diff --git a/awx/api/serializers.py b/awx/api/serializers.py
index f4a61f0c43..858aeb4ebf 100644
--- a/awx/api/serializers.py
+++ b/awx/api/serializers.py
@@ -1600,7 +1600,7 @@ class InventorySerializer(BaseSerializerWithVariables):
                         })
                 SmartFilter().query_from_string(host_filter)
             except RuntimeError as e:
-                raise models.base.ValidationError(e)
+                raise models.base.ValidationError(str(e))
         return host_filter
 
     def validate(self, attrs):
diff --git a/awx_collection/test/awx/test_inventory.py b/awx_collection/test/awx/test_inventory.py
new file mode 100644
index 0000000000..2ba52ac0a2
--- /dev/null
+++ b/awx_collection/test/awx/test_inventory.py
@@ -0,0 +1,60 @@
+from __future__ import (absolute_import, division, print_function)
+__metaclass__ = type
+
+import pytest
+
+from awx.main.models import Inventory
+
+
+@pytest.mark.django_db
+def test_inventory_create(run_module, admin_user, organization):
+    result = run_module('tower_inventory', {
+        'name': 'foo-inventory',
+        'organization': organization.name,
+        'variables': {'foo': 'bar', 'another-foo': {'barz': 'bar2'}},
+        'state': 'present'
+    }, admin_user)
+
+    inv = Inventory.objects.get(name='foo-inventory')
+    assert inv.variables == '{"foo": "bar", "another-foo": {"barz": "bar2"}}'
+
+    result.pop('module_args', None)
+    result.pop('invocation', None)
+    assert result == {
+        "name": "foo-inventory",
+        "id": inv.id,
+        "changed": True
+    }
+
+    assert inv.organization_id == organization.id
+
+
+@pytest.mark.django_db
+def test_invalid_smart_inventory_create(run_module, admin_user, organization):
+    result = run_module('tower_inventory', {
+        'name': 'foo-inventory',
+        'organization': organization.name,
+        'kind': 'smart',
+        'host_filter': 'ansible',
+        'state': 'present'
+    }, admin_user)
+    assert result.get('failed', False), result
+
+    assert 'Invalid query ansible' in result['msg']
+
+
+@pytest.mark.django_db
+def test_valid_smart_inventory_create(run_module, admin_user, organization):
+    result = run_module('tower_inventory', {
+        'name': 'foo-inventory',
+        'organization': organization.name,
+        'kind': 'smart',
+        'host_filter': 'name=my_host',
+        'state': 'present'
+    }, admin_user)
+    assert not result.get('failed', False), result
+
+    inv = Inventory.objects.get(name='foo-inventory')
+    assert inv.host_filter == 'name=my_host'
+    assert inv.kind == 'smart'
+    assert inv.organization_id == organization.id