diff --git a/drivers/md/dm-crypt.c b/drivers/md/dm-crypt.c
index 5cac11d7a876..de628883ee3d 100644
--- a/drivers/md/dm-crypt.c
+++ b/drivers/md/dm-crypt.c
@@ -1500,12 +1500,15 @@ static int crypt_set_key(struct crypt_config *cc, char *key)
 	if (!cc->key_size && strcmp(key, "-"))
 		goto out;
 
+	/* clear the flag since following operations may invalidate previously valid key */
+	clear_bit(DM_CRYPT_KEY_VALID, &cc->flags);
+
 	if (cc->key_size && crypt_decode_key(cc->key, key, cc->key_size) < 0)
 		goto out;
 
-	set_bit(DM_CRYPT_KEY_VALID, &cc->flags);
-
 	r = crypt_setkey_allcpus(cc);
+	if (!r)
+		set_bit(DM_CRYPT_KEY_VALID, &cc->flags);
 
 out:
 	/* Hex key string not needed after here, so wipe it. */