diff --git a/cli/azd/cmd/env.go b/cli/azd/cmd/env.go
index 572a257f92..19907e2f37 100644
--- a/cli/azd/cmd/env.go
+++ b/cli/azd/cmd/env.go
@@ -8,6 +8,7 @@ import (
 	"errors"
 	"fmt"
 	"io"
+	"os"
 
 	"github.com/azure/azure-dev/cli/azd/cmd/actions"
 	"github.com/azure/azure-dev/cli/azd/internal"
@@ -158,6 +159,14 @@ func newEnvSelectAction(azdCtx *azdcontext.AzdContext, args []string) actions.Ac
 }
 
 func (e *envSelectAction) Run(ctx context.Context) (*actions.ActionResult, error) {
+	_, err := environment.GetEnvironment(e.azdCtx, e.args[0])
+	if errors.Is(err, os.ErrNotExist) {
+		return nil, fmt.Errorf(`environment '%s' does not exist. You can create it with "azd env new %s"`,
+			e.args[0], e.args[0])
+	} else if err != nil {
+		return nil, fmt.Errorf("ensuring environment exists: %w", err)
+	}
+
 	if err := e.azdCtx.SetDefaultEnvironmentName(e.args[0]); err != nil {
 		return nil, fmt.Errorf("setting default environment: %w", err)
 	}
@@ -247,7 +256,7 @@ func newEnvNewFlags(cmd *cobra.Command, global *internal.GlobalCommandOptions) *
 func newEnvNewCmd() *cobra.Command {
 	cmd := &cobra.Command{
 		Use:   "new <environment>",
-		Short: "Create a new environment.",
+		Short: "Create a new environment and set it as the default.",
 	}
 	cmd.Args = cobra.MaximumNArgs(1)
 
diff --git a/cli/azd/cmd/testdata/TestUsage-azd-env-new.snap b/cli/azd/cmd/testdata/TestUsage-azd-env-new.snap
index 3f32e0a1b2..40bf70f1ea 100644
--- a/cli/azd/cmd/testdata/TestUsage-azd-env-new.snap
+++ b/cli/azd/cmd/testdata/TestUsage-azd-env-new.snap
@@ -1,5 +1,5 @@
 
-Create a new environment.
+Create a new environment and set it as the default.
 
 Usage
   azd env new <environment> [flags]
diff --git a/cli/azd/cmd/testdata/TestUsage-azd-env.snap b/cli/azd/cmd/testdata/TestUsage-azd-env.snap
index 3bba946f02..79d6198a35 100644
--- a/cli/azd/cmd/testdata/TestUsage-azd-env.snap
+++ b/cli/azd/cmd/testdata/TestUsage-azd-env.snap
@@ -12,7 +12,7 @@ Usage
 Available Commands
   get-values	: Get all environment values.
   list      	: List environments.
-  new       	: Create a new environment.
+  new       	: Create a new environment and set it as the default.
   refresh   	: Refresh environment settings by using information from a previous infrastructure provision.
   select    	: Set the default environment.
   set       	: Manage your environment settings.
diff --git a/cli/azd/test/functional/env_test.go b/cli/azd/test/functional/env_test.go
index 87b748c20b..e156a68e1d 100644
--- a/cli/azd/test/functional/env_test.go
+++ b/cli/azd/test/functional/env_test.go
@@ -100,6 +100,11 @@ func Test_CLI_Env_Management(t *testing.T) {
 	require.Len(t, environmentList, 2)
 	requireIsDefault(t, environmentList, envName)
 
+	// Verify that trying to select an environment which does not exist fails.
+	res, err := cli.RunCommand(ctx, "env", "select", "does-not-exist")
+	require.Error(t, err)
+	require.Contains(t, res.Stdout, "environment 'does-not-exist' does not exist")
+
 	// Verify that running refresh with an explicit env name from an argument and from a flag leads to an error.
 	_, err = cli.RunCommand(context.Background(), "env", "refresh", "-e", "from-flag", "from-arg")
 	require.Error(t, err)