diff --git a/README.md b/README.md
index ed86206..d8070e5 100644
--- a/README.md
+++ b/README.md
@@ -27,6 +27,9 @@ npm install -g @playwright/cli@latest
 playwright-cli --help
 ```
 
+Argument parsing and startup errors exit with code 1 and print an error message. With
+`--json`, these errors are written to stdout as `{ "isError": true, "error": "..." }`.
+
 ### Installing skills
 
 Claude Code, GitHub Copilot and others will use the locally installed skills.
diff --git a/playwright-cli.js b/playwright-cli.js
index 8e9d23f..28fa1f8 100755
--- a/playwright-cli.js
+++ b/playwright-cli.js
@@ -34,10 +34,24 @@ const UPDATE_CHECK_COMMANDS = new Set(['open', 'attach', 'list', 'install', 'ins
 main();
 
 async function main() {
-  // Parse once and inspect the arguments before program() runs, as it may mutate them.
-  const args = parseArgs(process.argv.slice(2));
-  await checkForUpdates(args).catch(() => {});
-  await program({ args, embedderVersion: packageJson.version });
+  const argv = process.argv.slice(2);
+  // Parsing can fail before the output mode is known, so start from the flag.
+  let json = argv.includes('--json');
+  try {
+    // Parse once and inspect the arguments before program() runs, as it may mutate them.
+    const args = parseArgs(argv);
+    json = !!args.json;
+    await checkForUpdates(args).catch(() => {});
+    await program({ args, embedderVersion: packageJson.version });
+  } catch (error) {
+    // Report the failure the way program() reports its own errors.
+    const message = error instanceof Error ? error.message : String(error);
+    if (json)
+      console.log(JSON.stringify({ isError: true, error: message }, null, 2));
+    else
+      console.error(message);
+    process.exit(1);
+  }
 }
 
 /**
diff --git a/tests/integration.spec.ts b/tests/integration.spec.ts
index 72e5831..94d4298 100644
--- a/tests/integration.spec.ts
+++ b/tests/integration.spec.ts
@@ -107,12 +107,31 @@ async function runCli(args: string[], env: Record<string, string> = {}): Promise
   });
 }
 
-test('open data URL', async ({}) => {
+test('open data URL', { annotation: { type: 'issue', description: 'https://github.com/microsoft/playwright-cli/issues/502' } }, async ({}) => {
+  const argumentError = "boolean option '--headed' should not be passed with '=value', use '--headed' or '--no-headed' instead";
+  expect(await runCli(['open', '--headed=false'])).toEqual({
+    output: '',
+    error: argumentError,
+    exitCode: 1,
+  });
+
+  expect(await runCli(['--json', 'open', '--headed=false'])).toEqual({
+    output: JSON.stringify({ isError: true, error: argumentError }, null, 2),
+    error: '',
+    exitCode: 1,
+  });
+
   expect(await runCli(['open', 'data:text/html,hello', '--persistent'])).toEqual(expect.objectContaining({
     output: expect.stringContaining('hello'),
     exitCode: 0,
   }));
 
+  expect(await runCli(['--json', 'screenshot', '--filename'])).toEqual({
+    output: JSON.stringify({ isError: true, error: "error: '--filename' option: expected string, received boolean" }, null, 2),
+    error: '',
+    exitCode: 1,
+  });
+
   expect(await runCli(['delete-data'])).toEqual(expect.objectContaining({
     output: expect.stringContaining('Deleted user data for'),
     exitCode: 0,