diff --git a/hadoop-yarn-project/CHANGES.txt b/hadoop-yarn-project/CHANGES.txt
index bd353851b50..590f9dd9d1b 100644
--- a/hadoop-yarn-project/CHANGES.txt
+++ b/hadoop-yarn-project/CHANGES.txt
@@ -201,6 +201,9 @@ Release 2.4.0 - UNRELEASED
     YARN-1450. Fixed test failure in TestUnmanagedAMLauncher by removing its
     dependency on distributed-shell. (Binglin Chang via vinodkv)
 
+    YARN-1405. Fixed ResourceManager to not hang when init/start fails with an
+    exception w.r.t state-store. (Jian He via vinodkv)
+
 Release 2.3.0 - UNRELEASED
 
   INCOMPATIBLE CHANGES
diff --git a/hadoop-yarn-project/hadoop-yarn/hadoop-yarn-server/hadoop-yarn-server-resourcemanager/src/main/java/org/apache/hadoop/yarn/server/resourcemanager/ResourceManager.java b/hadoop-yarn-project/hadoop-yarn/hadoop-yarn-server/hadoop-yarn-server-resourcemanager/src/main/java/org/apache/hadoop/yarn/server/resourcemanager/ResourceManager.java
index 2fced0f3f19..597d18c112e 100644
--- a/hadoop-yarn-project/hadoop-yarn/hadoop-yarn-server/hadoop-yarn-server-resourcemanager/src/main/java/org/apache/hadoop/yarn/server/resourcemanager/ResourceManager.java
+++ b/hadoop-yarn-project/hadoop-yarn/hadoop-yarn-server/hadoop-yarn-server-resourcemanager/src/main/java/org/apache/hadoop/yarn/server/resourcemanager/ResourceManager.java
@@ -362,7 +362,7 @@ protected void serviceInit(Configuration configuration) throws Exception {
         // the Exception from stateStore.init() needs to be handled for
         // HA and we need to give up master status if we got fenced
         LOG.error("Failed to init state store", e);
-        ExitUtil.terminate(1, e);
+        throw e;
       }
       rmContext.setStateStore(rmStore);
 
@@ -470,7 +470,7 @@ protected void serviceStart() throws Exception {
           // the Exception from loadState() needs to be handled for
           // HA and we need to give up master status if we got fenced
           LOG.error("Failed to load/recover state", e);
-          ExitUtil.terminate(1, e);
+          throw e;
         }
       }
 
diff --git a/hadoop-yarn-project/hadoop-yarn/hadoop-yarn-server/hadoop-yarn-server-resourcemanager/src/test/java/org/apache/hadoop/yarn/server/resourcemanager/TestRMRestart.java b/hadoop-yarn-project/hadoop-yarn/hadoop-yarn-server/hadoop-yarn-server-resourcemanager/src/test/java/org/apache/hadoop/yarn/server/resourcemanager/TestRMRestart.java
index acedd6e9eaa..d396262fc80 100644
--- a/hadoop-yarn-project/hadoop-yarn/hadoop-yarn-server/hadoop-yarn-server-resourcemanager/src/test/java/org/apache/hadoop/yarn/server/resourcemanager/TestRMRestart.java
+++ b/hadoop-yarn-project/hadoop-yarn/hadoop-yarn-server/hadoop-yarn-server-resourcemanager/src/test/java/org/apache/hadoop/yarn/server/resourcemanager/TestRMRestart.java
@@ -34,7 +34,6 @@
 import java.util.List;
 import java.util.Map;
 import java.util.Set;
-import java.util.concurrent.LinkedBlockingQueue;
 
 import org.apache.hadoop.conf.Configuration;
 import org.apache.hadoop.fs.CommonConfigurationKeysPublic;
@@ -46,7 +45,7 @@
 import org.apache.hadoop.security.UserGroupInformation;
 import org.apache.hadoop.security.token.Token;
 import org.apache.hadoop.security.token.delegation.DelegationKey;
-import org.apache.hadoop.util.ExitUtil;
+import org.apache.hadoop.service.Service.STATE;
 import org.apache.hadoop.yarn.api.protocolrecords.AllocateResponse;
 import org.apache.hadoop.yarn.api.protocolrecords.FinishApplicationMasterRequest;
 import org.apache.hadoop.yarn.api.protocolrecords.GetApplicationReportRequest;
@@ -68,9 +67,6 @@
 import org.apache.hadoop.yarn.api.records.ResourceRequest;
 import org.apache.hadoop.yarn.api.records.YarnApplicationState;
 import org.apache.hadoop.yarn.conf.YarnConfiguration;
-import org.apache.hadoop.yarn.event.AsyncDispatcher;
-import org.apache.hadoop.yarn.event.Dispatcher;
-import org.apache.hadoop.yarn.event.Event;
 import org.apache.hadoop.yarn.security.AMRMTokenIdentifier;
 import org.apache.hadoop.yarn.security.client.RMDelegationTokenIdentifier;
 import org.apache.hadoop.yarn.server.api.protocolrecords.NodeHeartbeatResponse;
@@ -94,7 +90,6 @@
 import org.junit.Assert;
 import org.junit.Before;
 import org.junit.Test;
-import org.mortbay.log.Log;
 
 public class TestRMRestart {
 
@@ -107,7 +102,6 @@ public class TestRMRestart {
   public void setup() throws UnknownHostException {
     Logger rootLogger = LogManager.getRootLogger();
     rootLogger.setLevel(Level.DEBUG);
-    ExitUtil.disableSystemExit();
     conf = new YarnConfiguration();
     UserGroupInformation.setConfiguration(conf);
     conf.set(YarnConfiguration.RECOVERY_ENABLED, "true");
@@ -1477,6 +1471,29 @@ public void testFinishedAppRemovalAfterRMRestart() throws Exception {
     rm2.stop();
   }
 
+  // This is to test RM does not get hang on shutdown.
+  @Test (timeout = 10000)
+  public void testRMShutdown() throws Exception {
+    MemoryRMStateStore memStore = new MemoryRMStateStore() {
+      @Override
+      public synchronized void checkVersion()
+          throws Exception {
+        throw new Exception("Invalid version.");
+      }
+    };
+    // start RM
+    memStore.init(conf);
+    MockRM rm1 = null;
+    try {
+      rm1 = new MockRM(conf, memStore);
+      rm1.start();
+      Assert.fail();
+    } catch (Exception e) {
+      Assert.assertTrue(e.getMessage().contains("Invalid version."));
+    }
+    Assert.assertTrue(rm1.getServiceState() == STATE.STOPPED);
+  }
+
   public static class TestSecurityMockRM extends MockRM {
 
     public TestSecurityMockRM(Configuration conf, RMStateStore store) {