diff --git a/homeassistant/components/digital_ocean.py b/homeassistant/components/digital_ocean.py
index 6ba2c824859..bd03fb01975 100644
--- a/homeassistant/components/digital_ocean.py
+++ b/homeassistant/components/digital_ocean.py
@@ -13,7 +13,7 @@ from homeassistant.const import CONF_ACCESS_TOKEN
 from homeassistant.util import Throttle
 import homeassistant.helpers.config_validation as cv
 
-REQUIREMENTS = ['python-digitalocean==1.12']
+REQUIREMENTS = ['python-digitalocean==1.13.2']
 
 _LOGGER = logging.getLogger(__name__)
 
@@ -44,13 +44,19 @@ CONFIG_SCHEMA = vol.Schema({
 
 def setup(hass, config):
     """Set up the Digital Ocean component."""
+    import digitalocean
+
     conf = config[DOMAIN]
     access_token = conf.get(CONF_ACCESS_TOKEN)
 
     digital = DigitalOcean(access_token)
 
-    if not digital.manager.get_account():
-        _LOGGER.error("No Digital Ocean account found for the given API Token")
+    try:
+        if not digital.manager.get_account():
+            _LOGGER.error("No account found for the given API token")
+            return False
+    except digitalocean.baseapi.DataReadError:
+        _LOGGER.error("API token not valid for authentication")
         return False
 
     hass.data[DATA_DIGITAL_OCEAN] = digital
diff --git a/requirements_all.txt b/requirements_all.txt
index 5c9158448fc..f7b11f7a338 100644
--- a/requirements_all.txt
+++ b/requirements_all.txt
@@ -836,7 +836,7 @@ python-blockchain-api==0.0.2
 python-clementine-remote==1.0.1
 
 # homeassistant.components.digital_ocean
-python-digitalocean==1.12
+python-digitalocean==1.13.2
 
 # homeassistant.components.ecobee
 python-ecobee-api==0.0.14