diff --git a/azurelinuxagent/common/osutil/default.py b/azurelinuxagent/common/osutil/default.py
index a8830ff3f..d9f945694 100644
--- a/azurelinuxagent/common/osutil/default.py
+++ b/azurelinuxagent/common/osutil/default.py
@@ -549,6 +549,13 @@ def is_atapiix_mod_loaded(self, max_retry=1):
                 time.sleep(1)
         return False
 
+    def is_mod_available(self, mod_name):
+        """
+        Checks if the given module is available.
+        """
+        ret = shellutil.run("modinfo {0}".format(mod_name), chk_err=False)
+        return ret == 0
+
     def mount(self, device, mount_point, option=None, chk_err=True):
         if not option:
             option = []
diff --git a/azurelinuxagent/ga/firewall_manager.py b/azurelinuxagent/ga/firewall_manager.py
index a75cf4a8e..7250c8874 100644
--- a/azurelinuxagent/ga/firewall_manager.py
+++ b/azurelinuxagent/ga/firewall_manager.py
@@ -24,6 +24,7 @@
 from azurelinuxagent.common import event
 from azurelinuxagent.common.event import WALAEventOperation
 from azurelinuxagent.common.utils import shellutil
+from azurelinuxagent.common.osutil import get_osutil
 
 from azurelinuxagent.common.future import ustr
 from azurelinuxagent.common.utils.flexible_version import FlexibleVersion
@@ -77,6 +78,7 @@ class FirewallManager(object):
     def __init__(self, wire_server_address):
         self._wire_server_address = wire_server_address
         self._verbose = False
+        self._osutil = get_osutil()
 
     # Friendly names for the firewall rules
     ACCEPT_DNS = "ACCEPT DNS"
@@ -308,6 +310,8 @@ def __init__(self, wire_server_address):
         #
         # Get the version of iptables and check whether we can use the wait option ("-w"), which was introduced in iptables 1.4.21.
         #
+        if not self._osutil.is_mod_available("xt_owner") or not self._osutil.is_mod_available("xt_conntrack"):
+            raise FirewallManagerNotAvailableError("iptables is not available")
         try:
             output = shellutil.run_command(["iptables", "--version"])
             #
@@ -446,6 +450,14 @@ class FirewallCmd(_FirewallManagerIndividualRules):
     def __init__(self, wire_server_address):
         super(FirewallCmd, self).__init__(wire_server_address)
 
+        #
+        # Check for required kernel modules. FirewallCmd uses iptables passthrough rules that require
+        # xt_owner (for the ACCEPT rule with -m owner) and xt_conntrack (for the DROP rule with -m conntrack).
+        # If these modules are not available, the firewall-cmd rules will fail.
+        #
+        if not self._osutil.is_mod_available("xt_owner") or not self._osutil.is_mod_available("xt_conntrack"):
+            raise FirewallManagerNotAvailableError("Required kernel modules (xt_owner, xt_conntrack) are not available for firewall-cmd")
+
         try:
             self._version = shellutil.run_command(["firewall-cmd", "--version"]).strip()
         except Exception as exception:
diff --git a/azurelinuxagent/ga/persist_firewall_rules.py b/azurelinuxagent/ga/persist_firewall_rules.py
index 2fd35e665..50397e671 100644
--- a/azurelinuxagent/ga/persist_firewall_rules.py
+++ b/azurelinuxagent/ga/persist_firewall_rules.py
@@ -22,7 +22,7 @@
 from azurelinuxagent.common import logger
 from azurelinuxagent.common import event
 from azurelinuxagent.common.event import add_event, WALAEventOperation
-from azurelinuxagent.ga.firewall_manager import FirewallCmd, FirewallStateError
+from azurelinuxagent.ga.firewall_manager import FirewallCmd, FirewallStateError, FirewallManagerNotAvailableError
 from azurelinuxagent.common.future import ustr
 from azurelinuxagent.common.osutil import get_osutil, systemd
 from azurelinuxagent.common.utils import shellutil, fileutil, textutil
@@ -132,7 +132,15 @@ def setup(self):
         # In case of a failure, this would throw. In such a case, we don't need to try to setup our custom service
         # because on system reboot, all iptables rules are reset by firewalld.service, so it would be a no-op.
         # setup permanent firewalld rules
-        firewall_manager = FirewallCmd(self._dst_ip)
+        try:
+            firewall_manager = FirewallCmd(self._dst_ip)
+        except FirewallManagerNotAvailableError as e:
+            # If required kernel modules (xt_owner, xt_conntrack) are not available, firewall-cmd cannot set up
+            # the required rules. Fall back to the custom network-setup service which may handle this better.
+            event.warn(WALAEventOperation.PersistFirewallRules, "Cannot use firewall-cmd for persistent rules: {0}. Falling back to custom network-setup service.", ustr(e))
+            self._setup_network_setup_service()
+            return
+
         event.info(WALAEventOperation.Firewall, "Using firewall-cmd [version {0}] to manage the persistent firewall rules", firewall_manager.version)
 
         try: