diff --git a/buildengine/engine.go b/buildengine/engine.go
index 9cb9ec452..668285e07 100644
--- a/buildengine/engine.go
+++ b/buildengine/engine.go
@@ -4,6 +4,7 @@ import (
 	"bytes"
 	"context"
 	"crypto/sha256"
+	"errors"
 	"fmt"
 	"path/filepath"
 	"runtime"
@@ -45,12 +46,12 @@ type Engine struct {
 	projects         map[ProjectKey]Project
 	moduleDirs       []string
 	externalDirs     []string
-	commands         map[string]string
 	controllerSchema *xsync.MapOf[string, *schema.Module]
 	schemaChanges    *pubsub.Topic[schemaChange]
 	cancel           func()
 	parallelism      int
 	listener         Listener
+	projectsToBuild  *xsync.MapOf[ProjectKey, bool]
 }
 
 type Option func(o *Engine)
@@ -85,6 +86,7 @@ func New(ctx context.Context, client ftlv1connect.ControllerServiceClient, modul
 		controllerSchema: xsync.NewMapOf[string, *schema.Module](),
 		schemaChanges:    pubsub.New[schemaChange](),
 		parallelism:      runtime.NumCPU(),
+		projectsToBuild:  xsync.NewMapOf[ProjectKey, bool](),
 	}
 	for _, option := range options {
 		option(e)
@@ -103,6 +105,7 @@ func New(ctx context.Context, client ftlv1connect.ControllerServiceClient, modul
 			return nil, err
 		}
 		e.projects[project.Config().Key] = project
+		e.projectsToBuild.Store(project.Config().Key, true)
 	}
 
 	if client == nil {
@@ -240,8 +243,10 @@ func (e *Engine) watchForModuleChanges(ctx context.Context, period time.Duration
 	err := e.buildAndDeploy(ctx, 1, true)
 	if err != nil {
 		logger.Errorf(err, "initial deploy failed")
+	} else {
+		logger.Infof("All modules deployed, watching for changes...")
 	}
-	logger.Infof("All modules deployed, watching for changes...")
+
 	moduleHashes := map[string][]byte{}
 	e.controllerSchema.Range(func(name string, sch *schema.Module) bool {
 		hash, err := computeModuleHash(sch)
@@ -319,7 +324,6 @@ func (e *Engine) watchForModuleChanges(ctx context.Context, period time.Duration
 				}
 			}
 		}
-
 	}
 }
 
@@ -346,52 +350,46 @@ func (e *Engine) getDependentProjectKeys(name string) []ProjectKey {
 }
 
 func (e *Engine) buildAndDeploy(ctx context.Context, replicas int32, waitForDeployOnline bool, projects ...ProjectKey) error {
+	logger := log.FromContext(ctx)
 	if len(projects) == 0 {
 		projects = maps.Keys(e.projects)
 	}
 
-	deployQueue := make(chan Project, len(projects))
-	wg, ctx := errgroup.WithContext(ctx)
+	buildGroup := errgroup.Group{}
+	deployGroup := errgroup.Group{}
 
-	// Build all projects and enqueue the modules for deployment.
-	wg.Go(func() error {
-		defer close(deployQueue)
-
-		return e.buildWithCallback(ctx, func(ctx context.Context, project Project) error {
-			if _, ok := project.(Module); ok {
-				select {
-				case deployQueue <- project:
-					return nil
-				case <-ctx.Done():
-					return ctx.Err()
-				}
-			}
+	buildGroup.Go(func() error {
+		return e.buildWithCallback(ctx, func(buildCtx context.Context, builtProject Project) error {
+			deployGroup.Go(func() error {
+				e.projectsToBuild.Store(builtProject.Config().Key, false)
+				return Deploy(buildCtx, builtProject.(Module), replicas, waitForDeployOnline, e.client) //nolint:forcetypeassert
+			})
 			return nil
 		}, projects...)
 	})
 
