diff --git a/nova/compute/manager.py b/nova/compute/manager.py
index 35b11e754dd9..6db63a0e1522 100644
--- a/nova/compute/manager.py
+++ b/nova/compute/manager.py
@@ -1733,6 +1733,12 @@ class ComputeManager(manager.Manager):
                 block_device_info['swap'])
             return block_device_info
 
+        except exception.OverQuota:
+            msg = ('Failed to create block device for instance due to being '
+                   'over volume resource quota')
+            LOG.debug(msg, instance=instance)
+            raise exception.InvalidBDM()
+
         except Exception:
             LOG.exception(_('Instance failed block device setup'),
                           instance=instance)
diff --git a/nova/tests/compute/test_compute.py b/nova/tests/compute/test_compute.py
index a61a45fcc733..13fbc0d6cd86 100644
--- a/nova/tests/compute/test_compute.py
+++ b/nova/tests/compute/test_compute.py
@@ -1035,6 +1035,27 @@ class ComputeVolumeTestCase(BaseTestCase):
                 self.compute.volume_snapshot_delete, self.context,
                 self.instance_object, 'fake_id', 'fake_id2', {})
 
+    @mock.patch.object(cinder.API, 'create',
+                       side_effect=exception.OverQuota(overs='volumes'))
+    def test_prep_block_device_over_quota_failure(self, mock_create):
+        instance = self._create_fake_instance()
+        bdms = [
+            block_device.BlockDeviceDict({
+                'boot_index': 0,
+                'guest_format': None,
+                'connection_info': None,
+                'device_type': u'disk',
+                'source_type': 'image',
+                'destination_type': 'volume',
+                'volume_size': 1,
+                'image_id': 1,
+                'device_name': '/dev/vdb',
+            })]
+        self.assertRaises(exception.InvalidBDM,
+                          compute_manager.ComputeManager()._prep_block_device,
+                          self.context, instance, bdms)
+        mock_create.assert_called_once()
+
 
 class ComputeTestCase(BaseTestCase):
     def test_wrap_instance_fault(self):
@@ -1513,6 +1534,30 @@ class ComputeTestCase(BaseTestCase):
         self._assert_state({'vm_state': vm_states.ERROR,
                             'task_state': None})
 
+    @mock.patch('nova.compute.manager.ComputeManager._prep_block_device',
+                side_effect=exception.OverQuota(overs='volumes'))
+    def test_setup_block_device_over_quota_fail(self, mock_prep_block_dev):
+        """block device mapping over quota failure test.
+
+        Make sure when we're over volume quota according to Cinder client, the
+        appropriate exception is raised and the instances to ERROR state, keep
+        the task state.
+        """
+        instance = self._create_fake_instance()
+        self.assertRaises(exception.OverQuota, self.compute.run_instance,
+                          self.context, instance=instance, request_spec={},
+                          filter_properties={}, requested_networks=[],
+                          injected_files=None, admin_password=None,
+                          is_first_time=True, node=None,
+                          legacy_bdm_in_spec=False)
+        #check state is failed even after the periodic poll
+        self._assert_state({'vm_state': vm_states.ERROR,
+                            'task_state': None})
+        self.compute.periodic_tasks(context.get_admin_context())
+        self._assert_state({'vm_state': vm_states.ERROR,
+                            'task_state': None})
+        mock_prep_block_dev.assert_called_once()
+
     def test_run_instance_spawn_fail(self):
         """spawn failure test.
 
diff --git a/nova/tests/volume/test_cinder.py b/nova/tests/volume/test_cinder.py
index c12bdc2dc866..9aabdff8c905 100644
--- a/nova/tests/volume/test_cinder.py
+++ b/nova/tests/volume/test_cinder.py
@@ -14,6 +14,7 @@
 #    under the License.
 
 from cinderclient import exceptions as cinder_exception
+import mock
 
 from nova import context
 from nova import exception
@@ -84,6 +85,17 @@ class CinderApiTestCase(test.NoDBTestCase):
         self.assertRaises(exception.InvalidInput,
                           self.api.create, self.ctx, 1, '', '')
 
+    @mock.patch('nova.volume.cinder.cinderclient')
+    def test_create_over_quota_failed(self, mock_cinderclient):
+        mock_cinderclient.return_value.volumes.create.side_effect = (
+            cinder_exception.OverLimit(413))
+        self.assertRaises(exception.OverQuota, self.api.create, self.ctx,
+                          1, '', '')
+        mock_cinderclient.return_value.volumes.create.assert_called_once_with(
+            1, user_id=None, imageRef=None, availability_zone=None,
+            volume_type=None, display_description='', snapshot_id=None,
+            display_name='', project_id=None, metadata=None)
+
     def test_get_all(self):
         cinder.cinderclient(self.ctx).AndReturn(self.cinderclient)
         cinder._untranslate_volume_summary_view(self.ctx,
diff --git a/nova/volume/cinder.py b/nova/volume/cinder.py
index f55ee61d4a1e..48c5f5ea65c4 100644
--- a/nova/volume/cinder.py
+++ b/nova/volume/cinder.py
@@ -301,6 +301,8 @@ class API(object):
         try:
             item = cinderclient(context).volumes.create(size, **kwargs)
             return _untranslate_volume_summary_view(context, item)
+        except cinder_exception.OverLimit:
+            raise exception.OverQuota(overs='volumes')
         except cinder_exception.BadRequest as e:
             raise exception.InvalidInput(reason=unicode(e))