diff --git a/engine/src/main/java/io/seldon/engine/service/InternalPredictionService.java b/engine/src/main/java/io/seldon/engine/service/InternalPredictionService.java
index 667c684301..f8efcd18d7 100644
--- a/engine/src/main/java/io/seldon/engine/service/InternalPredictionService.java
+++ b/engine/src/main/java/io/seldon/engine/service/InternalPredictionService.java
@@ -65,6 +65,7 @@
 import org.springframework.stereotype.Service;
 import org.springframework.util.LinkedMultiValueMap;
 import org.springframework.util.MultiValueMap;
+import org.springframework.web.client.HttpStatusCodeException;
 import org.springframework.web.client.ResourceAccessException;
 import org.springframework.web.client.RestTemplate;
 
@@ -495,27 +496,7 @@ private SeldonMessage queryREST(
           logger.debug(response);
           SeldonMessage.Builder builder = SeldonMessage.newBuilder();
           JsonFormat.parser().ignoringUnknownFields().merge(response, builder);
-          SeldonMessage seldonMessage = builder.build();
-          if (httpResponse.getStatusCode().is2xxSuccessful()) {
-            return seldonMessage;
-          } else {
-            logger.error(
-                "Couldn't retrieve prediction from external prediction server -- bad http return code: "
-                    + httpResponse.getStatusCode());
-            Status seldonMessageStatus = seldonMessage.getStatus();
-            if (seldonMessageStatus == null) {
-                throw new APIException(
-                        APIException.ApiExceptionType.ENGINE_MICROSERVICE_ERROR,
-                        String.format("Bad return code %d", httpResponse.getStatusCodeValue()));
-            }
-            else
-            {
-                throw new APIException(seldonMessageStatus.getCode(),
-                                       seldonMessageStatus.getReason(),
-                                       200,
-                                       seldonMessageStatus.getInfo());
-            }
-          }
+          return builder.build();
         } finally {
           if (logger.isDebugEnabled()) {
             logger.debug(
@@ -528,9 +509,12 @@ private SeldonMessage queryREST(
           logger.error("Invalid protocol buffer during Json Format merge - ", e);
           throw new APIException(
                   APIException.ApiExceptionType.ENGINE_MICROSERVICE_ERROR, e.toString());
-      } catch (APIException e)
+      } catch (HttpStatusCodeException e)
       {
-          throw e;
+          logger.error(
+                  "Couldn't retrieve prediction from external prediction server -- bad http return code: "
+                          + e.getRawStatusCode());
+          handleHttpStatusCodeError(e);
       } catch (Exception e)
       {
           logger.error("Couldn't retrieve prediction from external prediction server - ", e);
@@ -543,4 +527,31 @@ private SeldonMessage queryREST(
         APIException.ApiExceptionType.ENGINE_MICROSERVICE_ERROR,
         String.format("Failed to retrieve predictions after %d attempts", restRetries));
   }
+
+  private void handleHttpStatusCodeError(HttpStatusCodeException exception) {
+      String response = exception.getResponseBodyAsString();
+      SeldonMessage.Builder builder = SeldonMessage.newBuilder();
+      try {
+          JsonFormat.parser().ignoringUnknownFields().merge(response, builder);
+          SeldonMessage seldonMessage = builder.build();
+          Status seldonMessageStatus = seldonMessage.getStatus();
+          if (seldonMessageStatus == null) {
+              throw new APIException(
+                      APIException.ApiExceptionType.ENGINE_MICROSERVICE_ERROR,
+                      String.format("Bad return code %d", exception.getRawStatusCode()));
+          }
+          else
+          {
+              throw new APIException(seldonMessageStatus.getCode(),
+                      seldonMessageStatus.getReason(),
+                      200,
+                      seldonMessageStatus.getInfo());
+          }
+      } catch (InvalidProtocolBufferException ex)
+      {
+          logger.error("Invalid protocol buffer during Json Format merge - ", ex);
+          throw new APIException(
+                  APIException.ApiExceptionType.ENGINE_MICROSERVICE_ERROR, ex.toString());
+      }
+  }
 }
diff --git a/engine/src/test/java/io/seldon/engine/api/rest/TestRestClientControllerExternalGraphs.java b/engine/src/test/java/io/seldon/engine/api/rest/TestRestClientControllerExternalGraphs.java
index 7cdf11cd3e..aaa41c5d37 100644
--- a/engine/src/test/java/io/seldon/engine/api/rest/TestRestClientControllerExternalGraphs.java
+++ b/engine/src/test/java/io/seldon/engine/api/rest/TestRestClientControllerExternalGraphs.java
@@ -10,6 +10,8 @@
 import io.seldon.protos.PredictionProtos.SeldonMessage;
 import java.net.URI;
 import java.nio.charset.StandardCharsets;
+
+import org.junit.After;
 import org.junit.Assert;
 import org.junit.Before;
 import org.junit.Test;
@@ -25,6 +27,7 @@
 import org.springframework.boot.test.web.client.TestRestTemplate;
 import org.springframework.boot.web.server.LocalServerPort;
 import org.springframework.http.HttpEntity;
+import org.springframework.http.HttpHeaders;
 import org.springframework.http.HttpStatus;
 import org.springframework.http.MediaType;
 import org.springframework.http.ResponseEntity;
@@ -36,6 +39,8 @@
 import org.springframework.test.web.servlet.request.MockMvcRequestBuilders;
 import org.springframework.test.web.servlet.setup.MockMvcBuilders;
 import org.springframework.util.MultiValueMap;
+import org.springframework.web.client.HttpServerErrorException;
+import org.springframework.web.client.HttpStatusCodeException;
 import org.springframework.web.context.WebApplicationContext;
 
