diff --git a/.changelog/unreleased/improvements/3757-better-custom-tx-error.md b/.changelog/unreleased/improvements/3757-better-custom-tx-error.md
new file mode 100644
index 0000000000..3346e7238e
--- /dev/null
+++ b/.changelog/unreleased/improvements/3757-better-custom-tx-error.md
@@ -0,0 +1,3 @@
+- Improve error and help messages to clarify that a .tx
+  file is expected as input to --tx-path for a custom tx.
+  ([\#3757](https://github.com/anoma/namada/pull/3757))
\ No newline at end of file
diff --git a/crates/apps_lib/src/cli.rs b/crates/apps_lib/src/cli.rs
index 7124945d0f..9955a52797 100644
--- a/crates/apps_lib/src/cli.rs
+++ b/crates/apps_lib/src/cli.rs
@@ -4483,7 +4483,11 @@ pub mod args {
                 .arg(
                     TX_PATH_OPT
                         .def()
-                        .help(wrap!("The path to a serialized transaction."))
+                        .help(wrap!(
+                            "The path to a serialized transaction. It is \
+                             expected that this transaction is contained in a \
+                             .tx file, typically produced from a tx dump."
+                        ))
                         .conflicts_with_all([
                             CODE_PATH_OPT.name,
                             DATA_PATH_OPT.name,
diff --git a/crates/sdk/src/tx.rs b/crates/sdk/src/tx.rs
index ce5758d959..62368278aa 100644
--- a/crates/sdk/src/tx.rs
+++ b/crates/sdk/src/tx.rs
@@ -3708,7 +3708,12 @@ pub async fn build_custom(
 
     let mut tx = if let Some(serialized_tx) = serialized_tx {
         Tx::deserialize(serialized_tx.as_ref()).map_err(|_| {
-            Error::Other("Invalid tx deserialization.".to_string())
+            Error::Other(
+                "Invalid tx deserialization. Please make sure you are passing \
+                 a file in .tx format, typically produced from using the \
+                 `--dump-tx` flag."
+                    .to_string(),
+            )
         })?
     } else {
         let code_path = code_path