Methods and systems for modular system awareness in virtualized information handling systems (IHSs) include generating, by a chassis management controller (CMC), dependency information indicating which ones of modular IHSs included in a chassis are dependent on individual shared components in the chassis. When a fault occurs at one of the shared components, the CMC may determine, using the dependency information, which particular ones of the modular IHSs are operationally dependent on the fault. The CMC may send information indicative of the fault and of the dependent modular IHSs to a virtual machine manager, which may generate a ranking of virtual machines. The virtual machine manager may use the rankings to make migration decisions for virtual machines among modular IHSs.