diff --git a/newsfragments/2979.changed.md b/newsfragments/2979.changed.md
new file mode 100644
index 00000000000..35a8e49a056
--- /dev/null
+++ b/newsfragments/2979.changed.md
@@ -0,0 +1 @@
+Allow `create_exception!` to take a `dotted.module` to place the exception in a submodule.
diff --git a/src/exceptions.rs b/src/exceptions.rs
index 1e2572d1d38..622ee180abb 100644
--- a/src/exceptions.rs
+++ b/src/exceptions.rs
@@ -201,7 +201,7 @@ macro_rules! import_exception {
 ///
 #[macro_export]
 macro_rules! create_exception {
-    ($module: ident, $name: ident, $base: ty) => {
+    ($module: expr, $name: ident, $base: ty) => {
         #[repr(transparent)]
         #[allow(non_camel_case_types)] // E.g. `socket.herror`
         pub struct $name($crate::PyAny);
@@ -210,7 +210,7 @@ macro_rules! create_exception {
 
         $crate::create_exception_type_object!($module, $name, $base, ::std::option::Option::None);
     };
-    ($module: ident, $name: ident, $base: ty, $doc: expr) => {
+    ($module: expr, $name: ident, $base: ty, $doc: expr) => {
         #[repr(transparent)]
         #[allow(non_camel_case_types)] // E.g. `socket.herror`
         #[doc = $doc]
@@ -232,7 +232,7 @@ macro_rules! create_exception {
 #[doc(hidden)]
 #[macro_export]
 macro_rules! create_exception_type_object {
-    ($module: ident, $name: ident, $base: ty, $doc: expr) => {
+    ($module: expr, $name: ident, $base: ty, $doc: expr) => {
         $crate::pyobject_native_type_core!(
             $name,
             *$name::type_object_raw($crate::Python::assume_gil_acquired()),
@@ -876,6 +876,21 @@ mod tests {
         });
     }
 
+    #[test]
+    fn custom_exception_dotted_module() {
+        create_exception!(mymodule.exceptions, CustomError, PyException);
+        Python::with_gil(|py| {
+            let error_type = py.get_type::<CustomError>();
+            let ctx = [("CustomError", error_type)].into_py_dict(py);
+            let type_description: String = py
+                .eval("str(CustomError)", None, Some(ctx))
+                .unwrap()
+                .extract()
+                .unwrap();
+            assert_eq!(type_description, "<class 'mymodule.exceptions.CustomError'>");
+        });
+    }
+
     #[test]
     fn custom_exception_doc() {
         create_exception!(mymodule, CustomError, PyException, "Some docs");