diff --git a/tempest/cmd/run.py b/tempest/cmd/run.py
index e78f6b0..26bd418 100644
--- a/tempest/cmd/run.py
+++ b/tempest/cmd/run.py
@@ -70,6 +70,7 @@
 
     def take_action(self, parsed_args):
         self._set_env()
+        returncode = 0
         # Local execution mode
         if os.path.isfile('.testr.conf'):
             # If you're running in local execution mode and there is not a
@@ -77,8 +78,8 @@
             if not os.path.isdir('.testrepository'):
                 returncode = run_argv(['testr', 'init'], sys.stdin, sys.stdout,
                                       sys.stderr)
-            if returncode:
-                sys.exit(returncode)
+                if returncode:
+                    sys.exit(returncode)
         else:
             print("No .testr.conf file was found for local execution")
             sys.exit(2)
diff --git a/tempest/tests/cmd/test_run.py b/tempest/tests/cmd/test_run.py
index 9aa06e5..dcffd21 100644
--- a/tempest/tests/cmd/test_run.py
+++ b/tempest/tests/cmd/test_run.py
@@ -102,6 +102,14 @@
         subprocess.call(['git', 'init'], stderr=DEVNULL)
         self.assertRunExit(['tempest', 'run', '--regex', 'passing'], 0)
 
+    def test_tempest_run_passes_with_testrepository(self):
+        # Git init is required for the pbr testr command. pbr requires a git
+        # version or an sdist to work. so make the test directory a git repo
+        # too.
+        subprocess.call(['git', 'init'], stderr=DEVNULL)
+        subprocess.call(['testr', 'init'])
+        self.assertRunExit(['tempest', 'run', '--regex', 'passing'], 0)
+
     def test_tempest_run_fails(self):
         # Git init is required for the pbr testr command. pbr requires a git
         # version or an sdist to work. so make the test directory a git repo