diff --git a/hadoop-yarn-project/hadoop-yarn/hadoop-yarn-server/hadoop-yarn-server-nodemanager/src/main/java/org/apache/hadoop/yarn/server/nodemanager/amrmproxy/AMRMProxyService.java b/hadoop-yarn-project/hadoop-yarn/hadoop-yarn-server/hadoop-yarn-server-nodemanager/src/main/java/org/apache/hadoop/yarn/server/nodemanager/amrmproxy/AMRMProxyService.java
index 2696bca6c44..aeb3be8aa62 100644
--- a/hadoop-yarn-project/hadoop-yarn/hadoop-yarn-server/hadoop-yarn-server-nodemanager/src/main/java/org/apache/hadoop/yarn/server/nodemanager/amrmproxy/AMRMProxyService.java
+++ b/hadoop-yarn-project/hadoop-yarn/hadoop-yarn-server/hadoop-yarn-server-nodemanager/src/main/java/org/apache/hadoop/yarn/server/nodemanager/amrmproxy/AMRMProxyService.java
@@ -319,11 +319,16 @@ public class AMRMProxyService extends AbstractService implements
         + " ApplicationId:" + applicationAttemptId + " for the user: "
         + user);
 
-    RequestInterceptor interceptorChain =
-        this.createRequestInterceptorChain();
-    interceptorChain.init(createApplicationMasterContext(
-        applicationAttemptId, user, amrmToken, localToken));
-    chainWrapper.init(interceptorChain, applicationAttemptId);
+    try {
+      RequestInterceptor interceptorChain =
+          this.createRequestInterceptorChain();
+      interceptorChain.init(createApplicationMasterContext(this.nmContext,
+          applicationAttemptId, user, amrmToken, localToken));
+      chainWrapper.init(interceptorChain, applicationAttemptId);
+    } catch (Exception e) {
+      this.applPipelineMap.remove(applicationAttemptId.getApplicationId());
+      throw e;
+    }
   }
 
   /**
@@ -339,8 +344,10 @@ public class AMRMProxyService extends AbstractService implements
         this.applPipelineMap.remove(applicationId);
 
     if (pipeline == null) {
-      LOG.info("Request to stop an application that does not exist. Id:"
-          + applicationId);
+      LOG.info(
+          "No interceptor pipeline for application {},"
+              + " likely because its AM is not run in this node.",
+          applicationId);
     } else {
       // Remove the appAttempt in AMRMTokenSecretManager
       this.secretManager
@@ -413,11 +420,11 @@ public class AMRMProxyService extends AbstractService implements
   }
 
   private AMRMProxyApplicationContext createApplicationMasterContext(
-      ApplicationAttemptId applicationAttemptId, String user,
+      Context context, ApplicationAttemptId applicationAttemptId, String user,
       Token<AMRMTokenIdentifier> amrmToken,
       Token<AMRMTokenIdentifier> localToken) {
     AMRMProxyApplicationContextImpl appContext =
-        new AMRMProxyApplicationContextImpl(this.nmContext, getConfig(),
+        new AMRMProxyApplicationContextImpl(context, getConfig(),
             applicationAttemptId, user, amrmToken, localToken);
     return appContext;
   }
diff --git a/hadoop-yarn-project/hadoop-yarn/hadoop-yarn-server/hadoop-yarn-server-nodemanager/src/test/java/org/apache/hadoop/yarn/server/nodemanager/amrmproxy/BaseAMRMProxyTest.java b/hadoop-yarn-project/hadoop-yarn/hadoop-yarn-server/hadoop-yarn-server-nodemanager/src/test/java/org/apache/hadoop/yarn/server/nodemanager/amrmproxy/BaseAMRMProxyTest.java
index 4ec50691609..4b317e504af 100644
--- a/hadoop-yarn-project/hadoop-yarn/hadoop-yarn-server/hadoop-yarn-server-nodemanager/src/test/java/org/apache/hadoop/yarn/server/nodemanager/amrmproxy/BaseAMRMProxyTest.java
+++ b/hadoop-yarn-project/hadoop-yarn/hadoop-yarn-server/hadoop-yarn-server-nodemanager/src/test/java/org/apache/hadoop/yarn/server/nodemanager/amrmproxy/BaseAMRMProxyTest.java
@@ -120,9 +120,9 @@ public abstract class BaseAMRMProxyTest {
             + MockRequestInterceptor.class.getName());
 
     this.dispatcher = new AsyncDispatcher();
-    this.dispatcher.init(conf);
+    this.dispatcher.init(this.conf);
     this.dispatcher.start();
-    this.amrmProxyService = createAndStartAMRMProxyService();
+    createAndStartAMRMProxyService(this.conf);
   }
 
