diff --git a/src/util.cpp b/src/util.cpp
index 34483d95b0e..48d64e3eecc 100644
--- a/src/util.cpp
+++ b/src/util.cpp
@@ -459,9 +459,9 @@ bool ArgsManager::ParseParameters(int argc, const char* const argv[], std::strin
     if (it != m_override_args.end()) {
         if (it->second.size() > 0) {
             for (const auto& ic : it->second) {
-                fprintf(stderr, "warning: -includeconf cannot be used from commandline; ignoring -includeconf=%s\n", ic.c_str());
+                error += "-includeconf cannot be used from commandline; -includeconf=" + ic + "\n";
             }
-            m_override_args.erase(it);
+            return false;
         }
     }
     return true;
@@ -849,11 +849,12 @@ bool ArgsManager::ReadConfigFiles(std::string& error, bool ignore_invalid_keys)
         // if there is an -includeconf in the override args, but it is empty, that means the user
         // passed '-noincludeconf' on the command line, in which case we should not include anything
         if (m_override_args.count("-includeconf") == 0) {
+            std::string chain_id = GetChainName();
             std::vector<std::string> includeconf(GetArgs("-includeconf"));
             {
                 // We haven't set m_network yet (that happens in SelectParams()), so manually check
                 // for network.includeconf args.
-                std::vector<std::string> includeconf_net(GetArgs(std::string("-") + GetChainName() + ".includeconf"));
+                std::vector<std::string> includeconf_net(GetArgs(std::string("-") + chain_id + ".includeconf"));
                 includeconf.insert(includeconf.end(), includeconf_net.begin(), includeconf_net.end());
             }
 
@@ -862,7 +863,7 @@ bool ArgsManager::ReadConfigFiles(std::string& error, bool ignore_invalid_keys)
             {
                 LOCK(cs_args);
                 m_config_args.erase("-includeconf");
-                m_config_args.erase(std::string("-") + GetChainName() + ".includeconf");
+                m_config_args.erase(std::string("-") + chain_id + ".includeconf");
             }
 
             for (const std::string& to_include : includeconf) {
@@ -873,15 +874,22 @@ bool ArgsManager::ReadConfigFiles(std::string& error, bool ignore_invalid_keys)
                     }
                     LogPrintf("Included configuration file %s\n", to_include.c_str());
                 } else {
-                    fprintf(stderr, "Failed to include configuration file %s\n", to_include.c_str());
+                    error = "Failed to include configuration file " + to_include;
+                    return false;
                 }
             }
 
             // Warn about recursive -includeconf
             includeconf = GetArgs("-includeconf");
             {
-                std::vector<std::string> includeconf_net(GetArgs(std::string("-") + GetChainName() + ".includeconf"));
+                std::vector<std::string> includeconf_net(GetArgs(std::string("-") + chain_id + ".includeconf"));
                 includeconf.insert(includeconf.end(), includeconf_net.begin(), includeconf_net.end());
+                std::string chain_id_final = GetChainName();
+                if (chain_id_final != chain_id) {
+                    // Also warn about recursive includeconf for the chain that was specified in one of the includeconfs
+                    includeconf_net = GetArgs(std::string("-") + chain_id_final + ".includeconf");
+                    includeconf.insert(includeconf.end(), includeconf_net.begin(), includeconf_net.end());
+                }
             }
             for (const std::string& to_include : includeconf) {
                 fprintf(stderr, "warning: -includeconf cannot be used from included files; ignoring -includeconf=%s\n", to_include.c_str());
diff --git a/test/functional/feature_includeconf.py b/test/functional/feature_includeconf.py
index 9ccb89af434..9a7a0ca1031 100755
--- a/test/functional/feature_includeconf.py
+++ b/test/functional/feature_includeconf.py
@@ -41,14 +41,9 @@ class IncludeConfTest(BitcoinTestFramework):
         subversion = self.nodes[0].getnetworkinfo()["subversion"]
         assert subversion.endswith("main; relative)/")
 
-        self.log.info("-includeconf cannot be used as command-line arg. subversion should still end with 'main; relative)/'")
+        self.log.info("-includeconf cannot be used as command-line arg")
         self.stop_node(0)
-
-        self.start_node(0, extra_args=["-includeconf=relative2.conf"])
-
-        subversion = self.nodes[0].getnetworkinfo()["subversion"]
-        assert subversion.endswith("main; relative)/")
-        self.stop_node(0, expected_stderr="warning: -includeconf cannot be used from commandline; ignoring -includeconf=relative2.conf")
+        self.nodes[0].assert_start_raises_init_error(extra_args=["-includeconf=relative2.conf"], expected_msg="Error parsing command line arguments: -includeconf cannot be used from commandline; -includeconf=relative2.conf")
 
         self.log.info("-includeconf cannot be used recursively. subversion should end with 'main; relative)/'")
         with open(os.path.join(self.options.tmpdir, "node0", "relative.conf"), "a", encoding="utf8") as f:
@@ -59,8 +54,18 @@ class IncludeConfTest(BitcoinTestFramework):
         assert subversion.endswith("main; relative)/")
         self.stop_node(0, expected_stderr="warning: -includeconf cannot be used from included files; ignoring -includeconf=relative2.conf")
 
+        self.log.info("-includeconf cannot contain invalid arg")
+        with open(os.path.join(self.options.tmpdir, "node0", "relative.conf"), "w", encoding="utf8") as f:
+            f.write("foo=bar\n")
+        self.nodes[0].assert_start_raises_init_error(expected_msg="Error reading configuration file: Invalid configuration value foo")
+
+        self.log.info("-includeconf cannot be invalid path")
+        os.remove(os.path.join(self.options.tmpdir, "node0", "relative.conf"))
+        self.nodes[0].assert_start_raises_init_error(expected_msg="Error reading configuration file: Failed to include configuration file relative.conf")
+
         self.log.info("multiple -includeconf args can be used from the base config file. subversion should end with 'main; relative; relative2)/'")
         with open(os.path.join(self.options.tmpdir, "node0", "relative.conf"), "w", encoding="utf8") as f:
+            # Restore initial file contents
             f.write("uacomment=relative\n")
 
         with open(os.path.join(self.options.tmpdir, "node0", "bitcoin.conf"), "a", encoding='utf8') as f: