diff --git a/src/Runner.Worker/ActionManager.cs b/src/Runner.Worker/ActionManager.cs
index 69c4a338d..5236b3f61 100644
--- a/src/Runner.Worker/ActionManager.cs
+++ b/src/Runner.Worker/ActionManager.cs
@@ -115,6 +115,14 @@ namespace GitHub.Runner.Worker
                 executionContext.Result = TaskResult.Failed;
                 throw;
             }
+            catch (InvalidActionArchiveException ex)
+            {
+                // Log the error and fail the PrepareActionsAsync Initialization.
+                Trace.Error($"Caught exception from PrepareActionsAsync Initialization: {ex}");
+                executionContext.InfrastructureError(ex.Message);
+                executionContext.Result = TaskResult.Failed;
+                throw;
+            }
             if (!FeatureManager.IsContainerHooksEnabled(executionContext.Global.Variables))
             {
                 if (state.ImagesToPull.Count > 0)
@@ -907,7 +915,14 @@ namespace GitHub.Runner.Worker
                 Directory.CreateDirectory(stagingDirectory);
 
 #if OS_WINDOWS
-                ZipFile.ExtractToDirectory(archiveFile, stagingDirectory);
+                try
+                {
+                    ZipFile.ExtractToDirectory(archiveFile, stagingDirectory);
+                }
+                catch (InvalidDataException e)
+                {
+                    throw new InvalidActionArchiveException($"Can't un-zip archive file: {archiveFile}. action being checked out: {downloadInfo.NameWithOwner}@{downloadInfo.Ref}. error: {e}.");
+                }
 #else
                 string tar = WhichUtil.Which("tar", require: true, trace: Trace);
 
@@ -933,7 +948,7 @@ namespace GitHub.Runner.Worker
                     int exitCode = await processInvoker.ExecuteAsync(stagingDirectory, tar, $"-xzf \"{archiveFile}\"", null, executionContext.CancellationToken);
                     if (exitCode != 0)
                     {
-                        throw new NotSupportedException($"Can't use 'tar -xzf' extract archive file: {archiveFile}. return code: {exitCode}.");
+                        throw new InvalidActionArchiveException($"Can't use 'tar -xzf' extract archive file: {archiveFile}. Action being checked out: {downloadInfo.NameWithOwner}@{downloadInfo.Ref}. return code: {exitCode}.");
                     }
                 }
 #endif
diff --git a/src/Sdk/DTWebApi/WebApi/Exceptions.cs b/src/Sdk/DTWebApi/WebApi/Exceptions.cs
index 29bf26240..97505bb6a 100644
--- a/src/Sdk/DTWebApi/WebApi/Exceptions.cs
+++ b/src/Sdk/DTWebApi/WebApi/Exceptions.cs
@@ -2516,4 +2516,23 @@ namespace GitHub.DistributedTask.WebApi
         {
         }
     }
+
+    [Serializable]
+    public sealed class InvalidActionArchiveException : DistributedTaskException
+    {
+        public InvalidActionArchiveException(String message)
+            : base(message)
+        {
+        }
+
+        public InvalidActionArchiveException(String message, Exception innerException)
+            : base(message, innerException)
+        {
+        }
+
+        private InvalidActionArchiveException(SerializationInfo info, StreamingContext context)
+            : base(info, context)
+        {
+        }
+    }
 }
diff --git a/src/Test/L0/Worker/ActionManagerL0.cs b/src/Test/L0/Worker/ActionManagerL0.cs
index a3c45351d..dda20bdd8 100644
--- a/src/Test/L0/Worker/ActionManagerL0.cs
+++ b/src/Test/L0/Worker/ActionManagerL0.cs
@@ -96,6 +96,63 @@ namespace GitHub.Runner.Common.Tests.Worker
             }
         }
 
+        [Fact]
+        [Trait("Level", "L0")]
+        [Trait("Category", "Worker")]
+        public async void PrepareActions_DownloadActionFromDotCom_ZipFileError()
+        {
+            try
+            {
+                // Arrange
+                Setup();
+                const string ActionName = "ownerName/sample-action";
+                var actions = new List<Pipelines.ActionStep>
+                {
+                    new Pipelines.ActionStep()
+                    {
+                        Name = "action",
+                        Id = Guid.NewGuid(),
+                        Reference = new Pipelines.RepositoryPathReference()
+                        {
+                            Name = ActionName,
+                            Ref = "main",
+                            RepositoryType = "GitHub"
+                        }
+                    }
+                };
+
+                // Create a corrupted ZIP file for testing
+                var tempDir = _hc.GetDirectory(WellKnownDirectory.Temp);
+                Directory.CreateDirectory(tempDir);
+                var archiveFile = Path.Combine(tempDir, Path.GetRandomFileName());
+                using (var fileStream = new FileStream(archiveFile, FileMode.Create))
+                {
+                    // Used Co-Pilot for magic bytes here. They represent the tar header and just need to be invalid for the CLI to break.
+                    var buffer = new byte[] { 0x50, 0x4B, 0x03, 0x04, 0x0A, 0x00, 0x00, 0x00, 0x00, 0x00, 0xFF, 0xFF, 0xFF, 0xFF, 0xFF, 0xFF, 0xFF, 0xFF, 0xFF, 0xFF, 0x00, 0x00 };
+                    fileStream.Write(buffer, 0, buffer.Length);
+                }
+                using var stream = File.OpenRead(archiveFile);
+
+                string dotcomArchiveLink = GetLinkToActionArchive("https://api.github.com", ActionName, "main");
+                var mockClientHandler = new Mock<HttpClientHandler>();
+                mockClientHandler.Protected().Setup<Task<HttpResponseMessage>>("SendAsync", ItExpr.Is<HttpRequestMessage>(m => m.RequestUri == new Uri(dotcomArchiveLink)), ItExpr.IsAny<CancellationToken>())
+                    .ReturnsAsync(new HttpResponseMessage(HttpStatusCode.OK) { Content = new StreamContent(stream) });
+
+                var mockHandlerFactory = new Mock<IHttpClientHandlerFactory>();
+                mockHandlerFactory.Setup(p => p.CreateClientHandler(It.IsAny<RunnerWebProxy>())).Returns(mockClientHandler.Object);
+                _hc.SetSingleton(mockHandlerFactory.Object);
+
+                _configurationStore.Object.GetSettings().IsHostedServer = true;
+
+                // Act + Assert
+                await Assert.ThrowsAsync<InvalidActionArchiveException>(async () => await _actionManager.PrepareActionsAsync(_ec.Object, actions));
+            }
+            finally
+            {
+                Teardown();
+            }
+        }
+
         [Fact]
         [Trait("Level", "L0")]
         [Trait("Category", "Worker")]