diff --git a/command/e2etest/init_test.go b/command/e2etest/init_test.go
index 7993c4e13..5da646913 100644
--- a/command/e2etest/init_test.go
+++ b/command/e2etest/init_test.go
@@ -311,3 +311,43 @@ func TestInit_fromModule(t *testing.T) {
 		t.Fatalf("main.tf doesn't appear to be a vault configuration: \n%s", content)
 	}
 }
+
+func TestInitProviderNotFound(t *testing.T) {
+	t.Parallel()
+
+	// This test will reach out to registry.terraform.io as one of the possible
+	// installation locations for hashicorp/nonexist, which should not exist.
+	skipIfCannotAccessNetwork(t)
+
+	fixturePath := filepath.Join("testdata", "provider-not-found")
+	tf := e2e.NewBinary(terraformBin, fixturePath)
+	defer tf.Close()
+
+	t.Run("registry provider not found", func(t *testing.T) {
+		_, stderr, err := tf.Run("init")
+		if err == nil {
+			t.Fatal("expected error, got success")
+		}
+
+		if !strings.Contains(stderr, "provider registry registry.terraform.io does not have a\nprovider named registry.terraform.io/hashicorp/nonexist") {
+			t.Errorf("expected error message is missing from output:\n%s", stderr)
+		}
+	})
+
+	t.Run("local provider not found", func(t *testing.T) {
+		// The -plugin-dir directory must exist for the provider installer to search it.
+		pluginDir := tf.Path("empty")
+		if err := os.Mkdir(pluginDir, os.ModePerm); err != nil {
+			t.Fatal(err)
+		}
+
+		_, stderr, err := tf.Run("init", "-plugin-dir="+pluginDir)
+		if err == nil {
+			t.Fatal("expected error, got success")
+		}
+
+		if !strings.Contains(stderr, "provider registry.terraform.io/hashicorp/nonexist was not\nfound in any of the search locations\n\n- "+pluginDir) {
+			t.Errorf("expected error message is missing from output:\n%s", stderr)
+		}
+	})
+}
diff --git a/command/e2etest/testdata/provider-not-found/main.tf b/command/e2etest/testdata/provider-not-found/main.tf
new file mode 100644
index 000000000..3305c612b
--- /dev/null
+++ b/command/e2etest/testdata/provider-not-found/main.tf
@@ -0,0 +1,7 @@
+terraform {
+  required_providers {
+    nonexist = {
+      source = "registry.terraform.io/hashicorp/nonexist"
+    }
+  }
+}
diff --git a/command/init.go b/command/init.go
index f5fd8cd17..21e9959ca 100644
--- a/command/init.go
+++ b/command/init.go
@@ -505,7 +505,7 @@ func (c *InitCommand) getProviders(earlyConfig *earlyconfig.Config, state *state
 				diags = diags.Append(tfdiags.Sourceless(
 					tfdiags.Error,
 					"Failed to query available provider packages",
-					fmt.Sprintf("Could not retrieve the list of available versions for provider %s: %s\n\n%s ",
+					fmt.Sprintf("Could not retrieve the list of available versions for provider %s: %s\n\n%s",
 						provider.ForDisplay(), err, strings.Join(displaySources, "\n"),
 					),
 				))
@@ -513,7 +513,7 @@ func (c *InitCommand) getProviders(earlyConfig *earlyconfig.Config, state *state
 				diags = diags.Append(tfdiags.Sourceless(
 					tfdiags.Error,
 					"Failed to query available provider packages",
-					fmt.Sprintf("Could not retrieve the list of available versions for provider %s: %s ",
+					fmt.Sprintf("Could not retrieve the list of available versions for provider %s: %s",
 						provider.ForDisplay(), err,
 					),
 				))
diff --git a/internal/getproviders/errors.go b/internal/getproviders/errors.go
index ca8cb046d..c5f5191e0 100644
--- a/internal/getproviders/errors.go
+++ b/internal/getproviders/errors.go
@@ -196,7 +196,7 @@ func (err ErrQueryFailed) Unwrap() error {
 // grow in future.
 func ErrIsNotExist(err error) bool {
 	switch err.(type) {
-	case ErrProviderNotFound, ErrPlatformNotSupported:
+	case ErrProviderNotFound, ErrRegistryProviderNotKnown, ErrPlatformNotSupported:
 		return true
 	default:
 		return false
diff --git a/internal/getproviders/filesystem_mirror_source.go b/internal/getproviders/filesystem_mirror_source.go
index 18cfba6cb..801116e69 100644
--- a/internal/getproviders/filesystem_mirror_source.go
+++ b/internal/getproviders/filesystem_mirror_source.go
@@ -122,6 +122,5 @@ func (s *FilesystemMirrorSource) scanAllVersions() error {
 }
 
