diff --git a/Gopkg.lock b/Gopkg.lock
index 33250636a8a4..ac0b7198460c 100644
--- a/Gopkg.lock
+++ b/Gopkg.lock
@@ -382,11 +382,11 @@
 
 [[projects]]
   branch = "master"
-  digest = "1:fc21c9ecb1d30c7b1ef093f90ac10fe26ed90e801136dff6019eff03495450c6"
+  digest = "1:00f434f614520a4b48ef3f6d3ed5c7a1a4f89be1bed98c250711413f6da2eb51"
   name = "github.com/knative/test-infra"
   packages = ["."]
   pruneopts = "T"
-  revision = "c016a2a5676d3e363ad7bc94dc8d57a0aa1a0a9d"
+  revision = "c21d3a832727d5d4334e734c0878eac3a5a07ae7"
 
 [[projects]]
   branch = "master"
diff --git a/vendor/github.com/knative/test-infra/scripts/e2e-tests.sh b/vendor/github.com/knative/test-infra/scripts/e2e-tests.sh
index e3d1bde93d01..7c921048254a 100755
--- a/vendor/github.com/knative/test-infra/scripts/e2e-tests.sh
+++ b/vendor/github.com/knative/test-infra/scripts/e2e-tests.sh
@@ -152,6 +152,10 @@ function dump_cluster_state() {
 
 # Create a test cluster with kubetest and call the current script again.
 function create_test_cluster() {
+  # Fail fast during setup.
+  set -o errexit
+  set -o pipefail
+
   header "Creating test cluster"
   # Smallest cluster required to run the end-to-end-tests
   local CLUSTER_CREATION_ARGS=(
@@ -188,6 +192,9 @@ function create_test_cluster() {
   (( EMIT_METRICS )) && test_cmd_args+=" --emit-metrics"
   echo "Test script is ${E2E_SCRIPT}"
   download_k8s || return 1
+  # Don't fail test for kubetest, as it might incorrectly report test failure
+  # if teardown fails (for details, see success() below)
+  set +o errexit
   kubetest "${CLUSTER_CREATION_ARGS[@]}" \
     --up \
     --down \
@@ -196,6 +203,8 @@ function create_test_cluster() {
     --test-cmd "${E2E_SCRIPT}" \
     --test-cmd-args "${test_cmd_args}"
   echo "Test subprocess exited with code $?"
+  # Ignore any errors below, this is a best-effort cleanup and shouldn't affect the test result.
+  set +o errexit
   # Delete target pools and health checks that might have leaked.
   # See https://github.com/knative/serving/issues/959 for details.
   # TODO(adrcunha): Remove once the leak issue is resolved.
@@ -221,6 +230,10 @@ function create_test_cluster() {
 
 # Setup the test cluster for running the tests.
 function setup_test_cluster() {
+  # Fail fast during setup.
+  set -o errexit
+  set -o pipefail
+
   # Set the required variables if necessary.
   if [[ -z ${K8S_USER_OVERRIDE} ]]; then
     export K8S_USER_OVERRIDE=$(gcloud config get-value core/account)
@@ -302,10 +315,6 @@ function initialize() {
   readonly RUN_TESTS
   readonly EMIT_METRICS
 
-  # Fail fast during setup.
-  set -o errexit
-  set -o pipefail
-
   if (( ! RUN_TESTS )); then
     create_test_cluster
   else