diff --git a/porch/test/e2e/e2e_test.go b/porch/test/e2e/e2e_test.go
index 9aaca03b9e..b79b91ebb1 100644
--- a/porch/test/e2e/e2e_test.go
+++ b/porch/test/e2e/e2e_test.go
@@ -556,6 +556,68 @@ func (t *PorchSuite) TestUpdateResources(ctx context.Context) {
 	}
 }
 
+// Test will initialize an empty package, update its resources, adding a function
+// to the Kptfile's pipeline, and then check that the package was re-rendered.
+func (t *PorchSuite) TestRenderFailureOnPkgUpdate(ctx context.Context) {
+	const (
+		repository  = "re-render-test"
+		packageName = "simple-package"
+		description = "description"
+	)
+
+	t.registerMainGitRepositoryF(ctx, repository)
+
+	// Create a new package (via init)
+	pr := &porchapi.PackageRevision{
+		TypeMeta: metav1.TypeMeta{
+			Kind:       "PackageRevision",
+			APIVersion: porchapi.SchemeGroupVersion.String(),
+		},
+		ObjectMeta: metav1.ObjectMeta{
+			Namespace: t.namespace,
+		},
+		Spec: porchapi.PackageRevisionSpec{
+			PackageName:    packageName,
+			WorkspaceName:  description,
+			RepositoryName: repository,
+		},
+	}
+	t.CreateF(ctx, pr)
+
+	// Get the package resources
+	var newPackage porchapi.PackageRevisionResources
+	t.GetF(ctx, client.ObjectKey{
+		Namespace: t.namespace,
+		Name:      pr.Name,
+	}, &newPackage)
+
+	// Add a new resource
+	filename := filepath.Join("testdata", "render-status", "validate.yaml")
+	validationFn, err := os.ReadFile(filename)
+	if err != nil {
+		t.Fatalf("Failed to read validation function input from %q: %v", filename, err)
+	}
+	newPackage.Spec.Resources["validate.yaml"] = string(validationFn)
+
+	// Add function into a pipeline
+	kptfile := t.ParseKptfileF(&newPackage)
+	if kptfile.Pipeline == nil {
+		kptfile.Pipeline = &kptfilev1.Pipeline{}
+	}
+	kptfile.Pipeline.Validators = append(kptfile.Pipeline.Validators, kptfilev1.Function{
+		Image:      "gcr.io/kpt-fn/starlark:v0.4.3",
+		Name:       "always-fail",
+		ConfigPath: "validate.yaml",
+	})
+
+	t.SaveKptfileF(&newPackage, kptfile)
+
+	t.UpdateF(ctx, &newPackage)
+
+	renderStatus := newPackage.Status.RenderStatus
+	assert.NotEmpty(t, renderStatus.Err, "render error must be not empty for failed render operation.")
+}
+
 func (t *PorchSuite) TestFunctionRepository(ctx context.Context) {
 	repo := &configapi.Repository{
 		ObjectMeta: metav1.ObjectMeta{
diff --git a/porch/test/e2e/testdata/render-status/validate.yaml b/porch/test/e2e/testdata/render-status/validate.yaml
new file mode 100644
index 0000000000..0d861833c2
--- /dev/null
+++ b/porch/test/e2e/testdata/render-status/validate.yaml
@@ -0,0 +1,8 @@
+apiVersion: fn.kpt.dev/v1alpha1
+kind: StarlarkRun
+metadata:
+  name: validate
+  annotations:
+    config.kubernetes.io/local-config: "true"
+source: |-
+  fail("Validation always fails")
\ No newline at end of file