diff --git a/changelogs/fragments/fix_setup_bad_subset.yml b/changelogs/fragments/fix_setup_bad_subset.yml
new file mode 100644
index 00000000000..1bc1ce9977f
--- /dev/null
+++ b/changelogs/fragments/fix_setup_bad_subset.yml
@@ -0,0 +1,2 @@
+bugfixes:
+  - setup - fix error handling on bad subset given.
diff --git a/lib/ansible/modules/setup.py b/lib/ansible/modules/setup.py
index f2040dfc34b..520b9471969 100644
--- a/lib/ansible/modules/setup.py
+++ b/lib/ansible/modules/setup.py
@@ -126,10 +126,10 @@ EXAMPLES = """
 # import module snippets
 from ..module_utils.basic import AnsibleModule
 
+from ansible.module_utils._text import to_text
+from ansible.module_utils.facts import ansible_collector, default_collectors
+from ansible.module_utils.facts.collector import CollectorNotFoundError, CycleFoundInFactDeps, UnresolvedFactDep
 from ansible.module_utils.facts.namespace import PrefixFactNamespace
-from ansible.module_utils.facts import ansible_collector
-
-from ansible.module_utils.facts import default_collectors
 
 
 def main():
@@ -162,13 +162,16 @@ def main():
     namespace = PrefixFactNamespace(namespace_name='ansible',
                                     prefix='ansible_')
 
-    fact_collector = \
-        ansible_collector.get_ansible_collector(all_collector_classes=all_collector_classes,
-                                                namespace=namespace,
-                                                filter_spec=filter_spec,
-                                                gather_subset=gather_subset,
-                                                gather_timeout=gather_timeout,
-                                                minimal_gather_subset=minimal_gather_subset)
+    try:
+        fact_collector = ansible_collector.get_ansible_collector(all_collector_classes=all_collector_classes,
+                                                                 namespace=namespace,
+                                                                 filter_spec=filter_spec,
+                                                                 gather_subset=gather_subset,
+                                                                 gather_timeout=gather_timeout,
+                                                                 minimal_gather_subset=minimal_gather_subset)
+    except (TypeError, CollectorNotFoundError, CycleFoundInFactDeps, UnresolvedFactDep) as e:
+        # bad subset given, collector, idk, deps declared but not found
+        module.fail_json(msg=to_text(e))
 
     facts_dict = fact_collector.collect(module=module)
 
diff --git a/test/integration/targets/gathering_facts/runme.sh b/test/integration/targets/gathering_facts/runme.sh
index 4635562710e..9904c9e78e6 100755
--- a/test/integration/targets/gathering_facts/runme.sh
+++ b/test/integration/targets/gathering_facts/runme.sh
@@ -16,3 +16,6 @@ ansible-playbook verify_merge_facts.yml -v "$@" -e 'ansible_facts_parallel: Fals
 
 # ensure we dont clobber facts in loop
 ansible-playbook prevent_clobbering.yml -v "$@"
+
+# ensure we dont fail module on bad subset
+ansible-playbook verify_subset.yml "$@"
diff --git a/test/integration/targets/gathering_facts/verify_subset.yml b/test/integration/targets/gathering_facts/verify_subset.yml
new file mode 100644
index 00000000000..89132756ea7
--- /dev/null
+++ b/test/integration/targets/gathering_facts/verify_subset.yml
@@ -0,0 +1,13 @@
+- hosts: localhost
+  gather_facts: false
+  tasks:
+    - name: bad subset used
+      setup: gather_subset=nonsense
+      register: bad_sub
+      ignore_errors: true
+
+    - name: verify we fail the right way
+      assert:
+        that:
+          - bad_sub is failed
+          - "'MODULE FAILURE' not in bad_sub['msg']"