diff --git a/changelogs/fragments/16456-correct-YAML-error-message-when-file-load-failed.yml b/changelogs/fragments/16456-correct-YAML-error-message-when-file-load-failed.yml
new file mode 100644
index 00000000000..df16e7fb351
--- /dev/null
+++ b/changelogs/fragments/16456-correct-YAML-error-message-when-file-load-failed.yml
@@ -0,0 +1,2 @@
+bugfixes:
+  - display correct error information when an error exists in the last line of the file (https://github.com/ansible/ansible/issues/16456)
diff --git a/lib/ansible/errors/__init__.py b/lib/ansible/errors/__init__.py
index c9831a5cdd6..782d0719d16 100644
--- a/lib/ansible/errors/__init__.py
+++ b/lib/ansible/errors/__init__.py
@@ -100,7 +100,21 @@ class AnsibleError(Exception):
         with open(file_name, 'r') as f:
             lines = f.readlines()
 
+            # In case of a YAML loading error, PyYAML will report the very last line
+            # as the location of the error. Avoid an index error here in order to
+            # return a helpful message.
+            file_length = len(lines)
+            if line_number >= file_length:
+                line_number = file_length - 1
+
+            # If target_line contains only whitespace, move backwards until
+            # actual code is found. If there are several empty lines after target_line,
+            # the error lines would just be blank, which is not very helpful.
             target_line = lines[line_number]
+            while not target_line.strip():
+                line_number -= 1
+                target_line = lines[line_number]
+
             if line_number > 0:
                 prev_line = lines[line_number - 1]
 
diff --git a/test/units/errors/test_errors.py b/test/units/errors/test_errors.py
index ab5c19cdcdb..136a2695099 100644
--- a/test/units/errors/test_errors.py
+++ b/test/units/errors/test_errors.py
@@ -97,14 +97,15 @@ class TestErrors(unittest.TestCase):
                  "the exact syntax problem.\n\nThe offending line appears to be:\n\n\nthis is line 1\n^ here\n")
             )
 
-            # this line will not be found, as it is out of the index range
-            self.obj.ansible_pos = ('foo.yml', 2, 1)
-            e = AnsibleError(self.message, self.obj)
-            self.assertEqual(
-                e.message,
-                ("This is the error message\n\nThe error appears to be in 'foo.yml': line 2, column 1, but may\nbe elsewhere in the file depending on "
-                 "the exact syntax problem.\n\n(specified line no longer in file, maybe it changed?)")
-            )
+            with patch('ansible.errors.to_text', side_effect=IndexError('Raised intentionally')):
+                # raise an IndexError
+                self.obj.ansible_pos = ('foo.yml', 2, 1)
+                e = AnsibleError(self.message, self.obj)
+                self.assertEqual(
+                    e.message,
+                    ("This is the error message\n\nThe error appears to be in 'foo.yml': line 2, column 1, but may\nbe elsewhere in the file depending on "
+                     "the exact syntax problem.\n\n(specified line no longer in file, maybe it changed?)")
+                )
 
         m = mock_open()
         m.return_value.readlines.return_value = ['this line has unicode \xf0\x9f\x98\xa8 in it!\n']
@@ -119,3 +120,32 @@ class TestErrors(unittest.TestCase):
                  "file depending on the exact syntax problem.\n\nThe offending line appears to be:\n\n\nthis line has unicode \xf0\x9f\x98\xa8 in it!\n^ "
                  "here\n")
             )
+
+    def test_get_error_lines_error_in_last_line(self):
+        m = mock_open()
+        m.return_value.readlines.return_value = ['this is line 1\n', 'this is line 2\n', 'this is line 3\n']
+
+        with patch('{0}.open'.format(BUILTINS), m):
+            # If the error occurs in the last line of the file, use the correct index to get the line
+            # and avoid the IndexError
+            self.obj.ansible_pos = ('foo.yml', 4, 1)
+            e = AnsibleError(self.message, self.obj)
+            self.assertEqual(
+                e.message,
+                ("This is the error message\n\nThe error appears to be in 'foo.yml': line 4, column 1, but may\nbe elsewhere in the file depending on "
+                 "the exact syntax problem.\n\nThe offending line appears to be:\n\nthis is line 2\nthis is line 3\n^ here\n")
+            )
+
+    def test_get_error_lines_error_empty_lines_around_error(self):
+        """Test that trailing whitespace after the error is removed"""
+        m = mock_open()
+        m.return_value.readlines.return_value = ['this is line 1\n', 'this is line 2\n', 'this is line 3\n', '  \n', '   \n', ' ']
+
+        with patch('{0}.open'.format(BUILTINS), m):
+            self.obj.ansible_pos = ('foo.yml', 5, 1)
+            e = AnsibleError(self.message, self.obj)
+            self.assertEqual(
+                e.message,
+                ("This is the error message\n\nThe error appears to be in 'foo.yml': line 5, column 1, but may\nbe elsewhere in the file depending on "
+                 "the exact syntax problem.\n\nThe offending line appears to be:\n\nthis is line 2\nthis is line 3\n^ here\n")
+            )