diff --git a/packages/create-toolpad-app/tests/index.spec.ts b/packages/create-toolpad-app/tests/index.spec.ts
index 75fd539f57d..cbdfe5db0a9 100644
--- a/packages/create-toolpad-app/tests/index.spec.ts
+++ b/packages/create-toolpad-app/tests/index.spec.ts
@@ -43,7 +43,7 @@ test(
       cwd: currentDirectory,
     });
     cp.stdout?.pipe(process.stdout);
-    cp.stderr?.pipe(process.stdout);
+    cp.stderr?.pipe(process.stderr);
     const result = await cp;
     expect(result.stdout).toMatch('Run the following to get started');
     const packageJsonContent = await fs.readFile(path.resolve(testDir, './package.json'), {
@@ -77,10 +77,10 @@ test(
         BROWSER: 'none',
       },
     });
-    const { stdout: toolpadDevOutput } = toolpadProcess;
+    toolpadProcess.stdout?.pipe(process.stdout);
+    toolpadProcess.stderr?.pipe(process.stderr);
 
-    expect(toolpadDevOutput).toBeTruthy();
-    const match = await waitForMatch(toolpadDevOutput!, /http:\/\/localhost:(\d+)/);
+    const match = await waitForMatch(toolpadProcess.stdout!, /http:\/\/localhost:(\d+)/);
 
     expect(match).toBeTruthy();
 
diff --git a/packages/toolpad-app/cli/index.ts b/packages/toolpad-app/cli/index.ts
index d5ee2836c6b..e6b5b50d91f 100644
--- a/packages/toolpad-app/cli/index.ts
+++ b/packages/toolpad-app/cli/index.ts
@@ -11,12 +11,11 @@ export interface RunOptions {
   port?: number;
   dev?: boolean;
   base: string;
-  create: boolean;
 }
 
 async function runCommand(
   cmd: 'dev' | 'start',
-  { dir, dev: toolpadDevMode, create: createIfNotExists, ...args }: Omit<RunOptions, 'cmd'>,
+  { dir, dev: toolpadDevMode, ...args }: Omit<RunOptions, 'cmd'>,
 ) {
   const projectDir = path.resolve(process.cwd(), dir);
 
@@ -25,7 +24,6 @@ async function runCommand(
     dir: projectDir,
     dev: cmd !== 'start',
     toolpadDevMode,
-    createIfNotExists,
   });
 
   process.once('SIGINT', () => {
@@ -94,11 +92,6 @@ export default async function cli(argv: string[]) {
       describe: 'Public base path of the Toolpad application',
       default: '/prod',
     },
-    create: {
-      type: 'boolean',
-      describe: "Create the application directory if it doesn't exist",
-      default: false,
-    },
   } as const;
 
   const sharedRunOptions = {
diff --git a/packages/toolpad-app/src/server/index.ts b/packages/toolpad-app/src/server/index.ts
index ba663a25bb7..6c61e643913 100644
--- a/packages/toolpad-app/src/server/index.ts
+++ b/packages/toolpad-app/src/server/index.ts
@@ -12,7 +12,6 @@ import { WebSocket, WebSocketServer } from 'ws';
 import { listen } from '@mui/toolpad-utils/http';
 // eslint-disable-next-line import/extensions
 import openBrowser from 'react-dev-utils/openBrowser.js';
-import { folderExists } from '@mui/toolpad-utils/fs';
 import chalk from 'chalk';
 import { serveRpc } from '@mui/toolpad-utils/workerRpc';
 import * as url from 'node:url';
@@ -425,7 +424,6 @@ export interface RunAppOptions {
   dir?: string;
   base?: string;
   toolpadDevMode?: boolean;
-  createIfNotExists?: boolean;
 }
 
 export async function runApp({
@@ -434,19 +432,9 @@ export async function runApp({
   base = '/prod',
   port = 3000,
   toolpadDevMode = false,
-  createIfNotExists,
 }: RunAppOptions) {
   const projectDir = resolveProjectDir(dir);
 
-  if (!(await folderExists(projectDir)) && !createIfNotExists) {
-    console.error(
-      `${chalk.red('error')} - No project found at ${chalk.cyan(
-        `"${projectDir}"`,
-      )}. Use the --create option to initialize a new Toolpad project in this folder.`,
-    );
-    process.exit(1);
-  }
-
   if (!port) {
     port = dev ? await getPort({ port: getPreferredPorts(DEFAULT_PORT) }) : DEFAULT_PORT;
   } else {
diff --git a/test/integration/editor/deleteLast.spec.ts b/test/integration/editor/deleteLast.spec.ts
index 66d33e806e7..7bc00b51cc7 100644
--- a/test/integration/editor/deleteLast.spec.ts
+++ b/test/integration/editor/deleteLast.spec.ts
@@ -4,7 +4,6 @@ import { ToolpadEditor } from '../../models/ToolpadEditor';
 test.use({
   localAppConfig: {
     cmd: 'dev',
-    create: true,
   },
 });
 
diff --git a/test/integration/editor/new.spec.ts b/test/integration/editor/new.spec.ts
index c571e332c11..d4c48c0b183 100644
--- a/test/integration/editor/new.spec.ts
+++ b/test/integration/editor/new.spec.ts
@@ -7,7 +7,6 @@ import { ToolpadEditor } from '../../models/ToolpadEditor';
 test.use({
   localAppConfig: {
     cmd: 'dev',
-    create: true,
   },
 });
 
diff --git a/test/playwright/localTest.ts b/test/playwright/localTest.ts
index 32d68be2cab..c20ac49ca4c 100644
--- a/test/playwright/localTest.ts
+++ b/test/playwright/localTest.ts
@@ -51,7 +51,6 @@ interface LocalAppConfig {
   // Extra environment variables when running Toolpad
   env?: Record<string, string>;
   base?: string;
-  create?: boolean;
 }
 
 interface LocalServerConfig {
@@ -156,7 +155,7 @@ export async function runCustomServer(
 }
 
 export async function runApp(projectDir: string, options: LocalAppConfig) {
-  const { cmd = 'start', env, base, create } = options;
+  const { cmd = 'start', env, base } = options;
 
   if (cmd === 'start') {
     await buildApp(projectDir, { base, env });
@@ -167,10 +166,6 @@ export async function runApp(projectDir: string, options: LocalAppConfig) {
     args.push('--dev');
   }
 
-  if (create) {
-    args.push('--create');
-  }
-
   // Run each test on its own port to avoid race conditions when running tests in parallel.
   args.push('--port', String(await getPort()));