diff --git a/cmd/ztest.c b/cmd/ztest.c
index bab7e32db414..ece9acbaa459 100644
--- a/cmd/ztest.c
+++ b/cmd/ztest.c
@@ -3038,7 +3038,7 @@ ztest_spa_create_destroy(ztest_ds_t *zd, uint64_t id)
 	 */
 	nvroot = make_vdev_root("/dev/bogus", NULL, NULL, 0, 0, NULL, 0, 0, 1);
 	VERIFY3U(ENOENT, ==,
-	    spa_create("ztest_bad_file", nvroot, NULL, NULL, NULL));
+	    spa_create("ztest_bad_file", nvroot, NULL, NULL, NULL, NULL));
 	fnvlist_free(nvroot);
 
 	/*
@@ -3046,7 +3046,7 @@ ztest_spa_create_destroy(ztest_ds_t *zd, uint64_t id)
 	 */
 	nvroot = make_vdev_root("/dev/bogus", NULL, NULL, 0, 0, NULL, 0, 2, 1);
 	VERIFY3U(ENOENT, ==,
-	    spa_create("ztest_bad_mirror", nvroot, NULL, NULL, NULL));
+	    spa_create("ztest_bad_mirror", nvroot, NULL, NULL, NULL, NULL));
 	fnvlist_free(nvroot);
 
 	/*
@@ -3056,7 +3056,7 @@ ztest_spa_create_destroy(ztest_ds_t *zd, uint64_t id)
 	(void) pthread_rwlock_rdlock(&ztest_name_lock);
 	nvroot = make_vdev_root("/dev/bogus", NULL, NULL, 0, 0, NULL, 0, 0, 1);
 	VERIFY3U(EEXIST, ==,
-	    spa_create(zo->zo_pool, nvroot, NULL, NULL, NULL));
+	    spa_create(zo->zo_pool, nvroot, NULL, NULL, NULL, NULL));
 	fnvlist_free(nvroot);
 
 	/*
@@ -3208,7 +3208,7 @@ ztest_spa_upgrade(ztest_ds_t *zd, uint64_t id)
 	props = fnvlist_alloc();
 	fnvlist_add_uint64(props,
 	    zpool_prop_to_name(ZPOOL_PROP_VERSION), version);
-	VERIFY0(spa_create(name, nvroot, props, NULL, NULL));
+	VERIFY0(spa_create(name, nvroot, props, NULL, NULL, NULL));
 	fnvlist_free(nvroot);
 	fnvlist_free(props);
 
@@ -8686,7 +8686,8 @@ ztest_init(ztest_shared_t *zs)
 		free(buf);
 	}
 
-	VERIFY0(spa_create(ztest_opts.zo_pool, nvroot, props, NULL, NULL));
+	VERIFY0(spa_create(ztest_opts.zo_pool, nvroot, props,
+	    NULL, NULL, NULL));
 	fnvlist_free(nvroot);
 	fnvlist_free(props);
 
