diff --git a/nova/tests/fixtures/libvirt.py b/nova/tests/fixtures/libvirt.py
index 118d0e48da8a..2202a80525ee 100644
--- a/nova/tests/fixtures/libvirt.py
+++ b/nova/tests/fixtures/libvirt.py
@@ -1228,6 +1228,10 @@ class Domain(object):
         if emulator_pin is not None:
             definition['emulator_pin'] = emulator_pin.get('cpuset')
 
+        iothreads = tree.find('./iothreads')
+        if iothreads is not None:
+            definition['iothreads'] = iothreads.text
+
         iothread_pin = tree.find('./cputune/iothreadpin')
         if iothread_pin is not None:
             definition['iothread_pin'] = iothread_pin.get('cpuset')
@@ -1711,6 +1715,10 @@ class Domain(object):
             cputune = '<cputune>%s%s%s</cputune>' % (
                 emulatorpin, iothreadpin, cputune)
 
+        iothreads = ''
+        if 'iothreads' in self._def:
+            iothreads = '<iothreads>%s</iothreads>' % self._def['iothreads']
+
         numatune = ''
         for cellid, nodeset in self._def['memnodes'].items():
             numatune += '<memnode cellid="%d" nodeset="%s"/>' % (int(cellid),
@@ -1736,6 +1744,7 @@ class Domain(object):
   <memory>%(memory)s</memory>
   <currentMemory>%(memory)s</currentMemory>
   <vcpu%(vcpuset)s>%(vcpu)s</vcpu>
+  %(iothreads)s
   <os>
     <type arch='%(arch)s' machine='pc-0.12'>hvm</type>
     %(loader)s
@@ -1787,6 +1796,7 @@ class Domain(object):
                 'memory': self._def['memory'],
                 'vcpuset': vcpuset,
                 'vcpu': self._def['vcpu']['number'],
+                'iothreads': iothreads,
                 'arch': self._def['os']['arch'],
                 'loader': loader,
                 'disks': disks,
@@ -2085,6 +2095,27 @@ class Connection(object):
         self._emit_lifecycle(dom, VIR_DOMAIN_EVENT_DEFINED, 0)
         return dom
 
+    # TODO(lajoskatona): Move this validation to defineXML once fix for
+    # bug/2140537 is merged.
+    # This method is only used temporarily from
+    # nova/tests/functional/regressions/test_bug_2140537.py
+    def _defineXMLIOThreads(self, xml):
+        xml_doc = etree.fromstring(xml.encode('utf-8'))
+        iothreadpin = xml_doc.find('./cputune/iothreadpin')
+
+        if iothreadpin is not None and iothreadpin.get('iothread') is None:
+            raise make_libvirtError(
+                libvirtError,
+                "XML error: Missing required attribute 'iothread' "
+                "in element 'iothreadpin'",
+                error_code=VIR_ERR_XML_ERROR,
+                error_domain=VIR_FROM_DOMAIN)
+
+        dom = Domain(connection=self, running=False, transient=False, xml=xml)
+        self._vms[dom.name()] = dom
+        self._emit_lifecycle(dom, VIR_DOMAIN_EVENT_DEFINED, 0)
+        return dom
+
     def createXML(self, xml, flags):
         dom = Domain(connection=self, running=True, transient=True, xml=xml)
         self._vms[dom.name()] = dom
diff --git a/nova/tests/functional/regressions/test_bug_2140537.py b/nova/tests/functional/regressions/test_bug_2140537.py
new file mode 100644
index 000000000000..f7be2b0d4fd0
--- /dev/null
+++ b/nova/tests/functional/regressions/test_bug_2140537.py
@@ -0,0 +1,300 @@
+# Licensed under the Apache License, Version 2.0 (the "License"); you may
+# not use this file except in compliance with the License. You may obtain
+# a copy of the License at
+#
+#      http://www.apache.org/licenses/LICENSE-2.0
+#
+# Unless required by applicable law or agreed to in writing, software
+# distributed under the License is distributed on an "AS IS" BASIS, WITHOUT
+# WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied. See the
+# License for the specific language governing permissions and limitations
+# under the License.
+
+"""Regression test for bug 2140537.
