diff --git a/CHANGELOG.md b/CHANGELOG.md
index 863b428b5a..aeec2f6831 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -10,6 +10,7 @@ and this project adheres to
 
 - cosmwasm-std: Implement `checked_multiply_ratio` for
   `Uint64`/`Uint128`/`Uint256`
+- cosmwasm-std: Implement `checked_from_ratio` for `Decimal`/`Decimal256`
 
 ### Changed
 
diff --git a/packages/std/src/errors/mod.rs b/packages/std/src/errors/mod.rs
index 6af5c0d09a..64b1e96f92 100644
--- a/packages/std/src/errors/mod.rs
+++ b/packages/std/src/errors/mod.rs
@@ -5,8 +5,8 @@ mod verification_error;
 
 pub use recover_pubkey_error::RecoverPubkeyError;
 pub use std_error::{
-    CheckedMultiplyRatioError, ConversionOverflowError, DivideByZeroError, OverflowError,
-    OverflowOperation, StdError, StdResult,
+    CheckedFromRatioError, CheckedMultiplyRatioError, ConversionOverflowError, DivideByZeroError,
+    OverflowError, OverflowOperation, StdError, StdResult,
 };
 pub use system_error::SystemError;
 pub use verification_error::VerificationError;
diff --git a/packages/std/src/errors/std_error.rs b/packages/std/src/errors/std_error.rs
index fabc7a2ef0..165ba20fb6 100644
--- a/packages/std/src/errors/std_error.rs
+++ b/packages/std/src/errors/std_error.rs
@@ -535,6 +535,15 @@ pub enum CheckedMultiplyRatioError {
     Overflow,
 }
 
+#[derive(Error, Debug, PartialEq, Eq)]
+pub enum CheckedFromRatioError {
+    #[error("Denominator must not be zero")]
+    DivideByZero,
+
+    #[error("Overflow")]
+    Overflow,
+}
+
 #[cfg(test)]
 mod tests {
     use super::*;
diff --git a/packages/std/src/lib.rs b/packages/std/src/lib.rs
index 2e3d4c1fe5..10eda460e0 100644
--- a/packages/std/src/lib.rs
+++ b/packages/std/src/lib.rs
@@ -28,8 +28,9 @@ pub use crate::binary::Binary;
 pub use crate::coins::{coin, coins, has_coins, Coin};
 pub use crate::deps::{Deps, DepsMut, OwnedDeps};
 pub use crate::errors::{
-    CheckedMultiplyRatioError, ConversionOverflowError, DivideByZeroError, OverflowError,
-    OverflowOperation, RecoverPubkeyError, StdError, StdResult, SystemError, VerificationError,
+    CheckedFromRatioError, CheckedMultiplyRatioError, ConversionOverflowError, DivideByZeroError,
+    OverflowError, OverflowOperation, RecoverPubkeyError, StdError, StdResult, SystemError,
+    VerificationError,
 };
 #[cfg(feature = "stargate")]
 pub use crate::ibc::{
diff --git a/packages/std/src/math/decimal.rs b/packages/std/src/math/decimal.rs
index 92d260ba45..5b15a9c31a 100644
--- a/packages/std/src/math/decimal.rs
+++ b/packages/std/src/math/decimal.rs
@@ -7,7 +7,7 @@ use std::ops::{Add, AddAssign, Div, DivAssign, Mul, MulAssign, Sub, SubAssign};
 use std::str::FromStr;
 use thiserror::Error;
 
-use crate::errors::StdError;
+use crate::errors::{CheckedFromRatioError, CheckedMultiplyRatioError, StdError};
 use crate::OverflowError;
 
 use super::Fraction;
@@ -118,16 +118,32 @@ impl Decimal {
 
     /// Returns the ratio (numerator / denominator) as a Decimal
     pub fn from_ratio(numerator: impl Into<Uint128>, denominator: impl Into<Uint128>) -> Self {
+        match Decimal::checked_from_ratio(numerator, denominator) {
+            Ok(value) => value,
+            Err(CheckedFromRatioError::DivideByZero) => {
+                panic!("Denominator must not be zero")
+            }
+            Err(CheckedFromRatioError::Overflow) => panic!("Multiplication overflow"),
+        }
+    }
+
+    /// Returns the ratio (numerator / denominator) as a Decimal
+    pub fn checked_from_ratio(
+        numerator: impl Into<Uint128>,
+        denominator: impl Into<Uint128>,
+    ) -> Result<Self, CheckedFromRatioError> {
         let numerator: Uint128 = numerator.into();
         let denominator: Uint128 = denominator.into();
-        if denominator.is_zero() {
-            panic!("Denominator must not be zero");
+        match numerator.checked_multiply_ratio(Self::DECIMAL_FRACTIONAL, denominator) {
+            Ok(ratio) => {
+                // numerator * DECIMAL_FRACTIONAL / denominator
+                Ok(Decimal(ratio))
+            }
+            Err(CheckedMultiplyRatioError::Overflow) => Err(CheckedFromRatioError::Overflow),
+            Err(CheckedMultiplyRatioError::DivideByZero) => {
+                Err(CheckedFromRatioError::DivideByZero)
+            }
         }
-
-        Decimal(
-            // numerator * DECIMAL_FRACTIONAL / denominator
-            numerator.multiply_ratio(Self::DECIMAL_FRACTIONAL, denominator),
-        )
     }
 
     pub const fn is_zero(&self) -> bool {
@@ -658,6 +674,25 @@ mod tests {
         Decimal::from_ratio(1u128, 0u128);
     }
 
