diff --git a/packages/angular/build/src/builders/unit-test/tests/options/code-coverage-watermarks_spec.ts b/packages/angular/build/src/builders/unit-test/tests/options/code-coverage-watermarks_spec.ts
new file mode 100644
index 000000000000..8e29470e86b0
--- /dev/null
+++ b/packages/angular/build/src/builders/unit-test/tests/options/code-coverage-watermarks_spec.ts
@@ -0,0 +1,48 @@
+/**
+ * @license
+ * Copyright Google LLC All Rights Reserved.
+ *
+ * Use of this source code is governed by an MIT-style license that can be
+ * found in the LICENSE file at https://angular.dev/license
+ */
+
+import { execute } from '../../index';
+import { CoverageReporterEnum } from '../../schema';
+import {
+  BASE_OPTIONS,
+  describeBuilder,
+  UNIT_TEST_BUILDER_INFO,
+  setupApplicationTarget,
+} from '../setup';
+
+describeBuilder(execute, UNIT_TEST_BUILDER_INFO, (harness) => {
+  describe('Option: "coverageWatermarks"', () => {
+    beforeEach(async () => {
+      setupApplicationTarget(harness);
+    });
+
+    // Any coverage percentage is at or above a 0% high watermark and below a 101% low watermark.
+    for (const [watermark, level] of [
+      [[0, 0], 'high'],
+      [[101, 101], 'low'],
+    ] as const) {
+      it(`should mark coverage as "${level}" in the HTML report with ${watermark} watermarks`, async () => {
+        harness.useTarget('test', {
+          ...BASE_OPTIONS,
+          coverage: true,
+          coverageReporters: [CoverageReporterEnum.Html],
+          coverageWatermarks: {
+            statements: [...watermark],
+            branches: [...watermark],
+            functions: [...watermark],
+            lines: [...watermark],
+          },
+        });
+
+        const { result } = await harness.executeOnce();
+        expect(result?.success).toBeTrue();
+        harness.expectFile('coverage/test/index.html').content.toContain(`status-line ${level}`);
+      });
+    }
+  });
+});