diff --git a/Sources/Commands/PackageCommands/Init.swift b/Sources/Commands/PackageCommands/Init.swift
index 6dbb7a6e9f3..3cc7f87fa24 100644
--- a/Sources/Commands/PackageCommands/Init.swift
+++ b/Sources/Commands/PackageCommands/Init.swift
@@ -49,6 +49,9 @@ extension SwiftPackageCommand {
         @Option(name: .customLong("name"), help: "Provide custom package name")
         var packageName: String?
 
+        // This command should support creating the supplied --package-path if it isn't created.
+        var createPackagePath = true
+
         func run(_ swiftCommandState: SwiftCommandState) throws {
             guard let cwd = swiftCommandState.fileSystem.currentWorkingDirectory else {
                 throw InternalError("Could not find the current working directory")
diff --git a/Sources/CoreCommands/SwiftCommandState.swift b/Sources/CoreCommands/SwiftCommandState.swift
index 141ffeee9da..f75b68e24e6 100644
--- a/Sources/CoreCommands/SwiftCommandState.swift
+++ b/Sources/CoreCommands/SwiftCommandState.swift
@@ -53,6 +53,7 @@ import enum TSCBasic.ProcessLockError
 import var TSCBasic.stderrStream
 import class TSCBasic.TerminalController
 import class TSCBasic.ThreadSafeOutputByteStream
+import enum TSCBasic.SystemError
 
 import var TSCUtility.verbosity
 
@@ -90,12 +91,20 @@ public protocol _SwiftCommand {
     var workspaceDelegateProvider: WorkspaceDelegateProvider { get }
     var workspaceLoaderProvider: WorkspaceLoaderProvider { get }
     func buildSystemProvider(_ swiftCommandState: SwiftCommandState) throws -> BuildSystemProvider
+
+    // If a packagePath is specificed, this indicates that the command allows
+    // creating the directory if it doesn't exist.
+    var createPackagePath: Bool { get }
 }
 
 extension _SwiftCommand {
     public var toolWorkspaceConfiguration: ToolWorkspaceConfiguration {
         .init()
     }
+
+    public var createPackagePath: Bool {
+        return false
+    }
 }
 
 public protocol SwiftCommand: ParsableCommand, _SwiftCommand {
@@ -110,7 +119,8 @@ extension SwiftCommand {
             options: globalOptions,
             toolWorkspaceConfiguration: self.toolWorkspaceConfiguration,
             workspaceDelegateProvider: self.workspaceDelegateProvider,
-            workspaceLoaderProvider: self.workspaceLoaderProvider
+            workspaceLoaderProvider: self.workspaceLoaderProvider,
+            createPackagePath: self.createPackagePath
         )
 
         // We use this to attempt to catch misuse of the locking APIs since we only release the lock from here.
@@ -151,7 +161,8 @@ extension AsyncSwiftCommand {
             options: globalOptions,
             toolWorkspaceConfiguration: self.toolWorkspaceConfiguration,
             workspaceDelegateProvider: self.workspaceDelegateProvider,
-            workspaceLoaderProvider: self.workspaceLoaderProvider
+            workspaceLoaderProvider: self.workspaceLoaderProvider,
+            createPackagePath: self.createPackagePath
         )
 
         // We use this to attempt to catch misuse of the locking APIs since we only release the lock from here.
@@ -283,7 +294,8 @@ public final class SwiftCommandState {
         options: GlobalOptions,
         toolWorkspaceConfiguration: ToolWorkspaceConfiguration = .init(),
         workspaceDelegateProvider: @escaping WorkspaceDelegateProvider,
-        workspaceLoaderProvider: @escaping WorkspaceLoaderProvider
+        workspaceLoaderProvider: @escaping WorkspaceLoaderProvider,
+        createPackagePath: Bool
     ) throws {
         // output from background activities goes to stderr, this includes diagnostics and output from build operations,
         // package resolution that take place as part of another action
@@ -295,7 +307,8 @@ public final class SwiftCommandState {
             options: options,
             toolWorkspaceConfiguration: toolWorkspaceConfiguration,
             workspaceDelegateProvider: workspaceDelegateProvider,
-            workspaceLoaderProvider: workspaceLoaderProvider
+            workspaceLoaderProvider: workspaceLoaderProvider,
+            createPackagePath: createPackagePath
         )
     }
 
@@ -306,6 +319,7 @@ public final class SwiftCommandState {
         toolWorkspaceConfiguration: ToolWorkspaceConfiguration,
         workspaceDelegateProvider: @escaping WorkspaceDelegateProvider,
         workspaceLoaderProvider: @escaping WorkspaceLoaderProvider,
+        createPackagePath: Bool,
         hostTriple: Basics.Triple? = nil,
         fileSystem: any FileSystem = localFileSystem,
         environment: Environment = .current
@@ -341,19 +355,20 @@ public final class SwiftCommandState {
             self.options = options
 
