diff --git a/packages/angular/cli/src/command-builder/schematics-command-module.ts b/packages/angular/cli/src/command-builder/schematics-command-module.ts
index e2561fd1c273..684a4d9f4b5a 100644
--- a/packages/angular/cli/src/command-builder/schematics-command-module.ts
+++ b/packages/angular/cli/src/command-builder/schematics-command-module.ts
@@ -123,8 +123,7 @@ export abstract class SchematicsCommandModule
       optionTransforms: [
         // Add configuration file defaults
         async (schematic, current) => {
-          const projectName =
-            typeof current?.project === 'string' ? current.project : this.getProjectName();
+          const projectName = typeof current?.project === 'string' ? current.project : undefined;
 
           return {
             ...(await getSchematicDefaults(schematic.collection.name, schematic.name, projectName)),
@@ -407,7 +406,24 @@ export abstract class SchematicsCommandModule
       return projectName;
     }
 
-    return undefined;
+    if (workspace.projects.size === 0) {
+      throw new Error(
+        'Cannot determine project for command.\n' +
+          'This workspace does not contain any projects. ' +
+          'Run "ng generate application" or "ng generate library" to create one.',
+      );
+    }
+
+    throw new Error(
+      'Cannot determine project for command.\n' +
+        'This is a multi-project workspace and more than one project supports this command. ' +
+        'Use the "--project" option to specify a project or change the current ' +
+        'working directory to a project directory.\n\n' +
+        `Available projects are:\n${[...workspace.projects.keys()]
+          .sort()
+          .map((p) => `- ${p}`)
+          .join('\n')}`,
+    );
   }
 
   private getResolvePaths(collectionName: string): string[] {
diff --git a/tests/e2e/tests/commands/project-cannot-be-determined-by-cwd.ts b/tests/e2e/tests/commands/project-cannot-be-determined-by-cwd.ts
index b4b572bfa3ee..f0eaf7633482 100644
--- a/tests/e2e/tests/commands/project-cannot-be-determined-by-cwd.ts
+++ b/tests/e2e/tests/commands/project-cannot-be-determined-by-cwd.ts
@@ -1,6 +1,6 @@
 import assert from 'node:assert/strict';
 import { join } from 'node:path';
-import { execAndWaitForOutputToMatch, ng } from '../../utils/process';
+import { execAndCaptureError, execAndWaitForOutputToMatch, ng } from '../../utils/process';
 import { updateJsonFile } from '../../utils/project';
 import { expectToFail } from '../../utils/utils';
 
@@ -23,6 +23,29 @@ export default async function () {
     const { message } = await expectToFail(() => ng('build'));
     assert.match(message, new RegExp(errorMessage));
 
+    // Schematics that require a project should explain how to select one
+    const { message: generateMessage } = await expectToFail(() =>
+      ng('generate', 'component', 'foo'),
+    );
+    assert.match(generateMessage, new RegExp(errorMessage));
+    assert.match(generateMessage, /Use the "--project" option to specify a project/);
+    assert.match(generateMessage, /Available projects are:\n- second-app\n- third-app/);
+
+    // The project is checked before prompting for other options
+    const { message: interactiveMessage } = await execAndCaptureError(
+      'ng',
+      ['generate', 'component'],
+      {
+        ...process.env,
+        NG_FORCE_TTY: '1',
+        NG_CLI_ANALYTICS: 'false',
+        NG_FORCE_AUTOCOMPLETE: 'false',
+      },
+      'foo\n',
+    );
+    assert.match(interactiveMessage, /Use the "--project" option to specify a project/);
+    assert.doesNotMatch(interactiveMessage, /What name would you like to use for the component/);
+
     // Help should still work
     await execAndWaitForOutputToMatch('ng', ['build', '--help'], /--configuration/);
 
@@ -31,8 +54,21 @@ export default async function () {
 
     process.chdir(join(startCwd, 'projects/second-app'));
     await ng('build', '--configuration=development');
+    await ng('generate', 'component', 'foo', '--dry-run');
   } finally {
     // Restore path
     process.chdir(startCwd);
   }
+
+  // A project from the workspace schematic options is used and other validation errors are kept
+  await updateJsonFile('angular.json', (workspaceJson) => {
+    workspaceJson.schematics ??= {};
+    workspaceJson.schematics['@schematics/angular:component'] = { project: 'second-app' };
+  });
+  const { message: selectorMessage } = await expectToFail(() =>
+    ng('generate', 'component', 'foo', '--selector=1foo'),
+  );
+  assert.match(selectorMessage, /must match format "html-selector"/);
+  assert.doesNotMatch(selectorMessage, /Cannot determine project/);
+  await ng('generate', 'component', 'foo', '--dry-run');
 }