diff --git a/core-server/src/main/java/org/glassfish/jersey/server/internal/inject/SingleValueExtractor.java b/core-server/src/main/java/org/glassfish/jersey/server/internal/inject/SingleValueExtractor.java
index 69431fb..8eb21d5 100644
--- a/core-server/src/main/java/org/glassfish/jersey/server/internal/inject/SingleValueExtractor.java
+++ b/core-server/src/main/java/org/glassfish/jersey/server/internal/inject/SingleValueExtractor.java
@@ -1,5 +1,5 @@
 /*
- * Copyright (c) 2010, 2019 Oracle and/or its affiliates. All rights reserved.
+ * Copyright (c) 2010, 2021 Oracle and/or its affiliates. All rights reserved.
  *
  * This program and the accompanying materials are made available under the
  * terms of the Eclipse Public License v. 2.0, which is available at
@@ -62,7 +62,11 @@
         } catch (final WebApplicationException | ProcessingException ex) {
             throw ex;
         } catch (final IllegalArgumentException ex) {
-            return defaultValue();
+            if (value == null) {
+                return defaultValue();
+            } else {
+                throw new ExtractorException(ex);
+            }
         } catch (final Exception ex) {
             throw new ExtractorException(ex);
         }
diff --git a/tests/e2e-server/src/test/java/org/glassfish/jersey/tests/e2e/server/IllegalArgumentExceptionTest.java b/tests/e2e-server/src/test/java/org/glassfish/jersey/tests/e2e/server/IllegalArgumentExceptionTest.java
new file mode 100644
index 0000000..3e27023
--- /dev/null
+++ b/tests/e2e-server/src/test/java/org/glassfish/jersey/tests/e2e/server/IllegalArgumentExceptionTest.java
@@ -0,0 +1,124 @@
+/*
+ * Copyright (c) 2021 Oracle and/or its affiliates. All rights reserved.
+ *
+ * This program and the accompanying materials are made available under the
+ * terms of the Eclipse Public License v. 2.0, which is available at
+ * http://www.eclipse.org/legal/epl-2.0.
+ *
+ * This Source Code may also be made available under the following Secondary
+ * Licenses when the conditions for such availability set forth in the
+ * Eclipse Public License v. 2.0 are satisfied: GNU General Public License,
+ * version 2 with the GNU Classpath Exception, which is available at
+ * https://www.gnu.org/software/classpath/license.html.
+ *
+ * SPDX-License-Identifier: EPL-2.0 OR GPL-2.0 WITH Classpath-exception-2.0
+ */
+
+package org.glassfish.jersey.tests.e2e.server;
+
+import java.lang.annotation.Annotation;
+import java.lang.reflect.Type;
+
+import javax.validation.constraints.NotNull;
+import javax.ws.rs.DefaultValue;
+import javax.ws.rs.GET;
+import javax.ws.rs.HeaderParam;
+import javax.ws.rs.Path;
+import javax.ws.rs.QueryParam;
+import javax.ws.rs.core.Application;
+import javax.ws.rs.core.Response;
+import javax.ws.rs.ext.ParamConverter;
+import javax.ws.rs.ext.ParamConverterProvider;
+
+import org.glassfish.jersey.server.ResourceConfig;
+import org.glassfish.jersey.test.JerseyTest;
+import org.junit.Test;
+
+import static org.junit.Assert.assertEquals;
+
+public class IllegalArgumentExceptionTest extends JerseyTest {
+
+    private static final String PARAM_NAME = "paramName";
+
+    @Override
+    protected Application configure() {
+        return new ResourceConfig(TestResource.class, TestParamProvider.class);
+    }
+
+    @Path("test")
+    public static class TestResource {
+        @GET
+        @Path("1")
+        public String get1(@QueryParam(PARAM_NAME) CustomObj value) {
+            return "ok";
+        }
+        @GET
+        @Path("2")
+        public String get2(@NotNull @QueryParam(PARAM_NAME) String value) {
+            return "ok";
+        }
+        @GET
+        @Path("3")
+        public String get3(@NotNull @DefaultValue("get3") @QueryParam(PARAM_NAME) CustomObj value) {
+            return value.value;
+        }
+        @GET
+        @Path("4")
+        public String get4(@HeaderParam(PARAM_NAME) CustomObj header) {
+            return "ok";
+        }
+    }
+
+    @Test
+    public void illegalArgumentExceptionWith404() {
+        Response response = target().path("test/1").queryParam(PARAM_NAME, 1).request().get();
+        assertEquals(404, response.getStatus());
+    }
+
+    @Test
+    public void validationExceptionWith400() {
+        Response response = target().path("test/2").request().get();
+        assertEquals(400, response.getStatus());
+    }
+
+    @Test
+    public void with200() {
+        Response response = target().path("test/3").request().get();
+        assertEquals(200, response.getStatus());
+        assertEquals("get3", response.readEntity(String.class));
+    }
+
+    @Test
+    public void validationExceptionHeaderWith400() {
+        Response response = target().path("test/4").request().header(PARAM_NAME, "1").get();
+        assertEquals(400, response.getStatus());
+    }
+
+    private static class CustomObj {
+        private String value;
+    }
+
+    public static class TestParamProvider implements ParamConverterProvider {
+        @Override
+        public <T> ParamConverter<T> getConverter(Class<T> rawType, Type genericType, Annotation[] annotations) {
+            return (ParamConverter<T>) new ParamConverter<CustomObj>() {
+                @Override
+                public CustomObj fromString(String value) {
+                    if ("1".equals(value)) {
+                        throw new IllegalArgumentException("test exception");
+                    } else if (value != null) {
+                        CustomObj obj = new CustomObj();
+                        obj.value = value;
+                        return obj;
+                    } else {
+                        return null;
+                    }
+                }
+                @Override
+                public String toString(CustomObj value) {
+                    return null;
+                }
+            };
+        }
+    }
+}