diff --git a/nova/tests/unit/virt/libvirt/test_driver.py b/nova/tests/unit/virt/libvirt/test_driver.py
index 89e237aa6589..617349526e9d 100644
--- a/nova/tests/unit/virt/libvirt/test_driver.py
+++ b/nova/tests/unit/virt/libvirt/test_driver.py
@@ -1401,6 +1401,26 @@ class LibvirtConnTestCase(test.NoDBTestCase,
         self.assertRaises(exception.NovaException,
                           drvr.set_admin_password, instance, "123")
 
+    @mock.patch('nova.utils.get_image_from_system_metadata')
+    @mock.patch.object(host.Host,
+                       'has_min_version', return_value=True)
+    @mock.patch('nova.virt.libvirt.host.Host.get_guest')
+    def test_set_admin_password_error_with_unicode(
+            self, mock_get_guest, ver, mock_image):
+        self.flags(virt_type='kvm', group='libvirt')
+        instance = objects.Instance(**self.test_instance)
+        mock_image.return_value = {"properties": {
+            "hw_qemu_guest_agent": "yes"}}
+        mock_guest = mock.Mock(spec=libvirt_guest.Guest)
+        mock_guest.set_user_password.side_effect = (
+                fakelibvirt.libvirtError(
+                    b"failed: \xe9\x94\x99\xe8\xaf\xaf\xe3\x80\x82"))
+        mock_get_guest.return_value = mock_guest
+
+        drvr = libvirt_driver.LibvirtDriver(fake.FakeVirtAPI(), True)
+        self.assertRaises(exception.NovaException,
+                          drvr.set_admin_password, instance, "123")
+
     @mock.patch.object(objects.Service, 'save')
     @mock.patch.object(objects.Service, 'get_by_compute_host')
     def test_set_host_enabled_with_disable(self, mock_svc, mock_save):
diff --git a/nova/virt/libvirt/driver.py b/nova/virt/libvirt/driver.py
index d98ff6567197..422538ac927e 100644
--- a/nova/virt/libvirt/driver.py
+++ b/nova/virt/libvirt/driver.py
@@ -53,6 +53,7 @@ from oslo_concurrency import processutils
 from oslo_log import log as logging
 from oslo_serialization import jsonutils
 from oslo_service import loopingcall
+from oslo_utils import encodeutils
 from oslo_utils import excutils
 from oslo_utils import fileutils
 from oslo_utils import importutils
@@ -1814,9 +1815,10 @@ class LibvirtDriver(driver.ComputeDriver):
             guest.set_user_password(user, new_pass)
         except libvirt.libvirtError as ex:
             error_code = ex.get_error_code()
+            err_msg = encodeutils.exception_to_unicode(ex)
             msg = (_('Error from libvirt while set password for username '
                      '"%(user)s": [Error Code %(error_code)s] %(ex)s')
-                   % {'user': user, 'error_code': error_code, 'ex': ex})
+                   % {'user': user, 'error_code': error_code, 'ex': err_msg})
             raise exception.InternalError(msg)
 
     def _can_quiesce(self, instance, image_meta):
@@ -1840,10 +1842,11 @@ class LibvirtDriver(driver.ComputeDriver):
                 guest.thaw_filesystems()
         except libvirt.libvirtError as ex:
             error_code = ex.get_error_code()
+            err_msg = encodeutils.exception_to_unicode(ex)
             msg = (_('Error from libvirt while quiescing %(instance_name)s: '
                      '[Error Code %(error_code)s] %(ex)s')
                    % {'instance_name': instance.name,
-                      'error_code': error_code, 'ex': ex})
+                      'error_code': error_code, 'ex': err_msg})
             raise exception.InternalError(msg)
 
     def quiesce(self, context, instance, image_meta):