diff --git a/nova/api/openstack/compute/servers.py b/nova/api/openstack/compute/servers.py
index c57823a76493..3738ea00f9a1 100644
--- a/nova/api/openstack/compute/servers.py
+++ b/nova/api/openstack/compute/servers.py
@@ -601,6 +601,7 @@ class ServersController(wsgi.Controller):
                 exception.ImageNotActive,
                 exception.ImageBadRequest,
                 exception.ImageNotAuthorized,
+                exception.ImageUnacceptable,
                 exception.FixedIpNotFoundForAddress,
                 exception.FlavorNotFound,
                 exception.FlavorDiskTooSmall,
diff --git a/nova/compute/api.py b/nova/compute/api.py
index 047de8bae317..4a202683cf2f 100644
--- a/nova/compute/api.py
+++ b/nova/compute/api.py
@@ -528,6 +528,31 @@ class API(base.Base):
         # reason, we rely on the DB to cast True to a String.
         return True if bool_val else ''
 
+    @staticmethod
+    def _detect_nonbootable_image_from_properties(image_id, image):
+        """Check image for a property indicating it's nonbootable.
+
+        This is called from the API service to ensure that there are
+        no known image properties indicating that this image is of a
+        type that we do not support booting from.
+
+        Currently the only such property is 'cinder_encryption_key_id'.
+
+        :param image_id: UUID of the image
+        :param image: a dict representation of the image including properties
+        :raises: ImageUnacceptable if the image properties indicate
+                 that booting this image is not supported
+        """
+        if not image:
+            return
+
+        image_properties = image.get('properties', {})
+        if image_properties.get('cinder_encryption_key_id'):
+            reason = _('Direct booting of an image uploaded from an '
+                       'encrypted volume is unsupported.')
+            raise exception.ImageUnacceptable(image_id=image_id,
+                                              reason=reason)
+
     def _check_requested_image(self, context, image_id, image,
                                instance_type, root_bdm):
         if not image:
@@ -744,6 +769,7 @@ class API(base.Base):
         self._check_injected_file_quota(context, files_to_inject)
         self._check_requested_image(context, image_id, image,
                                     instance_type, root_bdm)
+        self._detect_nonbootable_image_from_properties(image_id, image)
 
     def _validate_and_build_base_options(self, context, instance_type,
                                          boot_meta, image_href, image_id,
diff --git a/nova/tests/unit/api/openstack/compute/test_serversV21.py b/nova/tests/unit/api/openstack/compute/test_serversV21.py
index c1d0370deaa0..149dca0c2826 100644
--- a/nova/tests/unit/api/openstack/compute/test_serversV21.py
+++ b/nova/tests/unit/api/openstack/compute/test_serversV21.py
@@ -3172,6 +3172,22 @@ class ServersControllerCreateTest(test.TestCase):
                 "Flavor's disk is too small for requested image."):
             self.controller.create(self.req, body=self.body)
 
+    @mock.patch.object(fake._FakeImageService, 'show',
+                       return_value=dict(
+                           id='76fa36fc-c930-4bf3-8c8a-ea2a2420deb6',
+                           status='active',
+                           properties=dict(
+                               cinder_encryption_key_id=fakes.FAKE_UUID)))
+    def test_create_server_image_nonbootable(self, mock_show):
+        self.req.body = jsonutils.dump_as_bytes(self.body)
+
+        expected_msg = ("Image {} is unacceptable: Direct booting of an image "
+                        "uploaded from an encrypted volume is unsupported.")
+        with testtools.ExpectedException(
+                webob.exc.HTTPBadRequest,
+                expected_msg.format(self.image_uuid)):
+            self.controller.create(self.req, body=self.body)
+
     def test_create_instance_with_image_non_uuid(self):
         self.body['server']['imageRef'] = 'not-uuid'
         self.assertRaises(exception.ValidationError,
diff --git a/releasenotes/notes/cinder-detect-nonbootable-image-6fad7f865b45f879.yaml b/releasenotes/notes/cinder-detect-nonbootable-image-6fad7f865b45f879.yaml
new file mode 100644
index 000000000000..0746df58f274
--- /dev/null
+++ b/releasenotes/notes/cinder-detect-nonbootable-image-6fad7f865b45f879.yaml
@@ -0,0 +1,9 @@
+---
+fixes:
+  - |
+    The Compute service has never supported direct booting of an instance from
+    an image that was created by the Block Storage service from an encrypted
+    volume.  Previously, this operation would result in an ACTIVE instance that
+    was unusable.  Beginning with this release, an attempt to boot from such an
+    image will result in the Compute API returning a 400 (Bad Request)
+    response.