             // Honor package-path option is provided.
-            if let packagePath = options.locations.packageDirectory {
-                try ProcessEnv.chdir(packagePath)
-            }
-
-            if toolWorkspaceConfiguration.shouldInstallSignalHandlers {
-                cancellator.installSignalHandlers()
-            }
-            self.cancellator = cancellator
+            try Self.chdirIfNeeded(
+                packageDirectory: self.options.locations.packageDirectory,
+                createPackagePath: createPackagePath
+            )
         } catch {
             self.observabilityScope.emit(error)
             throw ExitCode.failure
         }
 
+        if toolWorkspaceConfiguration.shouldInstallSignalHandlers {
+            cancellator.installSignalHandlers()
+        }
+        self.cancellator = cancellator
+
         // Create local variables to use while finding build path to avoid capture self before init error.
         let packageRoot = findPackageRoot(fileSystem: fileSystem)
 
@@ -529,6 +544,23 @@ public final class SwiftCommandState {
         return (identities, targets)
     }
 
+    private static func chdirIfNeeded(packageDirectory: AbsolutePath?, createPackagePath: Bool) throws {
+        if let packagePath = packageDirectory {
+            do {
+                try ProcessEnv.chdir(packagePath)
+            } catch let SystemError.chdir(errorCode, path) {
+                // If the command allows for the directory at the package path
+                // to not be present then attempt to create it and chdir again.
+                if createPackagePath {
+                    try makeDirectories(packagePath)
+                    try ProcessEnv.chdir(packagePath)
+                } else {
+                    throw SystemError.chdir(errorCode, path)
+                }
+            }
+        }
+    }
+
     private func getEditsDirectory() throws -> AbsolutePath {
         // TODO: replace multiroot-data-file with explicit overrides
         if let multiRootPackageDataFile = options.locations.multirootPackageDataFile {
diff --git a/Tests/BuildTests/PrepareForIndexTests.swift b/Tests/BuildTests/PrepareForIndexTests.swift
index a8701d52dce..16e8cf10a7e 100644
--- a/Tests/BuildTests/PrepareForIndexTests.swift
+++ b/Tests/BuildTests/PrepareForIndexTests.swift
@@ -208,6 +208,7 @@ class PrepareForIndexTests: XCTestCase {
                     observabilityScope: $1
                 )
             },
+            createPackagePath: false,
             hostTriple: .arm64Linux,
             fileSystem: localFileSystem,
             environment: .current
diff --git a/Tests/CommandsTests/SwiftCommandStateTests.swift b/Tests/CommandsTests/SwiftCommandStateTests.swift
index 77e6b80d6ca..3edd6113a26 100644
--- a/Tests/CommandsTests/SwiftCommandStateTests.swift
+++ b/Tests/CommandsTests/SwiftCommandStateTests.swift
@@ -22,8 +22,10 @@ import func PackageGraph.loadModulesGraph
 import _InternalTestSupport
 import XCTest
 
+import ArgumentParser
 import class TSCBasic.BufferedOutputByteStream
 import protocol TSCBasic.OutputByteStream
+import enum TSCBasic.SystemError
 import var TSCBasic.stderrStream
 
 final class SwiftCommandStateTests: CommandsTestCase {
@@ -485,12 +487,32 @@ final class SwiftCommandStateTests: CommandsTestCase {
         XCTAssertEqual(try targetToolchain.getClangCompiler(), targetClangPath)
         XCTAssertEqual(targetToolchain.librarianPath, targetArPath)
     }
+
+    func testPackagePathWithMissingFolder() async throws {
+        try withTemporaryDirectory { fixturePath in
+            let packagePath = fixturePath.appending(component: "Foo")
+            let options = try GlobalOptions.parse(["--package-path", packagePath.pathString])
+
+            do {
+                let outputStream = BufferedOutputByteStream()
+                XCTAssertThrowsError(try SwiftCommandState.makeMockState(outputStream: outputStream, options: options), "error expected")
+            }
+
+            do {
+                let outputStream = BufferedOutputByteStream()
+                let tool = try SwiftCommandState.makeMockState(outputStream: outputStream, options: options, createPackagePath: true)
+                tool.waitForObservabilityEvents(timeout: .now() + .seconds(1))
+                XCTAssertNoMatch(outputStream.bytes.validDescription, .contains("error:"))
+            }
+        }
+    }
 }
 
 extension SwiftCommandState {
     static func makeMockState(
         outputStream: OutputByteStream = stderrStream,
         options: GlobalOptions,
+        createPackagePath: Bool = false,
         fileSystem: any FileSystem = localFileSystem,
         environment: Environment = .current
     ) throws -> SwiftCommandState {
@@ -512,6 +534,7 @@ extension SwiftCommandState {
                     observabilityScope: $1
                 )
             },
+            createPackagePath: createPackagePath,
             hostTriple: .arm64Linux,
             fileSystem: fileSystem,
             environment: environment