diff --git a/src/code/SetPSResourceRepository.cs b/src/code/SetPSResourceRepository.cs
index d46c5ba48..91868af9e 100644
--- a/src/code/SetPSResourceRepository.cs
+++ b/src/code/SetPSResourceRepository.cs
@@ -162,6 +162,14 @@ protected override void ProcessRecord()
             PSRepositoryInfo.APIVersion? repoApiVersion = null;
             if (MyInvocation.BoundParameters.ContainsKey(nameof(ApiVersion)))
             {
+                if (ApiVersion == PSRepositoryInfo.APIVersion.Unknown)
+                {
+                    ThrowTerminatingError(new ErrorRecord(
+                        new ArgumentException("ApiVersion 'Unknown' is not a valid value for Set-PSResourceRepository. Valid values are: V2, V3, Local, NugetServer, ContainerRegistry"),
+                        "InvalidApiVersion",
+                        ErrorCategory.InvalidArgument,
+                        this));
+                }
                 repoApiVersion = ApiVersion;
             }
 
diff --git a/test/ResourceRepositoryTests/SetPSResourceRepository.Tests.ps1 b/test/ResourceRepositoryTests/SetPSResourceRepository.Tests.ps1
index fa9120dfe..c14df0cb1 100644
--- a/test/ResourceRepositoryTests/SetPSResourceRepository.Tests.ps1
+++ b/test/ResourceRepositoryTests/SetPSResourceRepository.Tests.ps1
@@ -345,15 +345,16 @@ Describe "Test Set-PSResourceRepository" -tags 'CI' {
         $repo.Priority | Should -Be 25
     }
 
-    It "should not change ApiVersion of repository if -ApiVersion parameter was not used" {
+    It "should throw error when trying to set ApiVersion to unknown" {
         Register-PSResourceRepository -Name $TestRepoName1 -Uri $tmpDir1Path
         $repo = Get-PSResourceRepository $TestRepoName1
         $repoApiVersion = $repo.ApiVersion
         $repoApiVersion | Should -Be "local"
 
-        Set-PSResourceRepository -Name $TestRepoName1 -ApiVersion "unknown" -ErrorVariable err -ErrorAction SilentlyContinue
+        {Set-PSResourceRepository -Name $TestRepoName1 -ApiVersion "unknown" -ErrorAction Stop} | Should -Throw -ErrorId "InvalidApiVersion,Microsoft.PowerShell.PSResourceGet.Cmdlets.SetPSResourceRepository"
+        
+        # Verify the repository ApiVersion was not changed
         $repo = Get-PSResourceRepository $TestRepoName1
-        $repo.ApiVersion | Should -Be "unknown"
-        $err.Count | Should -Be 0
+        $repo.ApiVersion | Should -Be "local"
     }
 }