diff --git a/azurerm/resource_arm_api_management_product.go b/azurerm/resource_arm_api_management_product.go
index 7f77286bb8ca..fff45954fd7b 100644
--- a/azurerm/resource_arm_api_management_product.go
+++ b/azurerm/resource_arm_api_management_product.go
@@ -118,6 +118,8 @@ func resourceArmApiManagementProductCreateUpdate(d *schema.ResourceData, meta in
 	if subscriptionRequired && subscriptionsLimit > 0 {
 		properties.ProductContractProperties.ApprovalRequired = utils.Bool(approvalRequired)
 		properties.ProductContractProperties.SubscriptionsLimit = utils.Int32(int32(subscriptionsLimit))
+	} else if approvalRequired {
+		return fmt.Errorf("`subscription_required` must be true and `subscriptions_limit` must be greater than 0 to use `approval_required`")
 	}
 
 	if _, err := client.CreateOrUpdate(ctx, resourceGroup, serviceName, productId, properties, ""); err != nil {
diff --git a/azurerm/resource_arm_api_management_product_test.go b/azurerm/resource_arm_api_management_product_test.go
index 01d707509662..2c21b0866bca 100644
--- a/azurerm/resource_arm_api_management_product_test.go
+++ b/azurerm/resource_arm_api_management_product_test.go
@@ -2,6 +2,7 @@ package azurerm
 
 import (
 	"fmt"
+	"regexp"
 	"testing"
 
 	"github.com/hashicorp/terraform/helper/resource"
@@ -221,6 +222,26 @@ func TestAccAzureRMApiManagementProduct_complete(t *testing.T) {
 	})
 }
 
+func TestAccAzureRMApiManagementProduct_approvalRequiredError(t *testing.T) {
+	resourceName := "azurerm_api_management_product.test"
+	ri := tf.AccRandTimeInt()
+	location := testLocation()
+
+	resource.ParallelTest(t, resource.TestCase{
+		PreCheck:     func() { testAccPreCheck(t) },
+		Providers:    testAccProviders,
+		CheckDestroy: testCheckAzureRMApiManagementProductDestroy,
+		Steps: []resource.TestStep{
+			{
+				Config: testAccAzureRMApiManagementProduct_approvalRequiredError(ri, location),
+				Check: resource.ComposeTestCheckFunc(
+					testCheckAzureRMApiManagementProductExists(resourceName)),
+				ExpectError: regexp.MustCompile("`subscription_required` must be true and `subscriptions_limit` must be greater than 0 to use `approval_required`"),
+			},
+		},
+	})
+}
+
 func testCheckAzureRMApiManagementProductExists(resourceName string) resource.TestCheckFunc {
 	return func(s *terraform.State) error {
 		// Ensure we have enough information in state to look up in API
@@ -323,6 +344,7 @@ resource "azurerm_api_management_product" "test" {
   display_name          = "Test Updated Product"
   subscription_required = true
   approval_required     = true
+  subscriptions_limit   = 1
   published             = true
 }
 `, rInt, location, rInt)
@@ -395,3 +417,37 @@ resource "azurerm_api_management_product" "test" {
 }
 `, rInt, location, rInt)
 }
+
+func testAccAzureRMApiManagementProduct_approvalRequiredError(rInt int, location string) string {
+	return fmt.Sprintf(`
+resource "azurerm_resource_group" "test" {
+  name     = "acctestRG-%d"
+  location = "%s"
+}
+
+resource "azurerm_api_management" "test" {
+  name                = "acctestAM-%d"
+  location            = "${azurerm_resource_group.test.location}"
+  resource_group_name = "${azurerm_resource_group.test.name}"
+  publisher_name      = "pub1"
+  publisher_email     = "pub1@email.com"
+
+  sku {
+    name     = "Developer"
+    capacity = 1
+  }
+}
+
+resource "azurerm_api_management_product" "test" {
+  product_id            = "test-product"
+  api_management_name   = "${azurerm_api_management.test.name}"
+  resource_group_name   = "${azurerm_resource_group.test.name}"
+  display_name          = "Test Product"
+  approval_required     = true
+  subscription_required = false
+  published             = true
+  description           = "This is an example description"
+  terms                 = "These are some example terms and conditions"
+}
+`, rInt, location, rInt)
+}