diff --git a/packages/cli/src/modules/build/lib/runner/runBackend.test.ts b/packages/cli/src/modules/build/lib/runner/runBackend.test.ts
new file mode 100644
index 0000000000..49fb59ecd9
--- /dev/null
+++ b/packages/cli/src/modules/build/lib/runner/runBackend.test.ts
@@ -0,0 +1,189 @@
+/*
+ * Copyright 2020 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 { runBackend } from './runBackend';
+
+// Mock external dependencies
+jest.mock('chokidar', () => ({
+  watch: jest.fn(() => ({
+    on: jest.fn().mockReturnThis(),
+    add: jest.fn(),
+  })),
+}));
+
+jest.mock('cross-spawn', () =>
+  jest.fn(() => ({
+    on: jest.fn().mockReturnThis(),
+    once: jest.fn().mockReturnThis(),
+    kill: jest.fn(),
+    killed: false,
+    exitCode: null,
+    pid: 12345,
+  })),
+);
+
+jest.mock('../ipc', () => ({
+  IpcServer: jest.fn().mockImplementation(() => ({
+    addChild: jest.fn(),
+  })),
+  ServerDataStore: {
+    bind: jest.fn(),
+  },
+}));
+
+jest.mock('ctrlc-windows', () => ({
+  ctrlc: jest.fn(),
+}));
+
+describe('runBackend', () => {
+  let originalEnv: NodeJS.ProcessEnv;
+  let originalPlatform: string;
+
+  beforeEach(() => {
+    // Save original environment
+    originalEnv = { ...process.env };
+    originalPlatform = process.platform;
+
+    // Clear environment variables that we're testing
+    delete process.env.NODE_ENV;
+    delete process.env.NODE_OPTIONS;
+
+    // Mock process.stdin.on to prevent actual stdin reading
+    jest.spyOn(process.stdin, 'on').mockReturnValue(process.stdin);
+
+    // Mock process.once to prevent actual signal handling
+    jest.spyOn(process, 'once').mockReturnValue(process);
+  });
+
+  afterEach(() => {
+    // Restore original environment
+    process.env = originalEnv;
+    Object.defineProperty(process, 'platform', {
+      value: originalPlatform,
+    });
+
+    jest.clearAllMocks();
+  });
+
+  describe('NODE_OPTIONS environment variable', () => {
+    it('should add --no-node-snapshot when NODE_OPTIONS is not set', async () => {
+      delete process.env.NODE_OPTIONS;
+
+      runBackend({
+        entry: 'src/index',
+      });
+
+      expect(process.env.NODE_OPTIONS).toBe('--no-node-snapshot');
+    });
+
+    it('should append --no-node-snapshot when NODE_OPTIONS exists without it', async () => {
+      process.env.NODE_OPTIONS = '--max-old-space-size=4096';
+
+      runBackend({
+        entry: 'src/index',
+      });
+
+      expect(process.env.NODE_OPTIONS).toBe(
+        '--max-old-space-size=4096 --no-node-snapshot',
+      );
+    });
+
+    it('should not add --no-node-snapshot when --node-snapshot already exists', async () => {
+      process.env.NODE_OPTIONS = '--node-snapshot --max-old-space-size=4096';
+
+      runBackend({
+        entry: 'src/index',
+      });
+
+      expect(process.env.NODE_OPTIONS).toBe(
+        '--node-snapshot --max-old-space-size=4096',
+      );
+    });
+
+    it('should not add --no-node-snapshot when --node-snapshot exists in the middle of NODE_OPTIONS', async () => {
+      process.env.NODE_OPTIONS =
+        '--max-old-space-size=4096 --node-snapshot --inspect';
+
+      runBackend({
+        entry: 'src/index',
+      });
+
+      expect(process.env.NODE_OPTIONS).toBe(
+        '--max-old-space-size=4096 --node-snapshot --inspect',
+      );
+    });
+
+    it('should handle NODE_OPTIONS with trailing spaces', async () => {
+      process.env.NODE_OPTIONS = '--max-old-space-size=4096 ';
+
+      runBackend({
+        entry: 'src/index',
+      });
+
+      expect(process.env.NODE_OPTIONS).toBe(
+        '--max-old-space-size=4096  --no-node-snapshot',
+      );
+    });
+  });
+
+  describe('NODE_ENV environment variable', () => {
+    it('should set NODE_ENV to development when not set', async () => {
+      delete process.env.NODE_ENV;
+
+      runBackend({
+        entry: 'src/index',
+      });
+
+      expect(process.env.NODE_ENV).toBe('development');
+    });
+
+    it('should not override existing NODE_ENV', async () => {
+      process.env.NODE_ENV = 'production';
+
+      runBackend({
+        entry: 'src/index',
+      });
+
+      expect(process.env.NODE_ENV).toBe('production');
+    });
+  });
+
+  describe('combined environment setup', () => {
+    it('should set both NODE_ENV and NODE_OPTIONS when neither is set', async () => {
+      delete process.env.NODE_ENV;
+      delete process.env.NODE_OPTIONS;
+
+      runBackend({
+        entry: 'src/index',
+      });
+
+      expect(process.env.NODE_ENV).toBe('development');
+      expect(process.env.NODE_OPTIONS).toBe('--no-node-snapshot');
+    });
+
+    it('should handle both environment variables independently', async () => {
+      process.env.NODE_ENV = 'test';
+      process.env.NODE_OPTIONS = '--inspect';
+
+      runBackend({
+        entry: 'src/index',
+      });
+
+      expect(process.env.NODE_ENV).toBe('test');
+      expect(process.env.NODE_OPTIONS).toBe('--inspect --no-node-snapshot');
+    });
+  });
+});
diff --git a/packages/cli/src/modules/build/lib/runner/runBackend.ts b/packages/cli/src/modules/build/lib/runner/runBackend.ts
index 49dccf804f..d48fb34fc2 100644
--- a/packages/cli/src/modules/build/lib/runner/runBackend.ts
+++ b/packages/cli/src/modules/build/lib/runner/runBackend.ts
@@ -52,6 +52,14 @@ export async function runBackend(options: RunBackendOptions) {
     envEnv.NODE_ENV = 'development';
   }
 
+  // Unless the user explicitly toggles node-snapshot, default to provide --no-node-snapshot to reduce number of steps to run scaffolder
+  //  on Node LTS.
+  if (!envEnv.NODE_OPTIONS?.includes('--node-snapshot')) {
+    envEnv.NODE_OPTIONS =
+      (envEnv.NODE_OPTIONS ? envEnv.NODE_OPTIONS + ' ' : '') +
+      '--no-node-snapshot';
+  }
+
   // Set up the parent IPC server and bind the available services
   const server = new IpcServer();
   ServerDataStore.bind(server);
diff --git a/packages/cli/src/modules/test/commands/package/test.ts b/packages/cli/src/modules/test/commands/package/test.ts
index 1ecf5b395e..72e78eae7b 100644
--- a/packages/cli/src/modules/test/commands/package/test.ts
+++ b/packages/cli/src/modules/test/commands/package/test.ts
@@ -78,6 +78,14 @@ export default async (_opts: OptionValues, cmd: Command) => {
     process.env.TZ = 'UTC';
   }
 
+  // Unless the user explicitly toggles node-snapshot, default to provide --no-node-snapshot to reduce number of steps to run scaffolder
+  //  on Node LTS.
+  if (!process.env.NODE_OPTIONS?.includes('--node-snapshot')) {
+    process.env.NODE_OPTIONS = `${
+      process.env.NODE_OPTIONS ? `${process.env.NODE_OPTIONS} ` : ''
+    }--no-node-snapshot`;
+  }
+
   // This ensures that the process doesn't exit too early before stdout is flushed
   if (args.includes('--help')) {
     (process.stdout as any)._handle.setBlocking(true);