+
+https://bugs.launchpad.net/nova/+bug/2140537
+
+When creating an instance with hw:cpu_policy=dedicated, pinned CPUs,
+Nova was incorrectly setting <iothreads>1</iothreads> in the libvirt XML
+without a corresponding <iothreadpin> element. This caused libvirt to
+reject the XML with: "XML error: Missing required attribute 'iothread'
+in element 'iothreadpin'".
+"""
+
+from lxml import etree
+from unittest import mock
+
+from nova.tests.fixtures import libvirt as fakelibvirt
+from nova.tests.functional import integrated_helpers
+from nova.tests.functional.libvirt import base
+
+
+class TestIOThreadPinningPinnedCPU(
+    base.LibvirtMigrationMixin,
+    base.ServersTestBase,
+    integrated_helpers.InstanceHelperMixin
+):
+    """Regression test for bug 2140537.
+
+    Instances with dedicated CPU policy (pinned CPUs) should NOT have
+    IOThreads configured and have IOThreadPin in their domain xml,
+    as they are incompatible with CPU pinning.
+    """
+
+    microversion = 'latest'
+    ADMIN_API = True
+    ADDITIONAL_FILTERS = ['NUMATopologyFilter']
+
+    def setUp(self):
+        # TODO(lajoskatona): remove this patch when the fix for
+        # bug/2140537 is merged, and the libvirt fixture has the
+        # necessary validation for XML fields for IOThreads.
+        patcher = mock.patch.object(
+            fakelibvirt.Connection, 'defineXML',
+            fakelibvirt.Connection._defineXMLIOThreads)
+        patcher.start()
+        self.addCleanup(patcher.stop)
+
+        super().setUp()
+        self.hostname = self.start_compute(
+            hostname='host1',
+            host_info=fakelibvirt.HostInfo(
+                cpu_nodes=2, cpu_sockets=1, cpu_cores=4, cpu_threads=1))
+        self.host = self.computes['host1']
+
+    def get_host(self, server_id):
+        server = self.api.get_server(server_id)
+        return server['OS-EXT-SRV-ATTR:host']
+
+    def _get_xml_element(self, xml, xpath):
+        """Get element from XML using xpath."""
+        xml_doc = etree.fromstring(xml.encode('utf-8'))
+        element = xml_doc.find(xpath)
+        return element
+
+    def test_iothread_pinning_pinned_cpu(self):
+        """Test that pinned CPU instances fail with iothreadpin bug.
+
+        This reproduces bug 2140537: When creating an instance with
+        hw:cpu_policy=dedicated, Nova incorrectly creates an <iothreadpin>
+        element without the required 'iothread' attribute, causing libvirt
+        to reject the XML.
+        """
+        # Configure host with dedicated CPUs
+        self.flags(
+            cpu_shared_set='0,1', cpu_dedicated_set='2,3', group='compute')
+        self.restart_compute_service('host1')
+
+        # Create VM with dedicated CPUs
+        extra_spec = {'hw:cpu_policy': 'dedicated'}
+        flavor = self._create_flavor(vcpu=1, extra_spec=extra_spec)
+
+        # BUG: This fails with libvirt error about missing 'iothread' attribute
+        # The server creation will fail and go to ERROR state
+        server = self._create_server(
+            flavor_id=flavor, host='host1', networks='none',
+            expected_state='ERROR')
+
+        # Verify the server is in ERROR state due to the libvirt XML error
+        self.assertEqual('ERROR', server['status'])
+
+        # Check the fault message contains the libvirt error
+        self.assertIn('Exceeded maximum number of retries',
+                      server['fault']['message'])
+        # Check the logs for the exception
+        self.assertIn("Missing required attribute 'iothread'",
+                      self.stdlog.logger.output)
+        self.assertIn("element 'iothreadpin'", self.stdlog.logger.output)
+
+    def test_iothread_pinning_explicit_numa(self):
+        """Test iothread pinning with explicit multi-node NUMA topology."""
