diff --git a/tools/projmgr/include/ProjMgrWorker.h b/tools/projmgr/include/ProjMgrWorker.h
index 9a38903ac..ae26e1724 100644
--- a/tools/projmgr/include/ProjMgrWorker.h
+++ b/tools/projmgr/include/ProjMgrWorker.h
@@ -897,6 +897,7 @@ class ProjMgrWorker {
     std::vector<ConnectPtrVec>& combinations, const ConnectPtrVec& previous = ConnectPtrVec());
   void PushBackUniquely(ConnectionsCollectionVec& vec, const ConnectionsCollection& value);
   void PushBackUniquely(std::vector<ToolchainItem>& vec, const ToolchainItem& value);
+  void GetRegisteredToolchainEnvVars(void);
   void GetRegisteredToolchains(void);
   bool GetLatestToolchain(ToolchainItem& toolchain);
   bool GetToolchainConfig(const std::string& name, const std::string& version, std::string& configPath, std::string& selectedConfigVersion);
diff --git a/tools/projmgr/src/ProjMgrWorker.cpp b/tools/projmgr/src/ProjMgrWorker.cpp
index 6a01ff63d..5a3115966 100644
--- a/tools/projmgr/src/ProjMgrWorker.cpp
+++ b/tools/projmgr/src/ProjMgrWorker.cpp
@@ -1723,7 +1723,7 @@ bool ProjMgrWorker::ProcessToolchain(ContextItem& context) {
 
   context.toolchain = GetToolchain(context.compiler);
 
-  GetRegisteredToolchains();
+  GetRegisteredToolchainEnvVars();
   if (!m_regToolchainsEnvVars.empty()) {
     // check if the required environment variable is set
     auto itr = std::find_if(m_regToolchainsEnvVars.begin(), m_regToolchainsEnvVars.end(), [&context](const auto& item) {
@@ -4480,18 +4480,21 @@ bool ProjMgrWorker::IsContextSelected(const string& context) {
 }
 
 bool ProjMgrWorker::ListToolchains(vector<ToolchainItem>& toolchains) {
+  // If list toolchains command is fired
+  if (m_selectedContexts[0].empty()) {
+    // list registered toolchains
+    GetRegisteredToolchains();
+    if (m_toolchains.empty()) {
+      return false;
+    }
+    toolchains = m_toolchains;
+    return true;
+  }
+
   bool allSupported = true;
   for (const auto& selectedContext : m_selectedContexts) {
     ContextItem& context = m_contexts[selectedContext];
-    if (selectedContext.empty()) {
-      // list registered toolchains
-      GetRegisteredToolchains();
-      if (m_toolchains.empty()) {
-        return false;
-      }
-      toolchains = m_toolchains;
-      return true;
-    }
+
     // list required toolchains for selected contexts
     if (!LoadPacks(context)) {
       return false;
@@ -4515,10 +4518,7 @@ bool ProjMgrWorker::ListEnvironment(EnvironmentList& env) {
   return true;
 }
 
-void ProjMgrWorker::GetRegisteredToolchains(void) {
-  if (!m_toolchains.empty()) {
-    return;
-  }
+void ProjMgrWorker::GetRegisteredToolchainEnvVars(void) {
   // extract toolchain info from environment variables
   static const regex regEx = regex("(\\w+)_TOOLCHAIN_(\\d+)_(\\d+)_(\\d+)=(.*)");
   for (const auto& envVar : m_envVars) {
@@ -4530,6 +4530,17 @@ void ProjMgrWorker::GetRegisteredToolchains(void) {
       m_regToolchainsEnvVars[sm[1]][string(sm[2]) + '.' + string(sm[3]) + '.' + string(sm[4])] = sm[5];
     }
   }
+
+  if (m_regToolchainsEnvVars.empty()) {
+    m_toolchainErrors[MessageType::Warning].insert("no compiler registered. Add path to compiler 'bin' directory with environment variable <name>_TOOLCHAIN_<major>_<minor>_<patch>. <name> is one of AC6, GCC, IAR, CLANG");
+  }
+}
+
+void ProjMgrWorker::GetRegisteredToolchains(void) {
+  if (!m_toolchains.empty()) {
+    return;
+  }
+  GetRegisteredToolchainEnvVars();
   // iterate over registered toolchains
   for (const auto& [toolchainName, toolchainVersions] : m_regToolchainsEnvVars) {
     for (const auto& [toolchainVersion, toolchainRoot] : toolchainVersions) {
@@ -4542,10 +4553,6 @@ void ProjMgrWorker::GetRegisteredToolchains(void) {
       }
     }
   }
-
-  if (m_regToolchainsEnvVars.empty()) {
-    m_toolchainErrors[MessageType::Warning].insert("no compiler registered. Add path to compiler 'bin' directory with environment variable <name>_TOOLCHAIN_<major>_<minor>_<patch>. <name> is one of AC6, GCC, IAR, CLANG");
-  }
 }
 
