diff --git a/crates/tower-runtime/src/errors.rs b/crates/tower-runtime/src/errors.rs
index 19c8ed10..eae04338 100644
--- a/crates/tower-runtime/src/errors.rs
+++ b/crates/tower-runtime/src/errors.rs
@@ -64,6 +64,9 @@ pub enum Error {
 
     #[snafu(display("cancelled"))]
     Cancelled,
+
+    #[snafu(display("dependency installation failed"))]
+    DependencyInstallationFailed,
 }
 
 impl From<std::io::Error> for Error {
diff --git a/crates/tower-runtime/src/local.rs b/crates/tower-runtime/src/local.rs
index ee4968e2..a6296517 100644
--- a/crates/tower-runtime/src/local.rs
+++ b/crates/tower-runtime/src/local.rs
@@ -222,7 +222,13 @@ async fn execute_local_app(
         ));
 
         // Wait for venv to finish up.
-        wait_for_process(ctx.clone(), &cancel_token, child).await;
+        let res = wait_for_process(ctx.clone(), &cancel_token, child).await;
+
+        if res != 0 {
+            // If the venv process failed, we want to return an error.
+            let _ = sx.send(res);
+            return Err(Error::VirtualEnvCreationFailed);
+        }
 
         // Check once more if the process was cancelled before we do a uv sync. The sync itself,
         // once started, will take a while and we have logic for checking for cancellation.
@@ -269,7 +275,13 @@ async fn execute_local_app(
                 ));
 
                 // Let's wait for the setup to finish. We don't care about the results.
-                wait_for_process(ctx.clone(), &cancel_token, child).await;
+                let res = wait_for_process(ctx.clone(), &cancel_token, child).await;
+
+                if res != 0 {
+                    // If the sync process failed, we want to return an error.
+                    let _ = sx.send(res);
+                    return Err(Error::DependencyInstallationFailed);
+                }
             }
         }
 
diff --git a/crates/tower-runtime/tests/example-apps/05-broken-dependencies/README.md b/crates/tower-runtime/tests/example-apps/05-broken-dependencies/README.md
new file mode 100644
index 00000000..e69de29b
diff --git a/crates/tower-runtime/tests/example-apps/05-broken-dependencies/Towerfile b/crates/tower-runtime/tests/example-apps/05-broken-dependencies/Towerfile
new file mode 100644
index 00000000..0f5b958c
--- /dev/null
+++ b/crates/tower-runtime/tests/example-apps/05-broken-dependencies/Towerfile
@@ -0,0 +1,3 @@
+[app]
+name = "05-broken-dependencies"
+script = "./main.py"
diff --git a/crates/tower-runtime/tests/example-apps/05-broken-dependencies/main.py b/crates/tower-runtime/tests/example-apps/05-broken-dependencies/main.py
new file mode 100644
index 00000000..0efff4c8
--- /dev/null
+++ b/crates/tower-runtime/tests/example-apps/05-broken-dependencies/main.py
@@ -0,0 +1 @@
+print("This should never run because dependency installation should fail")
diff --git a/crates/tower-runtime/tests/example-apps/05-broken-dependencies/pyproject.toml b/crates/tower-runtime/tests/example-apps/05-broken-dependencies/pyproject.toml
new file mode 100644
index 00000000..ce68498c
--- /dev/null
+++ b/crates/tower-runtime/tests/example-apps/05-broken-dependencies/pyproject.toml
@@ -0,0 +1,9 @@
+[project]
+name = "05-broken-dependencies"
+version = "0.1.0"
+description = "App with a non-existent dependency to test failure handling"
+readme = "README.md"
+requires-python = ">=3.12"
+dependencies = [
+    "this-package-definitely-does-not-exist-xyz-123456789>=1.0.0",
+]
diff --git a/crates/tower-runtime/tests/local_test.rs b/crates/tower-runtime/tests/local_test.rs
index d8ee4a6d..02069308 100644
--- a/crates/tower-runtime/tests/local_test.rs
+++ b/crates/tower-runtime/tests/local_test.rs
@@ -328,3 +328,50 @@ async fn test_running_app_with_secret() {
     let status = app.status().await.expect("Failed to get app status");
     assert!(status == Status::Exited, "App should be running");
 }
+
+#[tokio::test]
+async fn test_abort_on_dependency_installation_failure() {
+    debug!("Running 05-broken-dependencies");
+    // This test verifies that when dependency installation fails (uv sync returns non-zero),
+    // the app correctly reports a Crashed status rather than continuing execution.
+    let broken_deps_dir = get_example_app_dir("05-broken-dependencies");
+    let package = build_package_from_dir(&broken_deps_dir).await;
+    let (sender, mut receiver) = unbounded_channel();
+
+    let opts = StartOptions {
+        ctx: tower_telemetry::Context::new(),
+        package,
+        output_sender: sender,
+        cwd: None,
+        environment: "local".to_string(),
+        secrets: HashMap::new(),
+        parameters: HashMap::new(),
+        env_vars: HashMap::new(),
+        cache_dir: Some(config::default_cache_dir()),
+    };
+
+    // Start the app using the LocalApp runtime
+    let app = LocalApp::start(opts).await.expect("Failed to start app");
+
+    // Drain all output - we need to consume the channel for the app to complete
+    while let Some(output) = receiver.recv().await {
+        debug!("Received output: {:?}", output.line);
+    }
+
+    // The status should be Crashed since dependency installation failed
+    let status = app.status().await.expect("Failed to get app status");
+    match status {
+        Status::Crashed { code } => {
+            assert!(code != 0, "Exit code should be non-zero, got {}", code);
+        }
+        Status::Exited => {
+            panic!("App should have crashed due to dependency installation failure, not exited successfully");
+        }
+        Status::Running => {
+            panic!("App should not still be running");
+        }
+        Status::None => {
+            panic!("App should have a status");
+        }
+    }
+}