 @RunWith(SpringRunner.class)
@@ -59,6 +64,11 @@ public void setup() throws Exception {
     mvc = MockMvcBuilders.webAppContextSetup(context).addFilters(new XSSFilter()).build();
   }
 
+  @After
+  public void resetMocks() {
+    Mockito.reset(testRestTemplate.getRestTemplate());
+  }
+
   @LocalServerPort private int port;
 
   @Autowired private TestRestTemplate testRestTemplate;
@@ -751,4 +761,40 @@ public ResponseEntity<String> answer(InvocationOnMock invocation) {
             > -1);
     System.out.println(response);
   }
+
+  @Test
+  public void testModelPredictionNon200Response() throws Exception {
+    String jsonStr = readFile("src/test/resources/model_simple.json", StandardCharsets.UTF_8);
+    String responseStr =
+            readFile("src/test/resources/response_status.json", StandardCharsets.UTF_8);
+    io.seldon.protos.DeploymentProtos.PredictorSpec.Builder PredictorSpecBuilder = io.seldon.protos.DeploymentProtos.PredictorSpec.newBuilder();
+    EnginePredictor.updateMessageBuilderFromJson(PredictorSpecBuilder, jsonStr);
+    io.seldon.protos.DeploymentProtos.PredictorSpec predictorSpec = PredictorSpecBuilder.build();
+    final String predictJson = "{" + "\"binData\": \"MTIz\"" + "}";
+    ReflectionTestUtils.setField(enginePredictor, "predictorSpec", predictorSpec);
+
+    HttpStatusCodeException exception = HttpServerErrorException.InternalServerError
+            .create(HttpStatus.BAD_REQUEST, "status text", HttpHeaders.EMPTY, responseStr.getBytes(StandardCharsets.UTF_8), StandardCharsets.UTF_8);
+
+    Mockito.when(
+            testRestTemplate
+                    .getRestTemplate()
+                    .postForEntity(
+                            Matchers.<URI>any(),
+                            Matchers.<HttpEntity<MultiValueMap<String, String>>>any(),
+                            Matchers.<Class<String>>any()))
+            .thenThrow(exception);
+
+    MvcResult res =
+            mvc.perform(
+                    MockMvcRequestBuilders.post("/api/v0.1/predictions")
+                            .accept(MediaType.APPLICATION_JSON_UTF8)
+                            .content(predictJson)
+                            .contentType(MediaType.APPLICATION_JSON_UTF8))
+                    .andReturn();
+
+    // Check for returned response that wraps the ApiException into SeldonMessage
+    Assert.assertEquals(200, res.getResponse().getStatus());
+    Assert.assertEquals(responseStr, res.getResponse().getContentAsString());
+  }
 }
diff --git a/engine/src/test/resources/response_status.json b/engine/src/test/resources/response_status.json
new file mode 100644
index 0000000000..ff1bfebb19
--- /dev/null
+++ b/engine/src/test/resources/response_status.json
@@ -0,0 +1,8 @@
+{
+  "status": {
+    "code": 400,
+    "info": "test error message",
+    "reason": "exception in prediction",
+    "status": "FAILURE"
+  }
+}
\ No newline at end of file