_FILE || env.RUN_INSTALL_NODE_PACKAGES)
+      shell: bash
+      run: |
+        if [ ${{ steps.install_packages.outcome }} == "success" ]; then
+          exit 0
+        fi
+        echo "FAILED_NODE_PACKAGE_INSTALL=true" >>$GITHUB_ENV
+
+        if [[ -z "${INITIALIZED_TRUNK}" ]]; then
+          echo "::error::Failed to install node packages."
+          echo "::error::Aborting because this repo has an existing trunk.yaml file."
+          exit 1
+        fi
+        echo "::warning::Failed to install node packages."
+        echo "::warning::Disabling linters that depend on node packages."
+        ${TRUNK_PATH} check disable eslint
+        ${TRUNK_PATH} check disable stylelint