+        self.flags(
+            cpu_shared_set='0-1', cpu_dedicated_set='2-7', group='compute')
+        self.restart_compute_service('host1')
+
+        # Create flavor with explicit 2-node NUMA topology
+        extra_spec = {
+            'hw:cpu_policy': 'dedicated',
+            'hw:numa_nodes': '2',
+        }
+        flavor = self._create_flavor(vcpu=4, extra_spec=extra_spec)
+
+        # Server should go ACTIVE
+        # server = self._create_server(
+        #     flavor_id=flavor, host='host1', networks='none',
+        #     expected_state='ACTIVE')
+        server = self._create_server(
+            flavor_id=flavor, host='host1', networks='none',
+            expected_state='ERROR')
+
+        # conn = self.host.driver._host.get_connection()
+        # dom = conn.lookupByUUIDString(server['id'])
+        # srv_xml = dom.XMLDesc(0)
+
+        # # Should have iothreads element
+        # srv_iothread = self._get_xml_element(srv_xml, './iothreads')
+        # self.assertIsNotNone(srv_iothread)
+        # self.assertEqual('1', srv_iothread.text)
+
+        # # Should have emulatorpin and iothreadpin
+        # srv_emulatorpin = self._get_xml_element(
+        #     srv_xml, './cputune/emulatorpin')
+        # srv_iothreadpin = self._get_xml_element(
+        #     srv_xml, './cputune/iothreadpin')
+        # self.assertIsNotNone(srv_emulatorpin)
+        # self.assertIsNotNone(srv_iothreadpin)
+
+        # # iothreadpin should have iothread attribute set to 1
+        # self.assertEqual('1', srv_iothreadpin.get('iothread'))
+
+        # # Both should be pinned to the union of NUMA nodes
+        # self.assertEqual(srv_emulatorpin.get('cpuset'),
+        #                  srv_iothreadpin.get('cpuset'))
+
+        self.assertEqual('ERROR', server['status'])
+
+        # Check the fault message contains the libvirt error
+        self.assertIn('Exceeded maximum number of retries',
+                      server['fault']['message'])
+        # Check the logs for the exception
+        self.assertIn("Missing required attribute 'iothread'",
+                      self.stdlog.logger.output)
+        self.assertIn("element 'iothreadpin'", self.stdlog.logger.output)
+
+    def test_iothread_pinning_isolated_emulator(self):
+        """Test iothread pinning with isolated emulator threads policy."""
+        self.flags(
+            cpu_shared_set='0-1', cpu_dedicated_set='2-7', group='compute')
+        self.restart_compute_service('host1')
+
+        # Create flavor with isolated emulator threads
+        extra_spec = {
+            'hw:cpu_policy': 'dedicated',
+            'hw:emulator_threads_policy': 'isolate',
+        }
+        flavor = self._create_flavor(vcpu=2, extra_spec=extra_spec)
+
+        server = self._create_server(
+            flavor_id=flavor, host='host1', networks='none',
+            expected_state='ERROR')
+        # Server should go ACTIVE
+        # server = self._create_server(
+        #     flavor_id=flavor, host='host1', networks='none',
+        #     expected_state='ACTIVE')
+
+        # conn = self.host.driver._host.get_connection()
+        # dom = conn.lookupByUUIDString(server['id'])
+        # srv_xml = dom.XMLDesc(0)
+
+        # # Should have iothreads element
+        # srv_iothread = self._get_xml_element(srv_xml, './iothreads')
+        # self.assertIsNotNone(srv_iothread)
+        # self.assertEqual('1', srv_iothread.text)
+
+        # # Should have emulatorpin and iothreadpin
+        # srv_emulatorpin = self._get_xml_element(
+        #     srv_xml, './cputune/emulatorpin')
+        # srv_iothreadpin = self._get_xml_element(
+        #     srv_xml, './cputune/iothreadpin')
+        # self.assertIsNotNone(srv_emulatorpin)
+        # self.assertIsNotNone(srv_iothreadpin)
+
+        # # iothreadpin should have iothread attribute set to 1
+        # self.assertEqual('1', srv_iothreadpin.get('iothread'))
+
+        # # Both should be pinned to the same reserved/isolated CPU
+        # self.assertEqual(srv_emulatorpin.get('cpuset'),
+        #                  srv_iothreadpin.get('cpuset'))
+
+        # # Should be pinned to a single CPU (the reserved one)
+        # # With vcpu=2 and isolate policy, one extra CPU is reserved
+        # cpuset = srv_iothreadpin.get('cpuset')
+        # # The cpuset should be a single CPU from cpu_dedicated_set
+        # self.assertIsNotNone(cpuset)
+        self.assertEqual('ERROR', server['status'])
+
+        # Check the fault message contains the libvirt error
+        self.assertIn('Exceeded maximum number of retries',
+                      server['fault']['message'])
+        # Check the logs for the exception
+        self.assertIn("Missing required attribute 'iothread'",
+                      self.stdlog.logger.output)
+        self.assertIn("element 'iothreadpin'", self.stdlog.logger.output)
+
+    def test_iothread_pinning_shared_emulator(self):
+        """Test iothread pinning with shared emulator threads policy."""
