diff --git a/src/specify_cli/commands/bundle/__init__.py b/src/specify_cli/commands/bundle/__init__.py
index 7476cb41b5..10df8aca14 100644
--- a/src/specify_cli/commands/bundle/__init__.py
+++ b/src/specify_cli/commands/bundle/__init__.py
@@ -771,7 +771,17 @@ def _local_manifest_source(arg: str):
                 error_type=BundlerError,
                 label="bundle manifest",
             )
-        data = _yaml.safe_load(io.BytesIO(raw))
+        try:
+            data = _yaml.safe_load(io.BytesIO(raw))
+        except _yaml.YAMLError as exc:
+            # The sibling directory/bundle.yml branches reach YAML through
+            # load_yaml(), which turns a parse failure into a BundlerError. This
+            # branch parses inline, so without this it raises a raw YAMLError --
+            # neither a ValueError nor an OSError -- which escapes
+            # bundle_install()'s `except BundlerError` as a traceback.
+            raise BundlerError(
+                f"Invalid YAML in bundle.yml inside '{candidate}': {exc}"
+            ) from exc
         return BundleManifest.from_dict(data)
 
     if candidate.name == "bundle.yml" or candidate.suffix in (".yml", ".yaml"):
diff --git a/tests/integration/test_bundler_local_install.py b/tests/integration/test_bundler_local_install.py
index 164de57006..5ca873c78a 100644
--- a/tests/integration/test_bundler_local_install.py
+++ b/tests/integration/test_bundler_local_install.py
@@ -186,6 +186,50 @@ def test_local_zip_uses_bounded_archive_open(tmp_path: Path):
         _local_manifest_source(str(artifact))
 
 
+def test_local_zip_wraps_malformed_manifest_yaml(tmp_path: Path):
+    """A malformed bundle.yml inside a .zip must raise BundlerError.
+
+    The zip branch parses YAML inline rather than through load_yaml(), so the
+    raw yaml.YAMLError used to escape. It is neither a ValueError nor an
+    OSError, so nothing upstream caught it.
+    """
+    artifact = tmp_path / "bad-manifest.zip"
+    with zipfile.ZipFile(artifact, "w") as archive:
+        archive.writestr("bundle.yml", "bundle: [unclosed\n  id: demo\n")
+
+    with pytest.raises(BundlerError, match="Invalid YAML"):
+        _local_manifest_source(str(artifact))
+
+
+def test_malformed_manifest_yaml_fails_alike_for_every_local_source(tmp_path: Path):
+    """`bundle install` reports malformed YAML the same way for all 3 sources.
+
+    Directory and bundle.yml sources already exited 1 with an "Invalid YAML"
+    message; the .zip source dumped a yaml.parser.ParserError traceback.
+    """
+    bad_yaml = "bundle: [unclosed\n  id: demo\n"
+
+    directory = tmp_path / "dir-src"
+    directory.mkdir()
+    (directory / "bundle.yml").write_text(bad_yaml, encoding="utf-8")
+
+    manifest_file = tmp_path / "standalone.yml"
+    manifest_file.write_text(bad_yaml, encoding="utf-8")
+
+    artifact = tmp_path / "artifact.zip"
+    with zipfile.ZipFile(artifact, "w") as archive:
+        archive.writestr("bundle.yml", bad_yaml)
+
+    runner = CliRunner()
+    for source in (directory, manifest_file, artifact):
+        result = runner.invoke(app, ["bundle", "install", str(source)])
+        assert result.exit_code == 1, f"{source.name}: {result.output}"
+        assert result.exception is None or isinstance(
+            result.exception, SystemExit
+        ), f"{source.name} leaked {type(result.exception).__name__}"
+        assert "Invalid YAML" in result.output, f"{source.name}: {result.output}"
+
+
 def test_invalid_local_manifest_is_rejected_before_project_init(
     tmp_path: Path,
     monkeypatch,