diff --git a/lib/packages.ts b/lib/packages.ts
index 76befa1d010d..1417354a9b01 100644
--- a/lib/packages.ts
+++ b/lib/packages.ts
@@ -84,7 +84,7 @@ function loadPackageJson(p: string) {
       case 'engines':
         pkg['engines'] = {
           'node': '>= 10.13.0',
-          'npm': '^6.11.0',
+          'npm': '^6.11.0 || ^7.5.6',
           'yarn': '>= 1.13.0',
         };
         break;
diff --git a/packages/angular/cli/commands/new-impl.ts b/packages/angular/cli/commands/new-impl.ts
index b13f42b81be9..032923138992 100644
--- a/packages/angular/cli/commands/new-impl.ts
+++ b/packages/angular/cli/commands/new-impl.ts
@@ -24,8 +24,6 @@ export class NewCommand extends SchematicCommand<NewCommandSchema> {
   }
 
   public async run(options: NewCommandSchema & Arguments) {
-    await ensureCompatibleNpm(this.workspace.root);
-
     // Register the version of the CLI in the registry.
     const packageJson = require('../package.json');
     const version = packageJson.version;
diff --git a/packages/angular/cli/models/schematic-command.ts b/packages/angular/cli/models/schematic-command.ts
index e2c7803cb968..b19f95b479cf 100644
--- a/packages/angular/cli/models/schematic-command.ts
+++ b/packages/angular/cli/models/schematic-command.ts
@@ -40,7 +40,7 @@ import {
   getWorkspaceRaw,
 } from '../utilities/config';
 import { parseJsonSchemaToOptions } from '../utilities/json-schema';
-import { getPackageManager } from '../utilities/package-manager';
+import { ensureCompatibleNpm, getPackageManager } from '../utilities/package-manager';
 import { isTTY } from '../utilities/tty';
 import { isPackageNameSafeForAnalytics } from './analytics';
 import { BaseCommandOptions, Command } from './command';
@@ -534,6 +534,16 @@ export abstract class SchematicCommand<
       }
     });
 
+    // Temporary compatibility check for NPM 7
+    if (collectionName === '@schematics/angular' && schematicName === 'ng-new') {
+      if (
+        !input.skipInstall &&
+        (input.packageManager === undefined || input.packageManager === 'npm')
+      ) {
+        await ensureCompatibleNpm(this.workspace.root);
+      }
+    }
+
     return new Promise<number | void>(resolve => {
       workflow
         .execute({
diff --git a/packages/angular/cli/utilities/package-manager.ts b/packages/angular/cli/utilities/package-manager.ts
index 3789c56ea23b..8c53bdf97d20 100644
--- a/packages/angular/cli/utilities/package-manager.ts
+++ b/packages/angular/cli/utilities/package-manager.ts
@@ -8,6 +8,7 @@
 import { execSync } from 'child_process';
 import { existsSync } from 'fs';
 import { join } from 'path';
+import { satisfies, valid } from 'semver';
 import { PackageManager } from '../lib/config/schema';
 import { getConfiguredPackageManager } from './config';
 
@@ -56,7 +57,7 @@ export async function getPackageManager(root: string): Promise<PackageManager> {
 }
 
 /**
- * Checks if the npm version is version 6.x.  If not, display a message and exit.
+ * Checks if the npm version is a supported 7.x version.  If not, display a warning.
  */
 export async function ensureCompatibleNpm(root: string): Promise<void> {
   if ((await getPackageManager(root)) !== PackageManager.Npm) {
@@ -64,19 +65,19 @@ export async function ensureCompatibleNpm(root: string): Promise<void> {
   }
 
   try {
-    const version = execSync('npm --version', {encoding: 'utf8', stdio: 'pipe'}).trim();
-    const major = Number(version.match(/^(\d+)\./)?.[1]);
-    if (major === 6) {
+    const versionText = execSync('npm --version', {encoding: 'utf8', stdio: 'pipe'}).trim();
+    const version = valid(versionText);
+    if (!version) {
       return;
     }
 
