diff --git a/app/main/views/api_keys.py b/app/main/views/api_keys.py
index 68a93f8d2..a35b95558 100644
--- a/app/main/views/api_keys.py
+++ b/app/main/views/api_keys.py
@@ -69,14 +69,15 @@ def create_api_key(service_id):
         (KEY_TYPE_TEAM, 'Team and whitelist – limits who you can send to'),
         (KEY_TYPE_TEST, 'Test – pretends to send messages'),
     ]
+    disabled_options, option_hints = [], {}
     if current_service['restricted']:
         disabled_options = [KEY_TYPE_NORMAL]
-        option_hints = {KEY_TYPE_NORMAL: Markup(
+        option_hints[KEY_TYPE_NORMAL] = Markup(
             'This option is not available because your service is in '
             '<a href="{}#trial-mode">trial mode</a>'.format(url_for(".using_notify"))
-        )}
-    else:
-        disabled_options, option_hints = [], {}
+        )
+    if 'letter' in current_service['permissions']:
+        option_hints[KEY_TYPE_TEAM] = 'Can’t be used to send letters'
     if form.validate_on_submit():
         if form.key_type.data in disabled_options:
             abort(400)
diff --git a/tests/app/main/views/test_api_keys.py b/tests/app/main/views/test_api_keys.py
index bed5c5d00..1b680774b 100644
--- a/tests/app/main/views/test_api_keys.py
+++ b/tests/app/main/views/test_api_keys.py
@@ -10,6 +10,7 @@ from tests import validate_route_permission
 from tests.conftest import (
     mock_get_service,
     mock_get_live_service,
+    mock_get_service_with_letters,
     normalize_spaces,
     SERVICE_ONE_ID,
 )
@@ -145,6 +146,17 @@ def test_should_show_api_keys_page(
             'Test – pretends to send messages',
         ]
     ),
+    (
+        mock_get_service_with_letters,
+        [
+            'Live – sends to anyone',
+            (
+                'Team and whitelist – limits who you can send to '
+                'Can’t be used to send letters'
+            ),
+            'Test – pretends to send messages',
+        ]
+    ),
 ])
 def test_should_show_create_api_key_page(
     client_request,
diff --git a/tests/conftest.py b/tests/conftest.py
index 47412355c..af0c64b62 100644
--- a/tests/conftest.py
+++ b/tests/conftest.py
@@ -268,6 +268,19 @@ def mock_get_live_service(mocker, api_user_active):
     return mocker.patch('app.service_api_client.get_service', side_effect=_get)
 
 
+@pytest.fixture(scope='function')
+def mock_get_service_with_letters(mocker, api_user_active):
+    def _get(service_id):
+        return {'data': service_json(
+            service_id,
+            users=[api_user_active.id],
+            restricted=False,
+            permissions=['email', 'sms', 'letter']
+        )}
+
+    return mocker.patch('app.service_api_client.get_service', side_effect=_get)
+
+
 @pytest.fixture(scope='function')
 def mock_create_service(mocker):
     def _create(service_name, message_limit, restricted, user_id, email_from):