diff --git a/packages/cli/src/__tests__/e2e/test.spec.ts b/packages/cli/src/__tests__/e2e/test.spec.ts
index c136820180..0beaa18232 100644
--- a/packages/cli/src/__tests__/e2e/test.spec.ts
+++ b/packages/cli/src/__tests__/e2e/test.spec.ts
@@ -328,4 +328,18 @@ describe("e2e tests for test command", () => {
     expect(output[0].status).toBe("FAILED");
     expect(output[0].validation.status).toBe("SUCCEED");
   })
+
+  it("Should close with exit code 1 if any test fails", async () => {
+    const testCaseDir = getTestCaseDir(12);
+    const { exitCode, stdout } = await Commands.test(undefined, {
+      cwd: testCaseDir,
+      cli: polywrapCli,
+    });
+
+    expect(exitCode).toEqual(1);
+
+    const output = parseOutput(stdout);
+    expect(output.find(v => v.id === "bad.0")?.status).toBe("FAILED");
+    expect(output.find(v => v.id === "good.0")?.status).toBe("SUCCEED");
+  })
 });
diff --git a/packages/cli/src/commands/test.ts b/packages/cli/src/commands/test.ts
index c603713b3f..8d90663891 100644
--- a/packages/cli/src/commands/test.ts
+++ b/packages/cli/src/commands/test.ts
@@ -150,6 +150,7 @@ const _run = async (options: Required<TestCommandOptions>) => {
     if (!quiet) {
       printJobOutput(output);
     }
+
     workflowOutput.push(output);
   };
 
@@ -182,4 +183,13 @@ const _run = async (options: Required<TestCommandOptions>) => {
         );
     }
   }
+
+  const isFailed = (val: WorkflowOutput) =>
+    val.status === Status.FAILED &&
+    (val.validation.status === Status.SKIPPED ||
+      val.validation.status === Status.FAILED);
+
+  if (workflowOutput.some(isFailed)) {
+    process.exit(1);
+  }
 };
diff --git a/packages/test-cases/cases/cli/test/013-uri-error/polywrap.test.yaml b/packages/test-cases/cases/cli/test/013-uri-error/polywrap.test.yaml
new file mode 100644
index 0000000000..6a330d2656
--- /dev/null
+++ b/packages/test-cases/cases/cli/test/013-uri-error/polywrap.test.yaml
@@ -0,0 +1,17 @@
+name: run-test-wrapper
+format: 0.2.0
+jobs:
+  bad:
+    steps:
+    - uri: fs/../run-test-wrapper/buildd
+      method: add
+      args:
+        x: 1
+        y: 1
+  good:
+    steps:
+      - uri: fs/../run-test-wrapper/build
+        method: add
+        args:
+          x: 1
+          y: 1
\ No newline at end of file