diff --git a/internal/fileutil/fileutil.go b/internal/fileutil/fileutil.go
index 7e63b0f42d5..5cd40aa23d3 100644
--- a/internal/fileutil/fileutil.go
+++ b/internal/fileutil/fileutil.go
@@ -51,12 +51,12 @@ func Exists(path string) bool {
 	return err == nil
 }
 
-func IsDirEmpty(path string) bool {
+func IsDirEmpty(path string) (bool, error) {
 	entries, err := os.ReadDir(path)
 	if err != nil {
-		return false
+		return false, err
 	}
-	return len(entries) == 0
+	return len(entries) == 0, nil
 }
 
 // FileContains checks if a given file at 'path' contains the 'substring'
diff --git a/internal/fileutil/fileutil_test.go b/internal/fileutil/fileutil_test.go
new file mode 100644
index 00000000000..766dfc287d3
--- /dev/null
+++ b/internal/fileutil/fileutil_test.go
@@ -0,0 +1,90 @@
+// Copyright 2024 Jetify Inc. and contributors. All rights reserved.
+// Use of this source code is governed by the license in the LICENSE file.
+
+package fileutil
+
+import (
+	"os"
+	"path/filepath"
+	"testing"
+
+	"github.com/stretchr/testify/assert"
+	"github.com/stretchr/testify/require"
+)
+
+func TestIsDirEmpty(t *testing.T) {
+	tests := []struct {
+		name     string
+		setup    func(string) error
+		expected bool
+		wantErr  bool
+	}{
+		{
+			name: "empty directory",
+			setup: func(dir string) error {
+				return nil // Directory is already empty
+			},
+			expected: true,
+			wantErr:  false,
+		},
+		{
+			name: "directory with files",
+			setup: func(dir string) error {
+				file := filepath.Join(dir, "test.txt")
+				return os.WriteFile(file, []byte("test content"), 0o644)
+			},
+			expected: false,
+			wantErr:  false,
+		},
+		{
+			name: "directory with subdirectories",
+			setup: func(dir string) error {
+				subdir := filepath.Join(dir, "subdir")
+				return os.MkdirAll(subdir, 0o755)
+			},
+			expected: false,
+			wantErr:  false,
+		},
+		{
+			name: "directory with hidden files",
+			setup: func(dir string) error {
+				file := filepath.Join(dir, ".hidden")
+				return os.WriteFile(file, []byte("hidden content"), 0o644)
+			},
+			expected: false,
+			wantErr:  false,
+		},
+		{
+			name: "non-existent directory",
+			setup: func(dir string) error {
+				return os.RemoveAll(dir)
+			},
+			expected: false,
+			wantErr:  true,
+		},
+	}
+
+	for _, curTest := range tests {
+		t.Run(curTest.name, func(t *testing.T) {
+			// Create temporary directory for test
+			tempDir := t.TempDir()
+
+			// Setup test case
+			if curTest.setup != nil {
+				err := curTest.setup(tempDir)
+				require.NoError(t, err)
+			}
+
+			// Run the function
+			isEmpty, err := IsDirEmpty(tempDir)
+
+			// Check results
+			if curTest.wantErr {
+				assert.Error(t, err)
+			} else {
+				assert.NoError(t, err)
+				assert.Equal(t, curTest.expected, isEmpty)
+			}
+		})
+	}
+}
diff --git a/internal/nix/install.go b/internal/nix/install.go
index bcdeff7fe58..d714b8b5646 100644
--- a/internal/nix/install.go
+++ b/internal/nix/install.go
@@ -25,9 +25,9 @@ func BinaryInstalled() bool {
 	return cmdutil.Exists("nix")
 }
 
-func dirExistsAndIsNotEmpty() bool {
-	dir := "/nix"
-	return fileutil.Exists(dir) && !fileutil.IsDirEmpty(dir)
+func dirExistsAndIsNotEmpty(dir string) bool {
+	empty, err := fileutil.IsDirEmpty(dir)
+	return err == nil && !empty
 }
 
 var ensured = false
@@ -58,7 +58,7 @@ func EnsureNixInstalled(ctx context.Context, writer io.Writer, withDaemonFunc fu
 	if BinaryInstalled() {
 		return nil
 	}
-	if dirExistsAndIsNotEmpty() {
+	if dirExistsAndIsNotEmpty("/nix") {
 		if _, err = SourceProfile(); err != nil {
 			return err
 		} else if BinaryInstalled() {
diff --git a/internal/nix/install_test.go b/internal/nix/install_test.go
new file mode 100644
index 00000000000..7e8250849c3
--- /dev/null
+++ b/internal/nix/install_test.go
@@ -0,0 +1,79 @@
+// Copyright 2024 Jetify Inc. and contributors. All rights reserved.
+// Use of this source code is governed by the license in the LICENSE file.
+
+package nix
+
+import (
+	"os"
+	"path/filepath"
+	"testing"
+
+	"github.com/stretchr/testify/assert"
+	"github.com/stretchr/testify/require"
+)
+
+func TestDirExistsAndIsNotEmpty(t *testing.T) {
+	tests := []struct {
+		name     string
+		setup    func(string) error
+		expected bool
+	}{
+		{
+			name: "empty directory",
+			setup: func(dir string) error {
+				return nil // Directory is already empty
+			},
+			expected: false,
+		},
+		{
+			name: "directory with files",
+			setup: func(dir string) error {
+				file := filepath.Join(dir, "test.txt")
+				return os.WriteFile(file, []byte("test content"), 0o644)
+			},
+			expected: true,
+		},
+		{
+			name: "directory with subdirectories",
+			setup: func(dir string) error {
+				subdir := filepath.Join(dir, "subdir")
+				return os.MkdirAll(subdir, 0o755)
+			},
+			expected: true,
+		},
+		{
+			name: "directory with hidden files",
+			setup: func(dir string) error {
+				file := filepath.Join(dir, ".hidden")
+				return os.WriteFile(file, []byte("hidden content"), 0o644)
+			},
+			expected: true,
+		},
+		{
+			name: "non-existent directory",
+			setup: func(dir string) error {
+				return os.RemoveAll(dir)
+			},
+			expected: false,
+		},
+	}
+
+	for _, curTest := range tests {
+		t.Run(curTest.name, func(t *testing.T) {
+			// Create temporary directory for test
+			tempDir := t.TempDir()
+
+			// Setup test case
+			if curTest.setup != nil {
+				err := curTest.setup(tempDir)
+				require.NoError(t, err)
+			}
+
+			// Run the function
+			result := dirExistsAndIsNotEmpty(tempDir)
+
+			// Check results
+			assert.Equal(t, curTest.expected, result)
+		})
+	}
+}