diff --git a/include/sys/fs/zfs.h b/include/sys/fs/zfs.h
index ca929ed5117c..92ad72b55927 100644
--- a/include/sys/fs/zfs.h
+++ b/include/sys/fs/zfs.h
@@ -855,6 +855,9 @@ typedef struct zpool_load_policy {
 #define	ZPOOL_CONFIG_BOOTFS		"bootfs"	/* not stored on disk */
 #define	ZPOOL_CONFIG_MISSING_DEVICES	"missing_vdevs"	/* not stored on disk */
 #define	ZPOOL_CONFIG_LOAD_INFO		"load_info"	/* not stored on disk */
+#define	ZPOOL_CONFIG_CREATE_INFO	"create_info"	/* not stored on disk */
+#define	ZPOOL_CREATE_INFO_VDEV		"create_err_vdev"
+#define	ZPOOL_CREATE_INFO_POOL		"create_err_pool"
 #define	ZPOOL_CONFIG_REWIND_INFO	"rewind_info"	/* not stored on disk */
 #define	ZPOOL_CONFIG_UNSUP_FEAT		"unsup_feat"	/* not stored on disk */
 #define	ZPOOL_CONFIG_ENABLED_FEAT	"enabled_feat"	/* not stored on disk */
diff --git a/include/sys/spa.h b/include/sys/spa.h
index 1a84844c522a..cfc961634c73 100644
--- a/include/sys/spa.h
+++ b/include/sys/spa.h
@@ -777,7 +777,7 @@ extern int spa_open_rewind(const char *pool, spa_t **, const void *tag,
 extern int spa_get_stats(const char *pool, nvlist_t **config, char *altroot,
     size_t buflen);
 extern int spa_create(const char *pool, nvlist_t *nvroot, nvlist_t *props,
-    nvlist_t *zplprops, struct dsl_crypto_params *dcp);
+    nvlist_t *zplprops, struct dsl_crypto_params *dcp, nvlist_t **errinfo);
 extern int spa_import(char *pool, nvlist_t *config, nvlist_t *props,
     uint64_t flags);
 extern nvlist_t *spa_tryimport(nvlist_t *tryconfig);
diff --git a/include/sys/spa_impl.h b/include/sys/spa_impl.h
index 62cf196eeaa4..090b787c0fee 100644
--- a/include/sys/spa_impl.h
+++ b/include/sys/spa_impl.h
@@ -229,6 +229,7 @@ struct spa {
 	nvlist_t	*spa_config_syncing;	/* currently syncing config */
 	nvlist_t	*spa_config_splitting;	/* config for splitting */
 	nvlist_t	*spa_load_info;		/* info and errors from load */
+	nvlist_t	*spa_create_info;	/* info from create */
 	uint64_t	spa_config_txg;		/* txg of last config change */
 	uint32_t	spa_sync_pass;		/* iterate-to-convergence */
 	pool_state_t	spa_state;		/* pool state */
diff --git a/lib/libzfs/libzfs_pool.c b/lib/libzfs/libzfs_pool.c
index 7da5c218df39..e85ce189cf7e 100644
--- a/lib/libzfs/libzfs_pool.c
+++ b/lib/libzfs/libzfs_pool.c
@@ -1477,6 +1477,55 @@ zpool_is_draid_spare(const char *name)
 	return (B_FALSE);
 }
 
+
+/*
+ * Extract device-specific error information from a failed pool creation.
+ * If the kernel returned ZPOOL_CONFIG_CREATE_INFO in the ioctl output,
+ * set an appropriate error aux message identifying the problematic device.
+ *
+ * Returns B_TRUE if device-specific info was found and the error aux
+ * message was set, B_FALSE otherwise.
+ */
+static boolean_t
+zpool_create_info(libzfs_handle_t *hdl, zfs_cmd_t *zc)
+{
+	nvlist_t *outnv = NULL;
+	nvlist_t *errinfo = NULL;
+	const char *vdev = NULL;
+	const char *pname = NULL;
+	boolean_t found = B_FALSE;
+
+	if (zc->zc_nvlist_dst_size == 0)
+		return (B_FALSE);
+
+	if (nvlist_unpack((void *)(uintptr_t)zc->zc_nvlist_dst,
+	    zc->zc_nvlist_dst_size, &outnv, 0) != 0 || outnv == NULL)
+		return (B_FALSE);
+
+	if (nvlist_lookup_nvlist(outnv,
+	    ZPOOL_CONFIG_CREATE_INFO, &errinfo) != 0)
+		goto out;
+
+	if (nvlist_lookup_string(errinfo,
+	    ZPOOL_CREATE_INFO_VDEV, &vdev) != 0)
+		goto out;
+
+	if (nvlist_lookup_string(errinfo,
+	    ZPOOL_CREATE_INFO_POOL, &pname) == 0) {
+		zfs_error_aux(hdl, dgettext(TEXT_DOMAIN,
+		    "device '%s' is part of active pool '%s'"),
+		    vdev, pname);
+	} else {
+		zfs_error_aux(hdl, dgettext(TEXT_DOMAIN,
+		    "device '%s' is in use"), vdev);
+	}
+	found = B_TRUE;
+
+out:
+	nvlist_free(outnv);
+	return (found);
+}
+
 /*
  * Create the named pool, using the provided vdev list.  It is assumed
  * that the consumer has already validated the contents of the nvlist, so we
@@ -1556,9 +1605,21 @@ zpool_create(libzfs_handle_t *hdl, const char *pool, nvlist_t *nvroot,
 		zcmd_write_src_nvlist(hdl, &zc, zc_props);
 
