diff --git a/crates/papyrus_gateway/resources/V0_3_0_starknet_api_openrpc.json b/crates/papyrus_gateway/resources/V0_3_0_starknet_api_openrpc.json
index aeb1cece57..96a4321886 100644
--- a/crates/papyrus_gateway/resources/V0_3_0_starknet_api_openrpc.json
+++ b/crates/papyrus_gateway/resources/V0_3_0_starknet_api_openrpc.json
@@ -2455,6 +2455,10 @@
                 "code": 28,
                 "message": "Class hash not found"
             },
+            "TRANSACTION_REVERTED": {
+                "code": 29,
+                "message": "Transaction reverted"
+            },
             "PAGE_SIZE_TOO_BIG": {
                 "code": 31,
                 "message": "Requested page size is too big"
diff --git a/crates/papyrus_gateway/src/api.rs b/crates/papyrus_gateway/src/api.rs
index 0406bc9853..c0f27aca08 100644
--- a/crates/papyrus_gateway/src/api.rs
+++ b/crates/papyrus_gateway/src/api.rs
@@ -50,6 +50,8 @@ pub enum JsonRpcError {
     InvalidTransactionIndex = 27,
     #[error("Class hash not found.")]
     ClassHashNotFound = 28,
+    #[error("Transaction reverted.")]
+    TransactionReverted = 29,
     #[error("Requested page size is too big.")]
     PageSizeTooBig = 31,
     #[error("The supplied continuation token is invalid or unknown.")]
diff --git a/crates/papyrus_gateway/src/v0_3_0/api/api_impl.rs b/crates/papyrus_gateway/src/v0_3_0/api/api_impl.rs
index 775652e62e..4de9380b9a 100644
--- a/crates/papyrus_gateway/src/v0_3_0/api/api_impl.rs
+++ b/crates/papyrus_gateway/src/v0_3_0/api/api_impl.rs
@@ -6,12 +6,13 @@ use papyrus_storage::body::events::{EventIndex, EventsReader};
 use papyrus_storage::body::{BodyStorageReader, TransactionIndex};
 use papyrus_storage::state::StateStorageReader;
 use papyrus_storage::StorageReader;
-use starknet_api::block::BlockNumber;
+use starknet_api::block::{BlockNumber, BlockStatus};
 use starknet_api::core::{ChainId, ClassHash, ContractAddress, GlobalRoot, Nonce};
 use starknet_api::hash::{StarkFelt, StarkHash, GENESIS_HASH};
 use starknet_api::state::{StateNumber, StorageKey};
 use starknet_api::transaction::{
-    EventIndexInTransactionOutput, TransactionHash, TransactionOffsetInBlock,
+    EventIndexInTransactionOutput, TransactionExecutionStatus, TransactionHash,
+    TransactionOffsetInBlock,
 };
 use tracing::instrument;
 
@@ -214,10 +215,30 @@ impl JsonRpcV0_3_0Server for JsonRpcServerV0_3_0Impl {
 
         let block_number = transaction_index.0;
         let status = get_block_status(&txn, block_number)?;
+
+        // rejected blocks should not be a part of the API so we early return here.
+        // this assumption also holds for the conversion from block status to transaction status
+        // where we set rejected blocks to unreachable.
+        if status == BlockStatus::Rejected {
+            return Err(ErrorObjectOwned::from(JsonRpcError::BlockNotFound))?;
+        }
+
         let block_hash = get_block_header_by_number::<_, BlockHeader>(&txn, block_number)
             .map_err(internal_server_error)?
             .block_hash;
 
+        let (_, transaction_execution_status) = txn
+            .get_transaction(transaction_index)
+            .map_err(internal_server_error)?
+            .ok_or_else(|| ErrorObjectOwned::from(JsonRpcError::TransactionHashNotFound))?;
+
+        // starting from starknet v0.12.1 blocks can have reverted transactions (transactions that
+        // failed execution). RPC API v0.3 does not support these transactions therefore we
+        // return here with an error.
+        if transaction_execution_status == TransactionExecutionStatus::Reverted {
+            return Err(ErrorObjectOwned::from(JsonRpcError::TransactionReverted))?;
+        }
+
         let thin_tx_output = txn
             .get_transaction_output(transaction_index)
             .map_err(internal_server_error)?
diff --git a/crates/papyrus_gateway/src/v0_3_0/transaction.rs b/crates/papyrus_gateway/src/v0_3_0/transaction.rs
index c8a67342a0..ba3989093e 100644
--- a/crates/papyrus_gateway/src/v0_3_0/transaction.rs
+++ b/crates/papyrus_gateway/src/v0_3_0/transaction.rs
@@ -222,7 +222,10 @@ impl From<BlockStatus> for TransactionStatus {
             BlockStatus::AcceptedOnL1 => TransactionStatus::AcceptedOnL1,
             BlockStatus::AcceptedOnL2 => TransactionStatus::AcceptedOnL2,
             BlockStatus::Pending => TransactionStatus::Pending,
-            BlockStatus::Rejected => TransactionStatus::Rejected,
+            // we convert the block status to transaction status only in the creation of
+            // TransactionReceiptWithStatus before that we verify that the block is not
+            // rejected so this conversion should never happen
+            BlockStatus::Rejected => unreachable!("Rejected blocks are not returned by the API"),
         }
     }
 }