diff --git a/test/common/test-error-reporter.js b/test/common/test-error-reporter.js
index 3098b10885f19d..fed92d9776c8a8 100644
--- a/test/common/test-error-reporter.js
+++ b/test/common/test-error-reporter.js
@@ -30,6 +30,12 @@ module.exports = async function* errorReporter(source) {
       output.push(inspect(error));
       output.push('\n');
       yield output.join('\n');
+
+      if (process.env.FAIL_FAST) {
+        yield `\n\u001b[31m✖ Bailing on failed test: ${event.data.name}\u001b[0m\n`;
+        process.exitCode = 1;
+        process.emit('SIGINT');
+      }
     }
   }
 };
diff --git a/test/fixtures/test-runner/error-reporter-fail-fast/a.mjs b/test/fixtures/test-runner/error-reporter-fail-fast/a.mjs
new file mode 100644
index 00000000000000..6508394bbc682d
--- /dev/null
+++ b/test/fixtures/test-runner/error-reporter-fail-fast/a.mjs
@@ -0,0 +1,6 @@
+const assert = require('node:assert');
+const { test } = require('node:test');
+
+test('fail', () => {
+  assert.fail('a.mjs fail');
+});
diff --git a/test/fixtures/test-runner/error-reporter-fail-fast/b.mjs b/test/fixtures/test-runner/error-reporter-fail-fast/b.mjs
new file mode 100644
index 00000000000000..87abd62db2773f
--- /dev/null
+++ b/test/fixtures/test-runner/error-reporter-fail-fast/b.mjs
@@ -0,0 +1,6 @@
+const assert = require('node:assert');
+const { test } = require('node:test');
+
+test('fail', () => {
+  assert.fail('b.mjs fail');
+});
diff --git a/test/parallel/test-runner-error-reporter.js b/test/parallel/test-runner-error-reporter.js
new file mode 100644
index 00000000000000..2afe6f7cd4c7f5
--- /dev/null
+++ b/test/parallel/test-runner-error-reporter.js
@@ -0,0 +1,32 @@
+'use strict';
+
+const fixtures = require('../common/fixtures');
+const assert = require('node:assert');
+const { spawnSync } = require('node:child_process');
+const { test } = require('node:test');
+const cwd = fixtures.path('test-runner', 'error-reporter-fail-fast');
+const env = { ...process.env };
+
+test('all tests failures reported without FAIL_FAST flag', async () => {
+  const args = [
+    '--test-reporter=./test/common/test-error-reporter.js',
+    '--test-concurrency=1',
+    '--test',
+    `${cwd}/*.mjs`,
+  ];
+  const cp = spawnSync(process.execPath, args, { env });
+  const failureCount = (cp.stdout.toString().match(/Test failure:/g) || []).length;
+  assert.strictEqual(failureCount, 2, 'Expected two test failures without FAIL_FAST');
+});
+
+test('FAIL_FAST stops test execution after first failure', async () => {
+  const args = [
+    '--test-reporter=./test/common/test-error-reporter.js',
+    '--test-concurrency=1',
+    '--test',
+    `${cwd}/*.mjs`,
+  ];
+  const cp = spawnSync(process.execPath, args, { env: { ...env, FAIL_FAST: 'true' } });
+  const failureCount = (cp.stdout.toString().match(/Test failure:/g) || []).length;
+  assert.strictEqual(failureCount, 1, 'Expected one test failure with FAIL_FAST');
+});