 	(void) strlcpy(zc.zc_name, pool, sizeof (zc.zc_name));
+	zcmd_alloc_dst_nvlist(hdl, &zc, 4096);
 
 	if ((ret = zfs_ioctl(hdl, ZFS_IOC_POOL_CREATE, &zc)) != 0) {
 
+		if (zpool_create_info(hdl, &zc)) {
+			zcmd_free_nvlists(&zc);
+			nvlist_free(zc_props);
+			nvlist_free(zc_fsprops);
+			nvlist_free(hidden_args);
+			if (wkeydata != NULL)
+				free(wkeydata);
+			return (zfs_error(hdl,
+			    EZFS_BADDEV, errbuf));
+		}
+
 		zcmd_free_nvlists(&zc);
 		nvlist_free(zc_props);
 		nvlist_free(zc_fsprops);
diff --git a/module/zfs/spa.c b/module/zfs/spa.c
index 7d0846812c70..da13b14b64e2 100644
--- a/module/zfs/spa.c
+++ b/module/zfs/spa.c
@@ -1900,6 +1900,10 @@ spa_activate(spa_t *spa, spa_mode_t mode)
 static void
 spa_deactivate(spa_t *spa)
 {
+	if (spa->spa_create_info != NULL) {
+		nvlist_free(spa->spa_create_info);
+		spa->spa_create_info = NULL;
+	}
 	ASSERT(spa->spa_sync_on == B_FALSE);
 	ASSERT0P(spa->spa_dsl_pool);
 	ASSERT0P(spa->spa_root_vdev);
@@ -7013,7 +7017,7 @@ spa_create_check_encryption_params(dsl_crypto_params_t *dcp,
  */
 int
 spa_create(const char *pool, nvlist_t *nvroot, nvlist_t *props,
-    nvlist_t *zplprops, dsl_crypto_params_t *dcp)
+    nvlist_t *zplprops, dsl_crypto_params_t *dcp, nvlist_t **errinfo)
 {
 	spa_t *spa;
 	const char *altroot = NULL;
@@ -7164,6 +7168,10 @@ spa_create(const char *pool, nvlist_t *nvroot, nvlist_t *props,
 	spa_config_exit(spa, SCL_ALL, FTAG);
 
 	if (error != 0) {
+		if (errinfo != NULL) {
+			*errinfo = spa->spa_create_info;
+			spa->spa_create_info = NULL;
+		}
 		spa_unload(spa);
 		spa_deactivate(spa);
 		spa_remove(spa);
diff --git a/module/zfs/vdev_label.c b/module/zfs/vdev_label.c
index 16ba09c6f295..b1371b0349c6 100644
--- a/module/zfs/vdev_label.c
+++ b/module/zfs/vdev_label.c
@@ -1109,8 +1109,29 @@ vdev_label_init(vdev_t *vd, uint64_t crtxg, vdev_labeltype_t reason)
 	 * Determine if the vdev is in use.
 	 */
 	if (reason != VDEV_LABEL_REMOVE && reason != VDEV_LABEL_SPLIT &&
-	    vdev_inuse(vd, crtxg, reason, &spare_guid, &l2cache_guid))
+	    vdev_inuse(vd, crtxg, reason, &spare_guid, &l2cache_guid)) {
+		if (spa->spa_create_info == NULL) {
+			nvlist_t *nv = fnvlist_alloc();
+			nvlist_t *cfg;
+
+			if (vd->vdev_path != NULL)
+				fnvlist_add_string(nv,
+				    ZPOOL_CREATE_INFO_VDEV, vd->vdev_path);
+
+			cfg = vdev_label_read_config(vd, -1ULL);
+			if (cfg != NULL) {
+				const char *pname;
+				if (nvlist_lookup_string(cfg,
+				    ZPOOL_CONFIG_POOL_NAME, &pname) == 0)
+					fnvlist_add_string(nv,
+					    ZPOOL_CREATE_INFO_POOL, pname);
+				nvlist_free(cfg);
+			}
+
+			spa->spa_create_info = nv;
+		}
 		return (SET_ERROR(EBUSY));
+	}
 
