diff --git a/src/Orleans.Core.Abstractions/Runtime/AsyncEnumerableRequest.cs b/src/Orleans.Core.Abstractions/Runtime/AsyncEnumerableRequest.cs
index fa6da867c3d..ab265fc910b 100644
--- a/src/Orleans.Core.Abstractions/Runtime/AsyncEnumerableRequest.cs
+++ b/src/Orleans.Core.Abstractions/Runtime/AsyncEnumerableRequest.cs
@@ -1,6 +1,7 @@
 using System;
 using System.Collections.Generic;
 using System.Diagnostics;
+using System.Runtime.ExceptionServices;
 using System.Runtime.Serialization;
 using System.Threading;
 using System.Threading.Tasks;
@@ -43,6 +44,11 @@ public enum EnumerationResult
     /// </summary>
     MissingEnumeratorError = 1 << 4,
 
+    /// <summary>
+    /// The attempt to enumerate failed because the enumeration threw an exception.
+    /// </summary>
+    Error = 1 << 5,
+
     /// <summary>
     /// This result indicates that enumeration has completed and that no further results will be produced.
     /// </summary>
@@ -254,6 +260,11 @@ public async ValueTask<bool> MoveNextAsync()
                 result = await _target.MoveNext<T>(_requestId);
             }
 
+            if (result.Status is EnumerationResult.Error)
+            {
+                ExceptionDispatchInfo.Capture((Exception)result.Value).Throw();
+            }
+
             if (result.Status is not EnumerationResult.Heartbeat)
             {
                 break;
diff --git a/src/Orleans.Core/Runtime/AsyncEnumerableGrainExtension.cs b/src/Orleans.Core/Runtime/AsyncEnumerableGrainExtension.cs
index 71217375c61..49a96612821 100644
--- a/src/Orleans.Core/Runtime/AsyncEnumerableGrainExtension.cs
+++ b/src/Orleans.Core/Runtime/AsyncEnumerableGrainExtension.cs
@@ -216,7 +216,7 @@ private async ValueTask RemoveExpiredAsync(CancellationToken cancellationToken)
 
             // Wait for either the MoveNextAsync task to complete or the cancellation token to be cancelled.
             await moveNextTask.WaitAsync(cancellation.Token).SuppressThrowing();
-            if (moveNextTask is {IsCompletedSuccessfully: true })
+            if (moveNextTask.IsCompletedSuccessfully)
             {
                 OnMoveNext(requestId);
                 var hasValue = moveNextTask.GetAwaiter().GetResult();
@@ -231,6 +231,14 @@ private async ValueTask RemoveExpiredAsync(CancellationToken cancellationToken)
                     return (EnumerationResult.Completed, default);
                 }
             }
+            else if (moveNextTask.Exception is { } moveNextException)
+            {
+                // Completed, but not successfully.
+                var exception = moveNextException.InnerExceptions.Count == 1 ? moveNextException.InnerException : moveNextException;
+                await RemoveEnumeratorAsync(requestId);
+                await typedEnumerator.DisposeAsync();
+                return (EnumerationResult.Error, exception);
+            }
 
             return (EnumerationResult.Heartbeat, default);
         }
diff --git a/test/DefaultCluster.Tests/AsyncEnumerableGrainCallTests.cs b/test/DefaultCluster.Tests/AsyncEnumerableGrainCallTests.cs
index 20322a9b816..9d3bc8510c4 100644
--- a/test/DefaultCluster.Tests/AsyncEnumerableGrainCallTests.cs
+++ b/test/DefaultCluster.Tests/AsyncEnumerableGrainCallTests.cs
@@ -1,4 +1,4 @@
-using Microsoft.Extensions.Logging;
+using Microsoft.Extensions.Logging;
 using Orleans.Internal;
 using Orleans.Runtime;
 using TestExtensions;
@@ -46,6 +46,43 @@ public async Task ObservableGrain_AsyncEnumerable()
         Assert.Contains(grainCalls, c => c.InterfaceName.Contains(nameof(IAsyncEnumerableGrainExtension)) && c.MethodName.Contains(nameof(IAsyncDisposable.DisposeAsync)));
     }
 
