diff --git a/lang/funcs/filesystem.go b/lang/funcs/filesystem.go
index eb4921de1..1f00b5086 100644
--- a/lang/funcs/filesystem.go
+++ b/lang/funcs/filesystem.go
@@ -32,6 +32,7 @@ func MakeFileFunc(baseDir string, encBase64 bool) function.Function {
 			path := args[0].AsString()
 			src, err := readFileBytes(baseDir, path)
 			if err != nil {
+				err = function.NewArgError(0, err)
 				return cty.UnknownVal(cty.String), err
 			}
 
@@ -369,7 +370,7 @@ func readFileBytes(baseDir, path string) ([]byte, error) {
 		// ReadFile does not return Terraform-user-friendly error
 		// messages, so we'll provide our own.
 		if os.IsNotExist(err) {
-			return nil, fmt.Errorf("no file exists at %s", path)
+			return nil, fmt.Errorf("no file exists at %s; this function works only with files that are distributed as part of the configuration source code, so if this file will be created by a resource in this configuration you must instead obtain this result from an attribute of that resource", path)
 		}
 		return nil, fmt.Errorf("failed to read %s", path)
 	}
diff --git a/lang/funcs/filesystem_test.go b/lang/funcs/filesystem_test.go
index 15839f228..b91b52b1e 100644
--- a/lang/funcs/filesystem_test.go
+++ b/lang/funcs/filesystem_test.go
@@ -77,7 +77,7 @@ func TestTemplateFile(t *testing.T) {
 			cty.StringVal("testdata/missing"),
 			cty.EmptyObjectVal,
 			cty.NilVal,
-			`no file exists at testdata/missing`,
+			`no file exists at testdata/missing; this function works only with files that are distributed as part of the configuration source code, so if this file will be created by a resource in this configuration you must instead obtain this result from an attribute of that resource`,
 		},
 		{
 			cty.StringVal("testdata/hello.tmpl"),