 	/*
 	 * If this is a request to add or replace a spare or l2cache device
diff --git a/module/zfs/zfs_ioctl.c b/module/zfs/zfs_ioctl.c
index 3bbc9107ae2e..947e3f9354f8 100644
--- a/module/zfs/zfs_ioctl.c
+++ b/module/zfs/zfs_ioctl.c
@@ -1468,6 +1468,7 @@ zfs_ioc_pool_create(zfs_cmd_t *zc)
 	dsl_crypto_params_t *dcp = NULL;
 	const char *spa_name = zc->zc_name;
 	boolean_t unload_wkey = B_TRUE;
+	nvlist_t *errinfo = NULL;
 
 	if ((error = get_nvlist(zc->zc_nvlist_conf, zc->zc_nvlist_conf_size,
 	    zc->zc_iflags, &config)))
@@ -1519,7 +1520,16 @@ zfs_ioc_pool_create(zfs_cmd_t *zc)
 			spa_name = tname;
 	}
 
-	error = spa_create(zc->zc_name, config, props, zplprops, dcp);
+	error = spa_create(zc->zc_name, config, props, zplprops, dcp,
+	    &errinfo);
+	if (errinfo != NULL) {
+		nvlist_t *outnv = fnvlist_alloc();
+		fnvlist_add_nvlist(outnv,
+		    ZPOOL_CONFIG_CREATE_INFO, errinfo);
+		(void) put_nvlist(zc, outnv);
+		nvlist_free(outnv);
+		nvlist_free(errinfo);
+	}
 
 	/*
 	 * Set the remaining root properties
diff --git a/tests/runfiles/common.run b/tests/runfiles/common.run
index 19df29ec3e47..3aa0897fc921 100644
--- a/tests/runfiles/common.run
+++ b/tests/runfiles/common.run
@@ -428,7 +428,7 @@ tests = ['zpool_create_001_pos', 'zpool_create_002_pos',
     'zpool_create_features_005_pos', 'zpool_create_features_006_pos',
     'zpool_create_features_007_pos', 'zpool_create_features_008_pos',
     'zpool_create_features_009_pos', 'create-o_ashift',
-    'zpool_create_tempname', 'zpool_create_dryrun_output']
+    'zpool_create_tempname', 'zpool_create_errinfo_001_neg', 'zpool_create_dryrun_output']
 tags = ['functional', 'cli_root', 'zpool_create']
 
