diff --git a/internal/configs/configload/loader_load_test.go b/internal/configs/configload/loader_load_test.go
index ee2488c792ba..d285cc9f1656 100644
--- a/internal/configs/configload/loader_load_test.go
+++ b/internal/configs/configload/loader_load_test.go
@@ -105,6 +105,33 @@ func TestLoaderLoadConfig_loadDiags(t *testing.T) {
 	}
 }
 
+func TestLoaderLoadConfig_loadDiagsFromSubmodules(t *testing.T) {
+	// building a config which didn't load correctly may cause configs to panic
+	fixtureDir := filepath.Clean("testdata/invalid-names-in-submodules")
+	loader, err := NewLoader(&Config{
+		ModulesDir: filepath.Join(fixtureDir, ".terraform/modules"),
+	})
+	if err != nil {
+		t.Fatalf("unexpected error from NewLoader: %s", err)
+	}
+
+	cfg, diags := loader.LoadConfig(fixtureDir)
+	if !diags.HasErrors() {
+		t.Fatalf("loading succeeded; want an error")
+	}
+	if got, want := diags.Error(), " Invalid provider local name"; !strings.Contains(got, want) {
+		t.Errorf("missing expected error\nwant substring: %s\ngot: %s", want, got)
+	}
+
+	if cfg == nil {
+		t.Fatal("partial config not returned with diagnostics")
+	}
+
+	if cfg.Module == nil {
+		t.Fatal("expected config module")
+	}
+}
+
 func TestLoaderLoadConfig_childProviderGrandchildCount(t *testing.T) {
 	// This test is focused on the specific situation where:
 	// - A child module contains a nested provider block, which is no longer
diff --git a/internal/configs/configload/testdata/invalid-names-in-submodules/.terraform/modules/modules.json b/internal/configs/configload/testdata/invalid-names-in-submodules/.terraform/modules/modules.json
new file mode 100644
index 000000000000..c55c1cf54ff0
--- /dev/null
+++ b/internal/configs/configload/testdata/invalid-names-in-submodules/.terraform/modules/modules.json
@@ -0,0 +1,14 @@
+{
+	"Modules": [
+		{
+			"Key": "test",
+			"Source": "./sub",
+			"Dir": "testdata/invalid-names-in-submodules/sub"
+		},
+		{
+			"Key": "",
+			"Source": "",
+			"Dir": "."
+		}
+	]
+}
\ No newline at end of file
diff --git a/internal/configs/configload/testdata/invalid-names-in-submodules/main.tf b/internal/configs/configload/testdata/invalid-names-in-submodules/main.tf
new file mode 100644
index 000000000000..3fbc8c68cf0c
--- /dev/null
+++ b/internal/configs/configload/testdata/invalid-names-in-submodules/main.tf
@@ -0,0 +1,3 @@
+module "test" {
+	source = "./sub"
+}
diff --git a/internal/configs/configload/testdata/invalid-names-in-submodules/sub/main.tf b/internal/configs/configload/testdata/invalid-names-in-submodules/sub/main.tf
new file mode 100644
index 000000000000..aacab2c441dd
--- /dev/null
+++ b/internal/configs/configload/testdata/invalid-names-in-submodules/sub/main.tf
@@ -0,0 +1,7 @@
+resource "aws-_foo" "test" {
+
+}
+
+data "aws-_bar" "test" {
+
+}
diff --git a/internal/configs/provider_validation.go b/internal/configs/provider_validation.go
index facd92520ce2..0cf7378d3639 100644
--- a/internal/configs/provider_validation.go
+++ b/internal/configs/provider_validation.go
@@ -153,6 +153,18 @@ func validateProviderConfigs(parentCall *ModuleCall, cfg *Config, noProviderConf
 			}
 
 			localName := r.Addr().ImpliedProvider()
+
+			_, err := addrs.ParseProviderPart(localName)
+			if err != nil {
+				diags = append(diags, &hcl.Diagnostic{
+					Severity: hcl.DiagError,
+					Summary:  "Invalid provider local name",
+					Detail:   fmt.Sprintf("%q is an invalid implied provider local name: %s", localName, err),
+					Subject:  r.DeclRange.Ptr(),
+				})
+				continue
+			}
+
 			if _, ok := localNames[localName]; ok {
 				// OK, this was listed directly in the required_providers
 				continue