diff --git a/pkg/cloudprovider/providers/azure/BUILD b/pkg/cloudprovider/providers/azure/BUILD
index df856b22d50..8a87451e89c 100644
--- a/pkg/cloudprovider/providers/azure/BUILD
+++ b/pkg/cloudprovider/providers/azure/BUILD
@@ -30,6 +30,7 @@ go_library(
         "//pkg/cloudprovider:go_default_library",
         "//pkg/types:go_default_library",
         "//pkg/util/errors:go_default_library",
+        "//pkg/volume:go_default_library",
         "//vendor:github.com/Azure/azure-sdk-for-go/arm/compute",
         "//vendor:github.com/Azure/azure-sdk-for-go/arm/network",
         "//vendor:github.com/Azure/azure-sdk-for-go/arm/storage",
diff --git a/pkg/cloudprovider/providers/azure/azure_blob.go b/pkg/cloudprovider/providers/azure/azure_blob.go
index 4804877c171..5cca3bd7761 100644
--- a/pkg/cloudprovider/providers/azure/azure_blob.go
+++ b/pkg/cloudprovider/providers/azure/azure_blob.go
@@ -19,6 +19,7 @@ package azure
 import (
 	"fmt"
 	"regexp"
+	"strings"
 
 	azs "github.com/Azure/azure-sdk-for-go/storage"
 )
@@ -40,9 +41,20 @@ func (az *Cloud) createVhdBlob(accountName, accountKey, name string, sizeGB int6
 	// Blob name in URL must end with '.vhd' extension.
 	name = name + ".vhd"
 	err = blobClient.PutPageBlob(vhdContainerName, name, vhdSize, tags)
+	if err != nil {
+		// if container doesn't exist, create one and retry PutPageBlob
+		detail := err.Error()
+		if strings.Contains(detail, errContainerNotFound) {
+			err = blobClient.CreateContainer(vhdContainerName, azs.ContainerAccessTypeContainer)
+			if err == nil {
+				err = blobClient.PutPageBlob(vhdContainerName, name, vhdSize, tags)
+			}
+		}
+	}
 	if err != nil {
 		return "", "", fmt.Errorf("failed to put page blob: %v", err)
 	}
+
 	// add VHD signature to the blob
 	h, err := createVHDHeader(uint64(size))
 	if err != nil {
diff --git a/pkg/cloudprovider/providers/azure/azure_storage.go b/pkg/cloudprovider/providers/azure/azure_storage.go
index b69e3cdffb4..bf7b11eec2c 100644
--- a/pkg/cloudprovider/providers/azure/azure_storage.go
+++ b/pkg/cloudprovider/providers/azure/azure_storage.go
@@ -24,10 +24,14 @@ import (
 	"github.com/golang/glog"
 	"k8s.io/kubernetes/pkg/cloudprovider"
 	"k8s.io/kubernetes/pkg/types"
+	"k8s.io/kubernetes/pkg/volume"
 )
 
 const (
-	maxLUN = 64 // max number of LUNs per VM
+	maxLUN               = 64 // max number of LUNs per VM
+	errLeaseFailed       = "AcquireDiskLeaseFailed"
+	errLeaseIDMissing    = "LeaseIdMissing"
+	errContainerNotFound = "ContainerNotFound"
 )
 
 // AttachDisk attaches a vhd to vm
@@ -64,7 +68,7 @@ func (az *Cloud) AttachDisk(diskName, diskURI string, nodeName types.NodeName, l
 	if err != nil {
 		glog.Errorf("azure attach failed, err: %v", err)
 		detail := err.Error()
-		if strings.Contains(detail, "Code=\"AcquireDiskLeaseFailed\"") {
+		if strings.Contains(detail, errLeaseFailed) {
 			// if lease cannot be acquired, immediately detach the disk and return the original error
 			glog.Infof("failed to acquire disk lease, try detach")
 			az.DetachDiskByName(diskName, diskURI, nodeName)
@@ -235,6 +239,12 @@ func (az *Cloud) DeleteVolume(name, uri string) error {
 	err = az.deleteVhdBlob(accountName, key, blob)
 	if err != nil {
 		glog.Warningf("failed to delete blob %s err: %v", uri, err)
+		detail := err.Error()
+		if strings.Contains(detail, errLeaseIDMissing) {
+			// disk is still being used
+			// see https://msdn.microsoft.com/en-us/library/microsoft.windowsazure.storage.blob.protocol.bloberrorcodestrings.leaseidmissing.aspx
+			return volume.NewDeletedVolumeInUseError(fmt.Sprintf("disk %q is still in use while being deleted", name))
+		}
 		return fmt.Errorf("failed to delete vhd %v, account %s, blob %s, err: %v", uri, accountName, blob, err)
 	}
 	glog.V(4).Infof("blob %s deleted", uri)