diff --git a/packages/e2e-test-utils-playwright/src/request-utils/index.ts b/packages/e2e-test-utils-playwright/src/request-utils/index.ts
index b125005f86f1c8..364f5369564ac2 100644
--- a/packages/e2e-test-utils-playwright/src/request-utils/index.ts
+++ b/packages/e2e-test-utils-playwright/src/request-utils/index.ts
@@ -19,7 +19,7 @@ import { getPluginsMap, activatePlugin, deactivatePlugin } from './plugins';
 import {
 	deleteAllTemplates,
 	createTemplate,
-	updateTemplate,
+	updateOrCreateTemplate,
 } from './templates';
 import {
 	activateTheme,
@@ -179,8 +179,9 @@ class RequestUtils {
 		deleteAllTemplates.bind( this );
 	/** @borrows createTemplate as this.createTemplate */
 	createTemplate: typeof createTemplate = createTemplate.bind( this );
-	/** @borrows updateTemplate as this.updateTemplate */
-	updateTemplate: typeof updateTemplate = updateTemplate.bind( this );
+	/** @borrows updateOrCreateTemplate as this.updateOrCreateTemplate */
+	updateOrCreateTemplate: typeof updateOrCreateTemplate =
+		updateOrCreateTemplate.bind( this );
 	/** @borrows resetPreferences as this.resetPreferences */
 	resetPreferences: typeof resetPreferences = resetPreferences.bind( this );
 	/** @borrows listMedia as this.listMedia */
diff --git a/packages/e2e-test-utils-playwright/src/request-utils/templates.ts b/packages/e2e-test-utils-playwright/src/request-utils/templates.ts
index bb7467cce87a3f..6be65978ae48cd 100644
--- a/packages/e2e-test-utils-playwright/src/request-utils/templates.ts
+++ b/packages/e2e-test-utils-playwright/src/request-utils/templates.ts
@@ -89,7 +89,7 @@ async function createTemplate(
  * @param type    Template type.
  * @param payload Template attributes.
  */
-async function updateTemplate(
+async function updateOrCreateTemplate(
 	this: RequestUtils,
 	type: TemplateType,
 	payload: CreateTemplatePayload
@@ -104,8 +104,9 @@ async function updateTemplate(
 
 	const template = templates.find( ( t ) => t.slug === payload.slug );
 
+	// If the template is not found, create it.
 	if ( ! template ) {
-		throw new Error( `Template with slug "${ payload.slug }" not found.` );
+		return createTemplate.bind( this )( type, payload );
 	}
 
 	const updatedTemplate = await this.rest< Template >( {
@@ -117,4 +118,4 @@ async function updateTemplate(
 	return updatedTemplate;
 }
 
-export { deleteAllTemplates, createTemplate, updateTemplate };
+export { deleteAllTemplates, createTemplate, updateOrCreateTemplate };
diff --git a/test/e2e/specs/interactivity/instant-search.spec.ts b/test/e2e/specs/interactivity/instant-search.spec.ts
index a50c3df42a65d3..b8bdeb8f0163b8 100644
--- a/test/e2e/specs/interactivity/instant-search.spec.ts
+++ b/test/e2e/specs/interactivity/instant-search.spec.ts
@@ -556,7 +556,7 @@ test.describe( 'Instant Search', () => {
 
 		test.beforeAll( async ( { requestUtils } ) => {
 			// Edit the Home template instead of creating a new page
-			await requestUtils.updateTemplate( 'wp_template', {
+			await requestUtils.updateOrCreateTemplate( 'wp_template', {
 				slug: 'home',
 				content: `
 <!-- wp:query {"enhancedPagination":true,"queryId":1111,"query":{"inherit":true,"perPage":2,"order":"desc","orderBy":"date"}} -->
@@ -727,7 +727,7 @@ test.describe( 'Instant Search', () => {
 			page,
 			requestUtils,
 		} ) => {
-			await requestUtils.updateTemplate( 'wp_template', {
+			await requestUtils.updateOrCreateTemplate( 'wp_template', {
 				slug: 'home',
 				content: `
 	<!-- wp:query {"enhancedPagination":true,"queryId":1111,"query":{"inherit":true,"perPage":2,"order":"desc","orderBy":"date"}} -->
@@ -807,7 +807,7 @@ test.describe( 'Instant Search', () => {
 			requestUtils,
 		} ) => {
 			// Set up: Add one inherited and one custom query to the home template
-			await requestUtils.updateTemplate( 'wp_template', {
+			await requestUtils.updateOrCreateTemplate( 'wp_template', {
 				slug: 'home',
 				content: `
 	<!-- wp:query {"enhancedPagination":true,"queryId":1111,"query":{"inherit":true,"perPage":2,"order":"desc","orderBy":"date"}} -->