diff --git a/changelogs/fragments/56397-file-return-more-useful-error-for-recursion.yaml b/changelogs/fragments/56397-file-return-more-useful-error-for-recursion.yaml
new file mode 100644
index 00000000000..70bf4d87bc6
--- /dev/null
+++ b/changelogs/fragments/56397-file-return-more-useful-error-for-recursion.yaml
@@ -0,0 +1,2 @@
+bugfixes:
+  - file - return more useful error message for recursion error (https://github.com/ansible/ansible/issues/56397)
diff --git a/lib/ansible/modules/files/file.py b/lib/ansible/modules/files/file.py
index f64046f8cba..7794d4c2720 100644
--- a/lib/ansible/modules/files/file.py
+++ b/lib/ansible/modules/files/file.py
@@ -318,35 +318,44 @@ def get_state(path):
 # This should be moved into the common file utilities
 def recursive_set_attributes(b_path, follow, file_args, mtime, atime):
     changed = False
-    for b_root, b_dirs, b_files in os.walk(b_path):
-        for b_fsobj in b_dirs + b_files:
-            b_fsname = os.path.join(b_root, b_fsobj)
-            if not os.path.islink(b_fsname):
-                tmp_file_args = file_args.copy()
-                tmp_file_args['path'] = to_native(b_fsname, errors='surrogate_or_strict')
-                changed |= module.set_fs_attributes_if_different(tmp_file_args, changed, expand=False)
-                changed |= update_timestamp_for_file(tmp_file_args['path'], mtime, atime)
 
-            else:
-                # Change perms on the link
-                tmp_file_args = file_args.copy()
-                tmp_file_args['path'] = to_native(b_fsname, errors='surrogate_or_strict')
-                changed |= module.set_fs_attributes_if_different(tmp_file_args, changed, expand=False)
-                changed |= update_timestamp_for_file(tmp_file_args['path'], mtime, atime)
-
-                if follow:
-                    b_fsname = os.path.join(b_root, os.readlink(b_fsname))
-                    # The link target could be nonexistent
-                    if os.path.exists(b_fsname):
-                        if os.path.isdir(b_fsname):
-                            # Link is a directory so change perms on the directory's contents
-                            changed |= recursive_set_attributes(b_fsname, follow, file_args, mtime, atime)
-
-                        # Change perms on the file pointed to by the link
-                        tmp_file_args = file_args.copy()
-                        tmp_file_args['path'] = to_native(b_fsname, errors='surrogate_or_strict')
-                        changed |= module.set_fs_attributes_if_different(tmp_file_args, changed, expand=False)
-                        changed |= update_timestamp_for_file(tmp_file_args['path'], mtime, atime)
+    try:
+        for b_root, b_dirs, b_files in os.walk(b_path):
+            for b_fsobj in b_dirs + b_files:
+                b_fsname = os.path.join(b_root, b_fsobj)
+                if not os.path.islink(b_fsname):
+                    tmp_file_args = file_args.copy()
+                    tmp_file_args['path'] = to_native(b_fsname, errors='surrogate_or_strict')
+                    changed |= module.set_fs_attributes_if_different(tmp_file_args, changed, expand=False)
+                    changed |= update_timestamp_for_file(tmp_file_args['path'], mtime, atime)
+
+                else:
+                    # Change perms on the link
+                    tmp_file_args = file_args.copy()
+                    tmp_file_args['path'] = to_native(b_fsname, errors='surrogate_or_strict')
+                    changed |= module.set_fs_attributes_if_different(tmp_file_args, changed, expand=False)
+                    changed |= update_timestamp_for_file(tmp_file_args['path'], mtime, atime)
+
+                    if follow:
+                        b_fsname = os.path.join(b_root, os.readlink(b_fsname))
+                        # The link target could be nonexistent
+                        if os.path.exists(b_fsname):
+                            if os.path.isdir(b_fsname):
+                                # Link is a directory so change perms on the directory's contents
+                                changed |= recursive_set_attributes(b_fsname, follow, file_args, mtime, atime)
+
+                            # Change perms on the file pointed to by the link
+                            tmp_file_args = file_args.copy()
+                            tmp_file_args['path'] = to_native(b_fsname, errors='surrogate_or_strict')
+                            changed |= module.set_fs_attributes_if_different(tmp_file_args, changed, expand=False)
+                            changed |= update_timestamp_for_file(tmp_file_args['path'], mtime, atime)
+    except RuntimeError as e:
+        # on Python3 "RecursionError" is raised which is derived from "RuntimeError"
+        # TODO once this function is moved into the common file utilities, this should probably raise more general exception
+        raise AnsibleModuleError(
+            results={'msg': "Could not recursively set attributes on %s. Original error was: '%s'" % (to_native(b_path), to_native(e))}
+        )
+
     return changed