diff --git a/examples/templates/gcp-linux/main.tf b/examples/templates/gcp-linux/main.tf
index a53a29127bf2c..d97bdae3126a5 100644
--- a/examples/templates/gcp-linux/main.tf
+++ b/examples/templates/gcp-linux/main.tf
@@ -70,5 +70,21 @@ resource "google_compute_instance" "dev" {
     email  = data.google_compute_default_service_account.default.email
     scopes = ["cloud-platform"]
   }
-  metadata_startup_script = coder_agent.dev.init_script
+  # The startup script runs as root with no $HOME environment set up, which can break workspace applications, so
+  # instead of directly running the agent init script, setup the home directory, write the init script, and then execute
+  # it.
+  metadata_startup_script = <<EOMETA
+#!/usr/bin/env sh
+set -eux pipefail
+
+mkdir /root || true
+cat <<'EOCODER' > /root/coder_agent.sh
+${coder_agent.dev.init_script}
+EOCODER
+chmod +x /root/coder_agent.sh
+
+export HOME=/root
+/root/coder_agent.sh
+
+EOMETA
 }