diff --git a/tools/local-env/scripts/docker.js b/tools/local-env/scripts/docker.js
index 6a4bd157689e1..a6b0f4e0af38e 100644
--- a/tools/local-env/scripts/docker.js
+++ b/tools/local-env/scripts/docker.js
@@ -2,12 +2,11 @@
 
 const dotenv = require( 'dotenv' );
 const dotenvExpand = require( 'dotenv-expand' );
-const { spawnSync } = require( 'child_process' );
 const local_env_utils = require( './utils' );
 
-dotenvExpand.expand( dotenv.config() );
+local_env_utils.ensure_env_file();
 
-const composeFiles = local_env_utils.get_compose_files();
+dotenvExpand.expand( dotenv.config() );
 
 if ( process.argv.includes( '--coverage-html' ) ) {
 	process.env.LOCAL_PHP_XDEBUG = 'true';
@@ -25,39 +24,39 @@ if ( dockerCommand.includes( 'cli' ) && dockerCommand.includes( 'db' ) && ! dock
 	dockerCommand.push( '--defaults' );
 }
 
-const composeArgs = [
-	'compose',
-	...composeFiles
-		.map( ( composeFile ) => [ '-f', composeFile ] )
-		.flat(),
-	...dockerCommand,
-];
-
 // Failures during image pulls are re-attempted to rule out registry rate limits and network issues.
-const maxAttempts = 'pull' === dockerCommand[0] ? 3 : 1;
-
-// Execute any Docker compose command passed to this script.
-let returns;
-for ( let attempt = 1; attempt <= maxAttempts; attempt++ ) {
-	returns = spawnSync( 'docker', composeArgs, { stdio: 'inherit' } );
-
-	if ( 0 === returns.status ) {
+// `composer install` and `composer update` reach repo.packagist.org for the same reason, and both
+// are safe to repeat. Every other Composer command runs once, so a failure such as a PHPStan error
+// is reported as the real result it is.
+const composerArgs = dockerCommand.slice( dockerCommand.indexOf( 'composer' ) + 1 );
+let composerCommand;
+
+for ( let i = 0; i < composerArgs.length; i++ ) {
+	// Global options precede the command. `--working-dir` is the only one that takes a separate
+	// value, so it is the only value that could otherwise be mistaken for the command itself.
+	if ( '-d' === composerArgs[i] || '--working-dir' === composerArgs[i] ) {
+		i++;
+	} else if ( ! composerArgs[i].startsWith( '-' ) ) {
+		composerCommand = composerArgs[i];
 		break;
 	}
+}
 
-	if ( attempt === maxAttempts ) {
-		if ( maxAttempts > 1 ) {
-			console.log( `\ndocker compose ${ dockerCommand[0] } failed after ${ attempt } attempts.` );
-		}
+const retryable = 'pull' === dockerCommand[0] ||
+	( 'run' === dockerCommand[0] && dockerCommand.includes( 'composer' ) &&
+		[ 'install', 'update' ].includes( composerCommand ) );
 
-		break;
-	}
-
-	const delay = attempt * 10;
-	console.log( `\ndocker compose ${ dockerCommand[0] } failed (attempt ${ attempt } of ${ maxAttempts }). Retrying in ${ delay } seconds...\n` );
+// Execute any Docker compose command passed to this script.
+const returns = local_env_utils.compose_with_retry( dockerCommand, retryable ? 3 : 1 );
 
-	// Sleep synchronously so the retry loop stays in order without going async.
-	Atomics.wait( new Int32Array( new SharedArrayBuffer( 4 ) ), 0, 0, delay * 1000 );
+if ( returns.error ) {
+	console.error( `Could not run Docker Compose. ${ returns.error.message }` );
+} else if ( returns.signal && returns.signal !== 'SIGINT' ) {
+	console.error( `Docker Compose was terminated by ${ returns.signal }.` );
 }
 
-process.exit( returns.status );
+// `status` is null when Docker could not be spawned at all, or was killed by a signal. Ctrl-C
+// signals the whole process group, so this script usually dies alongside Compose without reaching
+// here. This covers a signal sent to Compose alone: SIGINT means the command was cancelled, as
+// when ending `env:logs`, and every other signal means it was killed before it finished.
+process.exit( returns.signal === 'SIGINT' ? 0 : ( returns.status ?? 1 ) );
diff --git a/tools/local-env/scripts/install.js b/tools/local-env/scripts/install.js
index 0578545c11fec..17053b84d17f2 100644
--- a/tools/local-env/scripts/install.js
+++ b/tools/local-env/scripts/install.js
@@ -7,6 +7,8 @@ const { execSync } = require( 'child_process' );
 const { readFileSync, writeFileSync } = require( 'fs' );
 const local_env_utils = require( './utils' );
 
+local_env_utils.ensure_env_file();
+
 dotenvExpand.expand( dotenv.config() );
 
 // Create wp-config.php. This verifies the database connection, so retrying it doubles as the
diff --git a/tools/local-env/scripts/start.js b/tools/local-env/scripts/start.js
index b796b70c68bd1..984e06bee5617 100644
--- a/tools/local-env/scripts/start.js
+++ b/tools/local-env/scripts/start.js
@@ -4,17 +4,11 @@ const dotenv       = require( 'dotenv' );
 const dotenvExpand = require( 'dotenv-expand' );
 const { execSync, spawnSync } = require( 'child_process' );
 const local_env_utils = require( './utils' );
-const { copyFileSync, existsSync } = require( 'node:fs' );
 
