diff --git a/py/bc.c b/py/bc.c
index e7a1a333f7..12887645b9 100644
--- a/py/bc.c
+++ b/py/bc.c
@@ -196,7 +196,12 @@ void mp_setup_code_state(mp_code_state_t *code_state, size_t n_args, size_t n_kw
             }
             // Didn't find name match with positional args
             if ((scope_flags & MP_SCOPE_FLAG_VARKEYWORDS) == 0) {
-                mp_raise_msg(&mp_type_TypeError, "function does not take keyword arguments");
+                if (MICROPY_ERROR_REPORTING == MICROPY_ERROR_REPORTING_TERSE) {
+                    mp_raise_msg(&mp_type_TypeError, "unexpected keyword argument");
+                } else {
+                    nlr_raise(mp_obj_new_exception_msg_varg(&mp_type_TypeError,
+                        "unexpected keyword argument '%q'", MP_OBJ_QSTR_VALUE(wanted_arg_name)));
+                }
             }
             mp_obj_dict_store(dict, kwargs[2 * i], kwargs[2 * i + 1]);
 continue2:;