diff --git a/src/licensedcode/models.py b/src/licensedcode/models.py
index 9947607d51c..a3d4205e322 100644
--- a/src/licensedcode/models.py
+++ b/src/licensedcode/models.py
@@ -852,6 +852,16 @@ def load_licenses(
             'No licenses were loaded. Check to see if the license data files '
             f'are available at "{licenses_data_dir}".'
         )
+        if licenses_data_dir == join(data_dir, 'licenses'):
+            # The built-in license data ships in its own package, so the most
+            # likely cause here is that this package is not installed.
+            msg += (
+                ' The built-in license data is published in a separate '
+                '"licensedcode-data" package: install it with '
+                '"pip install licensedcode-data", or install '
+                '"scancode-toolkit[licenses]" to also get the prebuilt '
+                'license index.'
+            )
         raise InvalidLicense(msg)
 
     return licenses
diff --git a/tests/licensedcode/test_license_models.py b/tests/licensedcode/test_license_models.py
index bbbe9253755..f29d8f9414c 100644
--- a/tests/licensedcode/test_license_models.py
+++ b/tests/licensedcode/test_license_models.py
@@ -10,6 +10,8 @@
 import os
 from unittest import TestCase as TestCaseClass
 
+import pytest
+
 from commoncode.testcase import FileBasedTesting
 
 from licensedcode import index
@@ -660,3 +662,39 @@ def test_get_key_phrases_ignores_nested_key_phrase_markup(self):
             raise Exception('Exception should be raised')
         except InvalidRuleRequiredPhrase:
             pass
+
+
+class TestLoadLicensesFailure(object):
+
+    def test_load_licenses_failure_mentions_licensedcode_data_for_builtin_dir(
+        self, tmp_path, monkeypatch
+    ):
+        # Point the built-in data dir at an empty tree, as it would be when the
+        # licensedcode-data package is not installed.
+        data_dir = tmp_path / 'data'
+        builtin_licenses_dir = data_dir / 'licenses'
+        builtin_licenses_dir.mkdir(parents=True)
+        monkeypatch.setattr(models, 'data_dir', str(data_dir))
+
+        with pytest.raises(models.InvalidLicense) as excinfo:
+            models.load_licenses(licenses_data_dir=str(builtin_licenses_dir))
+
+        message = str(excinfo.value)
+        assert 'No licenses were loaded' in message
+        assert 'licensedcode-data' in message
+
+    def test_load_licenses_failure_omits_package_hint_for_other_dirs(
+        self, tmp_path, monkeypatch
+    ):
+        # A caller-provided directory has nothing to do with the packaging of
+        # the built-in license data, so the hint must not be added there.
+        monkeypatch.setattr(models, 'data_dir', str(tmp_path / 'data'))
+        custom_licenses_dir = tmp_path / 'custom-licenses'
+        custom_licenses_dir.mkdir()
+
+        with pytest.raises(models.InvalidLicense) as excinfo:
+            models.load_licenses(licenses_data_dir=str(custom_licenses_dir))
+
+        message = str(excinfo.value)
+        assert 'No licenses were loaded' in message
+        assert 'licensedcode-data' not in message