diff --git a/runtime/lua/vim/lsp/document_color.lua b/runtime/lua/vim/lsp/document_color.lua
index f75c29c0d1..3799da4e8d 100644
--- a/runtime/lua/vim/lsp/document_color.lua
+++ b/runtime/lua/vim/lsp/document_color.lua
@@ -65,12 +65,13 @@ end
 --- Cache of the highlight groups that we've already created.
 --- @type table<string, true>
 local color_cache = {}
+local n_color_cache = 0
 
 --- Gets or creates the highlight group for the given LSP color information.
 ---
 --- @param hex_code string
 --- @param style string
---- @return string
+--- @return string?
 local function get_hl_group(hex_code, style)
   if style ~= 'background' then
     style = 'foreground'
@@ -78,17 +79,23 @@ local function get_hl_group(hex_code, style)
 
   local hl_name = ('LspDocumentColor_%s_%s'):format(hex_code:sub(2), style)
 
-  if not color_cache[hl_name] then
-    if style == 'background' then
-      api.nvim_set_hl(0, hl_name, { bg = hex_code, fg = get_contrast_color(hex_code) })
-    else
-      api.nvim_set_hl(0, hl_name, { fg = hex_code })
-    end
-
-    color_cache[hl_name] = true
+  if color_cache[hl_name] then
+    return hl_name
   end
 
-  return hl_name
+  -- Limit number of created highlight groups to 10000 to not approach near
+  -- a hard limit of 19999 highlight groups (`:h E849`)
+  if n_color_cache > 10000 then
+    return nil
+  end
+
+  local hl_opts = style == 'background' and { bg = hex_code, fg = get_contrast_color(hex_code) }
+    or { fg = hex_code }
+  local ok = pcall(api.nvim_set_hl, 0, hl_name, hl_opts)
+  color_cache[hl_name] = ok
+  n_color_cache = n_color_cache + (ok and 1 or 0)
+
+  return ok and hl_name or nil
 end
 
 --- @class (private) vim.lsp.document_color.Provider : vim.lsp.Capability
@@ -138,6 +145,7 @@ function Provider:new(bufnr)
     desc = 'Refresh document_color',
     callback = function()
       color_cache = {}
+      n_color_cache = 0
       local provider = Provider.active[bufnr]
       if provider then
         provider:clear()
diff --git a/src/nvim/api/vim.c b/src/nvim/api/vim.c
index 3ab8e5a6bf..aa3475ad76 100644
--- a/src/nvim/api/vim.c
+++ b/src/nvim/api/vim.c
@@ -92,10 +92,15 @@
 /// Gets a highlight group by name
 ///
 /// similar to |hlID()|, but allocates a new ID if not present.
-Integer nvim_get_hl_id_by_name(String name)
+/// @param[out] err Error details, if any
+Integer nvim_get_hl_id_by_name(String name, Error *err)
   FUNC_API_SINCE(7)
 {
-  return syn_check_group(name.data, name.size);
+  int ret;
+  TRY_WRAP(err, {
+    ret = syn_check_group(name.data, name.size);
+  });
+  return ret;
 }
 
 /// Gets all or specific highlight groups in a namespace.
@@ -173,10 +178,13 @@ DictAs(get_hl_info) nvim_get_hl(Integer ns_id, Dict(get_highlight) *opts, Arena
 void nvim_set_hl(uint64_t channel_id, Integer ns_id, String name, Dict(highlight) *val, Error *err)
   FUNC_API_SINCE(7)
 {
-  int hl_id = syn_check_group(name.data, name.size);
-  VALIDATE_S((hl_id != 0), "highlight name", name.data, {
-    return;
+  int hl_id;
+  TRY_WRAP(err, {
+    hl_id = syn_check_group(name.data, name.size);
   });
+  if (ERROR_SET(err) || hl_id == 0) {
+    return;
+  }
   int link_id = -1;
 
   // Setting URLs directly through highlight attributes is not supported
diff --git a/test/functional/api/highlight_spec.lua b/test/functional/api/highlight_spec.lua
index 523ba9e59a..46392432c0 100644
--- a/test/functional/api/highlight_spec.lua
+++ b/test/functional/api/highlight_spec.lua
@@ -252,12 +252,25 @@ describe('API: set highlight', function()
 
   it('does not segfault on invalid group name #20009', function()
     eq(
-      "Invalid highlight name: 'foo bar'",
+      'Vim:E5248: Invalid character in group name',
       pcall_err(api.nvim_set_hl, 0, 'foo bar', { bold = true })
     )
     assert_alive()
   end)
 
+  it('can be silenced if there are too many groups #38930', function()
+    local n_groups = vim.tbl_count(api.nvim_get_hl(0, {}))
+    local has_fail = false
+    for i = n_groups + 1, 20000 do
+      local _, msg = pcall(api.nvim_set_hl, 0, 'New_' .. i, { fg = '#000000' })
+      local is_fail = type(msg) == 'string'
+        and msg:find('Too many highlight and syntax groups$') ~= nil
+      has_fail = has_fail or is_fail
+    end
+    eq('', exec_capture('messages'))
+    eq(true, has_fail)
+  end)
+
   it('update=true sets only specified keys', function()
     api.nvim_set_hl(0, 'TestGroup', { fg = '#ff0000', bg = '#0000ff', bold = true })
     api.nvim_set_hl(0, 'TestGroup', { bg = '#00ff00', update = true })