diff --git a/src/Microsoft.DotNet.ProjectModel/ErrorCodes.DotNet.cs b/src/Microsoft.DotNet.ProjectModel/ErrorCodes.DotNet.cs
index d4cabc6f2..7389836dd 100644
--- a/src/Microsoft.DotNet.ProjectModel/ErrorCodes.DotNet.cs
+++ b/src/Microsoft.DotNet.ProjectModel/ErrorCodes.DotNet.cs
@@ -7,5 +7,8 @@ namespace Microsoft.Extensions.ProjectModel
     {
         // Target framework not installed
         public static readonly string DOTNET1011 = nameof(DOTNET1011);
+
+        // Reference assemblies location not specified
+        public static readonly string DOTNET1012 = nameof(DOTNET1012);
     }
 }
diff --git a/src/Microsoft.DotNet.ProjectModel/ProjectContextBuilder.cs b/src/Microsoft.DotNet.ProjectModel/ProjectContextBuilder.cs
index f1058cdf8..2f1979fed 100644
--- a/src/Microsoft.DotNet.ProjectModel/ProjectContextBuilder.cs
+++ b/src/Microsoft.DotNet.ProjectModel/ProjectContextBuilder.cs
@@ -171,20 +171,36 @@ namespace Microsoft.Extensions.ProjectModel
                     DiagnosticMessageSeverity.Warning));
             }
 
-            if (requiresFrameworkAssemblies && !frameworkReferenceResolver.IsInstalled(TargetFramework))
+            if (requiresFrameworkAssemblies)
             {
                 var frameworkInfo = Project.GetTargetFramework(TargetFramework);
-                
-                // If there was an attempt to use reference assemblies but they were not installed
-                // report an error
-                diagnostics.Add(new DiagnosticMessage(
-                    ErrorCodes.DOTNET1011,
-                    $"Framework not installed: {TargetFramework.DotNetFrameworkName}",
-                    filePath: Project.ProjectFilePath,
-                    severity: DiagnosticMessageSeverity.Error,
-                    startLine: frameworkInfo.Line,
-                    startColumn: frameworkInfo.Column
-                ));
+
+                if (string.IsNullOrEmpty(ReferenceAssembliesPath))
+                {
+                    // If there was an attempt to use reference assemblies but they were not installed
+                    // report an error
+                    diagnostics.Add(new DiagnosticMessage(
+                        ErrorCodes.DOTNET1012,
+                        $"The reference assemblies directory was not specified. You can set the location using the DOTNET_REFERENCE_ASSEMBLIES_PATH environment variable.",
+                        filePath: Project.ProjectFilePath,
+                        severity: DiagnosticMessageSeverity.Error,
+                        startLine: frameworkInfo.Line,
+                        startColumn: frameworkInfo.Column
+                    ));
+                }
+                else if (!frameworkReferenceResolver.IsInstalled(TargetFramework))
+                {
+                    // If there was an attempt to use reference assemblies but they were not installed
+                    // report an error
+                    diagnostics.Add(new DiagnosticMessage(
+                        ErrorCodes.DOTNET1011,
+                        $"Framework not installed: {TargetFramework.DotNetFrameworkName} in {ReferenceAssembliesPath}",
+                        filePath: Project.ProjectFilePath,
+                        severity: DiagnosticMessageSeverity.Error,
+                        startLine: frameworkInfo.Line,
+                        startColumn: frameworkInfo.Column
+                    ));
+                }
             }
 
             // Create a library manager
diff --git a/src/Microsoft.DotNet.Tools.Compiler/Program.cs b/src/Microsoft.DotNet.Tools.Compiler/Program.cs
index cc73ea2e3..01d14d4bc 100644
--- a/src/Microsoft.DotNet.Tools.Compiler/Program.cs
+++ b/src/Microsoft.DotNet.Tools.Compiler/Program.cs
@@ -108,11 +108,6 @@ namespace Microsoft.DotNet.Tools.Compiler
             // Create the library exporter
             var exporter = context.CreateExporter(configuration);
 
