diff --git a/CHANGES.md b/CHANGES.md
index 495247b50e..34ffdbcfd6 100644
--- a/CHANGES.md
+++ b/CHANGES.md
@@ -9,6 +9,7 @@ Improvements 🙌:
  - Give user the possibility to prevent accidental call (#1869)
  - Display device information (name, id and key) in Cryptography setting screen (#1784)
  - Ensure users do not accidentally ignore other users (#1890)
+ - Better handling DM creation when invitees cannot be inviting due to denied federation
  - Support new config.json format and config.domain.json files (#1682)
  - Increase Font size on Calling screen (#1643)
  - Make the user's Avatar live in the general settings
diff --git a/matrix-sdk-android/src/main/java/org/matrix/android/sdk/api/session/room/failure/CreateRoomFailure.kt b/matrix-sdk-android/src/main/java/org/matrix/android/sdk/api/session/room/failure/CreateRoomFailure.kt
index d70dae3454..508cf5ea1d 100644
--- a/matrix-sdk-android/src/main/java/org/matrix/android/sdk/api/session/room/failure/CreateRoomFailure.kt
+++ b/matrix-sdk-android/src/main/java/org/matrix/android/sdk/api/session/room/failure/CreateRoomFailure.kt
@@ -18,8 +18,9 @@
 package org.matrix.android.sdk.api.session.room.failure
 
 import org.matrix.android.sdk.api.failure.Failure
+import org.matrix.android.sdk.api.failure.MatrixError
 
 sealed class CreateRoomFailure : Failure.FeatureFailure() {
-
-    object CreatedWithTimeout: CreateRoomFailure()
+    object CreatedWithTimeout : CreateRoomFailure()
+    data class CreatedWithFederationFailure(val matrixError: MatrixError) : CreateRoomFailure()
 }
diff --git a/matrix-sdk-android/src/main/java/org/matrix/android/sdk/internal/session/room/create/CreateRoomTask.kt b/matrix-sdk-android/src/main/java/org/matrix/android/sdk/internal/session/room/create/CreateRoomTask.kt
index 4db3a47502..6738c7d881 100644
--- a/matrix-sdk-android/src/main/java/org/matrix/android/sdk/internal/session/room/create/CreateRoomTask.kt
+++ b/matrix-sdk-android/src/main/java/org/matrix/android/sdk/internal/session/room/create/CreateRoomTask.kt
@@ -21,6 +21,8 @@ import com.zhuinden.monarchy.Monarchy
 import io.realm.RealmConfiguration
 import kotlinx.coroutines.TimeoutCancellationException
 import org.greenrobot.eventbus.EventBus
+import org.matrix.android.sdk.api.failure.Failure
+import org.matrix.android.sdk.api.failure.MatrixError
 import org.matrix.android.sdk.api.session.room.failure.CreateRoomFailure
 import org.matrix.android.sdk.api.session.room.model.create.CreateRoomParams
 import org.matrix.android.sdk.api.session.room.model.create.CreateRoomPreset
@@ -62,8 +64,19 @@ internal class DefaultCreateRoomTask @Inject constructor(
 
         val createRoomBody = createRoomBodyBuilder.build(params)
 
