diff --git a/src/components/Workspace/__tests__/workspace-context.spec.tsx b/src/components/Workspace/__tests__/workspace-context.spec.tsx
new file mode 100644
index 0000000..60bbc17
--- /dev/null
+++ b/src/components/Workspace/__tests__/workspace-context.spec.tsx
@@ -0,0 +1,207 @@
+import { useContext } from 'react';
+import { useQuery } from '@tanstack/react-query';
+import { render, screen, waitFor } from '@testing-library/react';
+import { userEvent } from '@testing-library/user-event';
+import { createReactRouterMock } from '../../../utils/test-utils';
+import { getLastUsedWorkspace, setLastUsedWorkspace } from '../utils';
+import { WorkspaceProvider, WorkspaceContext } from '../workspace-context';
+
+jest.mock('@tanstack/react-query', () => ({
+  ...jest.requireActual('@tanstack/react-query'),
+  useQuery: jest.fn(),
+}));
+
+jest.mock('../utils', () => ({
+  ...jest.requireActual('../utils'),
+  createWorkspaceQueryOptions: jest.fn(),
+  getLastUsedWorkspace: jest.fn(),
+  setLastUsedWorkspace: jest.fn(),
+}));
+
+// Test data
+const mockWorkspaces = [
+  {
+    metadata: {
+      name: 'workspace-1',
+    },
+    status: {
+      namespaces: [{ type: 'default', name: 'test-namespace' }],
+      type: 'home',
+    },
+  },
+  {
+    metadata: {
+      name: 'workspace-2',
+    },
+    status: {
+      namespaces: [{ type: 'default', name: 'test-namespace-2' }],
+    },
+  },
+];
+
+const mockNamespace = 'test-namespace';
+
+const mockUseNavigate = createReactRouterMock('useNavigate');
+const mockUseParams = createReactRouterMock('useParams');
+const mockUseQuery = useQuery as jest.Mock;
+const mockGetLastUsedWorkspace = getLastUsedWorkspace as jest.Mock;
+
+describe('WorkspaceProvider', () => {
+  const mockNavigate = jest.fn();
+
+  beforeEach(() => {
+    jest.clearAllMocks();
+    mockUseNavigate.mockReturnValue(mockNavigate);
+    mockUseParams.mockReturnValue({});
+    mockGetLastUsedWorkspace.mockReturnValue('workspace-1');
+  });
+
+  it('should renders loading spinner when data is being fetched', () => {
+    mockUseQuery
+      .mockReturnValueOnce({
+        data: undefined,
+        isLoading: true,
+      })
+      .mockReturnValueOnce({
+        data: undefined,
+        isLoading: true,
+      });
+
+    render(
+      <WorkspaceProvider>
+        <div>Child content</div>
+      </WorkspaceProvider>,
+    );
+
+    expect(screen.getByRole('progressbar')).toBeInTheDocument();
+    expect(screen.queryByText('Child content')).not.toBeInTheDocument();
+  });
+
+  it('should renders children when data is loaded', async () => {
+    mockUseQuery
+      .mockReturnValueOnce({
+        data: mockWorkspaces,
+        isLoading: false,
+      })
+      .mockReturnValue({
+        data: mockWorkspaces[0],
+        isLoading: false,
+      });
+
+    render(
+      <WorkspaceProvider>
+        <div>Child content</div>
+      </WorkspaceProvider>,
+    );
+
+    await waitFor(() => {
+      expect(screen.getByText('Child content')).toBeInTheDocument();
+    });
+  });
+
+  it('handles error state correctly', () => {
+    const errorMessage = 'Failed to load workspace';
+    mockUseQuery
+      .mockReturnValueOnce({
+        data: mockWorkspaces,
+        isLoading: false,
+      })
+      .mockReturnValueOnce({
+        error: new Error(errorMessage),
+        isLoading: false,
+      });
+
+    render(
+      <WorkspaceProvider>
+        <div>Child content</div>
+      </WorkspaceProvider>,
+    );
+
+    expect(screen.getByText(`Unable to access workspace workspace-1`)).toBeInTheDocument();
+    expect(screen.getByText(errorMessage)).toBeInTheDocument();
+  });
+
+  it('provides correct context values', async () => {
+    mockUseQuery
+      .mockReturnValueOnce({
+        data: mockWorkspaces,
+        isLoading: false,
+      })
+      .mockReturnValueOnce({
+        data: mockWorkspaces[0],
+        isLoading: false,
+      });
+
+    const TestConsumer = () => {
+      const context = useContext(WorkspaceContext);
+      return (
+        <div>
+          <div data-test="namespace">{context.namespace}</div>
+          <div data-test="workspace">{context.workspace}</div>
+          <div data-test="workspaces-loaded">{String(context.workspacesLoaded)}</div>
+        </div>
+      );
+    };
+
+    render(
+      <WorkspaceProvider>
+        <TestConsumer />
+      </WorkspaceProvider>,
+    );
+
+    await waitFor(() => {
+      expect(screen.getByTestId('namespace')).toHaveTextContent(mockNamespace);
+      expect(screen.getByTestId('workspace')).toHaveTextContent('workspace-1');
+      expect(screen.getByTestId('workspaces-loaded')).toHaveTextContent('true');
+    });
+  });
+
+  it('updates last used workspace when active workspace changes', async () => {
+    mockUseQuery
+      .mockReturnValueOnce({
+        data: mockWorkspaces,
+        isLoading: false,
+      })
+      .mockReturnValueOnce({
+        data: mockWorkspaces[0],
+        isLoading: false,
+      });
+
+    mockUseParams.mockReturnValue({ workspaceName: 'workspace-2' });
+
+    render(
+      <WorkspaceProvider>
+        <div>Child content</div>
+      </WorkspaceProvider>,
+    );
+
+    await waitFor(() => {
+      expect(setLastUsedWorkspace).toHaveBeenCalledWith('workspace-2');
+    });
+  });
+
+  it('navigates to home workspace when error occurs and home button is clicked', async () => {
+    const errorMessage = 'Failed to load workspace';
+    mockUseQuery
+      .mockReturnValueOnce({
+        data: mockWorkspaces,
+        isLoading: false,
+      })
+      .mockReturnValueOnce({
+        error: new Error(errorMessage),
+        isLoading: false,
+      });
+
+    render(
+      <WorkspaceProvider>
+        <div>Child content</div>
+      </WorkspaceProvider>,
+    );
+
+    const homeButton = screen.getByText('Go to workspace-1 workspace');
+    await userEvent.click(homeButton);
+
+    expect(setLastUsedWorkspace).toHaveBeenCalledWith('workspace-1');
+    expect(mockNavigate).toHaveBeenCalledWith('/workspaces/workspace-1/applications');
+  });
+});
diff --git a/src/components/Workspace/workspace-context.tsx b/src/components/Workspace/workspace-context.tsx
index 1909ed9..bab2045 100644
--- a/src/components/Workspace/workspace-context.tsx
+++ b/src/components/Workspace/workspace-context.tsx
@@ -1,8 +1,9 @@
 import * as React from 'react';
-import { useParams } from 'react-router-dom';
-import { Bullseye, Spinner } from '@patternfly/react-core';
+import { useNavigate, useParams } from 'react-router-dom';
+import { Bullseye, Button, Spinner } from '@patternfly/react-core';
 import { useQuery } from '@tanstack/react-query';
 import { RouterParams } from '../../routes/utils';
+import ErrorEmptyState from '../../shared/components/empty-state/ErrorEmptyState';
 import { Workspace } from '../../types';
 import {
   createWorkspaceQueryOptions,
@@ -33,26 +34,52 @@ export const WorkspaceContext = React.createContext<WorkspaceContextData>({
 export const WorkspaceProvider: React.FC<React.PropsWithChildren> = ({ children }) => {
   const { data: workspaces, isLoading: workspaceLoading } = useQuery(createWorkspaceQueryOptions());
   const params = useParams<RouterParams>();
+  const navigate = useNavigate();
+
+  const homeWorkspace = React.useMemo(
+    () => (!workspaceLoading ? getHomeWorkspace(workspaces) ?? workspaces[0] : null),
+    [workspaces, workspaceLoading],
+  );
 
