diff --git a/sdk/identity/azure-identity/src/main/java/com/azure/identity/AzureCliCredential.java b/sdk/identity/azure-identity/src/main/java/com/azure/identity/AzureCliCredential.java
index c7068bc9b9f56..0ee540096db13 100644
--- a/sdk/identity/azure-identity/src/main/java/com/azure/identity/AzureCliCredential.java
+++ b/sdk/identity/azure-identity/src/main/java/com/azure/identity/AzureCliCredential.java
@@ -83,7 +83,14 @@ public Mono<AccessToken> getToken(TokenRequestContext request) {
         return identityClient.authenticateWithAzureCli(request)
             .doOnNext(token -> LoggingUtil.logTokenSuccess(LOGGER, request))
             .doOnError(error -> LoggingUtil.logTokenError(LOGGER, identityClient.getIdentityClientOptions(), request,
-                error));
+                error))
+            .onErrorMap(error -> {
+                if (identityClient.getIdentityClientOptions().isChained()) {
+                    return new CredentialUnavailableException(error.getMessage(), error);
+                } else {
+                    return error;
+                }
+            });
     }
 
     @Override
@@ -94,7 +101,11 @@ public AccessToken getTokenSync(TokenRequestContext request) {
             return accessToken;
         } catch (Exception e) {
             LoggingUtil.logTokenError(LOGGER, identityClient.getIdentityClientOptions(), request, e);
-            throw e;
+            if (identityClient.getIdentityClientOptions().isChained()) {
+                throw new CredentialUnavailableException(e.getMessage(), e);
+            } else {
+                throw e;
+            }
         }
     }
 }
diff --git a/sdk/identity/azure-identity/src/main/java/com/azure/identity/AzureDeveloperCliCredential.java b/sdk/identity/azure-identity/src/main/java/com/azure/identity/AzureDeveloperCliCredential.java
index e8871cf98e0c1..c43f5d2ae307d 100644
--- a/sdk/identity/azure-identity/src/main/java/com/azure/identity/AzureDeveloperCliCredential.java
+++ b/sdk/identity/azure-identity/src/main/java/com/azure/identity/AzureDeveloperCliCredential.java
@@ -83,7 +83,14 @@ public Mono<AccessToken> getToken(TokenRequestContext request) {
         return identityClient.authenticateWithAzureDeveloperCli(request)
             .doOnNext(token -> LoggingUtil.logTokenSuccess(LOGGER, request))
             .doOnError(error -> LoggingUtil.logTokenError(LOGGER, identityClient.getIdentityClientOptions(), request,
-                error));
+                error))
+            .onErrorMap(error -> {
+                if (identityClient.getIdentityClientOptions().isChained()) {
+                    return new CredentialUnavailableException(error.getMessage(), error);
+                } else {
+                    return error;
+                }
+            });
     }
 
     @Override
@@ -94,7 +101,11 @@ public AccessToken getTokenSync(TokenRequestContext request) {
             return accessToken;
         } catch (Exception e) {
             LoggingUtil.logTokenError(LOGGER, identityClient.getIdentityClientOptions(), request, e);
-            throw e;
+            if (identityClient.getIdentityClientOptions().isChained()) {
+                throw new CredentialUnavailableException(e.getMessage(), e);
+            } else {
+                throw e;
+            }
         }
     }
 }
diff --git a/sdk/identity/azure-identity/src/main/java/com/azure/identity/AzurePowerShellCredential.java b/sdk/identity/azure-identity/src/main/java/com/azure/identity/AzurePowerShellCredential.java
index 1714e0cb55898..44c1d0f89a1b0 100644
--- a/sdk/identity/azure-identity/src/main/java/com/azure/identity/AzurePowerShellCredential.java
+++ b/sdk/identity/azure-identity/src/main/java/com/azure/identity/AzurePowerShellCredential.java
@@ -75,6 +75,13 @@ public Mono<AccessToken> getToken(TokenRequestContext request) {
         return identityClient.authenticateWithAzurePowerShell(request)
             .doOnNext(token -> LoggingUtil.logTokenSuccess(LOGGER, request))
             .doOnError(error -> LoggingUtil.logTokenError(LOGGER, identityClient.getIdentityClientOptions(), request,
-                error));
+                error))
+            .onErrorMap(error -> {
+                if (identityClient.getIdentityClientOptions().isChained()) {
+                    return new CredentialUnavailableException(error.getMessage(), error);
+                } else {
+                    return error;
+                }
+            });
     }
 }
diff --git a/sdk/identity/azure-identity/src/main/java/com/azure/identity/DefaultAzureCredentialBuilder.java b/sdk/identity/azure-identity/src/main/java/com/azure/identity/DefaultAzureCredentialBuilder.java
index ad64181775eb0..91b1ea94cc15c 100644
--- a/sdk/identity/azure-identity/src/main/java/com/azure/identity/DefaultAzureCredentialBuilder.java
+++ b/sdk/identity/azure-identity/src/main/java/com/azure/identity/DefaultAzureCredentialBuilder.java
@@ -76,6 +76,7 @@ public class DefaultAzureCredentialBuilder extends CredentialBuilderBase<Default
      */
     public DefaultAzureCredentialBuilder() {
         this.identityClientOptions.setIdentityLogOptionsImpl(new IdentityLogOptionsImpl(true));
+        this.identityClientOptions.setChained(true);
     }
 