-// Copy the default .env file when one is not present.
-if ( ! existsSync( '.env' ) ) {
-	copyFileSync( '.env.example', '.env' );
-}
+local_env_utils.ensure_env_file();
 
 dotenvExpand.expand( dotenv.config() );
 
-const composeFiles = local_env_utils.get_compose_files();
-
 // Check if the Docker service is running.
 try {
 	execSync( 'docker info' );
@@ -32,18 +26,19 @@ if ( process.env.LOCAL_PHP_MEMCACHED === 'true' ) {
 	containers.push( 'memcached' );
 }
 
-spawnSync(
-	'docker',
-	[
-		'compose',
-		...composeFiles.map( ( composeFile ) => [ '-f', composeFile ] ).flat(),
-		'up',
-		'--quiet-pull',
-		'-d',
-		...containers,
-	],
-	{ stdio: 'inherit' }
-);
+// `up` pulls any image that is missing, so it is re-attempted for the same reasons as `env:pull`.
+const up = local_env_utils.compose_with_retry( [ 'up', '--quiet-pull', '-d', ...containers ], 3 );
+
+// No signal is exempt here, unlike in `docker.js`: `env:start` runs `composer update -W` next, and
+// that must not run against containers that never came up.
+if ( up.status !== 0 ) {
+	const reason = up.signal ? `It was terminated by ${ up.signal }.` : up.error?.message ?? '';
+
+	console.error( `Could not start the Docker containers. ${ reason }`.trim() );
+
+	// `status` is null when Docker could not be spawned at all, or was killed by a signal.
+	process.exit( up.status ?? 1 );
+}
 
 // If Docker Toolbox is being used, we need to manually forward LOCAL_PORT to the Docker VM.
 if ( process.env.DOCKER_TOOLBOX_INSTALL_PATH ) {
diff --git a/tools/local-env/scripts/utils.js b/tools/local-env/scripts/utils.js
index 51f02e32a1d2d..58c02716241d5 100644
--- a/tools/local-env/scripts/utils.js
+++ b/tools/local-env/scripts/utils.js
@@ -1,9 +1,85 @@
 /* jshint node:true */
 
-const { existsSync } = require( 'node:fs' );
+const { spawnSync } = require( 'node:child_process' );
+const { constants, copyFileSync, existsSync } = require( 'node:fs' );
+const { join } = require( 'node:path' );
+
+const repo_root = join( __dirname, '..', '..', '..' );
 
 const local_env_utils = {
 
+	/**
+	 * Creates the .env file from .env.example when one is not present.
+	 *
+	 * Docker Compose reads this file to resolve the image tags, so it must exist before any
+	 * Compose command runs, not just before the containers are started.
+	 */
+	ensure_env_file: function() {
+		try {
+			copyFileSync( join( repo_root, '.env.example' ), join( repo_root, '.env' ), constants.COPYFILE_EXCL );
+		} catch ( e ) {
+			// A .env that is already there is the common case and needs no warning. Any other
+			// failure means the scripts run without the settings from .env, which is worth
+			// reporting, but is never a reason to refuse to run a command such as `env:stop`.
+			if ( e.code !== 'EEXIST' ) {
+				console.warn( `Could not create a .env file from .env.example. ${ e.message }` );
+			}
+		}
+	},
+
+	/**
+	 * Runs a Docker Compose command, re-attempting it when it fails.
+	 *
+	 * Any command that reaches a registry can fail for reasons that clear on their own, such as
+	 * rate limits and transient network errors.
+	 *
+	 * @param {string[]} args     The Compose command and its arguments, such as `[ 'pull' ]`.
+	 * @param {number}   attempts How many times to run the command before giving up.
+	 *
+	 * @return {Object} The result of the last attempt.
+	 */
+	compose_with_retry: function( args, attempts ) {
+		const composeArgs = [
+			'compose',
+			...local_env_utils.get_compose_files()
+				.map( ( composeFile ) => [ '-f', composeFile ] )
+				.flat(),
+			...args,
+		];
+
+		let returns;
+
+		for ( let attempt = 1; attempt <= attempts; attempt++ ) {
+			returns = spawnSync( 'docker', composeArgs, { stdio: 'inherit' } );
+
+			if ( 0 === returns.status ) {
+				break;
+			}
+
+			// A command killed by a signal was cancelled rather than failed, and a command that
+			// could not be spawned at all fails the same way every time. Do not run either again.
+			if ( returns.signal || returns.error ) {
+				break;
+			}
+
+			if ( attempt === attempts ) {
+				if ( attempts > 1 ) {
+					console.log( `\ndocker compose ${ args[0] } failed after ${ attempt } attempts.` );
+				}
+
+				break;
+			}
+
+			const delay = attempt * 10;
+			console.log( `\ndocker compose ${ args[0] } failed (attempt ${ attempt } of ${ attempts }). Retrying in ${ delay } seconds...\n` );
+
+			// Sleep synchronously so the retry loop stays in order without going async.
+			Atomics.wait( new Int32Array( new SharedArrayBuffer( 4 ) ), 0, 0, delay * 1000 );
+		}
+
+		return returns;
+	},
+
 	/**
 	 * Determines which Docker compose files are required to properly configure the local environment given the
 	 * specified PHP version, database type, and database version.