diff --git a/.chronus/changes/http-client-js-correct-warning-for-apikey-auth-2025-3-30-21-48-15.md b/.chronus/changes/http-client-js-correct-warning-for-apikey-auth-2025-3-30-21-48-15.md
new file mode 100644
index 00000000000..18cf64a07bc
--- /dev/null
+++ b/.chronus/changes/http-client-js-correct-warning-for-apikey-auth-2025-3-30-21-48-15.md
@@ -0,0 +1,7 @@
+---
+changeKind: fix
+packages:
+  - "@typespec/http-client-js"
+---
+
+Emit correct diagnostic for unsupported API key auth
\ No newline at end of file
diff --git a/packages/http-client-js/src/components/client-context/client-context-factory.tsx b/packages/http-client-js/src/components/client-context/client-context-factory.tsx
index e4996855c9b..c254f746789 100644
--- a/packages/http-client-js/src/components/client-context/client-context-factory.tsx
+++ b/packages/http-client-js/src/components/client-context/client-context-factory.tsx
@@ -113,8 +113,10 @@ function AuthScheme(props: AuthSchemeProps) {
       );
     case "apiKey":
       if (props.scheme.in !== "header") {
-        reportDiagnostic($.program, { code: "non-model-parts", target: props.client.service });
-        return null;
+        reportDiagnostic($.program, {
+          code: "key-credential-non-header-not-implemented",
+          target: props.client.service,
+        });
       }
 
       return (