diff --git a/src/packageManager.ts b/src/packageManager.ts
index 4281361..03521e6 100644
--- a/src/packageManager.ts
+++ b/src/packageManager.ts
@@ -49,6 +49,20 @@ class NPM implements PackageManager {
 class Yarn implements PackageManager {
   name = 'Yarn'
   cli = 'yarn'
+  private workspace: boolean
+
+  constructor(rootDir: string) {
+    this.workspace = this.isWorkspace(rootDir);
+  }
+
+  private isWorkspace(rootDir: string) {
+    try {
+      const packageJSON = JSON.parse(fs.readFileSync(path.join(rootDir, 'package.json'), 'utf-8'));
+      return !!packageJSON.workspaces;
+    } catch (e) {
+      return false;
+    }
+  }
 
   init(): string {
     return 'yarn init -y'
@@ -67,7 +81,7 @@ class Yarn implements PackageManager {
   }
 
   installDevDependency(name: string): string {
-    return `yarn add --dev ${name}`
+    return `yarn add --dev ${this.workspace ? '-W ' : ''}${name}`
   }
 
   runPlaywrightTest(args: string): string {
@@ -82,8 +96,10 @@ class Yarn implements PackageManager {
 class PNPM implements PackageManager {
   name = 'pnpm'
   cli = 'pnpm'
+  private workspace: boolean;
 
-  constructor(private workspace: boolean) {
+  constructor(rootDir: string) {
+    this.workspace = fs.existsSync(path.resolve(rootDir, 'pnpm-workspace.yaml'));
   }
 
   init(): string {
@@ -118,10 +134,9 @@ class PNPM implements PackageManager {
 export function determinePackageManager(rootDir: string): PackageManager {
   if (process.env.npm_config_user_agent) {
     if (process.env.npm_config_user_agent.includes('yarn'))
-      return new Yarn();
+      return new Yarn(rootDir);
     if (process.env.npm_config_user_agent.includes('pnpm'))
-      return new PNPM(fs.existsSync(path.resolve(rootDir, 'pnpm-workspace.yaml')));
-    return new NPM();
+      return new PNPM(rootDir);
   }
   return new NPM();
 }
diff --git a/tests/integration.spec.ts b/tests/integration.spec.ts
index 0156561..534811a 100644
--- a/tests/integration.spec.ts
+++ b/tests/integration.spec.ts
@@ -112,6 +112,31 @@ test('should generate in the root of pnpm workspace', async ({ run, packageManag
   expect(fs.existsSync(path.join(dir, 'playwright.config.ts'))).toBeTruthy();
 });
 
+test('should generate in the root of yarn workspaces', async ({ run, packageManager }) => {
+  test.skip(packageManager !== 'yarn');
+
+  const dir = test.info().outputDir;
+  fs.mkdirSync(dir, { recursive: true });
+  fs.writeFileSync(path.join(dir, 'package.json'), `{
+  "name": "yarn-monorepo",
+  "version": "1.0.0",
+  "private": true,
+  "workspaces": ["packages/*"]
+}`);
+  for (const pkg of ['foo', 'bar']) {
+    const packageDir = path.join(dir, 'packages', pkg);
+    fs.mkdirSync(packageDir, { recursive: true });
+    childProcess.execSync('yarn init -y', { cwd: packageDir });
+  }
+  childProcess.execSync('yarn install', { cwd: dir });
+
+  await run([], { installGitHubActions: false, testDir: 'tests', language: 'TypeScript', installPlaywrightDependencies: false, installPlaywrightBrowsers: false });
+  assertLockFilesExist(dir, packageManager);
+  expect(fs.existsSync(path.join(dir, 'tests/example.spec.ts'))).toBeTruthy();
+  expect(fs.existsSync(path.join(dir, 'node_modules/playwright'))).toBeTruthy();
+  expect(fs.existsSync(path.join(dir, 'playwright.config.ts'))).toBeTruthy();
+});
+
 test('should not duplicate gitignore entries', async ({ run, dir }) => {
   fs.writeFileSync(path.join(dir, '.gitignore'), validGitignore);