diff --git a/cmd/admin-handlers-users.go b/cmd/admin-handlers-users.go
index ecc7f6689..93d27d5c6 100644
--- a/cmd/admin-handlers-users.go
+++ b/cmd/admin-handlers-users.go
@@ -21,6 +21,7 @@ import (
 	"bytes"
 	"encoding/json"
 	"errors"
+	"fmt"
 	"io"
 	"net/http"
 	"os"
@@ -680,6 +681,17 @@ func (a adminAPIHandlers) AddServiceAccount(w http.ResponseWriter, r *http.Reque
 		requestorIsDerivedCredential = true
 	}
 
+	if globalIAMSys.GetUsersSysType() == MinIOUsersSysType && targetUser != cred.AccessKey {
+		// For internal IDP, ensure that the targetUser's parent account exists.
+		// It could be a regular user account or the root account.
+		_, isRegularUser := globalIAMSys.GetUser(ctx, targetUser)
+		if !isRegularUser && targetUser != globalActiveCred.AccessKey {
+			writeErrorResponseJSON(ctx, w, toAdminAPIErr(ctx,
+				fmt.Errorf("parent user %s does not exist. Cannot create service account", targetUser)), r.URL)
+			return
+		}
+	}
+
 	// Check if we are creating svc account for request sender.
 	isSvcAccForRequestor := false
 	if targetUser == requestorUser || targetUser == requestorParentUser {
diff --git a/cmd/admin-handlers-users_test.go b/cmd/admin-handlers-users_test.go
index cee6094b5..cecdc974c 100644
--- a/cmd/admin-handlers-users_test.go
+++ b/cmd/admin-handlers-users_test.go
@@ -1136,7 +1136,7 @@ func (s *TestSuiteIAM) TestAccMgmtPlugin(c *check) {
 	c.assertSvcAccDeletion(ctx, s, userAdmClient, accessKey, bucket)
 
 	// 6. Check that service account **can** be created for some other user.
-	// This is possible because of the policy enforced in the plugin.
+	// This is possible because the policy enforced in the plugin.
 	c.mustCreateSvcAccount(ctx, globalActiveCred.AccessKey, userAdmClient)
 }