+    [Theory, TestCategory("BVT"), TestCategory("Observable")]
+    [InlineData(0, false)]
+    [InlineData(0, true)]
+    [InlineData(1, false)]
+    [InlineData(1, true)]
+    [InlineData(9, false)]
+    [InlineData(9, true)]
+    [InlineData(10, false)]
+    [InlineData(10, true)]
+    [InlineData(11, false)]
+    [InlineData(11, true)]
+    public async Task ObservableGrain_AsyncEnumerable_Throws(int errorIndex, bool waitAfterYield)
+    {
+        const string ErrorMessage = "This is my error!";
+        var grain = GrainFactory.GetGrain<IObservableGrain>(Guid.NewGuid());
+
+        var values = new List<int>();
+        try
+        {
+            await foreach (var entry in grain.GetValuesWithError(errorIndex, waitAfterYield, ErrorMessage).WithBatchSize(10))
+            {
+                values.Add(entry);
+                Logger.LogInformation("ObservableGrain_AsyncEnumerable: {Entry}", entry);
+            }
+        }
+        catch (InvalidOperationException iox)
+        {
+            Assert.Equal(ErrorMessage, iox.Message);
+        }
+
+        Assert.Equal(errorIndex, values.Count);
+
+        // Check that the enumerator is disposed
+        var grainCalls = await grain.GetIncomingCalls();
+        Assert.Contains(grainCalls, c => c.InterfaceName.Contains(nameof(IAsyncEnumerableGrainExtension)) && c.MethodName.Contains(nameof(IAsyncDisposable.DisposeAsync)));
+    }
+
     [Fact, TestCategory("BVT"), TestCategory("Observable")]
     public async Task ObservableGrain_AsyncEnumerable_Batch()
     {
diff --git a/test/Grains/TestGrainInterfaces/IObservableGrain.cs b/test/Grains/TestGrainInterfaces/IObservableGrain.cs
index 3a80ff49df9..c2f05c5d1c5 100644
--- a/test/Grains/TestGrainInterfaces/IObservableGrain.cs
+++ b/test/Grains/TestGrainInterfaces/IObservableGrain.cs
@@ -1,4 +1,4 @@
-namespace UnitTests.GrainInterfaces
+namespace UnitTests.GrainInterfaces
 {
     /// <summary>
     /// A grain which returns IAsyncEnumerable
@@ -10,6 +10,7 @@ public interface IObservableGrain : IGrainWithGuidKey
         ValueTask Deactivate();
         ValueTask OnNext(string data);
         IAsyncEnumerable<string> GetValues();
+        IAsyncEnumerable<int> GetValuesWithError(int errorIndex, bool waitAfterYield, string errorMessage);
 
         ValueTask<List<(string InterfaceName, string MethodName)>> GetIncomingCalls();
     }
diff --git a/test/Grains/TestInternalGrains/ObservableGrain.cs b/test/Grains/TestInternalGrains/ObservableGrain.cs
index 3574e597258..8e6ce366792 100644
--- a/test/Grains/TestInternalGrains/ObservableGrain.cs
+++ b/test/Grains/TestInternalGrains/ObservableGrain.cs
@@ -1,4 +1,4 @@
-using System.Threading.Channels;
+using System.Threading.Channels;
 using UnitTests.GrainInterfaces;
 
 namespace UnitTests.Grains
@@ -10,6 +10,21 @@ public class ObservableGrain : Grain, IObservableGrain, IIncomingGrainCallFilter
 
         public IAsyncEnumerable<string> GetValues() => _updates.Reader.ReadAllAsync();
 
+        public async IAsyncEnumerable<int> GetValuesWithError(int errorIndex, bool waitAfterYield, string errorMessage)
+        {
+            await Task.CompletedTask;
+            for (var i = 0; i < int.MaxValue; i++)
+            {
+                if (i == errorIndex)
+                {
+                    throw new InvalidOperationException(errorMessage);
+                }
+
+                yield return i;
+                await Task.Yield();
+            }
+        }
+
         public ValueTask Complete()
         {
             _updates.Writer.Complete();