   @After
@@ -136,12 +136,19 @@ public abstract class BaseAMRMProxyTest {
     return threadpool;
   }
 
-  protected MockAMRMProxyService createAndStartAMRMProxyService() {
-    MockAMRMProxyService svc =
+  protected Configuration getConf() {
+    return this.conf;
+  }
+
+  protected void createAndStartAMRMProxyService(Configuration config) {
+    // Stop the existing instance first if not null
+    if (this.amrmProxyService != null) {
+      this.amrmProxyService.stop();
+    }
+    this.amrmProxyService =
         new MockAMRMProxyService(new NullContext(), dispatcher);
-    svc.init(conf);
-    svc.start();
-    return svc;
+    this.amrmProxyService.init(config);
+    this.amrmProxyService.start();
   }
 
   /**
diff --git a/hadoop-yarn-project/hadoop-yarn/hadoop-yarn-server/hadoop-yarn-server-nodemanager/src/test/java/org/apache/hadoop/yarn/server/nodemanager/amrmproxy/TestAMRMProxyService.java b/hadoop-yarn-project/hadoop-yarn/hadoop-yarn-server/hadoop-yarn-server-nodemanager/src/test/java/org/apache/hadoop/yarn/server/nodemanager/amrmproxy/TestAMRMProxyService.java
index 837278c234e..fa17f2668e6 100644
--- a/hadoop-yarn-project/hadoop-yarn/hadoop-yarn-server/hadoop-yarn-server-nodemanager/src/test/java/org/apache/hadoop/yarn/server/nodemanager/amrmproxy/TestAMRMProxyService.java
+++ b/hadoop-yarn-project/hadoop-yarn/hadoop-yarn-server/hadoop-yarn-server-nodemanager/src/test/java/org/apache/hadoop/yarn/server/nodemanager/amrmproxy/TestAMRMProxyService.java
@@ -21,9 +21,11 @@ package org.apache.hadoop.yarn.server.nodemanager.amrmproxy;
 import java.io.IOException;
 import java.util.ArrayList;
 import java.util.List;
+import java.util.Map;
 
 import org.apache.commons.logging.Log;
 import org.apache.commons.logging.LogFactory;
+import org.apache.hadoop.conf.Configuration;
 import org.apache.hadoop.yarn.api.protocolrecords.AllocateRequest;
 import org.apache.hadoop.yarn.api.protocolrecords.AllocateResponse;
 import org.apache.hadoop.yarn.api.protocolrecords.FinishApplicationMasterResponse;
@@ -34,6 +36,7 @@ import org.apache.hadoop.yarn.api.records.Container;
 import org.apache.hadoop.yarn.api.records.ContainerId;
 import org.apache.hadoop.yarn.api.records.FinalApplicationStatus;
 import org.apache.hadoop.yarn.api.records.ResourceRequest;
+import org.apache.hadoop.yarn.conf.YarnConfiguration;
 import org.apache.hadoop.yarn.exceptions.YarnException;
 import org.apache.hadoop.yarn.server.nodemanager.amrmproxy.AMRMProxyService.RequestInterceptorChainWrapper;
 import org.apache.hadoop.yarn.util.Records;
@@ -94,6 +97,32 @@ public class TestAMRMProxyService extends BaseAMRMProxyTest {
     Assert.assertEquals(Integer.toString(testAppId), response1.getQueue());
   }
 
+  /**
+   * Tests the case when interceptor pipeline initialization fails.
+   */
+  @Test
+  public void testInterceptorInitFailure() {
+    Configuration conf = this.getConf();
+    // Override with a bad interceptor configuration
+    conf.set(YarnConfiguration.AMRM_PROXY_INTERCEPTOR_CLASS_PIPELINE,
+        "class.that.does.not.exist");
+
+    // Reinitialize instance with the new config
+    createAndStartAMRMProxyService(conf);
+    int testAppId = 1;
+    try {
+      registerApplicationMaster(testAppId);
+      Assert.fail("Should not reach here. Expecting an exception thrown");
+    } catch (Exception e) {
+      Map<ApplicationId, RequestInterceptorChainWrapper> pipelines =
+          getAMRMProxyService().getPipelines();
+      ApplicationId id = getApplicationId(testAppId);
+      Assert.assertTrue(
+          "The interceptor pipeline should be removed if initializtion fails",
+          pipelines.get(id) == null);
+    }
+  }
+
   /**
    * Tests the registration of multiple application master serially one at a
    * time.