diff --git a/.changeset/dry-donkeys-cheer.md b/.changeset/dry-donkeys-cheer.md
new file mode 100644
index 0000000000..70ed45fa74
--- /dev/null
+++ b/.changeset/dry-donkeys-cheer.md
@@ -0,0 +1,5 @@
+---
+'@backstage/create-app': patch
+---
+
+Added a check to ensure that Yarn v1 is used when creating new projects.
diff --git a/packages/create-app/src/lib/tasks.test.ts b/packages/create-app/src/lib/tasks.test.ts
index 2894f1ffe9..95ced49490 100644
--- a/packages/create-app/src/lib/tasks.test.ts
+++ b/packages/create-app/src/lib/tasks.test.ts
@@ -193,27 +193,58 @@ describe('tasks', () => {
       // requires callback implementation to support `promisify` wrapper
       // https://stackoverflow.com/a/60579617/10044859
       mockExec.mockImplementation((_command, callback) => {
-        callback(null, 'standard out', 'standard error');
+        if (_command === 'yarn --version') {
+          callback(null, { stdout: '1.22.5', stderr: 'standard error' });
+        } else {
+          callback(null, { stdout: 'standard out', stderr: 'standard error' });
+        }
       });
 
       const appDir = 'projects/dir';
       await expect(buildAppTask(appDir)).resolves.not.toThrow();
-      expect(mockChdir).toHaveBeenCalledTimes(2);
+      expect(mockChdir).toHaveBeenCalledTimes(1);
       expect(mockChdir).toHaveBeenNthCalledWith(1, appDir);
-      expect(mockChdir).toHaveBeenNthCalledWith(2, appDir);
-      expect(mockExec).toHaveBeenCalledTimes(2);
+      expect(mockExec).toHaveBeenCalledTimes(3);
       expect(mockExec).toHaveBeenNthCalledWith(
         1,
-        'yarn install',
+        'yarn --version',
         expect.any(Function),
       );
       expect(mockExec).toHaveBeenNthCalledWith(
         2,
+        'yarn install',
+        expect.any(Function),
+      );
+      expect(mockExec).toHaveBeenNthCalledWith(
+        3,
         'yarn tsc',
         expect.any(Function),
       );
     });
 
+    it('should error out on incorrect yarn version', async () => {
+      const mockChdir = jest.spyOn(process, 'chdir');
+
+      // requires callback implementation to support `promisify` wrapper
+      // https://stackoverflow.com/a/60579617/10044859
+      mockExec.mockImplementation((_command, callback) => {
+        callback(null, { stdout: '3.2.1', stderr: 'standard error' });
+      });
+
+      const appDir = 'projects/dir';
+      await expect(buildAppTask(appDir)).rejects.toThrow(
+        /^@backstage\/create-app requires Yarn v1, found '3\.2\.1'/,
+      );
+      expect(mockChdir).toHaveBeenCalledTimes(1);
+      expect(mockChdir).toHaveBeenNthCalledWith(1, appDir);
+      expect(mockExec).toHaveBeenCalledTimes(1);
+      expect(mockExec).toHaveBeenNthCalledWith(
+        1,
+        'yarn --version',
+        expect.any(Function),
+      );
+    });
+
     it('should fail if project directory does not exist', async () => {
       const appDir = 'projects/missingProject';
       await expect(buildAppTask(appDir)).rejects.toThrow(
diff --git a/packages/create-app/src/lib/tasks.ts b/packages/create-app/src/lib/tasks.ts
index 23017c8ec7..f158a2d1f1 100644
--- a/packages/create-app/src/lib/tasks.ts
+++ b/packages/create-app/src/lib/tasks.ts
@@ -199,9 +199,21 @@ export async function createTemporaryAppFolderTask(tempDir: string) {
  * @param appDir - location of application to build
  */
 export async function buildAppTask(appDir: string) {
+  process.chdir(appDir);
+
+  await Task.forItem('determining', 'yarn version', async () => {
+    const result = await exec('yarn --version');
+    const yarnVersion = result.stdout?.trim();
+
+    if (yarnVersion && !yarnVersion.startsWith('1.')) {
+      throw new Error(
+        `@backstage/create-app requires Yarn v1, found '${yarnVersion}'. You can migrate the project to Yarn 3 after creation using https://backstage.io/docs/tutorials/yarn-migration`,
+      );
+    }
+  });
+
   const runCmd = async (cmd: string) => {
     await Task.forItem('executing', cmd, async () => {
-      process.chdir(appDir);
       await exec(cmd).catch(error => {
         process.stdout.write(error.stderr);
         process.stdout.write(error.stdout);