diff --git a/tests/exception_proxy_004.phpt b/tests/exception_proxy_004.phpt
new file mode 100644
index 0000000..dfa4287
--- /dev/null
+++ b/tests/exception_proxy_004.phpt
@@ -0,0 +1,37 @@
+--TEST--
+Test V8::setExceptionProxyFactory() : Proxy handling on exception in factory
+--SKIPIF--
+<?php require_once(dirname(__FILE__) . '/skipif.inc'); ?>
+--FILE--
+<?php
+class myv8 extends V8Js
+{
+        public function throwException(string $message) {
+                throw new Exception($message);
+        }
+}
+
+$v8 = new myv8();
+$v8->setExceptionProxyFactory(function (Throwable $ex) {
+        throw new Exception('moep');
+});
+
+try {
+        $v8->executeString('
+                try {
+                        PHP.throwException("Oops");
+                        print("done\\n");
+                }
+                catch (e) {
+                        print("caught\\n");
+                        var_dump(e);
+                }
+        ', null, V8Js::FLAG_PROPAGATE_PHP_EXCEPTIONS);
+} catch (Exception $ex) {
+        echo "caught in php: " . $ex->getMessage() . PHP_EOL;
+}
+?>
+===EOF===
+--EXPECT--
+caught in php: moep
+===EOF===
diff --git a/v8js_object_export.cc b/v8js_object_export.cc
index d78fd51..e6e8354 100644
--- a/v8js_object_export.cc
+++ b/v8js_object_export.cc
@@ -53,7 +53,12 @@ v8::Local<v8::Value> v8js_propagate_exception(v8js_ctx *ctx) /* {{{ */
 		call_user_function(EG(function_table), NULL, &ctx->exception_proxy_factory, &tmp_zv, 1, params);
 		zval_ptr_dtor(&params[0]);
 
-		return_value = ctx->isolate->ThrowException(zval_to_v8js(&tmp_zv, ctx->isolate));
+		if(EG(exception)) {
+			// exception proxy threw exception itself, don't forward, just stop execution.
+			v8js_terminate_execution(ctx->isolate);
+		} else {
+			return_value = ctx->isolate->ThrowException(zval_to_v8js(&tmp_zv, ctx->isolate));
+		}
 	} else {
 		ZVAL_OBJ(&tmp_zv, EG(exception));
 		return_value = ctx->isolate->ThrowException(zval_to_v8js(&tmp_zv, ctx->isolate));