-    // tslint:disable-next-line: no-console
-    console.error(
-      `npm version ${version} detected.\n` +
-      'The Angular CLI currently requires npm version 6.\n\n' +
-      'Please install a compatible version to proceed (`npm install --global npm@6`).\n',
-    );
-    process.exit(3);
+    if (satisfies(version, '>=7 <7.5.6')) {
+      // tslint:disable-next-line: no-console
+      console.warn(
+        `npm version ${version} detected.` +
+          ' When using npm 7 with the Angular CLI, npm version 7.5.6 or higher is recommended.',
+      );
+    }
   } catch {
     // npm is not installed
   }
diff --git a/tests/legacy-cli/e2e/tests/misc/npm-7.ts b/tests/legacy-cli/e2e/tests/misc/npm-7.ts
index 38c3b4f8e76d..6a2a2c9d7eb2 100644
--- a/tests/legacy-cli/e2e/tests/misc/npm-7.ts
+++ b/tests/legacy-cli/e2e/tests/misc/npm-7.ts
@@ -1,7 +1,8 @@
+import { rimraf } from '../../utils/fs';
 import { ng, npm } from '../../utils/process';
 import { expectToFail } from '../../utils/utils';
 
-const errorText = 'The Angular CLI currently requires npm version 6.';
+const warningText = 'npm version 7.5.6 or higher is recommended';
 
 export default async function() {
   // Windows CI fails with permission errors when trying to replace npm
@@ -11,29 +12,66 @@ export default async function() {
 
   const currentDirectory = process.cwd();
   try {
-    // Install version 7.x
-    await npm('install', '--global', 'npm@7');
+    // Install version >=7.5.6
+    await npm('install', '--global', 'npm@>=7.5.6');
 
-    // Ensure `ng add` exits and shows npm error
+    // Ensure `ng update` does not show npm warning
+    const { stderr: stderrUpdate1 } = await ng('update');
+    if (stderrUpdate1.includes(warningText)) {
+      throw new Error('ng update expected to not show npm version warning.');
+    }
+
+    // Install version <7.5.6
+    await npm('install', '--global', 'npm@7.4.0');
+
+    // Ensure `ng add` shows npm warning
     const { message: stderrAdd } = await expectToFail(() => ng('add'));
-    if (!stderrAdd.includes(errorText)) {
-      throw new Error('ng add expected to show npm version error.');
+    if (!stderrAdd.includes(warningText)) {
+      throw new Error('ng add expected to show npm version warning.');
     }
 
-    // Ensure `ng update` exits and shows npm error
-    const { message: stderrUpdate } = await expectToFail(() => ng('update'));
-    if (!stderrUpdate.includes(errorText)) {
-      throw new Error('ng update expected to show npm version error.');
+    // Ensure `ng update` shows npm warning
+    const { stderr: stderrUpdate2 } = await ng('update');
+    if (!stderrUpdate2.includes(warningText)) {
+      throw new Error('ng update expected to show npm version warning.');
     }
 
-    // Ensure `ng new` exits and shows npm error
+    // Ensure `ng build` executes successfully
+    const { stderr: stderrBuild } = await ng('build');
+    if (stderrBuild.includes(warningText)) {
+      throw new Error('ng build expected to not show npm version warning.');
+    }
+
+    // Ensure `ng new` shows npm warning
     // Must be outside the project for `ng new`
     process.chdir('..');
     const { message: stderrNew } = await expectToFail(() => ng('new'));
-    if (!stderrNew.includes(errorText)) {
-      throw new Error('ng new expected to show npm version error.');
+    if (!stderrNew.includes(warningText)) {
+      throw new Error('ng new expected to show npm version warning.');
+    }
+
+    // Ensure `ng new --package-manager=npm` shows npm warning
+    const { message: stderrNewNpm } = await expectToFail(() => ng('new', '--package-manager=npm'));
+    if (!stderrNewNpm.includes(warningText)) {
+      throw new Error('ng new expected to show npm version warning.');
+    }
+
+    // Ensure `ng new --skip-install` executes successfully
+    const { stderr: stderrNewSkipInstall } = await ng('new', 'npm-seven-skip', '--skip-install');
+    if (stderrNewSkipInstall.includes(warningText)) {
+      throw new Error('ng new --skip-install expected to not show npm version warning.');
+    }
+
+    // Ensure `ng new --package-manager=yarn` executes successfully
+    const { stderr: stderrNewYarn } = await ng('new', 'npm-seven-yarn', '--package-manager=yarn');
+    if (stderrNewYarn.includes(warningText)) {
+      throw new Error('ng new --package-manager=yarn expected to not show npm version warning.');
     }
   } finally {
+    // Cleanup extra test projects
+    await rimraf('npm-seven-skip');
+    await rimraf('npm-seven-yarn');
+
     // Change directory back
     process.chdir(currentDirectory);