diff --git a/src/python/grpcio/commands.py b/src/python/grpcio/commands.py
index 3e3c72ff6ed..98ad2e571d8 100644
--- a/src/python/grpcio/commands.py
+++ b/src/python/grpcio/commands.py
@@ -320,11 +320,11 @@ class BuildExt(build_ext.build_ext):
         extension.extra_link_args += list(BuildExt.LINK_OPTIONS[compiler])
     try:
       build_ext.build_ext.build_extensions(self)
-    except KeyboardInterrupt:
-      raise
     except Exception as error:
-      support.diagnose_build_ext_error(self, error, traceback.format_exc())
-      raise CommandError("Failed `build_ext` step.")
+      formatted_exception = traceback.format_exc()
+      support.diagnose_build_ext_error(self, error, formatted_exception)
+      raise CommandError(
+          "Failed `build_ext` step:\n{}".format(formatted_exception))
 
 
 class Gather(setuptools.Command):
diff --git a/src/python/grpcio/support.py b/src/python/grpcio/support.py
index 96d9cbf4f37..33244eb388e 100644
--- a/src/python/grpcio/support.py
+++ b/src/python/grpcio/support.py
@@ -77,10 +77,27 @@ def _expect_compile(compiler, source_string, error_message):
             .format(error_message))
 
 def diagnose_compile_error(build_ext, error):
-  """Attempt to run a few test files through the compiler to see if we can
-     diagnose the reason for the compile failure."""
+  """Attempt to diagnose an error during compilation."""
   for c_check, message in C_CHECKS.items():
     _expect_compile(build_ext.compiler, c_check, message)
+  python_sources = [
+      source for source in build_ext.get_source_files()
+      if source.startswith('./src/python') and source.endswith('c')
+  ]
+  for source in python_sources:
+    if not os.path.isfile(source):
+      raise commands.CommandError(
+          ("Diagnostics found a missing Python extension source file:\n{}\n\n"
+           "This is usually because the Cython sources haven't been transpiled "
+           "into C yet and you're building from source.\n"
+           "Try setting the environment variable "
+           "`GRPC_PYTHON_BUILD_WITH_CYTHON=1` when invoking `setup.py` or "
+           "when using `pip`, e.g.:\n\n"
+           "pip install -rrequirements.txt\n"
+           "GRPC_PYTHON_BUILD_WITH_CYTHON=1 pip install .")
+            .format(source)
+          )
+
 
 _ERROR_DIAGNOSES = {
     errors.CompileError: diagnose_compile_error