-	// Process deployment queue.
-	for range len(projects) {
-		wg.Go(func() error {
-			for {
-				select {
-				case project, ok := <-deployQueue:
-					if !ok {
-						return nil
-					}
-					if module, ok := project.(Module); ok {
-						err := Deploy(ctx, module, replicas, waitForDeployOnline, e.client)
-						if err != nil {
-							return err
-						}
-					}
-				case <-ctx.Done():
-					return ctx.Err()
-				}
-			}
-		})
+	// Wait for all build and deploy attempts to complete
+	buildErr := buildGroup.Wait()
+	deployErr := deployGroup.Wait()
+
+	pendingInitialBuilds := []string{}
+	e.projectsToBuild.Range(func(key ProjectKey, value bool) bool {
+		if value {
+			pendingInitialBuilds = append(pendingInitialBuilds, string(key))
+		}
+		return true
+	})
+
+	// Print out all modules that have yet to build if there are any errors
+	if len(pendingInitialBuilds) > 0 {
+		logger.Infof("Modules waiting to build: %s", strings.Join(pendingInitialBuilds, ", "))
+	}
+
+	if buildErr != nil {
+		return buildErr
 	}
-	return wg.Wait()
+
+	return deployErr
 }
 
 type buildCallback func(ctx context.Context, project Project) error
@@ -424,29 +422,31 @@ func (e *Engine) buildWithCallback(ctx context.Context, callback buildCallback,
 	}
 
 	topology := TopologicalSort(graph)
+
+	errCh := make(chan error, 1024)
 	for _, group := range topology {
 		// Collect schemas to be inserted into "built" map for subsequent groups.
 		schemas := make(chan *schema.Module, len(group))
-		wg, ctx := errgroup.WithContext(ctx)
+
+		wg := errgroup.Group{}
 		wg.SetLimit(e.parallelism)
 		for _, keyStr := range group {
 			key := ProjectKey(keyStr)
-			wg.Go(func() error {
-				if !mustBuild[key] {
-					return e.mustSchema(ctx, key, builtModules, schemas)
-				}
 
-				err := e.build(ctx, key, builtModules, schemas)
-				if err == nil && callback != nil {
-					return callback(ctx, e.projects[key])
+			wg.Go(func() error {
+				err := e.tryBuild(ctx, mustBuild, key, builtModules, schemas, callback)
+				if err != nil {
+					errCh <- err
 				}
-				return err
+				return nil
 			})
 		}
-		err := wg.Wait()
+
+		err = wg.Wait()
 		if err != nil {
 			return err
 		}
+
 		// Now this group is built, collect all the schemas.
 		close(schemas)
 		for sch := range schemas {
@@ -454,9 +454,45 @@ func (e *Engine) buildWithCallback(ctx context.Context, callback buildCallback,
 		}
 	}
 
+	close(errCh)
+	allErrors := []error{}
+	for err := range errCh {
+		allErrors = append(allErrors, err)
+	}
+
+	if len(allErrors) > 0 {
+		return errors.Join(allErrors...)
+	}
+
 	return nil
 }
 
+func (e *Engine) tryBuild(ctx context.Context, mustBuild map[ProjectKey]bool, key ProjectKey, builtModules map[string]*schema.Module, schemas chan *schema.Module, callback buildCallback) error {
+	logger := log.FromContext(ctx)
+	if !mustBuild[key] {
+		return e.mustSchema(ctx, key, builtModules, schemas)
+	}
+
+	project, ok := e.projects[key]
+	if !ok {
+		return fmt.Errorf("project %q not found", key)
+	}
+
+	for _, dep := range project.Config().Dependencies {
+		if _, ok := builtModules[dep]; !ok {
+			logger.Warnf("%q build skipped because its dependency %q failed to build", key, dep)
+			return nil
+		}
+	}
+
+	err := e.build(ctx, key, builtModules, schemas)
+	if err == nil && callback != nil {
+		return callback(ctx, e.projects[key])
+	}
+
+	return err
+}
+
 // Publish either the schema from the FTL controller, or from a local build.
 func (e *Engine) mustSchema(ctx context.Context, key ProjectKey, builtModules map[string]*schema.Module, schemas chan<- *schema.Module) error {
 	if sch, ok := e.controllerSchema.Load(string(key)); ok {