 bool ProjMgrWorker::GetLatestToolchain(ToolchainItem& toolchain) {
diff --git a/tools/projmgr/test/src/ProjMgrUnitTests.cpp b/tools/projmgr/test/src/ProjMgrUnitTests.cpp
index 4ae6cb5cc..558b7c5eb 100644
--- a/tools/projmgr/test/src/ProjMgrUnitTests.cpp
+++ b/tools/projmgr/test/src/ProjMgrUnitTests.cpp
@@ -1926,6 +1926,52 @@ TEST_F(ProjMgrUnitTests, ListToolchainsSolution) {
   EXPECT_EQ(outStr2, expected2);
 }
 
+TEST_F(ProjMgrUnitTests, ListToolchains_with_unknown_toolchain) {
+  StdStreamRedirect streamRedirect;
+  char* envp[4];
+  string ac6 = "AC6_TOOLCHAIN_6_18_0=" + testinput_folder;
+  string gcc = "GCC_TOOLCHAIN_11_3_1=" + testinput_folder;
+  string unknown = "UNKNOWN_TOOLCHAIN_1_2_3=" + testinput_folder;
+  envp[0] = (char*)ac6.c_str();
+  envp[1] = (char*)gcc.c_str();
+  envp[2] = (char*)unknown.c_str();
+  envp[3] = (char*)'\0';
+  char* argv[5];
+  const string& csolution = testinput_folder + "/TestSolution/toolchain.csolution.yml";
+  argv[1] = (char*)"list";
+  argv[2] = (char*)"toolchains";
+  argv[3] = (char*)"--solution";
+  argv[4] = (char*)csolution.c_str();
+
+  // Test listing required toolchains
+  EXPECT_EQ(0, RunProjMgr(5, argv, envp));
+  const string& expected = "AC6@>=0.0.0\nAC6@>=6.18.0\nGCC@11.3.1\n";
+  const string& outStr = streamRedirect.GetOutString();
+  const string& errStr = streamRedirect.GetErrorString();
+  EXPECT_EQ(outStr, expected);
+  EXPECT_TRUE(errStr.empty());
+
+  // Test with no input solution
+  streamRedirect.ClearStringStreams();
+  EXPECT_EQ(1, RunProjMgr(3, argv, envp));
+  const string& expected2 = "AC6@6.18.0\nGCC@11.3.1\n";
+  const string& outStr2 = streamRedirect.GetOutString();
+  const string& errStr2 = streamRedirect.GetErrorString();
+  EXPECT_EQ(outStr2, expected2);
+  EXPECT_TRUE(errStr2.find("error csolution: no toolchain cmake files found for 'UNKNOWN' in") != std::string::npos);
+
+  // Test with converting the solution
+  streamRedirect.ClearStringStreams();
+  argv[1] = (char*)"convert";
+  argv[2] = (char*)"--solution";
+  argv[3] = (char*)csolution.c_str();
+
+  // Test listing required toolchains
+  EXPECT_EQ(0, RunProjMgr(4, argv, envp));
+  const string& errStr3 = streamRedirect.GetErrorString();
+  EXPECT_TRUE(errStr3.empty());
+}
+
 TEST_F(ProjMgrUnitTests, ListLayersUniquelyCompatibleBoard) {
   StdStreamRedirect streamRedirect;
   char* argv[8];