diff --git a/src/cli/main.zig b/src/cli/main.zig
index 2bdc5ea7db..d60b55f549 100644
--- a/src/cli/main.zig
+++ b/src/cli/main.zig
@@ -2798,6 +2798,35 @@ fn checkFileWithBuildEnvPreserved(
 
     // Build the file (works for both app and module files)
     build_env.build(filepath) catch |err| {
+        // Even on error, try to drain and print any reports that were collected
+        const drained = build_env.drainReports() catch &[_]BuildEnv.DrainedModuleReports{};
+        defer build_env.gpa.free(drained);
+
+        // Print any error reports to stderr before failing
+        const stderr = std.fs.File.stderr();
+        const num_reports = blk: {
+            var count: usize = 0;
+            for (drained) |mod| count += mod.reports.len;
+            break :blk count;
+        };
+
+        if (num_reports > 0) {
+            _ = stderr.write("DEBUG: Found ") catch {};
+            var buf: [32]u8 = undefined;
+            const count_str = std.fmt.bufPrint(&buf, "{d}", .{num_reports}) catch "?";
+            _ = stderr.write(count_str) catch {};
+            _ = stderr.write(" reports\n") catch {};
+
+            for (drained) |mod| {
+                for (mod.reports) |report| {
+                    _ = stderr.write(report.title) catch {};
+                    _ = stderr.write("\n") catch {};
+                }
+            }
+        } else {
+            _ = stderr.write("DEBUG: No reports found\n") catch {};
+        }
+
         return err;
     };
 
@@ -2894,7 +2923,24 @@ fn checkFileWithBuildEnv(
     }
 
     // Build the file (works for both app and module files)
-    try build_env.build(filepath);
+    build_env.build(filepath) catch {
+        // Even on error, drain reports to show what went wrong
+        const drained = build_env.drainReports() catch &[_]BuildEnv.DrainedModuleReports{};
+        defer build_env.gpa.free(drained);
+
+        // Convert BuildEnv drained reports to our format
+        var reports = try build_env.gpa.alloc(DrainedReport, drained.len);
+        for (drained, 0..) |mod, i| {
+            reports[i] = .{
+                .file_path = try build_env.gpa.dupe(u8, mod.abs_path),
+                .reports = try build_env.gpa.dupe(reporting.Report, mod.reports),
+            };
+        }
+
+        return CheckResult{
+            .reports = reports,
+        };
+    };
 
     // Drain all reports
     const drained = try build_env.drainReports();
diff --git a/src/compile/compile_package.zig b/src/compile/compile_package.zig
index 243f19b87f..1f56fd0125 100644
--- a/src/compile/compile_package.zig
+++ b/src/compile/compile_package.zig
@@ -534,7 +534,50 @@ pub const PackageEnv = struct {
     fn doParse(self: *PackageEnv, module_id: ModuleId) !void {
         // Load source and init ModuleEnv
         var st = &self.modules.items[module_id];
-        const src = try std.fs.cwd().readFileAlloc(self.gpa, st.path, std.math.maxInt(usize));
+        const src = std.fs.cwd().readFileAlloc(self.gpa, st.path, std.math.maxInt(usize)) catch |read_err| {
+            // If the file wasn't found, create a proper diagnostic report
+            if (read_err == error.FileNotFound) {
+                // Create a diagnostic on the importing module(s)
+                for (st.dependents.items) |importer_id| {
+                    const importer = &self.modules.items[importer_id];
+
+                    var rep = Report.init(self.gpa, "Module not found", .runtime_error);
+
+                    const msg1 = try std.fmt.allocPrint(self.gpa,
+                        "Could not find module '{s}' at the following path:", .{st.name});
+                    _ = try rep.addOwnedString(msg1);
+                    try rep.addErrorMessage(msg1);
+                    try rep.document.addLineBreak();
+
+                    const path_msg = try rep.addOwnedString(st.path);
+                    try rep.document.addText("    ");
+                    try rep.document.addAnnotated(path_msg, .emphasized);
+                    try rep.document.addLineBreak();
+                    try rep.document.addLineBreak();
+
+                    const hint = try rep.addOwnedString(
+                        "This module was imported but the file does not exist. " ++
+                        "If this is a builtin module like Str, Bool, or Result, " ++
+                        "they are automatically available and should not be explicitly imported.");
+                    try rep.document.addText(hint);
+
+                    // Emit the report immediately so it gets displayed
+                    self.sink.emitFn(self.sink.ctx, importer.name, rep);
+                }
+
+                // If no importers (shouldn't happen), add report to this module
+                if (st.dependents.items.len == 0) {
+                    var rep = Report.init(self.gpa, "Module not found", .runtime_error);
+                    const msg = try std.fmt.allocPrint(self.gpa,
+                        "Could not find module file at: {s}", .{st.path});
+                    _ = try rep.addOwnedString(msg);
+                    try rep.addErrorMessage(msg);
+                    // Emit the report immediately so it gets displayed
+                    self.sink.emitFn(self.sink.ctx, st.name, rep);
+                }
+            }
+            return read_err;
+        };
 
         // line starts for diagnostics and consistent positions