 func (s *FilesystemMirrorSource) ForDisplay(provider addrs.Provider) string {
-	// TODO: Since we have the provider, this could show the entire search path
 	return s.baseDir
 }
diff --git a/internal/getproviders/memoize_source_test.go b/internal/getproviders/memoize_source_test.go
index a2765d877..12c8b9dc5 100644
--- a/internal/getproviders/memoize_source_test.go
+++ b/internal/getproviders/memoize_source_test.go
@@ -39,7 +39,7 @@ func TestMemoizeSource(t *testing.T) {
 		}
 
 		_, err = source.AvailableVersions(nonexistProvider)
-		if want, ok := err.(ErrProviderNotFound); !ok {
+		if want, ok := err.(ErrRegistryProviderNotKnown); !ok {
 			t.Fatalf("wrong error type from nonexist call:\ngot:  %T\nwant: %T", err, want)
 		}
 
@@ -122,11 +122,11 @@ func TestMemoizeSource(t *testing.T) {
 		source := NewMemoizeSource(mock)
 
 		_, err := source.AvailableVersions(nonexistProvider)
-		if want, ok := err.(ErrProviderNotFound); !ok {
+		if want, ok := err.(ErrRegistryProviderNotKnown); !ok {
 			t.Fatalf("wrong error type from first call:\ngot:  %T\nwant: %T", err, want)
 		}
 		_, err = source.AvailableVersions(nonexistProvider)
-		if want, ok := err.(ErrProviderNotFound); !ok {
+		if want, ok := err.(ErrRegistryProviderNotKnown); !ok {
 			t.Fatalf("wrong error type from second call:\ngot:  %T\nwant: %T", err, want)
 		}
 
diff --git a/internal/getproviders/mock_source.go b/internal/getproviders/mock_source.go
index 3e90a07e8..1672cc896 100644
--- a/internal/getproviders/mock_source.go
+++ b/internal/getproviders/mock_source.go
@@ -51,7 +51,7 @@ func (s *MockSource) AvailableVersions(provider addrs.Provider) (VersionList, er
 	if len(ret) == 0 {
 		// In this case, we'll behave like a registry that doesn't know about
 		// this provider at all, rather than just returning an empty result.
-		return nil, ErrProviderNotFound{provider, []string{"mock source"}}
+		return nil, ErrRegistryProviderNotKnown{provider}
 	}
 	ret.Sort()
 	return ret, nil
diff --git a/internal/getproviders/multi_source_test.go b/internal/getproviders/multi_source_test.go
index 448354833..db81355fd 100644
--- a/internal/getproviders/multi_source_test.go
+++ b/internal/getproviders/multi_source_test.go
@@ -73,7 +73,7 @@ func TestMultiSourceAvailableVersions(t *testing.T) {
 		}
 
 		_, err = multi.AvailableVersions(addrs.NewDefaultProvider("baz"))
-		if want, ok := err.(ErrProviderNotFound); !ok {
+		if want, ok := err.(ErrRegistryProviderNotKnown); !ok {
 			t.Fatalf("wrong error type:\ngot:  %T\nwant: %T", err, want)
 		}
 	})
@@ -147,7 +147,7 @@ func TestMultiSourceAvailableVersions(t *testing.T) {
 		}
 
 		_, err = multi.AvailableVersions(addrs.NewDefaultProvider("baz"))
-		if want, ok := err.(ErrProviderNotFound); !ok {
+		if want, ok := err.(ErrRegistryProviderNotKnown); !ok {
 			t.Fatalf("wrong error type:\ngot:  %T\nwant: %T", err, want)
 		}
 	})
@@ -165,8 +165,7 @@ func TestMultiSourceAvailableVersions(t *testing.T) {
 			t.Fatal("expected error, got success")
 		}
 
-		wantErr := `provider registry.terraform.io/hashicorp/foo was not found in any of the search locations`
-		_ = []string{"mock source", "mock source"}
+		wantErr := `provider registry registry.terraform.io does not have a provider named registry.terraform.io/hashicorp/foo`
 
 		if err.Error() != wantErr {
 			t.Fatalf("wrong error.\ngot:  %s\nwant: %s\n", err, wantErr)