diff --git a/packages/backend-app-api/src/wiring/BackendInitializer.test.ts b/packages/backend-app-api/src/wiring/BackendInitializer.test.ts
index 133a404ce7..a8b302b905 100644
--- a/packages/backend-app-api/src/wiring/BackendInitializer.test.ts
+++ b/packages/backend-app-api/src/wiring/BackendInitializer.test.ts
@@ -18,6 +18,8 @@ import {
   createServiceRef,
   createServiceFactory,
   coreServices,
+  createBackendPlugin,
+  createBackendModule,
 } from '@backstage/backend-plugin-api';
 import { BackendInitializer } from './BackendInitializer';
 import { ServiceRegistry } from './ServiceRegistry';
@@ -72,4 +74,45 @@ describe('BackendInitializer', () => {
     expect(rootFactory).toHaveBeenCalled();
     expect(pluginFactory).not.toHaveBeenCalled();
   });
+
+  it('should forward errors when plugins fail to start', async () => {
+    const init = new BackendInitializer(new ServiceRegistry([]));
+    init.add(
+      createBackendPlugin({
+        pluginId: 'test',
+        register(reg) {
+          reg.registerInit({
+            deps: {},
+            async init() {
+              throw new Error('NOPE');
+            },
+          });
+        },
+      })(),
+    );
+    await expect(init.start()).rejects.toThrow(
+      "Plugin 'test' startup failed; caused by Error: NOPE",
+    );
+  });
+
+  it('should forward errors when modules fail to start', async () => {
+    const init = new BackendInitializer(new ServiceRegistry([]));
+    init.add(
+      createBackendModule({
+        pluginId: 'test',
+        moduleId: 'mod',
+        register(reg) {
+          reg.registerInit({
+            deps: {},
+            async init() {
+              throw new Error('NOPE');
+            },
+          });
+        },
+      })(),
+    );
+    await expect(init.start()).rejects.toThrow(
+      "Module 'mod' for plugin 'test' startup failed; caused by Error: NOPE",
+    );
+  });
 });
diff --git a/packages/backend-app-api/src/wiring/BackendInitializer.ts b/packages/backend-app-api/src/wiring/BackendInitializer.ts
index f33254b025..8c2b75e887 100644
--- a/packages/backend-app-api/src/wiring/BackendInitializer.ts
+++ b/packages/backend-app-api/src/wiring/BackendInitializer.ts
@@ -26,6 +26,7 @@ import { EnumerableServiceHolder, ServiceOrExtensionPoint } from './types';
 // Direct internal import to avoid duplication
 // eslint-disable-next-line @backstage/no-forbidden-package-imports
 import { InternalBackendFeature } from '@backstage/backend-plugin-api/src/wiring/types';
+import { ForwardedError } from '@backstage/errors';
 
 export interface BackendRegisterInit {
   consumes: Set<ServiceOrExtensionPoint>;
@@ -194,12 +195,17 @@ export class BackendInitializer {
         // Modules are initialized before plugins, so that they can provide extension to the plugin
         const modules = moduleInits.get(pluginId) ?? [];
         await Promise.all(
-          Array.from(modules.values()).map(async moduleInit => {
+          Array.from(modules).map(async ([moduleId, moduleInit]) => {
             const moduleDeps = await this.#getInitDeps(
               moduleInit.init.deps,
               pluginId,
             );
-            await moduleInit.init.func(moduleDeps);
+            await moduleInit.init.func(moduleDeps).catch(error => {
+              throw new ForwardedError(
+                `Module '${moduleId}' for plugin '${pluginId}' startup failed`,
+                error,
+              );
+            });
           }),
         );
 
@@ -211,7 +217,12 @@ export class BackendInitializer {
             pluginInit.init.deps,
             pluginId,
           );
-          await pluginInit.init.func(pluginDeps);
+          await pluginInit.init.func(pluginDeps).catch(error => {
+            throw new ForwardedError(
+              `Plugin '${pluginId}' startup failed`,
+              error,
+            );
+          });
         }
 
         // Once the plugin and all modules have been initialized, we can signal that the plugin has stared up successfully