diff --git a/pkg/cloudprovider/providers/vsphere/vsphere.go b/pkg/cloudprovider/providers/vsphere/vsphere.go
index e5811fdffc7..09da52cdd42 100644
--- a/pkg/cloudprovider/providers/vsphere/vsphere.go
+++ b/pkg/cloudprovider/providers/vsphere/vsphere.go
@@ -495,6 +495,9 @@ func (i *Instances) ExternalID(name string) (string, error) {
 
 	vm, err := getVirtualMachineByName(i.cfg, ctx, c, name)
 	if err != nil {
+		if _, ok := err.(*find.NotFoundError); ok {
+			return "", cloudprovider.InstanceNotFound
+		}
 		return "", err
 	}
 
@@ -531,6 +534,12 @@ func (i *Instances) InstanceID(name string) (string, error) {
 	defer c.Logout(ctx)
 
 	vm, err := getVirtualMachineByName(i.cfg, ctx, c, name)
+	if err != nil {
+		if _, ok := err.(*find.NotFoundError); ok {
+			return "", cloudprovider.InstanceNotFound
+		}
+		return "", err
+	}
 
 	var mvm mo.VirtualMachine
 	err = getVirtualMachineManagedObjectReference(ctx, c, vm, "summary", &mvm)
diff --git a/pkg/cloudprovider/providers/vsphere/vsphere_test.go b/pkg/cloudprovider/providers/vsphere/vsphere_test.go
index 1bf98e709bb..5bdded9c75f 100644
--- a/pkg/cloudprovider/providers/vsphere/vsphere_test.go
+++ b/pkg/cloudprovider/providers/vsphere/vsphere_test.go
@@ -24,6 +24,7 @@ import (
 	"testing"
 
 	"golang.org/x/net/context"
+	"k8s.io/kubernetes/pkg/cloudprovider"
 	"k8s.io/kubernetes/pkg/util/rand"
 )
 
@@ -185,12 +186,31 @@ func TestInstances(t *testing.T) {
 	}
 	t.Logf("Found ExternalID(%s) = %s\n", srvs[0], externalId)
 
+	nonExistingVM := rand.String(15)
+	externalId, err = i.ExternalID(nonExistingVM)
+	if err == cloudprovider.InstanceNotFound {
+		t.Logf("VM %s was not found as expected\n", nonExistingVM)
+	} else if err == nil {
+		t.Fatalf("Instances.ExternalID did not fail as expected, VM %s was found", nonExistingVM)
+	} else {
+		t.Fatalf("Instances.ExternalID did not fail as expected, err: %v", err)
+	}
+
 	instanceId, err := i.InstanceID(srvs[0])
 	if err != nil {
 		t.Fatalf("Instances.InstanceID(%s) failed: %s", srvs[0], err)
 	}
 	t.Logf("Found InstanceID(%s) = %s\n", srvs[0], instanceId)
 
+	instanceId, err = i.InstanceID(nonExistingVM)
+	if err == cloudprovider.InstanceNotFound {
+		t.Logf("VM %s was not found as expected\n", nonExistingVM)
+	} else if err == nil {
+		t.Fatalf("Instances.InstanceID did not fail as expected, VM %s was found", nonExistingVM)
+	} else {
+		t.Fatalf("Instances.InstanceID did not fail as expected, err: %v", err)
+	}
+
 	addrs, err := i.NodeAddresses(srvs[0])
 	if err != nil {
 		t.Fatalf("Instances.NodeAddresses(%s) failed: %s", srvs[0], err)