diff --git a/CHANGELOG.rst b/CHANGELOG.rst
index b9f6786c10..aacbc668a2 100644
--- a/CHANGELOG.rst
+++ b/CHANGELOG.rst
@@ -22,6 +22,9 @@ Runtime Behavior Changes
 * finagle-netty4: Change the 'connection_requests' metric to debug verbosity.
   ``PHAB_ID=D391289``
 
+* finagle-serversets: Ensure `ZkSession#retrying` is resilient to ZK host resolution failure.
+  ``PHAB_ID=D403895``
+
 * finagle-thrift: Per-method metrics are now created lazily, so if you have methods on a Thrift
   service that you don't use, the associated metrics won't be exported.  ``PHAB_ID=D400382``
 
diff --git a/finagle-serversets/src/main/scala/com/twitter/finagle/serverset2/ZkSession.scala b/finagle-serversets/src/main/scala/com/twitter/finagle/serverset2/ZkSession.scala
index bac22633ad..8af95aae6f 100644
--- a/finagle-serversets/src/main/scala/com/twitter/finagle/serverset2/ZkSession.scala
+++ b/finagle-serversets/src/main/scala/com/twitter/finagle/serverset2/ZkSession.scala
@@ -8,6 +8,7 @@ import com.twitter.finagle.stats._
 import com.twitter.io.Buf
 import com.twitter.logging.Logger
 import com.twitter.util._
+import java.net.UnknownHostException
 import scala.collection.concurrent
 
 object zkConcurrentOperations
@@ -297,8 +298,13 @@ private[serverset2] object ZkSession {
   /**
    * Produce a new `ZkSession`.
    *
+   * Note: if `ClientBuilder` throws `UnknownHostException`, we return a no-op `ZkSession`
+   * in a failed state to trigger a retry (see `ZkSession#retrying`).
+   *
+   * @param retryStream The backoff schedule for reconnecting on session expiry and retrying operations.
    * @param hosts A comma-separated "host:port" string for a ZooKeeper server.
    * @param sessionTimeout The ZooKeeper session timeout to use.
+   * @param statsReceiver A [[StatsReceiver]] for the ZooKeeper session.
    */
   private[serverset2] def apply(
     retryStream: RetryStream,
@@ -307,22 +313,37 @@ private[serverset2] object ZkSession {
     statsReceiver: StatsReceiver
   )(
     implicit timer: Timer
-  ): ZkSession =
-    new ZkSession(
-      retryStream,
+  ): ZkSession = {
+    val watchedZkReader = try {
       ClientBuilder()
         .hosts(hosts)
         .sessionTimeout(sessionTimeout)
         .statsReceiver(DefaultStatsReceiver.scope("zkclient").scope(Zk2Resolver.statsOf(hosts)))
         .readOnlyOK()
-        .reader(),
-      statsReceiver.scope(Zk2Resolver.statsOf(hosts))
-    )
+        .reader()
+    } catch {
+      case exc: UnknownHostException =>
+        Watched(NullZooKeeperReader, Var(WatchState.FailedToInitialize(exc)))
+    }
+
+    new ZkSession(retryStream, watchedZkReader, statsReceiver.scope(Zk2Resolver.statsOf(hosts)))
+  }
 
   /**
-   * Produce a `Var[ZkSession]` representing a ZooKeeper session that automatically
-   * reconnects upon session expiry. Reconnect attempts cease when any
-   * observation of the returned `Var[ZkSession]` is closed.
+   * Determine if the given `WatchState` requires a reconnect (see `ZkSession#retrying`).
+   */
+  private[serverset2] def needsReconnect(state: WatchState): Boolean = {
+    state match {
+      case WatchState.FailedToInitialize(_) | WatchState.SessionState(SessionState.Expired) => true
+      case _ => false
+    }
+  }
+
+  /**
+   * Produce a `Var[ZkSession]` representing a ZooKeeper session that automatically retries
+   * when a session fails to initialize _or_ when the current session expires.
+   *
+   * Reconnect attempts cease when any observation of the returned Var[ZkSession] is closed.
    */
   def retrying(
     backoff: RetryStream,
@@ -360,21 +381,25 @@ private[serverset2] object ZkSession {
           case _ =>
         }
 