-        val createRoomResponse = executeRequest<CreateRoomResponse>(eventBus) {
-            apiCall = roomAPI.createRoom(createRoomBody)
+        val createRoomResponse = try {
+            executeRequest<CreateRoomResponse>(eventBus) {
+                apiCall = roomAPI.createRoom(createRoomBody)
+            }
+        } catch (throwable: Throwable) {
+            if (throwable is Failure.ServerError
+                    && throwable.httpCode == 403
+                    && throwable.error.code == MatrixError.M_FORBIDDEN
+                    && throwable.error.message.startsWith("Federation denied with")) {
+                throw CreateRoomFailure.CreatedWithFederationFailure(throwable.error)
+            } else {
+                throw throwable
+            }
         }
         val roomId = createRoomResponse.roomId
         // Wait for room to come back from the sync (but it can maybe be in the DB if the sync response is received before)
diff --git a/vector/src/main/java/im/vector/app/features/createdirect/CreateDirectRoomActivity.kt b/vector/src/main/java/im/vector/app/features/createdirect/CreateDirectRoomActivity.kt
index 5d6bef4e2f..41260b06c8 100644
--- a/vector/src/main/java/im/vector/app/features/createdirect/CreateDirectRoomActivity.kt
+++ b/vector/src/main/java/im/vector/app/features/createdirect/CreateDirectRoomActivity.kt
@@ -48,9 +48,9 @@ import im.vector.app.features.userdirectory.UserDirectoryFragment
 import im.vector.app.features.userdirectory.UserDirectorySharedAction
 import im.vector.app.features.userdirectory.UserDirectorySharedActionViewModel
 import im.vector.app.features.userdirectory.UserDirectoryViewModel
+import kotlinx.android.synthetic.main.activity.*
 import org.matrix.android.sdk.api.failure.Failure
 import org.matrix.android.sdk.api.session.room.failure.CreateRoomFailure
-import kotlinx.android.synthetic.main.activity.*
 import java.net.HttpURLConnection
 import javax.inject.Inject
 
@@ -138,19 +138,29 @@ class CreateDirectRoomActivity : SimpleFragmentActivity() {
 
     private fun renderCreationFailure(error: Throwable) {
         hideWaitingView()
-        if (error is CreateRoomFailure.CreatedWithTimeout) {
-            finish()
-        } else {
-            val message = if (error is Failure.ServerError && error.httpCode == HttpURLConnection.HTTP_INTERNAL_ERROR /*500*/) {
-                // This error happen if the invited userId does not exist.
-                getString(R.string.create_room_dm_failure)
-            } else {
-                errorFormatter.toHumanReadable(error)
+        when (error) {
+            is CreateRoomFailure.CreatedWithTimeout -> {
+                finish()
+            }
+            is CreateRoomFailure.CreatedWithFederationFailure -> {
+                AlertDialog.Builder(this)
+                        .setMessage(getString(R.string.create_room_federation_error, error.matrixError.message))
+                        .setCancelable(false)
+                        .setPositiveButton(R.string.ok) { _, _ -> finish() }
+                        .show()
+            }
+            else                                              -> {
+                val message = if (error is Failure.ServerError && error.httpCode == HttpURLConnection.HTTP_INTERNAL_ERROR /*500*/) {
+                    // This error happen if the invited userId does not exist.
+                    getString(R.string.create_room_dm_failure)
+                } else {
+                    errorFormatter.toHumanReadable(error)
+                }
+                AlertDialog.Builder(this)
+                        .setMessage(message)
+                        .setPositiveButton(R.string.ok, null)
+                        .show()
             }
-            AlertDialog.Builder(this)
-                    .setMessage(message)
-                    .setPositiveButton(R.string.ok, null)
-                    .show()
         }
     }
 
diff --git a/vector/src/main/res/values/strings.xml b/vector/src/main/res/values/strings.xml
index 34cf24b476..25ec5de33b 100644
--- a/vector/src/main/res/values/strings.xml
+++ b/vector/src/main/res/values/strings.xml
@@ -1640,6 +1640,7 @@
     <string name="create_room_public_description">"Anyone will be able to join this room"</string>
     <string name="create_room_directory_title">"Room Directory"</string>
     <string name="create_room_directory_description">"Publish this room in the room directory"</string>
+    <string name="create_room_federation_error">"The room has been created, but some invitations have not been sent for the following reason:\n\n%s"</string>
 
     <string name="keys_backup_unable_to_get_trust_info">"An error occurred getting trust info"</string>
     <string name="keys_backup_unable_to_get_keys_backup_data">"An error occurred getting keys backup data"</string>