diff --git a/lib/nvmf/nvmf.c b/lib/nvmf/nvmf.c
index 40d5cfee7..7af3a9da1 100644
--- a/lib/nvmf/nvmf.c
+++ b/lib/nvmf/nvmf.c
@@ -116,6 +116,7 @@ nvmf_tgt_create_poll_group(void *io_device, void *ctx_buf)
 	struct spdk_nvmf_transport *transport;
 	struct spdk_thread *thread = spdk_get_thread();
 	uint32_t sid;
+	int rc;
 
 	SPDK_DTRACE_PROBE1(nvmf_create_poll_group, spdk_thread_get_id(thread));
 
@@ -123,7 +124,10 @@ nvmf_tgt_create_poll_group(void *io_device, void *ctx_buf)
 	TAILQ_INIT(&group->qpairs);
 
 	TAILQ_FOREACH(transport, &tgt->transports, link) {
-		nvmf_poll_group_add_transport(group, transport);
+		rc = nvmf_poll_group_add_transport(group, transport);
+		if (rc != 0) {
+			return rc;
+		}
 	}
 
 	group->num_sgroups = tgt->max_subsystems;
@@ -714,6 +718,9 @@ _nvmf_tgt_add_transport_done(struct spdk_io_channel_iter *i, int status)
 {
 	struct spdk_nvmf_tgt_add_transport_ctx *ctx = spdk_io_channel_iter_get_ctx(i);
 
+	if (status) {
+		TAILQ_REMOVE(&ctx->tgt->transports, ctx->transport, link);
+	}
 	ctx->cb_fn(ctx->cb_arg, status);
 
 	free(ctx);
diff --git a/lib/nvmf/nvmf_rpc.c b/lib/nvmf/nvmf_rpc.c
index 84dfc4882..edbda4796 100644
--- a/lib/nvmf/nvmf_rpc.c
+++ b/lib/nvmf/nvmf_rpc.c
@@ -1787,6 +1787,8 @@ struct nvmf_rpc_create_transport_ctx {
 	char				*tgt_name;
 	struct spdk_nvmf_transport_opts	opts;
 	struct spdk_jsonrpc_request	*request;
+	struct spdk_nvmf_transport	*transport;
+	int				status;
 };
 
 /**
@@ -1889,24 +1891,30 @@ nvmf_rpc_create_transport_ctx_free(struct nvmf_rpc_create_transport_ctx *ctx)
 	free(ctx);
 }
 
+static void
+nvmf_rpc_transport_destroy_done_cb(void *cb_arg)
+{
+	struct nvmf_rpc_create_transport_ctx *ctx = cb_arg;
+
+	spdk_jsonrpc_send_error_response_fmt(ctx->request, SPDK_JSONRPC_ERROR_INTERNAL_ERROR,
+					     "Failed to add transport to tgt.(%d)", ctx->status);
+	nvmf_rpc_create_transport_ctx_free(ctx);
+}
+
 static void
 nvmf_rpc_tgt_add_transport_done(void *cb_arg, int status)
 {
 	struct nvmf_rpc_create_transport_ctx *ctx = cb_arg;
-	struct spdk_jsonrpc_request *request;
-
-	request = ctx->request;
-	nvmf_rpc_create_transport_ctx_free(ctx);
 
 	if (status) {
 		SPDK_ERRLOG("Failed to add transport to tgt.(%d)\n", status);
-		spdk_jsonrpc_send_error_response_fmt(request, SPDK_JSONRPC_ERROR_INTERNAL_ERROR,
-						     "Failed to add transport to tgt.(%d)",
-						     status);
+		ctx->status = status;
+		spdk_nvmf_transport_destroy(ctx->transport, nvmf_rpc_transport_destroy_done_cb, ctx);
 		return;
 	}
 
-	spdk_jsonrpc_send_bool_response(request, true);
+	spdk_jsonrpc_send_bool_response(ctx->request, true);
+	nvmf_rpc_create_transport_ctx_free(ctx);
 }
 
 static void
@@ -1915,7 +1923,6 @@ rpc_nvmf_create_transport(struct spdk_jsonrpc_request *request,
 {
 	struct nvmf_rpc_create_transport_ctx *ctx;
 	enum spdk_nvme_transport_type trtype;
-	struct spdk_nvmf_transport *transport;
 	struct spdk_nvmf_tgt *tgt;
 
 	ctx = calloc(1, sizeof(*ctx));
@@ -1985,9 +1992,9 @@ rpc_nvmf_create_transport(struct spdk_jsonrpc_request *request,
 	/* Transport can parse additional params themselves */
 	ctx->opts.transport_specific = params;
 
