diff --git a/packages/server/src/terminal/worker-terminal-manager.test.ts b/packages/server/src/terminal/worker-terminal-manager.test.ts
index 2a584087a3..0bcc2acf92 100644
--- a/packages/server/src/terminal/worker-terminal-manager.test.ts
+++ b/packages/server/src/terminal/worker-terminal-manager.test.ts
@@ -70,7 +70,7 @@ import {
   TerminalWorkerIncompatibleError,
 } from "./terminal-worker-pool.js";
 import { connectTerminalWorker } from "./terminal-worker-client.js";
-import { launchTerminalWorker } from "./terminal-worker-launch.js";
+import { launchTerminalWorker, TerminalWorkerLaunchError } from "./terminal-worker-launch.js";
 
 type TerminalRow = TerminalState["grid"][number];
 
@@ -2671,3 +2671,34 @@ it.each([false, true])(
   },
   45000,
 );
+
+// Both Windows reports in #8766: the worker's process identity query (PowerShell there, `ps` here)
+// fails, the worker exits before writing its record, and the daemon used to exit with it.
+it.skipIf(isPlatform("win32"))(
+  "starts without a worker when the worker cannot read its own identity, and launches one once it can",
+  async () => {
+    const paseoHome = createTemporaryHome();
+    const binDir = mkdtempSync(join(tmpdir(), "worker-terminal-manager-no-ps-"));
+    temporaryDirs.push(binDir);
+    writeFileSync(join(binDir, "ps"), "#!/bin/sh\nexit 1\n", { mode: 0o755 });
+    const originalPath = process.env.PATH;
+    process.env.PATH = `${binDir}${delimiter}${originalPath ?? ""}`;
+    try {
+      manager = await startRealWorkerManager({ paseoHome });
+      expect(await workerRecords(paseoHome)).toEqual([]);
+      await expect(
+        manager.createTerminal({ workspaceId: "ws-no-identity", cwd: paseoHome }),
+      ).rejects.toThrow(TerminalWorkerLaunchError);
+      expect(await workerRecords(paseoHome)).toEqual([]);
+    } finally {
+      process.env.PATH = originalPath;
+    }
+
+    const terminal = trackTerminal(
+      await manager.createTerminal({ workspaceId: "ws-no-identity", cwd: paseoHome }),
+    );
+    expect(terminal.id).toBeTruthy();
+    expect((await workerRecords(paseoHome)).map((record) => record.pid)).toHaveLength(1);
+  },
+  30000,
+);
diff --git a/packages/server/src/terminal/worker-terminal-manager.ts b/packages/server/src/terminal/worker-terminal-manager.ts
index 9a82826cec..ea91d54a66 100644
--- a/packages/server/src/terminal/worker-terminal-manager.ts
+++ b/packages/server/src/terminal/worker-terminal-manager.ts
@@ -1269,8 +1269,17 @@ export async function startWorkerTerminalManager(
     try {
       current = await startCurrent();
     } catch (error) {
-      if (!(error instanceof NoTerminalWorkerAvailableError)) throw error;
-      logger.warn(error.message);
+      if (error instanceof NoTerminalWorkerAvailableError) {
+        logger.warn(error.message);
+      } else {
+        // The daemon starts without terminals rather than not at all. A worker that cannot start
+        // here (its process identity query failed, say) is launched again by the first terminal
+        // creation, which reports the same error if it still cannot.
+        logger.error(
+          { err: error },
+          "Terminal worker did not start; terminals are unavailable until one starts",
+        );
+      }
     }
   }