diff --git a/packages/core/integration-tests/test/integration/postcss-modules-config-invalid/.postcssrc b/packages/core/integration-tests/test/integration/postcss-modules-config-invalid/.postcssrc
new file mode 100644
index 00000000000..8fa6c61ff95
--- /dev/null
+++ b/packages/core/integration-tests/test/integration/postcss-modules-config-invalid/.postcssrc
@@ -0,0 +1,7 @@
+{
+  "plugins": {
+    "postcss-import": {},
+    "postcss-url": {}
+    "postcss-custom-properties": {}
+  }
+}
diff --git a/packages/core/integration-tests/test/integration/postcss-modules-config-invalid/src/index.css b/packages/core/integration-tests/test/integration/postcss-modules-config-invalid/src/index.css
new file mode 100644
index 00000000000..e69de29bb2d
diff --git a/packages/core/integration-tests/test/postcss.js b/packages/core/integration-tests/test/postcss.js
index 07ebf71e3c4..a0dde2a4695 100644
--- a/packages/core/integration-tests/test/postcss.js
+++ b/packages/core/integration-tests/test/postcss.js
@@ -672,4 +672,50 @@ describe('postcss', () => {
       },
     );
   });
+
+  it('should throw an error with code frame when .postcssrc is invalid', async function () {
+    let configFilePath = path.join(
+      __dirname,
+      '/integration/postcss-modules-config-invalid/.postcssrc',
+    );
+    let code = await inputFS.readFile(configFilePath, 'utf8');
+    await assert.rejects(
+      () =>
+        bundle(
+          path.join(
+            __dirname,
+            '/integration/postcss-modules-config-invalid/src/index.css',
+          ),
+        ),
+      {
+        name: 'BuildError',
+        diagnostics: [
+          {
+            codeFrames: [
+              {
+                code,
+                filePath: configFilePath,
+                language: 'json5',
+                codeHighlights: [
+                  {
+                    end: {
+                      column: 5,
+                      line: 5,
+                    },
+                    start: {
+                      column: 5,
+                      line: 5,
+                    },
+                    message: `JSON5: invalid character '\\"' at 5:5`,
+                  },
+                ],
+              },
+            ],
+            message: 'Failed to parse .postcssrc',
+            origin: '@parcel/utils',
+          },
+        ],
+      },
+    );
+  });
 });
diff --git a/packages/core/utils/src/config.js b/packages/core/utils/src/config.js
index 33df8e8c8e4..3c0d7e73158 100644
--- a/packages/core/utils/src/config.js
+++ b/packages/core/utils/src/config.js
@@ -2,6 +2,7 @@
 
 import type {ConfigResult, File, FilePath} from '@parcel/types';
 import type {FileSystem} from '@parcel/fs';
+import ThrowableDiagnostic from '@parcel/diagnostic';
 import path from 'path';
 import clone from 'clone';
 import {parse as json5} from 'json5';
@@ -88,7 +89,39 @@ export async function loadConfig(
         config = configContent;
       } else {
         let parse = opts?.parser ?? getParser(extname);
-        config = parse(configContent);
+        try {
+          config = parse(configContent);
+        } catch (e) {
+          if (extname !== '' && extname !== 'json') {
+            throw e;
+          }
+
+          let pos = {
+            line: e.lineNumber,
+            column: e.columnNumber,
+          };
+
+          throw new ThrowableDiagnostic({
+            diagnostic: {
+              message: `Failed to parse ${path.basename(configFile)}`,
+              origin: '@parcel/utils',
+              codeFrames: [
+                {
+                  language: 'json5',
+                  filePath: configFile,
+                  code: configContent,
+                  codeHighlights: [
+                    {
+                      start: pos,
+                      end: pos,
+                      message: e.message,
+                    },
+                  ],
+                },
+              ],
+            },
+          });
+        }
       }
 
       let output = {