+        self.flags(
+            cpu_shared_set='0-1', cpu_dedicated_set='2-7', group='compute')
+        self.restart_compute_service('host1')
+
+        # Create flavor with shared emulator threads
+        extra_spec = {
+            'hw:cpu_policy': 'dedicated',
+            'hw:emulator_threads_policy': 'share',
+        }
+        flavor = self._create_flavor(vcpu=2, extra_spec=extra_spec)
+
+        server = self._create_server(
+            flavor_id=flavor, host='host1', networks='none',
+            expected_state='ERROR')
+        # Server should go ACTIVE
+        # server = self._create_server(
+        #     flavor_id=flavor, host='host1', networks='none',
+        #     expected_state='ACTIVE')
+
+        # conn = self.host.driver._host.get_connection()
+        # dom = conn.lookupByUUIDString(server['id'])
+        # srv_xml = dom.XMLDesc(0)
+
+        # # Should have iothreads element
+        # srv_iothread = self._get_xml_element(srv_xml, './iothreads')
+        # self.assertIsNotNone(srv_iothread)
+        # self.assertEqual('1', srv_iothread.text)
+
+        # # Should have emulatorpin and iothreadpin
+        # srv_emulatorpin = self._get_xml_element(
+        #     srv_xml, './cputune/emulatorpin')
+        # srv_iothreadpin = self._get_xml_element(
+        #     srv_xml, './cputune/iothreadpin')
+        # self.assertIsNotNone(srv_emulatorpin)
+        # self.assertIsNotNone(srv_iothreadpin)
+
+        # # iothreadpin should have iothread attribute set to 1
+        # self.assertEqual('1', srv_iothreadpin.get('iothread'))
+
+        # # Both should be pinned to cpu_shared_set (0-1)
+        # self.assertEqual(srv_emulatorpin.get('cpuset'),
+        #                  srv_iothreadpin.get('cpuset'))
+        # self.assertEqual('0-1', srv_iothreadpin.get('cpuset'))
+
+        self.assertEqual('ERROR', server['status'])
+
+        # Check the fault message contains the libvirt error
+        self.assertIn('Exceeded maximum number of retries',
+                      server['fault']['message'])
+        # Check the logs for the exception
+        self.assertIn("Missing required attribute 'iothread'",
+                      self.stdlog.logger.output)
+        self.assertIn("element 'iothreadpin'", self.stdlog.logger.output)
+
+    def test_iothread_no_pinning(self):
+        # No CPU pinning (shared CPUs only)
+        # Expects: NO cputune element at all (no emulatorpin, no iothreadpin)
+        flavor = self._create_flavor(vcpu=1,)
+        server = self._create_server(
+            flavor_id=flavor, host='host1', networks='none',
+            expected_state='ACTIVE')
+        conn = self.host.driver._host.get_connection()
+        dom = conn.lookupByUUIDString(server['id'])
+        srv_xml = dom.XMLDesc(0)
+
+        srv_iothread = self._get_xml_element(srv_xml, './iothreads')
+        srv_iothreadpin = self._get_xml_element(
+            srv_xml, './cputune/iothreadpin')
+
+        # iothreads should be set to 1 for all instances
+        self.assertIsNotNone(srv_iothread)
+        self.assertEqual('1', srv_iothread.text)
+
+        # And no pinning for shared CPUs, no iothreadpin
+        self.assertIsNone(srv_iothreadpin)