diff --git a/nodepool/driver/aws/adapter.py b/nodepool/driver/aws/adapter.py
index fdda2451d..4877304f3 100644
--- a/nodepool/driver/aws/adapter.py
+++ b/nodepool/driver/aws/adapter.py
@@ -1120,6 +1120,12 @@ class AwsAdapter(statemachine.Adapter):
                 # Re-raise as a quota exception so that the
                 # statemachine driver resets quota.
                 raise exceptions.QuotaException(str(error))
+            if (error.response['Error']['Code'] ==
+                'InsufficientInstanceCapacity'):
+                # Re-raise as CapacityException so it would have
+                # "error.capacity" statsd_key, which can be handled
+                # differently than "error.unknown"
+                raise exceptions.CapacityException(str(error))
             raise
 
     def _createInstance(self, label, image_external_id,
diff --git a/nodepool/exceptions.py b/nodepool/exceptions.py
index 7a1b92ce5..1fe822663 100644
--- a/nodepool/exceptions.py
+++ b/nodepool/exceptions.py
@@ -31,6 +31,10 @@ class LaunchKeyscanException(Exception):
     statsd_key = 'error.keyscan'
 
 
+class CapacityException(Exception):
+    statsd_key = 'error.capacity'
+
+
 class BuilderError(RuntimeError):
     pass