-      // Kick off a delayed reconnection on session expiration.
+      // Kick off a delayed reconnection if the new session failed to initialize _or_ the current session expired.
       zkSession.state.changes
-        .filter {
-          _ == WatchState.SessionState(SessionState.Expired)
-        }
+        .filter(needsReconnect)
         .toFuture()
-        .unit
-        .before {
+        .flatMap { state =>
           val jitter = backoff.next()
-          logger.error(
-            s"Zookeeper session ${zkSession.sessionIdAsHex} has expired. Reconnecting in $jitter"
-          )
+          state match {
+            case WatchState.FailedToInitialize(exc) =>
+              logger.error(
+                s"Zookeeper session failed to initialize with exception: $exc. Retrying in $jitter"
+              )
+            case WatchState.SessionState(SessionState.Expired) =>
+              logger.error(
+                s"Zookeeper session ${zkSession.sessionIdAsHex} has expired. Reconnecting in $jitter"
+              )
+          }
           Future.sleep(jitter)
         }
-        .ensure { reconnect() }
+        .ensure(reconnect())
     }
 
     reconnect()
diff --git a/finagle-serversets/src/main/scala/com/twitter/finagle/serverset2/client/types.scala b/finagle-serversets/src/main/scala/com/twitter/finagle/serverset2/client/types.scala
index c8e2ba8654..4fd7f22e7b 100644
--- a/finagle-serversets/src/main/scala/com/twitter/finagle/serverset2/client/types.scala
+++ b/finagle-serversets/src/main/scala/com/twitter/finagle/serverset2/client/types.scala
@@ -86,6 +86,7 @@ private[serverset2] sealed trait WatchState
 
 private[serverset2] object WatchState {
   object Pending extends WatchState
+  case class FailedToInitialize(exc: Throwable) extends WatchState
   case class Determined(event: NodeEvent) extends WatchState
   case class SessionState(state: com.twitter.finagle.serverset2.client.SessionState)
       extends WatchState
diff --git a/finagle-serversets/src/test/scala/com/twitter/finagle/serverset2/ZkSessionTest.scala b/finagle-serversets/src/test/scala/com/twitter/finagle/serverset2/ZkSessionTest.scala
index 05d42ad78f..5ced16ce31 100644
--- a/finagle-serversets/src/test/scala/com/twitter/finagle/serverset2/ZkSessionTest.scala
+++ b/finagle-serversets/src/test/scala/com/twitter/finagle/serverset2/ZkSessionTest.scala
@@ -167,6 +167,56 @@ class ZkSessionTest extends FunSuite with Eventually with IntegrationPatience {
     }
   }
 
+  test("factory retries when ZK session fails to initialize") {
+    Time.withCurrentTimeFrozen { tc =>
+      val identity = Identities.get().head
+      val authInfo = "%s:%s".format(identity, identity)
+      implicit val timer = new MockTimer
+
+      // A normal `ZkSession` with updatable state.
+      val zkState: Var[WatchState] with Updatable[WatchState] = Var(WatchState.Pending)
+      val watchedZk = Watched(new OpqueueZkReader(), zkState)
+
+      // A failed `ZkSession`.
+      val failedZk = Watched(
+        new OpqueueZkReader(),
+        Var(WatchState.FailedToInitialize(new Exception("failed")))
+      )
+
+      // Return failed session on the first invocation.
+      var failed = true
+      val zk = ZkSession.retrying(
+        retryStream,
+        () => {
+          if (failed) {
+            failed = false
+            new ZkSession(retryStream, failedZk, NullStatsReceiver)
+          } else new ZkSession(retryStream, watchedZk, NullStatsReceiver)
+        }
+      )
+
+      zk.changes.respond {
+        case _ => ()
+      }
+
+      // The underlying session is in a failed state here. Ensure we haven't updated the `Var` yet.
+      assert(zk.sample() == ZkSession.nil)
+
+      // Advance the timer to allow `reconnect` to run.
+      tc.advance(10.seconds)
+      timer.tick()
+
+      // The underlying `ZkSession` should be set to `watchedZk` now.
+      // Update the session state to connected -- we should receive auth info.
+      zkState() = WatchState.SessionState(SessionState.SyncConnected)
+      eventually {
+        assert(
+          watchedZk.value.opq == Seq(AddAuthInfo("digest", Buf.Utf8(authInfo)))
+        )
+      }
+    }
+  }
+
   test("factory authenticates and closes on expiry") {
     Time.withCurrentTimeFrozen { tc =>
       val identity = Identities.get().head