-            var diagnostics = new List<DiagnosticMessage>();
-
-            // Collect dependency diagnostics
-            diagnostics.AddRange(context.LibraryManager.GetAllDiagnostics());
-
             // Gather exports for the project
             var dependencies = exporter.GetDependencies().ToList();
 
@@ -151,6 +146,29 @@ namespace Microsoft.DotNet.Tools.Compiler
             Reporter.Output.WriteLine($"Compiling {context.RootProject.Identity.Name.Yellow()} for {context.TargetFramework.DotNetFrameworkName.Yellow()}");
             var sw = Stopwatch.StartNew();
 
+            var diagnostics = new List<DiagnosticMessage>();
+            var missingFrameworkDiagnostics = new List<DiagnosticMessage>();
+
+            // Collect dependency diagnostics
+            foreach (var diag in context.LibraryManager.GetAllDiagnostics())
+            {
+                if (diag.ErrorCode == ErrorCodes.DOTNET1011 ||
+                    diag.ErrorCode == ErrorCodes.DOTNET1012)
+                {
+                    missingFrameworkDiagnostics.Add(diag);
+                }
+
+                diagnostics.Add(diag);
+            }
+
+            if (missingFrameworkDiagnostics.Count > 0)
+            {
+                // The framework isn't installed so we should short circuit the rest of the compilation
+                // so we don't get flooded with errors
+                PrintSummary(missingFrameworkDiagnostics, sw);
+                return false;
+            }
+
             // Dump dependency data
             // TODO: Turn on only if verbose, we can look at the response
             // file anyways
@@ -240,11 +258,6 @@ namespace Microsoft.DotNet.Tools.Compiler
                                  })
                                  .Execute();
 
-            foreach (var diag in diagnostics)
-            {
-                PrintDiagnostic(diag);
-            }
-
             var success = result.ExitCode == 0;
 
             if (success && compilationOptions.EmitEntryPoint.GetValueOrDefault())
@@ -255,10 +268,7 @@ namespace Microsoft.DotNet.Tools.Compiler
                              runtimeContext.CreateExporter(configuration));
             }
 
-            PrintSummary(success, diagnostics);
-
-            Reporter.Output.WriteLine($"Time elapsed {sw.Elapsed}");
-            Reporter.Output.WriteLine();
+            PrintSummary(diagnostics, sw, success);
 
             return success;
         }
@@ -423,14 +433,16 @@ namespace Microsoft.DotNet.Tools.Compiler
             return "\"" + input.Replace("\\", "\\\\").Replace("\"", "\\\"") + "\"";
         }
 
-        private static void PrintSummary(bool success, List<DiagnosticMessage> diagnostics)
+        private static void PrintSummary(List<DiagnosticMessage> diagnostics, Stopwatch sw, bool success = true)
         {
+            PrintDiagnostics(diagnostics);
+
             Reporter.Output.WriteLine();
 
             var errorCount = diagnostics.Count(d => d.Severity == DiagnosticMessageSeverity.Error);
             var warningCount = diagnostics.Count(d => d.Severity == DiagnosticMessageSeverity.Warning);
 
-            if (errorCount > 0)
+            if (errorCount > 0 || !success)
             {
                 Reporter.Output.WriteLine("Compilation failed.".Red());
             }
@@ -443,6 +455,9 @@ namespace Microsoft.DotNet.Tools.Compiler
             Reporter.Output.WriteLine($"    {errorCount} Error(s)");
 
             Reporter.Output.WriteLine();
+
+            Reporter.Output.WriteLine($"Time elapsed {sw.Elapsed}");
+            Reporter.Output.WriteLine();
         }
 
         private static bool AddResources(Project project, List<string> compilerArgs, string intermediateOutputPath)
@@ -553,6 +568,14 @@ namespace Microsoft.DotNet.Tools.Compiler
             return null;
         }
 
+        private static void PrintDiagnostics(List<DiagnosticMessage> diagnostics)
+        {
+            foreach (var diag in diagnostics)
+            {
+                PrintDiagnostic(diag);
+            }
+        }
+        
         private static void PrintDiagnostic(DiagnosticMessage diag)
         {
             switch (diag.Severity)