diff --git a/.changeset/proud-queens-mix.md b/.changeset/proud-queens-mix.md
new file mode 100644
index 0000000000..b5a1343998
--- /dev/null
+++ b/.changeset/proud-queens-mix.md
@@ -0,0 +1,5 @@
+---
+'@backstage/plugin-scaffolder-backend-module-gitlab': minor
+---
+
+Add examples for gitlab:group:ensureExists scaffolder action & improve related tests
diff --git a/plugins/scaffolder-backend-module-gitlab/src/actions/createGitlabGroupEnsureExistsAction.examples.test.ts b/plugins/scaffolder-backend-module-gitlab/src/actions/createGitlabGroupEnsureExistsAction.examples.test.ts
new file mode 100644
index 0000000000..2d077c7400
--- /dev/null
+++ b/plugins/scaffolder-backend-module-gitlab/src/actions/createGitlabGroupEnsureExistsAction.examples.test.ts
@@ -0,0 +1,198 @@
+/*
+ * Copyright 2023 The Backstage Authors
+ *
+ * Licensed under the Apache License, Version 2.0 (the "License");
+ * you may not use this file except in compliance with the License.
+ * You may obtain a copy of the License at
+ *
+ *     http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing, software
+ * distributed under the License is distributed on an "AS IS" BASIS,
+ * WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+ * See the License for the specific language governing permissions and
+ * limitations under the License.
+ */
+
+import { createGitlabGroupEnsureExistsAction } from './createGitlabGroupEnsureExistsAction';
+import { createMockActionContext } from '@backstage/plugin-scaffolder-node-test-utils';
+import { ConfigReader } from '@backstage/core-app-api';
+import { ScmIntegrations } from '@backstage/integration';
+import yaml from 'yaml';
+import { examples } from './createGitlabGroupEnsureExistsAction.examples';
+
+const mockGitlabClient = {
+  Groups: {
+    search: jest.fn(),
+    create: jest.fn(),
+  },
+};
+jest.mock('@gitbeaker/node', () => ({
+  Gitlab: class {
+    constructor() {
+      return mockGitlabClient;
+    }
+  },
+}));
+
+describe('gitlab:group:ensureExists', () => {
+  const mockContext = createMockActionContext();
+
+  afterEach(() => {
+    jest.resetAllMocks();
+  });
+
+  it(`Should ${examples[0].description}`, async () => {
+    mockGitlabClient.Groups.search.mockResolvedValue([]);
+    mockGitlabClient.Groups.create.mockResolvedValue({
+      id: 3,
+      full_path: 'group1',
+    });
+
+    const config = new ConfigReader({
+      integrations: {
+        gitlab: [
+          {
+            host: 'gitlab.com',
+            token: 'tokenlols',
+            apiBaseUrl: 'https://api.gitlab.com',
+          },
+        ],
+      },
+    });
+    const integrations = ScmIntegrations.fromConfig(config);
+
+    const action = createGitlabGroupEnsureExistsAction({ integrations });
+
+    await action.handler({
+      ...mockContext,
+      input: yaml.parse(examples[0].example).steps[0].input,
+    });
+
+    expect(mockGitlabClient.Groups.create).toHaveBeenCalledWith(
+      'group1',
+      'group1',
+      {},
+    );
+
+    expect(mockContext.output).toHaveBeenCalledWith('groupId', 3);
+  });
+
+  it(`Should ${examples[1].description}`, async () => {
+    mockGitlabClient.Groups.search.mockResolvedValue([
+      {
+        id: 1,
+        full_path: 'group1',
+      },
+    ]);
+    mockGitlabClient.Groups.create.mockResolvedValue({
+      id: 3,
+      full_path: 'group1/group2',
+    });
+
+    const config = new ConfigReader({
+      integrations: {
+        gitlab: [
+          {
+            host: 'gitlab.com',
+            token: 'tokenlols',
+            apiBaseUrl: 'https://api.gitlab.com',
+          },
+        ],
+      },
+    });
+    const integrations = ScmIntegrations.fromConfig(config);
+
+    const action = createGitlabGroupEnsureExistsAction({ integrations });
+
+    await action.handler({
+      ...mockContext,
+      input: yaml.parse(examples[1].example).steps[0].input,
+    });
+
+    expect(mockGitlabClient.Groups.create).toHaveBeenCalledWith(
+      'group2',
+      'group2',
+      {
+        parent_id: 1,
+      },
+    );
+
+    expect(mockContext.output).toHaveBeenCalledWith('groupId', 3);
+  });
+
+  it(`Should ${examples[2].description}`, async () => {
+    mockGitlabClient.Groups.search.mockResolvedValue([
+      {
+        id: 1,
+        full_path: 'group1',
+      },
+      {
+        id: 2,
+        full_path: 'group1/group2',
+      },
+    ]);
+    mockGitlabClient.Groups.create.mockResolvedValue({
+      id: 3,
+      full_path: 'group1/group2/group3',
+    });
+
+    const config = new ConfigReader({
+      integrations: {
+        gitlab: [
+          {
+            host: 'gitlab.com',
+            token: 'tokenlols',
+            apiBaseUrl: 'https://api.gitlab.com',
+          },
+        ],
+      },
+    });
+    const integrations = ScmIntegrations.fromConfig(config);
+
+    const action = createGitlabGroupEnsureExistsAction({ integrations });
+
+    await action.handler({