-	transport = spdk_nvmf_transport_create(ctx->trtype, &ctx->opts);
+	ctx->transport = spdk_nvmf_transport_create(ctx->trtype, &ctx->opts);
 
-	if (!transport) {
+	if (!ctx->transport) {
 		SPDK_ERRLOG("Transport type '%s' create failed\n", ctx->trtype);
 		spdk_jsonrpc_send_error_response_fmt(request, SPDK_JSONRPC_ERROR_INTERNAL_ERROR,
 						     "Transport type '%s' create failed", ctx->trtype);
@@ -1997,7 +2004,7 @@ rpc_nvmf_create_transport(struct spdk_jsonrpc_request *request,
 
 	/* add transport to target */
 	ctx->request = request;
-	spdk_nvmf_tgt_add_transport(tgt, transport, nvmf_rpc_tgt_add_transport_done, ctx);
+	spdk_nvmf_tgt_add_transport(tgt, ctx->transport, nvmf_rpc_tgt_add_transport_done, ctx);
 }
 SPDK_RPC_REGISTER("nvmf_create_transport", rpc_nvmf_create_transport, SPDK_RPC_RUNTIME)
 
diff --git a/module/event/subsystems/nvmf/nvmf_tgt.c b/module/event/subsystems/nvmf/nvmf_tgt.c
index 3478a564f..321ab765b 100644
--- a/module/event/subsystems/nvmf/nvmf_tgt.c
+++ b/module/event/subsystems/nvmf/nvmf_tgt.c
@@ -3,6 +3,7 @@
  *
  *   Copyright (c) Intel Corporation.
  *   All rights reserved.
+ *   Copyright (c) 2021 NVIDIA CORPORATION & AFFILIATES. All rights reserved.
  *
  *   Redistribution and use in source and binary forms, with or without
  *   modification, are permitted provided that the following conditions
@@ -166,12 +167,22 @@ nvmf_tgt_create_poll_group_done(void *ctx)
 {
 	struct nvmf_tgt_poll_group *pg = ctx;
 
+	assert(pg);
+
+	if (!pg->group) {
+		SPDK_ERRLOG("Failed to create nvmf poll group\n");
+		/* Change the state to error but wait for completions from all other threads */
+		g_tgt_state = NVMF_TGT_ERROR;
+	}
+
 	TAILQ_INSERT_TAIL(&g_poll_groups, pg, link);
 
 	assert(g_num_poll_groups < nvmf_get_cpuset_count());
 
 	if (++g_num_poll_groups == nvmf_get_cpuset_count()) {
-		g_tgt_state = NVMF_TGT_INIT_START_SUBSYSTEMS;
+		if (g_tgt_state != NVMF_TGT_ERROR) {
+			g_tgt_state = NVMF_TGT_INIT_START_SUBSYSTEMS;
+		}
 		nvmf_tgt_advance_state();
 	}
 }
diff --git a/test/unit/lib/nvmf/nvmf.c/nvmf_ut.c b/test/unit/lib/nvmf/nvmf.c/nvmf_ut.c
index f846a03a7..9906a00b1 100644
--- a/test/unit/lib/nvmf/nvmf.c/nvmf_ut.c
+++ b/test/unit/lib/nvmf/nvmf.c/nvmf_ut.c
@@ -169,6 +169,7 @@ test_nvmf_tgt_create_poll_group(void)
 	struct spdk_nvmf_ns		ns = {};
 	struct spdk_bdev		bdev = {};
 	struct spdk_io_channel		ch = {};
+	struct spdk_nvmf_transport_poll_group transport_pg = {};
 
 	thread = spdk_thread_create(NULL, NULL);
 	SPDK_CU_ASSERT_FATAL(thread != NULL);
@@ -202,7 +203,9 @@ test_nvmf_tgt_create_poll_group(void)
 	transport.tgt = &tgt;
 	TAILQ_INSERT_TAIL(&tgt.transports, &transport, link);
 
+	MOCK_SET(nvmf_transport_poll_group_create, &transport_pg);
 	rc = nvmf_tgt_create_poll_group((void *)&tgt, (void *)&group);
+	MOCK_SET(nvmf_transport_poll_group_create, NULL);
 	CU_ASSERT(rc == 0);
 	CU_ASSERT(group.num_sgroups == 1);
 	CU_ASSERT(group.sgroups != NULL);