diff --git a/apps/wing-console/console/server/src/utils/simulator.ts b/apps/wing-console/console/server/src/utils/simulator.ts
index 4b4e25fa084..34fe6d8302b 100644
--- a/apps/wing-console/console/server/src/utils/simulator.ts
+++ b/apps/wing-console/console/server/src/utils/simulator.ts
@@ -1,4 +1,5 @@
 import { simulator } from "@winglang/sdk";
+import { LogLevel, TraceType } from "@winglang/sdk/lib/std/test-runner.js";
 import Emittery from "emittery";
 
 import type { ResourceLifecycleEvent, Trace } from "../types.js";
@@ -62,7 +63,14 @@ export const createSimulator = (props?: CreateSimulatorProps): Simulator => {
     });
     instance.onTrace({
       callback(trace) {
-        events.emit("trace", trace);
+        if (
+          trace.type === TraceType.SIMULATOR &&
+          trace.level === LogLevel.ERROR
+        ) {
+          events.emit("error", new Error(trace.data.message));
+        } else {
+          events.emit("trace", trace);
+        }
       },
     });
     instance.onResourceLifecycleEvent({
diff --git a/libs/wingsdk/src/simulator/lockfile.ts b/libs/wingsdk/src/simulator/lockfile.ts
index 1216b9b93e8..2052c93e108 100644
--- a/libs/wingsdk/src/simulator/lockfile.ts
+++ b/libs/wingsdk/src/simulator/lockfile.ts
@@ -98,8 +98,17 @@ export class Lockfile {
       if (this.lastMtime) {
         // Check if the lockfile got compromised because we were too late to update it.
         if (Date.now() > this.lastMtime + STALE_THRESHOLD) {
-          this.markAsCompromised("Lockfile was not updated in time");
-          return;
+          // Try to acquire the lock again.
+          try {
+            fs.closeSync(this.lockfile);
+            this.lockfile = undefined;
+            this.lastMtime = undefined;
+            this.lock();
+            return;
+          } catch (error) {
+            this.markAsCompromised("Lockfile was not updated in time", error);
+            return;
+          }
         }
 
         // Check if the lockfile got compromised because access was lost or something else updated it.
diff --git a/libs/wingsdk/src/simulator/simulator.ts b/libs/wingsdk/src/simulator/simulator.ts
index 247572afef0..3aa4a2a8a6b 100644
--- a/libs/wingsdk/src/simulator/simulator.ts
+++ b/libs/wingsdk/src/simulator/simulator.ts
@@ -241,6 +241,18 @@ export class Simulator {
         if (error) {
           console.error(error);
         }
+        this.addTrace({
+          data: {
+            message: `Another process is already running the simulator on the same state directory.`,
+            error,
+            status: "failure",
+          },
+          type: TraceType.SIMULATOR,
+          level: LogLevel.ERROR,
+          sourcePath: "",
+          sourceType: "",
+          timestamp: new Date().toISOString(),
+        });
         await this.stop();
       },
     });