diff --git a/podman/client.py b/podman/client.py
index 5785f6b9..05b2c163 100644
--- a/podman/client.py
+++ b/podman/client.py
@@ -19,6 +19,7 @@
 from podman.domain.secrets import SecretsManager
 from podman.domain.system import SystemManager
 from podman.domain.volumes import VolumesManager
+from podman.errors.exceptions import PodmanConnectionError
 
 logger = logging.getLogger("podman")
 
@@ -114,27 +115,38 @@ def from_env(
             Client used to communicate with a Podman service.
 
         Raises:
-            ValueError when required environment variable is not set
+            PodmanConnectionError: When connection to service fails or environment is invalid
         """
-        environment = environment or os.environ
-        credstore_env = credstore_env or {}
-
-        if version == "auto":
-            version = None
-
-        kwargs = {
-            'version': version,
-            'timeout': timeout,
-            'tls': False,
-            'credstore_env': credstore_env,
-            'max_pool_size': max_pool_size,
-        }
-
-        host = environment.get("CONTAINER_HOST") or environment.get("DOCKER_HOST") or None
-        if host is not None:
-            kwargs['base_url'] = host
-
-        return PodmanClient(**kwargs)
+        try:
+            environment = environment or os.environ
+            credstore_env = credstore_env or {}
+
+            if version == "auto":
+                version = None
+
+            kwargs = {
+                'version': version,
+                'timeout': timeout,
+                'tls': False,
+                'credstore_env': credstore_env,
+                'max_pool_size': max_pool_size,
+            }
+
+            host = environment.get("CONTAINER_HOST") or environment.get("DOCKER_HOST") or None
+            if host is not None:
+                kwargs['base_url'] = host
+
+            return PodmanClient(**kwargs)
+        except Exception as exc:
+            error_msg = "Failed to initialize Podman client from environment"
+            if isinstance(exc, ValueError):
+                error_msg = "Invalid environment configuration for Podman client"
+            elif isinstance(exc, (ConnectionError, TimeoutError)):
+                error_msg = "Failed to connect to Podman service"
+
+            raise PodmanConnectionError(
+                message=error_msg, environment=environment, host=host, original_error=exc
+            ) from exc
 
     @cached_property
     def containers(self) -> ContainersManager:
diff --git a/podman/errors/exceptions.py b/podman/errors/exceptions.py
index 7cf5970a..61527218 100644
--- a/podman/errors/exceptions.py
+++ b/podman/errors/exceptions.py
@@ -1,6 +1,6 @@
 """Podman API Errors."""
 
-from typing import Iterable, List, Optional, Union, TYPE_CHECKING
+from typing import Iterable, List, Optional, Union, Dict, TYPE_CHECKING
 
 from requests import Response
 from requests.exceptions import HTTPError
@@ -142,3 +142,58 @@ def __init__(
 
 class InvalidArgument(PodmanError):
     """Parameter to method/function was not valid."""
+
+
+class PodmanConnectionError(PodmanError):
+    """Exception raised when connection to Podman service fails using environment configuration."""
+
+    def __init__(
+        self,
+        message: str,
+        environment: Optional[Dict[str, str]] = None,
+        host: Optional[str] = None,
+        original_error: Optional[Exception] = None,
+    ):
+        """Initialize PodmanConnectionError.
+
+        Args:
+            message: Description of the error
+            environment: Environment variables used in connection attempt
+            host: URL to Podman service that failed
+            original_error: Original exception that caused this error
+        """
+        super().__init__(message)
+        self.environment = environment
+        self.host = host
+        self.original_error = original_error
+
+    def __str__(self) -> str:
+        """Format error message with details about connection attempt."""
+        msg = [super().__str__()]
+
+        if self.host:
+            msg.append(f"Host: {self.host}")
+
+        if self.environment:
+            relevant_vars = {
+                k: v
+                for k, v in self.environment.items()
+                if k
+                in (
+                    'DOCKER_HOST',
+                    'CONTAINER_HOST',
+                    'DOCKER_TLS_VERIFY',
+                    'CONTAINER_TLS_VERIFY',
+                    'DOCKER_CERT_PATH',
+                    'CONTAINER_CERT_PATH',
+                )
+            }
+            if relevant_vars:
+                msg.append("Environment:")
+                for key, value in relevant_vars.items():
+                    msg.append(f"  {key}={value}")
+
+        if self.original_error:
+            msg.append(f"Caused by: {str(self.original_error)}")
+
+        return " | ".join(msg)