diff --git a/doc/releases/changelog-dev.md b/doc/releases/changelog-dev.md
index 5ae70719f35..35034a4ed0f 100644
--- a/doc/releases/changelog-dev.md
+++ b/doc/releases/changelog-dev.md
@@ -296,6 +296,9 @@
   and the diagonalising gates using the factors/summands instead of using the full matrix.
   [(#3022)](https://github.com/PennyLaneAI/pennylane/pull/3022)
 
+* `qml.grouping.is_pauli_word` now returns `False` for operators that don't inherit from `qml.Observable`, instead of raising an error.
+  [(#3039)](https://github.com/PennyLaneAI/pennylane/pull/3039)
+
 <h3>Breaking changes</h3>
 
 * Measuring an operator that might not be hermitian as an observable now raises a warning instead of an
diff --git a/pennylane/grouping/utils.py b/pennylane/grouping/utils.py
index af2c2db0454..dbc94eff30b 100644
--- a/pennylane/grouping/utils.py
+++ b/pennylane/grouping/utils.py
@@ -74,7 +74,7 @@ def is_pauli_word(observable):
     """
 
     if not isinstance(observable, Observable):
-        raise TypeError(f"Expected {Observable} instance, instead got {type(observable)} instance.")
+        return False
 
     pauli_word_names = ["Identity", "PauliX", "PauliY", "PauliZ"]
     if isinstance(observable, Tensor):
diff --git a/tests/grouping/test_grouping_utils.py b/tests/grouping/test_grouping_utils.py
index 74335e58f56..ab0ff27d82a 100644
--- a/tests/grouping/test_grouping_utils.py
+++ b/tests/grouping/test_grouping_utils.py
@@ -256,6 +256,14 @@ def test_is_pauli_word(self):
         assert not is_pauli_word(observable_3)
         assert not is_pauli_word(observable_4)
 
+    def test_is_pauli_word_non_observable(self):
+        """Test that non-observables are not Pauli Words."""
+
+        class DummyOp(qml.operation.Operator):
+            num_wires = 1
+
+        assert not is_pauli_word(DummyOp(1))
+
     def test_are_identical_pauli_words(self):
         """Tests for determining if two Pauli words have the same ``wires`` and ``name`` attributes."""