diff --git a/crates/nu-cli/src/env/directory_specific_environment.rs b/crates/nu-cli/src/env/directory_specific_environment.rs
index 49f1c4269b..5fa5512660 100644
--- a/crates/nu-cli/src/env/directory_specific_environment.rs
+++ b/crates/nu-cli/src/env/directory_specific_environment.rs
@@ -1,6 +1,8 @@
 use crate::commands::{self, autoenv::Trusted};
 use commands::autoenv;
 use indexmap::{IndexMap, IndexSet};
+use nu_errors::ShellError;
+use nu_source::Span;
 use std::{
     collections::hash_map::DefaultHasher,
     ffi::OsString,
@@ -32,36 +34,42 @@ impl DirectorySpecificEnvironment {
         }
     }
 
-    fn toml_if_directory_is_trusted(&self, mut wdirenv: PathBuf) -> std::io::Result<toml::Value> {
+    fn toml_if_directory_is_trusted(
+        &self,
+        wdirenv: PathBuf,
+    ) -> Result<toml::Value, ShellError> {
         if let Some(trusted) = &self.trusted {
-            wdirenv.push(".nu-env");
-            if wdirenv.exists() {
-                let content = std::fs::read_to_string(&wdirenv)?;
-                let mut hasher = DefaultHasher::new();
-                content.hash(&mut hasher);
-                if trusted.files.get(wdirenv.to_str().unwrap())
-                    == Some(&hasher.finish().to_string())
-                {
-                    return Ok(content.parse::<toml::Value>()?);
-                }
+            let content = std::fs::read_to_string(&wdirenv)?;
+            let mut hasher = DefaultHasher::new();
+            content.hash(&mut hasher);
+
+            if trusted.files.get(wdirenv.to_str().unwrap()) == Some(&hasher.finish().to_string()) {
+                return Ok(content.parse::<toml::Value>().or_else(|_| {
+                    Err(ShellError::untagged_runtime_error(
+                        "Could not parse .nu-env file. Is it well-formed?",
+                    ))
+                })?);
             }
+            return Err(ShellError::untagged_runtime_error("Found untrusted .nu-env file in this directory. Run 'autoenv trust' and restart nushell to allow it. This needs to be done after each change to the file."));
         }
-        Err(Error::new(ErrorKind::Other, "No trusted directories"))
+        Err(ShellError::untagged_runtime_error("No trusted directories"))
     }
 
-    pub fn env_vars_to_add(&mut self) -> std::io::Result<IndexMap<EnvKey, EnvVal>> {
+    pub fn env_vars_to_add(&mut self) -> Result<IndexMap<EnvKey, EnvVal>, ShellError> {
         let current_dir = std::env::current_dir()?;
         let mut working_dir = Some(current_dir.as_path());
         let mut vars_to_add = IndexMap::new();
 
         //Start in the current directory, then traverse towards the root with working_dir to see if we are in a subdirectory of a valid directory.
         while let Some(wdir) = working_dir {
-            if let Ok(toml_doc) = self.toml_if_directory_is_trusted(wdir.to_path_buf()) {
+            let wdirenv = wdir.join(".nu-env");
+            if wdirenv.exists() {
+                let toml_doc = self.toml_if_directory_is_trusted(wdirenv)?;
                 toml_doc
                     .get("env")
-                    .ok_or_else(|| Error::new(ErrorKind::InvalidData, "env section missing"))?
+                    .ok_or_else(|| Error::new(ErrorKind::InvalidData, "env section missing in .nu-env"))?
                     .as_table()
-                    .ok_or_else(|| Error::new(ErrorKind::InvalidData, "env section malformed"))?
+                    .ok_or_else(|| Error::new(ErrorKind::InvalidData, "malformed env section in .nu-env"))?
                     .iter()
                     .for_each(|(dir_env_key, dir_env_val)| {
                         let dir_env_val: EnvVal = dir_env_val.as_str().unwrap().into();
@@ -88,7 +96,7 @@ impl DirectorySpecificEnvironment {
 
     //If the user has left directories which added env vars through .nu, we clear those vars
     //once they are marked for deletion, remove them from added_env_vars
-    pub fn env_vars_to_delete(&mut self) -> std::io::Result<IndexSet<EnvKey>> {
+    pub fn env_vars_to_delete(&mut self) -> Result<IndexSet<EnvKey>, ShellError> {
         let current_dir = std::env::current_dir()?;
         let mut working_dir = Some(current_dir.as_path());
 
diff --git a/crates/nu-cli/src/env/environment.rs b/crates/nu-cli/src/env/environment.rs
index 8df68f035c..64b7a790be 100644
--- a/crates/nu-cli/src/env/environment.rs
+++ b/crates/nu-cli/src/env/environment.rs
@@ -4,6 +4,7 @@ use indexmap::{indexmap, IndexSet};
 use nu_protocol::{UntaggedValue, Value};
 use std::ffi::OsString;
 use std::fmt::Debug;
+use nu_errors::ShellError;
 
 pub trait Env: Debug + Send {
     fn env(&self) -> Option<Value>;
@@ -57,7 +58,7 @@ impl Environment {
         }
     }
 
-    pub fn maintain_directory_environment(&mut self) -> std::io::Result<()> {
+    pub fn maintain_directory_environment(&mut self) -> Result<(), ShellError> {
         self.direnv.env_vars_to_delete()?.iter().for_each(|k| {
             self.remove_env(&k);
         });
diff --git a/crates/nu-cli/src/env/environment_syncer.rs b/crates/nu-cli/src/env/environment_syncer.rs
index 1f1d34d99a..28d8cf01c9 100644
--- a/crates/nu-cli/src/env/environment_syncer.rs
+++ b/crates/nu-cli/src/env/environment_syncer.rs
@@ -3,6 +3,8 @@ use crate::data::config::{Conf, NuConfig};
 use crate::env::environment::{Env, Environment};
 use parking_lot::Mutex;
 use std::sync::Arc;
+use nu_errors::ShellError;
+use nu_source::Text;
 
 pub struct EnvironmentSyncer {
     pub env: Arc<Mutex<Box<Environment>>>,
@@ -44,7 +46,9 @@ impl EnvironmentSyncer {
     pub fn sync_env_vars(&mut self, ctx: &mut Context) {
         let mut environment = self.env.lock();
 
-        environment.maintain_directory_environment().ok();
+        if let Err(e) = environment.maintain_directory_environment() {
+            crate::cli::print_err(e, &Text::from(""));
+        }
         if environment.env().is_some() {
             for (name, value) in ctx.with_host(|host| host.vars()) {
                 if name != "path" && name != "PATH" {