diff --git a/nova/tests/functional/regressions/test_bug_1894966.py b/nova/tests/functional/regressions/test_bug_1894966.py
new file mode 100644
index 000000000000..74cd7c07c483
--- /dev/null
+++ b/nova/tests/functional/regressions/test_bug_1894966.py
@@ -0,0 +1,41 @@
+# 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.
+
+from nova import test
+from nova.tests import fixtures as nova_fixtures
+from nova.tests.functional.api import client
+from nova.tests.functional import integrated_helpers
+
+
+class TestCreateServerGroupWithEmptyPolicies(
+    test.TestCase, integrated_helpers.InstanceHelperMixin,
+):
+    """Demonstrate bug #1894966.
+
+    Attempt to create a server group with an invalid 'policies' field. It
+    should fail cleanly.
+    """
+    def setUp(self):
+        super().setUp()
+
+        api_fixture = self.useFixture(nova_fixtures.OSAPIFixture(
+            api_version='v2.1'))
+        self.api = api_fixture.api
+        self.api.microversion = '2.63'  # the last version with the bug
+
+    def test_create_with_empty_policies(self):
+        exc = self.assertRaises(
+            client.OpenStackApiException,
+            self.api.post_server_groups,
+            {'name': 'test group', 'policies': []})
+        # FIXME(stephenfin): This should not be a 500 error
+        self.assertEqual(500, exc.response.status_code)