diff --git a/ruby/lib/minitest/queue/runner.rb b/ruby/lib/minitest/queue/runner.rb
index 106c7b5f..de39a04e 100644
--- a/ruby/lib/minitest/queue/runner.rb
+++ b/ruby/lib/minitest/queue/runner.rb
@@ -304,7 +304,11 @@ def report_command
         step("Waiting for workers to complete")
 
         unless supervisor.wait_for_workers { display_warnings(supervisor.build) }
-          unless supervisor.queue_initialized?
+          # A lazy-load leader only marks the queue as initialized once it has
+          # streamed every test, but workers start on the first batch, so the wait
+          # can end (e.g. on --max-test-failed) while it is still streaming.
+          # Check streaming? first: the status only moves from streaming to ready.
+          unless supervisor.streaming? || supervisor.queue_initialized?
             abort! "No leader was elected. This typically means no worker was able to start. Were there any errors during application boot?", 40
           end
 
@@ -314,7 +318,7 @@ def report_command
             reporter.write_failure_file(queue_config.failure_file) if queue_config.failure_file
             reporter.write_flaky_tests_file(queue_config.export_flaky_tests_file) if queue_config.export_flaky_tests_file
 
-            abort!("#{supervisor.size} tests weren't run.", exit_code)
+            abort!(unrun_tests_message(supervisor), exit_code)
           end
         end
 
@@ -447,6 +451,16 @@ def print_worker_profiles(supervisor)
         Minitest::Queue::WorkerProfileReporter.new(supervisor).print_summary
       end
 
+      def unrun_tests_message(supervisor)
+        # Read the status before the size: tests a streaming leader hasn't pushed
+        # yet aren't in the queue, so the size is only a lower bound.
+        if supervisor.streaming?
+          "At least #{supervisor.size} tests weren't run (the leader hadn't finished streaming tests to the queue)."
+        else
+          "#{supervisor.size} tests weren't run."
+        end
+      end
+
       def parser
         @parser ||= OptionParser.new do |opts|
           opts.banner = "Usage: minitest-queue [options] COMMAND [ARGS]"
diff --git a/ruby/test/integration/minitest_redis_test.rb b/ruby/test/integration/minitest_redis_test.rb
index 75c509f4..974e4745 100644
--- a/ruby/test/integration/minitest_redis_test.rb
+++ b/ruby/test/integration/minitest_redis_test.rb
@@ -674,6 +674,78 @@ def test_all_workers_died
       assert_equal expected.strip, normalize(out.lines[0..2].join.strip)
     end
 
+    def test_max_test_failed_while_leader_is_streaming
+      build_id = 'max-test-failed-while-streaming'
+      test_file = File.expand_path('../../fixtures/test/failing_test.rb', __FILE__)
+      entries = 10.times.map { |i| CI::Queue::QueueEntry.format("FailingTest#test_failing_#{i}", test_file) }
+
+      with_streaming_leader(build_id, entries) do
+        _, err = capture_subprocess_io do
+          system(
+            @exe, 'run',
+            '--queue', @redis_url,
+            '--seed', 'foobar',
+            '--build', build_id,
+            '--worker', '1',
+            '--timeout', '5',
+            '--lazy-load',
+            '--max-test-failed', '1',
+            '-Itest',
+            'test/failing_test.rb',
+            chdir: 'test/fixtures/',
+          )
+        end
+
+        refute_predicate $?, :success?
+        assert_equal 'This worker is exiting early because too many failed tests were encountered.', filter_deprecation_warnings(err).chomp
+
+        out, err = capture_subprocess_io do
+          system(
+            @exe, 'report',
+            '--queue', @redis_url,
+            '--build', build_id,
+            '--timeout', '5',
+            '--max-test-failed', '1',
+            chdir: 'test/fixtures/',
+          )
+        end
+
+        assert_equal 44, $?.exitstatus
+        assert_empty filter_deprecation_warnings(err)
+        output = normalize(out)
+        refute_includes output, 'No leader was elected'
+        assert_includes output, 'Ran 1 tests, 1 assertions, 1 failures, 0 errors, 0 skips, 0 requeues in X.XXs (aggregated)'
+        assert_includes output, 'Encountered too many failed tests. Test run was ended early.'
+        assert_includes output, 'Error 1 of 1'
+        assert_equal "At least 9 tests weren't run (the leader hadn't finished streaming tests to the queue).", output.lines.last.strip
+      end
+    end
+
+    def test_report_timeout_while_leader_is_streaming
+      build_id = 'report-timeout-while-streaming'
+      test_file = File.expand_path('../../fixtures/test/passing_test.rb', __FILE__)
+      entries = 3.times.map { |i| CI::Queue::QueueEntry.format("PassingTest#test_passing_#{i}", test_file) }
+
+      with_streaming_leader(build_id, entries) do
+        out, err = capture_subprocess_io do
+          system(
+            @exe, 'report',
+            '--queue', @redis_url,
+            '--build', build_id,
+            '--timeout', '1',
+            chdir: 'test/fixtures/',
+          )
+        end
+
+        assert_equal 43, $?.exitstatus
+        assert_empty filter_deprecation_warnings(err)
+        output = normalize(out)
+        refute_includes output, 'No leader was elected'
+        assert_includes output, 'Timed out waiting for tests to be executed.'
+        assert_equal "At least 3 tests weren't run (the leader hadn't finished streaming tests to the queue).", output.lines.last.strip
+      end
+    end
+
     def test_circuit_breaker
       out, err = capture_subprocess_io do
         system(
@@ -1966,5 +2038,23 @@ def test_application_error
     def normalize_xml(output)
       normalize_backtrace(freeze_xml_timing(rewrite_paths(output)))
     end
+
+    # Streams `entries` to the queue like a lazy-load leader, then pauses before
+    # marking the queue ready, so the block runs while the leader is still streaming.
+    def with_streaming_leader(build_id, entries)
+      tests = Enumerator.new do |yielder|
+        entries.each { |entry| yielder << entry }
+        Fiber.yield # pause stream_populate here until the fiber is resumed
+      end
+      leader = CI::Queue::Redis.new(
+        @redis_url,
+        CI::Queue::Configuration.new(build_id: build_id, worker_id: 'leader', timeout: 5),
+      )
+      stream = Fiber.new { leader.stream_populate(tests, batch_size: 1) }
+      capture_io { stream.resume }
+      yield
+    ensure
+      capture_io { stream.resume } if stream&.alive?
+    end
   end
 end