diff --git a/docs/release-notes/version-3.4.md b/docs/release-notes/version-3.4.md
index 5903ec004..cec86665c 100644
--- a/docs/release-notes/version-3.4.md
+++ b/docs/release-notes/version-3.4.md
@@ -10,6 +10,7 @@
 ### Bug Fixes
 
 * [#11383](https://github.com/netbox-community/netbox/issues/11383) - Fix ordering of global search results by object type
+* [#12238](https://github.com/netbox-community/netbox/issues/12238) - Improve error message for API token IP prefix validation failures
 * [#12255](https://github.com/netbox-community/netbox/issues/12255) - Restore the ability to move inventory items among devices
 * [#12270](https://github.com/netbox-community/netbox/issues/12270) - Fix pre-population of list values when creating a saved filter
 * [#12296](https://github.com/netbox-community/netbox/issues/12296) - Fix "mark connected" form field for bulk editing front & rear ports
diff --git a/netbox/users/forms.py b/netbox/users/forms.py
index e8647aa5f..c87d5868b 100644
--- a/netbox/users/forms.py
+++ b/netbox/users/forms.py
@@ -6,6 +6,7 @@ from django.utils.html import mark_safe
 from django.utils.translation import gettext as _
 
 from ipam.formfields import IPNetworkFormField
+from ipam.validators import prefix_validator
 from netbox.preferences import PREFERENCES
 from utilities.forms import BootstrapMixin, DateTimePicker, StaticSelect
 from utilities.utils import flatten_dict
@@ -104,7 +105,7 @@ class TokenForm(BootstrapMixin, forms.ModelForm):
         help_text=_("If no key is provided, one will be generated automatically.")
     )
     allowed_ips = SimpleArrayField(
-        base_field=IPNetworkFormField(),
+        base_field=IPNetworkFormField(validators=[prefix_validator]),
         required=False,
         label=_('Allowed IPs'),
         help_text=_('Allowed IPv4/IPv6 networks from where the token can be used. Leave blank for no restrictions. '