   const activeWorkspaceName =
-    params.workspaceName ??
-    getLastUsedWorkspace() ??
-    getHomeWorkspace(workspaces)?.metadata?.name ??
-    workspaces[0]?.metadata?.name;
+    params.workspaceName ?? getLastUsedWorkspace() ?? homeWorkspace?.metadata?.name;
 
-  const { data: workspaceResource, isLoading: activeWorkspaceLoading } = useQuery(
-    createWorkspaceQueryOptions(activeWorkspaceName),
-  );
+  const {
+    data: workspaceResource,
+    isLoading: activeWorkspaceLoading,
+    error,
+  } = useQuery({ ...createWorkspaceQueryOptions(activeWorkspaceName), retry: false });
 
   const namespace = !activeWorkspaceLoading
     ? getDefaultNsForWorkspace(workspaceResource)?.name
     : undefined;
 
   React.useEffect(() => {
-    if (getLastUsedWorkspace() !== activeWorkspaceName) {
+    if (!error && getLastUsedWorkspace() !== activeWorkspaceName) {
       setLastUsedWorkspace(activeWorkspaceName);
     }
-  }, [activeWorkspaceName]);
+  }, [activeWorkspaceName, error]);
+
+  if (error) {
+    return (
+      <ErrorEmptyState
+        title={`Unable to access workspace ${activeWorkspaceName}`}
+        body={error.message}
+      >
+        {homeWorkspace ? (
+          <Button
+            variant="primary"
+            onClick={() => {
+              setLastUsedWorkspace(homeWorkspace.metadata.name);
+              navigate(`/workspaces/${homeWorkspace.metadata.name}/applications`);
+            }}
+          >
+            Go to {homeWorkspace.metadata.name} workspace
+          </Button>
+        ) : null}
+      </ErrorEmptyState>
+    );
+  }
 
   return (
     <WorkspaceContext.Provider
@@ -65,7 +92,7 @@ export const WorkspaceProvider: React.FC<React.PropsWithChildren> = ({ children
         lastUsedWorkspace: getLastUsedWorkspace(),
       }}
     >
-      {!(workspaceLoading && activeWorkspaceLoading) ? (
+      {!(workspaceLoading || activeWorkspaceLoading) ? (
         children
       ) : (
         <Bullseye>
diff --git a/src/routes/index.tsx b/src/routes/index.tsx
index ccb295c..a4088d0 100644
--- a/src/routes/index.tsx
+++ b/src/routes/index.tsx
@@ -113,7 +113,7 @@ export const router = createBrowserRouter([
         element: <ImportForm />,
       },
       {
-        path: `/workspaces/:${RouterParams.workspaceName}/applications`,
+        path: `workspaces/:${RouterParams.workspaceName}/applications`,
         loader: applicationPageLoader,
         element: <ApplicationListView />,
         errorElement: <RouteErrorBoundry />,