diff --git a/builtin/providers/azurerm/resource_arm_template_deployment.go b/builtin/providers/azurerm/resource_arm_template_deployment.go
index 79f400715d..5eb37cd70e 100644
--- a/builtin/providers/azurerm/resource_arm_template_deployment.go
+++ b/builtin/providers/azurerm/resource_arm_template_deployment.go
@@ -101,7 +101,7 @@ func resourceArmTemplateDeploymentCreate(d *schema.ResourceData, meta interface{
 
 	_, err := deployClient.CreateOrUpdate(resGroup, name, deployment, make(chan struct{}))
 	if err != nil {
-		return nil
+		return fmt.Errorf("Error creating deployment: %s", err)
 	}
 
 	read, err := deployClient.Get(resGroup, name)
diff --git a/builtin/providers/azurerm/resource_arm_template_deployment_test.go b/builtin/providers/azurerm/resource_arm_template_deployment_test.go
index 99314628bf..efb64ce0c5 100644
--- a/builtin/providers/azurerm/resource_arm_template_deployment_test.go
+++ b/builtin/providers/azurerm/resource_arm_template_deployment_test.go
@@ -3,6 +3,7 @@ package azurerm
 import (
 	"fmt"
 	"net/http"
+	"regexp"
 	"testing"
 
 	"github.com/hashicorp/terraform/helper/acctest"
@@ -47,6 +48,22 @@ func TestAccAzureRMTemplateDeployment_withParams(t *testing.T) {
 	})
 }
 
+func TestAccAzureRMTemplateDeployment_withError(t *testing.T) {
+	ri := acctest.RandInt()
+	config := fmt.Sprintf(testAccAzureRMTemplateDeployment_withError, ri, ri)
+	resource.Test(t, resource.TestCase{
+		PreCheck:     func() { testAccPreCheck(t) },
+		Providers:    testAccProviders,
+		CheckDestroy: testCheckAzureRMTemplateDeploymentDestroy,
+		Steps: []resource.TestStep{
+			{
+				Config:      config,
+				ExpectError: regexp.MustCompile("The deployment operation failed"),
+			},
+		},
+	})
+}
+
 func testCheckAzureRMTemplateDeploymentExists(name string) resource.TestCheckFunc {
 	return func(s *terraform.State) error {
 		// Ensure we have enough information in state to look up in API
@@ -249,3 +266,66 @@ DEPLOY
   }
 
 `
+
+// StorageAccount name is too long, forces error
+var testAccAzureRMTemplateDeployment_withError = `
+  resource "azurerm_resource_group" "test" {
+    name = "acctestrg-%d"
+    location = "West US"
+  }
+
+  output "test" {
+    value = "${azurerm_template_deployment.test.outputs.testOutput}"
+  }
+
+  resource "azurerm_template_deployment" "test" {
+    name = "acctesttemplate-%d"
+    resource_group_name = "${azurerm_resource_group.test.name}"
+    template_body = <<DEPLOY
+{
+  "$schema": "https://schema.management.azure.com/schemas/2015-01-01/deploymentTemplate.json#",
+  "contentVersion": "1.0.0.0",
+  "parameters": {
+    "storageAccountType": {
+      "type": "string",
+      "defaultValue": "Standard_LRS",
+      "allowedValues": [
+        "Standard_LRS",
+        "Standard_GRS",
+        "Standard_ZRS"
+      ],
+      "metadata": {
+        "description": "Storage Account type"
+      }
+    }
+  },
+  "variables": {
+    "location": "[resourceGroup().location]",
+    "storageAccountName": "badStorageAccountNameTooLong",
+    "apiVersion": "2015-06-15"
+  },
+  "resources": [
+    {
+      "type": "Microsoft.Storage/storageAccounts",
+      "name": "[variables('storageAccountName')]",
+      "apiVersion": "[variables('apiVersion')]",
+      "location": "[variables('location')]",
+      "properties": {
+        "accountType": "[parameters('storageAccountType')]"
+      }
+    }
+  ],
+  "outputs": {
+    "testOutput": {
+      "type": "string",
+      "value": "Output Value"
+    }
+  }
+}
+DEPLOY
+    parameters {
+        storageAccountType = "Standard_GRS"
+    }
+    deployment_mode = "Complete"
+  }
+`