diff --git a/src/rez/package_cache.py b/src/rez/package_cache.py
index 0f8335756b..e3024fc8e3 100644
--- a/src/rez/package_cache.py
+++ b/src/rez/package_cache.py
@@ -501,15 +501,16 @@ def add_variants(self, variants: Iterable[Variant], package_cache_async: bool =
         """Add the given variants to the package payload cache.
         """
 
-        # A prod install is necessary because add_variants works by
-        # starting a rez-pkg-cache proc, and this can only be done reliably in
-        # a prod install. On non-windows we could fork instead, but there would
-        # remain no good solution on windows.
+        # A prod install is necessary for async caching because add_variants
+        # works by starting a rez-pkg-cache proc, and this can only be done
+        # reliably in a prod install. On non-windows we could fork instead, but
+        # there would remain no good solution on windows.
         #
-        if not system.is_production_rez_install:
+        if package_cache_async and not system.is_production_rez_install:
             raise PackageCacheError(
-                "PackageCache.add_variants is only supported in a "
-                "production rez installation."
+                "Asynchronous package caching is only supported in a "
+                "production rez installation. Use synchronous caching "
+                "(package_cache_async = False) in non-production installs."
             )
 
         variants_ = []
diff --git a/src/rez/resolved_context.py b/src/rez/resolved_context.py
index 3b45ac50d1..1e739b58c7 100644
--- a/src/rez/resolved_context.py
+++ b/src/rez/resolved_context.py
@@ -1935,7 +1935,7 @@ def _update_package_cache(self) -> None:
             return
 
         # see PackageCache.add_variants
-        if not system.is_production_rez_install:
+        if self.package_cache_async and not system.is_production_rez_install:
             return
 
         pkgcache = self._get_package_cache()
diff --git a/src/rez/tests/test_package_cache.py b/src/rez/tests/test_package_cache.py
index eefe69c1c0..ced6f96c28 100644
--- a/src/rez/tests/test_package_cache.py
+++ b/src/rez/tests/test_package_cache.py
@@ -15,6 +15,7 @@
 
 from rez.tests.util import TestBase, TempdirMixin, restore_os_environ, \
     install_dependent
+from rez.system import system
 from rez.packages import get_package
 from rez.package_cache import PackageCache
 from rez.resolved_context import ResolvedContext
@@ -340,3 +341,55 @@ def test_add_variant_skipped_variant_too_large(self):
              patch.object(pkgcache, 'variant_meets_space_requirements', return_value=False):
             _, status = pkgcache.add_variant(variant)
             self.assertEqual(status, PackageCache.VARIANT_SKIPPED)
+
+    def test_add_variants_async_fails_without_prod_install(self):
+        """async add_variants raises when not a production install."""
+        pkgcache = self._pkgcache()
+
+        package = get_package("versioned", "3.0")
+        variant = next(package.iter_variants())
+
+        with patch.object(type(system), "is_production_rez_install", False):
+            with self.assertRaises(PackageCacheError):
+                pkgcache.add_variants([variant], package_cache_async=True)
+
+    def test_add_variants_sync(self):
+        """sync add_variants succeeds caching variants when not a production install."""
+        pkgcache = self._pkgcache()
+
+        package = get_package("versioned", "3.0")
+        variant = next(package.iter_variants())
+
+        with patch.object(type(system), "is_production_rez_install", False):
+            pkgcache.add_variants([variant], package_cache_async=False)
+
+        cached_root = pkgcache.get_cached_root(variant)
+        self.assertIsNotNone(cached_root)
+        self.assertTrue(os.path.isdir(cached_root))
+
+        pkgcache.remove_variant(variant)
+
+    def test_update_package_cache_async_skips_without_prod_install(self):
+        """_update_package_cache returns early for async caching on non-prod install."""
+        c = ResolvedContext(["versioned-3.0"])
+
+        c.package_caching = True
+        c.package_cache_async = True
+
+        with patch.object(type(system), "is_production_rez_install", False), \
+             patch.object(c, "_get_package_cache") as mock_get_cache:
+            c._update_package_cache()
+            mock_get_cache.assert_not_called()
+
+    def test_update_package_cache_sync_proceeds_without_prod_install(self):
+        """_update_package_cache proceeds for sync caching on non-prod install."""
+        pkgcache = self._pkgcache()
+        c = ResolvedContext(["versioned-3.0"])
+
+        c.package_caching = True
+        c.package_cache_async = False
+
+        with patch.object(type(system), "is_production_rez_install", False), \
+             patch.object(c, "_get_package_cache", return_value=pkgcache) as mock_get_cache:
+            c._update_package_cache()
+            mock_get_cache.assert_called_once()