diff --git a/pkg/cmd/extension/command.go b/pkg/cmd/extension/command.go
index 0030b5078..7f2ec0ac1 100644
--- a/pkg/cmd/extension/command.go
+++ b/pkg/cmd/extension/command.go
@@ -338,7 +338,15 @@ func NewCmdExtension(f *cmdutil.Factory) *cobra.Command {
 						if err != nil {
 							return err
 						}
-						return m.InstallLocal(wd)
+
+						err = m.InstallLocal(wd)
+						if errors.Is(err, ErrExtensionExecutableNotFound) {
+							if io.IsStdoutTTY() {
+								fmt.Fprintln(io.ErrOut, err.Error())
+							}
+							return nil
+						}
+						return err
 					}
 
 					repo, err := ghrepo.FromFullName(args[0])
diff --git a/pkg/cmd/extension/command_test.go b/pkg/cmd/extension/command_test.go
index e26e70690..dccd487ea 100644
--- a/pkg/cmd/extension/command_test.go
+++ b/pkg/cmd/extension/command_test.go
@@ -286,6 +286,38 @@ func TestNewCmdExtension(t *testing.T) {
 				}
 			},
 		},
+		{
+			name: "install local extension without executable TTY",
+			args: []string{"install", "."},
+			managerStubs: func(em *extensions.ExtensionManagerMock) func(*testing.T) {
+				em.InstallLocalFunc = func(dir string) error {
+					return ErrExtensionExecutableNotFound
+				}
+				em.ListFunc = func() []extensions.Extension {
+					return []extensions.Extension{}
+				}
+				return nil
+			},
+			wantStderr: fmt.Sprintln(ErrExtensionExecutableNotFound.Error()),
+			wantErr:    false,
+			isTTY:      true,
+		},
+		{
+			name: "install local extension without executable no TTY",
+			args: []string{"install", "."},
+			managerStubs: func(em *extensions.ExtensionManagerMock) func(*testing.T) {
+				em.InstallLocalFunc = func(dir string) error {
+					return ErrExtensionExecutableNotFound
+				}
+				em.ListFunc = func() []extensions.Extension {
+					return []extensions.Extension{}
+				}
+				return nil
+			},
+			wantStderr: "",
+			wantErr:    false,
+			isTTY:      false,
+		},
 		{
 			name: "error extension not found",
 			args: []string{"install", "owner/gh-some-ext"},