+      ...mockContext,
+      input: yaml.parse(examples[2].example).steps[0].input,
+    });
+
+    expect(mockGitlabClient.Groups.create).toHaveBeenCalledWith(
+      'group3',
+      'group3',
+      {
+        parent_id: 2,
+      },
+    );
+
+    expect(mockContext.output).toHaveBeenCalledWith('groupId', 3);
+  });
+
+  it(`Should ${examples[3].description}`, async () => {
+    const config = new ConfigReader({
+      integrations: {
+        gitlab: [
+          {
+            host: 'gitlab.com',
+            token: 'tokenlols',
+            apiBaseUrl: 'https://api.gitlab.com',
+          },
+        ],
+      },
+    });
+    const integrations = ScmIntegrations.fromConfig(config);
+
+    const action = createGitlabGroupEnsureExistsAction({ integrations });
+
+    await action.handler({
+      ...mockContext,
+      isDryRun: yaml.parse(examples[3].example).steps[0].isDryRun,
+      input: yaml.parse(examples[3].example).steps[0].input,
+    });
+
+    expect(mockGitlabClient.Groups.search).not.toHaveBeenCalled();
+    expect(mockGitlabClient.Groups.create).not.toHaveBeenCalled();
+
+    expect(mockContext.output).toHaveBeenCalledWith('groupId', 42);
+  });
+});
diff --git a/plugins/scaffolder-backend-module-gitlab/src/actions/createGitlabGroupEnsureExistsAction.examples.ts b/plugins/scaffolder-backend-module-gitlab/src/actions/createGitlabGroupEnsureExistsAction.examples.ts
new file mode 100644
index 0000000000..41dd822e82
--- /dev/null
+++ b/plugins/scaffolder-backend-module-gitlab/src/actions/createGitlabGroupEnsureExistsAction.examples.ts
@@ -0,0 +1,85 @@
+/*
+ * Copyright 2023 The Backstage Authors
+ *
+ * Licensed under the Apache License, Version 2.0 (the "License");
+ * you may not use this file except in compliance with the License.
+ * You may obtain a copy of the License at
+ *
+ *     http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing, software
+ * distributed under the License is distributed on an "AS IS" BASIS,
+ * WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+ * See the License for the specific language governing permissions and
+ * limitations under the License.
+ */
+import { TemplateExample } from '@backstage/plugin-scaffolder-node';
+import yaml from 'yaml';
+
+export const examples: TemplateExample[] = [
+  {
+    description: 'Creating a group at the top level',
+    example: yaml.stringify({
+      steps: [
+        {
+          id: 'gitlabGroup',
+          name: 'Group',
+          action: 'gitlab:group:ensureExists',
+          input: {
+            repoUrl: 'gitlab.com',
+            path: ['group1'],
+          },
+        },
+      ],
+    }),
+  },
+  {
+    description: 'Create a group nested within another group',
+    example: yaml.stringify({
+      steps: [
+        {
+          id: 'gitlabGroup',
+          name: 'Group',
+          action: 'gitlab:group:ensureExists',
+          input: {
+            repoUrl: 'gitlab.com',
+            path: ['group1', 'group2'],
+          },
+        },
+      ],
+    }),
+  },
+  {
+    description: 'Create a group nested within multiple other groups',
+    example: yaml.stringify({
+      steps: [
+        {
+          id: 'gitlabGroup',
+          name: 'Group',
+          action: 'gitlab:group:ensureExists',
+          input: {
+            repoUrl: 'gitlab.com',
+            path: ['group1', 'group2', 'group3'],
+          },
+        },
+      ],
+    }),
+  },
+  {
+    description: 'Create a group in dry run mode',
+    example: yaml.stringify({
+      steps: [
+        {
+          id: 'gitlabGroup',
+          name: 'Group',
+          action: 'gitlab:group:ensureExists',
+          isDryRun: true,
+          input: {
+            repoUrl: 'https://gitlab.com/my-repo',
+            path: ['group1', 'group2', 'group3'],
+          },
+        },
+      ],
+    }),
+  },
+];
diff --git a/plugins/scaffolder-backend-module-gitlab/src/actions/createGitlabGroupEnsureExistsAction.ts b/plugins/scaffolder-backend-module-gitlab/src/actions/createGitlabGroupEnsureExistsAction.ts
index 74d3805254..2cf583a95d 100644
--- a/plugins/scaffolder-backend-module-gitlab/src/actions/createGitlabGroupEnsureExistsAction.ts
+++ b/plugins/scaffolder-backend-module-gitlab/src/actions/createGitlabGroupEnsureExistsAction.ts
@@ -21,6 +21,7 @@ import { GroupSchema } from '@gitbeaker/core/dist/types/resources/Groups';
 import commonGitlabConfig from '../commonGitlabConfig';
 import { getToken } from '../util';
 import { z } from 'zod';
+import { examples } from './createGitlabGroupEnsureExistsAction.examples';
 
 /**
  * Creates an `gitlab:group:ensureExists` Scaffolder action.
@@ -36,6 +37,7 @@ export const createGitlabGroupEnsureExistsAction = (options: {
     id: 'gitlab:group:ensureExists',
     description: 'Ensures a Gitlab group exists',
     supportsDryRun: true,
+    examples,
     schema: {
       input: commonGitlabConfig.merge(
         z.object({