diff --git a/.github/workflows/browser-extension-build.yml b/.github/workflows/browser-extension-build.yml
index b8cf9b54f..08be44b63 100644
--- a/.github/workflows/browser-extension-build.yml
+++ b/.github/workflows/browser-extension-build.yml
@@ -70,6 +70,11 @@ jobs:
     steps:
       - uses: actions/checkout@v4
 
+      - name: Setup .NET
+        uses: actions/setup-dotnet@v4
+        with:
+          dotnet-version: 9.0.x
+
       - name: Setup Node.js
         uses: actions/setup-node@v4
         with:
@@ -77,7 +82,40 @@ jobs:
           cache: 'npm'
           cache-dependency-path: apps/browser-extension/package-lock.json
 
-      - name: Install dependencies
+      - name: Install .NET dependencies
+        working-directory: apps/server
+        run: dotnet workload install wasm-tools
+
+      - name: Build API server
+        working-directory: apps/server
+        run: dotnet build AliasVault.Api
+
+      - name: Start dev database
+        run: ./install.sh configure-dev-db start
+
+      - name: Start API server
+        working-directory: apps/server/AliasVault.Api
+        run: |
+          dotnet run --no-build &
+          # Wait for API to be ready
+          echo "Waiting for API to start..."
+          for i in {1..30}; do
+            if curl -s http://localhost:5092/v1/Auth/status > /dev/null 2>&1; then
+              echo "API is ready!"
+              break
+            fi
+            echo "Attempt $i: API not ready yet..."
+            sleep 2
+          done
+        env:
+          ConnectionStrings__AliasServerDbContext: "Host=localhost;Port=5433;Database=aliasdb_e2e_extension;Username=aliasvault;Password=password"
+          JWT_KEY: "12345678901234567890123456789012"
+          DATA_PROTECTION_CERT_PASS: "Development"
+          PUBLIC_REGISTRATION_ENABLED: "true"
+          ADMIN_PASSWORD_HASH: "AQAAAAIAAYagAAAAEKWfKfa2gh9Z72vjAlnNP1xlME7FsunRznzyrfqFte40FToufRwa3kX8wwDwnEXZag=="
+          ADMIN_PASSWORD_GENERATED: "2024-01-01T00:00:00Z"
+
+      - name: Install browser extension dependencies
         run: npm ci
         working-directory: apps/browser-extension
 
@@ -88,6 +126,8 @@ jobs:
       - name: Build and run E2E tests
         run: xvfb-run --auto-servernum npm run test:e2e:build
         working-directory: apps/browser-extension
+        env:
+          ALIASVAULT_API_URL: "http://localhost:5092"
 
       - name: Upload Playwright report
         if: always()
diff --git a/apps/browser-extension/playwright.config.ts b/apps/browser-extension/playwright.config.ts
index 471854595..cc04f0b42 100644
--- a/apps/browser-extension/playwright.config.ts
+++ b/apps/browser-extension/playwright.config.ts
@@ -14,6 +14,9 @@ import { defineConfig, devices } from '@playwright/test';
 export default defineConfig({
   testDir: './tests/e2e',
 
+  // Global setup to check API availability before tests
+  globalSetup: './tests/global-setup.ts',
+
   // Global teardown to clean up browser contexts
   globalTeardown: './tests/global-teardown.ts',
 
diff --git a/apps/browser-extension/tests/fixtures/fixtures.ts b/apps/browser-extension/tests/fixtures/fixtures.ts
index ec500f8cd..509edadaf 100644
--- a/apps/browser-extension/tests/fixtures/fixtures.ts
+++ b/apps/browser-extension/tests/fixtures/fixtures.ts
@@ -2,7 +2,7 @@ import { test as base, chromium, type BrowserContext, type Page } from '@playwri
 import path from 'path';
 import { fileURLToPath } from 'url';
 
-import { createTestUser, isApiAvailable, type TestUser } from '../helpers/test-api';
+import { createTestUser, type TestUser } from '../helpers/test-api';
 
 const __filename = fileURLToPath(import.meta.url);
 const __dirname = path.dirname(__filename);
@@ -100,18 +100,7 @@ export const test = base.extend<TestFixtures>({
   },
 
   testUser: async ({ apiUrl }, use) => {
-    // Check if the API is available
-    const apiAvailable = await isApiAvailable(apiUrl);
-    if (!apiAvailable) {
-      console.warn(`API not available at ${apiUrl}. Tests requiring authentication will fail.`);
-      // Return a placeholder user - tests should handle this gracefully
-      await use({
-        username: 'api_unavailable',
-        password: 'api_unavailable',
-      });
-      return;
-    }
-
+    // API availability is checked in global setup
     // Create a test user for this test run
     const testUser = await createTestUser(apiUrl);
     await use(testUser);
diff --git a/apps/browser-extension/tests/global-setup.ts b/apps/browser-extension/tests/global-setup.ts
new file mode 100644
index 000000000..a7cac314b
--- /dev/null
+++ b/apps/browser-extension/tests/global-setup.ts
@@ -0,0 +1,28 @@
+/**
+ * Global setup for E2E tests.
+ *
+ * Runs before any tests to ensure prerequisites are met.
+ */
+
+import { isApiAvailable } from './helpers/test-api';
+
+/**
+ * Default API URL for local development.
+ */
+const DEFAULT_API_URL = process.env.ALIASVAULT_API_URL || 'http://localhost:5092';
+
+export default async function globalSetup(): Promise<void> {
+  console.log(`Checking API availability at ${DEFAULT_API_URL}...`);
+
+  const apiAvailable = await isApiAvailable(DEFAULT_API_URL);
+
+  if (!apiAvailable) {
+    throw new Error(
+      `API is not available at ${DEFAULT_API_URL}. ` +
+        'Please ensure the AliasVault API server is running before running E2E tests. ' +
+        'You can set a custom API URL via the ALIASVAULT_API_URL environment variable.'
+    );
+  }
+
+  console.log('API is available. Proceeding with tests...');
+}