     /**
diff --git a/sdk/identity/azure-identity/src/main/java/com/azure/identity/IntelliJCredential.java b/sdk/identity/azure-identity/src/main/java/com/azure/identity/IntelliJCredential.java
index 25b4cfd13d942..8d2916199375a 100644
--- a/sdk/identity/azure-identity/src/main/java/com/azure/identity/IntelliJCredential.java
+++ b/sdk/identity/azure-identity/src/main/java/com/azure/identity/IntelliJCredential.java
@@ -133,6 +133,13 @@ public Mono<AccessToken> getToken(TokenRequestContext request) {
                    })
             .doOnNext(token -> LoggingUtil.logTokenSuccess(LOGGER, request))
             .doOnError(error -> LoggingUtil.logTokenError(LOGGER, identityClient.getIdentityClientOptions(),
-                request, error));
+                request, error))
+            .onErrorMap(error -> {
+                if (identityClient.getIdentityClientOptions().isChained()) {
+                    return new CredentialUnavailableException(error.getMessage(), error);
+                } else {
+                    return error;
+                }
+            });
     }
 }
diff --git a/sdk/identity/azure-identity/src/main/java/com/azure/identity/SharedTokenCacheCredential.java b/sdk/identity/azure-identity/src/main/java/com/azure/identity/SharedTokenCacheCredential.java
index 51810f6d389db..bb3b31a95003a 100644
--- a/sdk/identity/azure-identity/src/main/java/com/azure/identity/SharedTokenCacheCredential.java
+++ b/sdk/identity/azure-identity/src/main/java/com/azure/identity/SharedTokenCacheCredential.java
@@ -101,7 +101,14 @@ public Mono<AccessToken> getToken(TokenRequestContext request) {
             .map(this::updateCache)
             .doOnNext(token -> LoggingUtil.logTokenSuccess(LOGGER, request))
             .doOnError(error -> LoggingUtil.logTokenError(LOGGER, identityClient.getIdentityClientOptions(),
-                request, error));
+                request, error))
+            .onErrorMap(error -> {
+                if (identityClient.getIdentityClientOptions().isChained()) {
+                    return new CredentialUnavailableException(error.getMessage(), error);
+                } else {
+                    return error;
+                }
+            });
     }
 
     private AccessToken updateCache(MsalToken msalToken) {
diff --git a/sdk/identity/azure-identity/src/main/java/com/azure/identity/implementation/IdentityClientOptions.java b/sdk/identity/azure-identity/src/main/java/com/azure/identity/implementation/IdentityClientOptions.java
index c3519ecc31886..df97ec95d4d46 100644
--- a/sdk/identity/azure-identity/src/main/java/com/azure/identity/implementation/IdentityClientOptions.java
+++ b/sdk/identity/azure-identity/src/main/java/com/azure/identity/implementation/IdentityClientOptions.java
@@ -15,6 +15,7 @@
 import com.azure.core.util.logging.ClientLogger;
 import com.azure.identity.AzureAuthorityHosts;
 import com.azure.identity.AuthenticationRecord;
+import com.azure.identity.ChainedTokenCredential;
 import com.azure.identity.TokenCachePersistenceOptions;
 import com.azure.identity.implementation.util.IdentityConstants;
 import com.azure.identity.implementation.util.ValidationUtil;
@@ -72,6 +73,8 @@ public final class IdentityClientOptions implements Cloneable {
 
     private Duration credentialProcessTimeout = Duration.ofSeconds(10);
 
+    private boolean isChained;
+
     /**
      * Creates an instance of IdentityClientOptions with default settings.
      */
@@ -708,6 +711,24 @@ public void setCredentialProcessTimeout(Duration credentialProcessTimeout) {
         this.credentialProcessTimeout = credentialProcessTimeout;
     }
 
+    /**
+     * Indicates whether this options instance is part of a {@link ChainedTokenCredential}.
+     * @return true if this options instance is part of a {@link ChainedTokenCredential}, false otherwise.
+     */
+    public boolean isChained() {
+        return this.isChained;
+    }
+
+    /**
+     * Sets whether this options instance is part of a {@link ChainedTokenCredential}.
+     * @param isChained
+     * @return the updated client options
+     */
+    public IdentityClientOptions setChained(boolean isChained) {
+        this.isChained = isChained;
+        return this;
+    }
+
     public IdentityClientOptions clone() {
         IdentityClientOptions clone =  new IdentityClientOptions()
             .setAdditionallyAllowedTenants(this.additionallyAllowedTenants)