+    #[test]
+    #[should_panic(expected = "Multiplication overflow")]
+    fn decimal_from_ratio_panics_for_mul_overflow() {
+        Decimal::from_ratio(u128::MAX, 1u128);
+    }
+
+    #[test]
+    fn decimal_checked_from_ratio_does_not_panic() {
+        assert_eq!(
+            Decimal::checked_from_ratio(1u128, 0u128),
+            Err(CheckedFromRatioError::DivideByZero)
+        );
+
+        assert_eq!(
+            Decimal::checked_from_ratio(u128::MAX, 1u128),
+            Err(CheckedFromRatioError::Overflow)
+        );
+    }
+
     #[test]
     fn decimal_implements_fraction() {
         let fraction = Decimal::from_str("1234.567").unwrap();
diff --git a/packages/std/src/math/decimal256.rs b/packages/std/src/math/decimal256.rs
index 4dc1ef01ff..a7898203ba 100644
--- a/packages/std/src/math/decimal256.rs
+++ b/packages/std/src/math/decimal256.rs
@@ -7,7 +7,7 @@ use std::ops::{Add, AddAssign, Div, DivAssign, Mul, MulAssign, Sub, SubAssign};
 use std::str::FromStr;
 use thiserror::Error;
 
-use crate::errors::StdError;
+use crate::errors::{CheckedFromRatioError, CheckedMultiplyRatioError, StdError};
 use crate::{OverflowError, Uint512};
 
 use super::Fraction;
@@ -130,16 +130,32 @@ impl Decimal256 {
 
     /// Returns the ratio (numerator / denominator) as a Decimal256
     pub fn from_ratio(numerator: impl Into<Uint256>, denominator: impl Into<Uint256>) -> Self {
+        match Decimal256::checked_from_ratio(numerator, denominator) {
+            Ok(value) => value,
+            Err(CheckedFromRatioError::DivideByZero) => {
+                panic!("Denominator must not be zero")
+            }
+            Err(CheckedFromRatioError::Overflow) => panic!("Multiplication overflow"),
+        }
+    }
+
+    /// Returns the ratio (numerator / denominator) as a Decimal256
+    pub fn checked_from_ratio(
+        numerator: impl Into<Uint256>,
+        denominator: impl Into<Uint256>,
+    ) -> Result<Self, CheckedFromRatioError> {
         let numerator: Uint256 = numerator.into();
         let denominator: Uint256 = denominator.into();
-        if denominator.is_zero() {
-            panic!("Denominator must not be zero");
+        match numerator.checked_multiply_ratio(Self::DECIMAL_FRACTIONAL, denominator) {
+            Ok(ratio) => {
+                // numerator * DECIMAL_FRACTIONAL / denominator
+                Ok(Self(ratio))
+            }
+            Err(CheckedMultiplyRatioError::Overflow) => Err(CheckedFromRatioError::Overflow),
+            Err(CheckedMultiplyRatioError::DivideByZero) => {
+                Err(CheckedFromRatioError::DivideByZero)
+            }
         }
-
-        Self(
-            // numerator * DECIMAL_FRACTIONAL / denominator
-            numerator.multiply_ratio(Self::DECIMAL_FRACTIONAL, denominator),
-        )
     }
 
     pub const fn is_zero(&self) -> bool {
@@ -690,6 +706,25 @@ mod tests {
         Decimal256::from_ratio(1u128, 0u128);
     }
 
+    #[test]
+    #[should_panic(expected = "Multiplication overflow")]
+    fn decimal256_from_ratio_panics_for_mul_overflow() {
+        Decimal256::from_ratio(Uint256::MAX, 1u128);
+    }
+
+    #[test]
+    fn decimal256_checked_from_ratio_does_not_panic() {
+        assert_eq!(
+            Decimal256::checked_from_ratio(1u128, 0u128),
+            Err(CheckedFromRatioError::DivideByZero)
+        );
+
+        assert_eq!(
+            Decimal256::checked_from_ratio(Uint256::MAX, 1u128),
+            Err(CheckedFromRatioError::Overflow)
+        );
+    }
+
     #[test]
     fn decimal256_implements_fraction() {
         let fraction = Decimal256::from_str("1234.567").unwrap();