 [tests/functional/cli_root/zpool_destroy]
diff --git a/tests/zfs-tests/tests/Makefile.am b/tests/zfs-tests/tests/Makefile.am
index 9bb39b012cf2..7e71d0bb4878 100644
--- a/tests/zfs-tests/tests/Makefile.am
+++ b/tests/zfs-tests/tests/Makefile.am
@@ -1092,6 +1092,7 @@ nobase_dist_datadir_zfs_tests_tests_SCRIPTS += \
 	functional/cli_root/zpool_create/zpool_create_features_008_pos.ksh \
 	functional/cli_root/zpool_create/zpool_create_features_009_pos.ksh \
 	functional/cli_root/zpool_create/zpool_create_tempname.ksh \
+	functional/cli_root/zpool_create/zpool_create_errinfo_001_neg.ksh \
 	functional/cli_root/zpool_destroy/zpool_destroy_001_pos.ksh \
 	functional/cli_root/zpool_destroy/zpool_destroy_002_pos.ksh \
 	functional/cli_root/zpool_destroy/zpool_destroy_003_neg.ksh \
diff --git a/tests/zfs-tests/tests/functional/cli_root/zpool_create/zpool_create_errinfo_001_neg.ksh b/tests/zfs-tests/tests/functional/cli_root/zpool_create/zpool_create_errinfo_001_neg.ksh
new file mode 100755
index 000000000000..1c11aec6399e
--- /dev/null
+++ b/tests/zfs-tests/tests/functional/cli_root/zpool_create/zpool_create_errinfo_001_neg.ksh
@@ -0,0 +1,103 @@
+#!/bin/ksh -p
+# SPDX-License-Identifier: CDDL-1.0
+#
+# CDDL HEADER START
+#
+# The contents of this file are subject to the terms of the
+# Common Development and Distribution License (the "License").
+# You may not use this file except in compliance with the License.
+#
+# You can obtain a copy of the license at usr/src/OPENSOLARIS.LICENSE
+# or https://opensource.org/licenses/CDDL-1.0.
+# See the License for the specific language governing permissions
+# and limitations under the License.
+#
+# When distributing Covered Code, include this CDDL HEADER in each
+# file and include the License file at usr/src/OPENSOLARIS.LICENSE.
+# If applicable, add the following below this CDDL HEADER, with the
+# fields enclosed by brackets "[]" replaced with your own identifying
+# information: Portions Copyright [yyyy] [name of copyright owner]
+#
+# CDDL HEADER END
+#
+
+#
+# Copyright (c) 2026, Christos Longros. All rights reserved.
+#
+
+. $STF_SUITE/include/libtest.shlib
+
+#
+# DESCRIPTION:
+# 'zpool create' should report which device is in use when it fails
+# because a vdev belongs to an active pool.
+#
+# STRATEGY:
+# 1. Create a backing file for two block devices.
+# 2. Attach two block devices to the same file.
+# 3. Attempt to create a mirror pool using both devices.
+# 4. Verify the error message identifies the specific device.
+# 5. Verify the error message names the active pool.
+#
+
+verify_runnable "global"
+
+TESTFILE="$TEST_BASE_DIR/vdev_errinfo"
+TESTPOOL2="testpool_errinfo"
+BLKDEV1=""
+BLKDEV2=""
+
+function cleanup
+{
+	destroy_pool $TESTPOOL2
+	destroy_pool $TESTPOOL
+
+	if is_linux; then
+		[[ -n "$BLKDEV1" ]] && losetup -d "$BLKDEV1" 2>/dev/null
+		[[ -n "$BLKDEV2" ]] && losetup -d "$BLKDEV2" 2>/dev/null
+	elif is_freebsd; then
+		[[ -n "$BLKDEV1" ]] && mdconfig -d -u "$BLKDEV1" 2>/dev/null
+		[[ -n "$BLKDEV2" ]] && mdconfig -d -u "$BLKDEV2" 2>/dev/null
+	fi
+
+	rm -f "$TESTFILE"
+}
+
+log_assert "'zpool create' reports device-specific errors for in-use vdevs."
+log_onexit cleanup
+
+# Create a file to back the block devices
+log_must truncate -s $MINVDEVSIZE "$TESTFILE"
+
+# Attach two block devices to the same file (platform-specific)
+if is_linux; then
+	BLKDEV1=$(losetup -f --show "$TESTFILE")
+	BLKDEV2=$(losetup -f --show "$TESTFILE")
+elif is_freebsd; then
+	BLKDEV1=/dev/$(mdconfig -a -t vnode -f "$TESTFILE")
+	BLKDEV2=/dev/$(mdconfig -a -t vnode -f "$TESTFILE")
+else
+	log_unsupported "Platform not supported for this test"
+fi
+
+log_note "Using devices: $BLKDEV1 $BLKDEV2"
+
+# Attempt to create a mirror pool; this should fail because both
+# devices refer to the same underlying file.
+log_mustnot zpool create $TESTPOOL2 mirror $BLKDEV1 $BLKDEV2
+
+# Re-run to capture the error message for content verification
+errmsg=$(zpool create $TESTPOOL2 mirror $BLKDEV1 $BLKDEV2 2>&1)
+log_note "zpool create output: $errmsg"
+
+# Error message should name one of the devices
+log_must eval "echo '$errmsg' | grep -qE '$BLKDEV1|$BLKDEV2'"
+
+# Error message should name the active pool
+if echo "$errmsg" | grep -q "active pool"; then
+	log_note "Error message correctly identifies the active pool"
+else
+	log_fail "Error message does not mention the active pool: $errmsg"
+fi
+
+log_pass "'zpool create' reports device-specific errors for in-use vdevs."