diff --git a/bigchaindb/config_utils.py b/bigchaindb/config_utils.py
index 81f8ed46..e1dcbdc9 100644
--- a/bigchaindb/config_utils.py
+++ b/bigchaindb/config_utils.py
@@ -22,6 +22,7 @@ from pkg_resources import iter_entry_points, ResolutionError
 
 import bigchaindb
 from bigchaindb.consensus import AbstractConsensusRules
+from bigchaindb import exceptions
 
 # TODO: move this to a proper configuration file for logging
 logging.getLogger('requests').setLevel(logging.WARNING)
@@ -98,7 +99,12 @@ def file_config(filename=None):
 
     logger.debug('file_config() will try to open `{}`'.format(filename))
     with open(filename) as f:
-        config = json.load(f)
+        try:
+            config = json.load(f)
+        except ValueError as err:
+            raise exceptions.ConfigurationError(
+                'Failed to parse the JSON configuration from `{}`, {}'.format(filename, err)
+            )
 
     logger.info('Configuration loaded from `{}`'.format(filename))
 
diff --git a/bigchaindb/exceptions.py b/bigchaindb/exceptions.py
index 480a0bd8..7b652fa3 100644
--- a/bigchaindb/exceptions.py
+++ b/bigchaindb/exceptions.py
@@ -1,6 +1,9 @@
 """Custom exceptions used in the `bigchaindb` package.
 """
 
+class ConfigurationError(Exception):
+    """Raised when there is a problem with server configuration"""
+
 
 class OperationError(Exception):
     """Raised when an operation cannot go through"""
diff --git a/tests/test_config_utils.py b/tests/test_config_utils.py
index ea58f61a..bce2c9a8 100644
--- a/tests/test_config_utils.py
+++ b/tests/test_config_utils.py
@@ -229,6 +229,13 @@ def test_file_config():
     assert config == {}
 
 
+def test_invalid_file_config():
+    from bigchaindb.config_utils import file_config, CONFIG_DEFAULT_PATH
+    with patch('builtins.open', mock_open(read_data='{_INVALID_JSON_}')) as m:
+        with pytest.raises(exceptions.ConfigurationError):
+            file_config()
+
+
 def test_write_config():
     from bigchaindb.config_utils import write_config, CONFIG_DEFAULT_PATH
     m = mock_open()