diff --git a/Polyfills/XMLHttpRequest/Source/XMLHttpRequest.cpp b/Polyfills/XMLHttpRequest/Source/XMLHttpRequest.cpp
index 344169a8..4e11278f 100644
--- a/Polyfills/XMLHttpRequest/Source/XMLHttpRequest.cpp
+++ b/Polyfills/XMLHttpRequest/Source/XMLHttpRequest.cpp
@@ -57,6 +57,7 @@ namespace Babylon::Polyfills::Internal
         {
             constexpr const char* ReadyStateChange = "readystatechange";
             constexpr const char* LoadEnd = "loadend";
+            constexpr const char* Error = "error";
         }
     }
 
@@ -262,19 +263,24 @@ namespace Babylon::Polyfills::Internal
             .then(arcana::inline_scheduler, arcana::cancellation::none(), [sendRegion{std::move(sendRegion)}]() mutable {
                 sendRegion.reset();
             })
-            .then(m_runtimeScheduler, arcana::cancellation::none(), [this]() {
+            .then(m_runtimeScheduler, arcana::cancellation::none(), [this](const arcana::expected<void, std::exception_ptr>& result) {
+                // Run on every outcome -- transport exception OR underlying request succeeded but ended in a non-2xx
+                // status (e.g. a missing local file on UWP, where UrlLib silently retains status 0). The previous
+                // success-only continuation here skipped readyState=Done / loadend / error and let the JS observer
+                // hang.
+                const auto statusCode = arcana::underlying_cast(m_request.StatusCode());
+                const bool failed = result.has_error() || statusCode < 200 || statusCode >= 300;
+
                 SetReadyState(ReadyState::Done);
+                if (failed)
+                {
+                    RaiseEvent(EventType::Error);
+                }
                 RaiseEvent(EventType::LoadEnd);
 
                 // Assume the XMLHttpRequest will only be used for a single request and clear the event handlers.
                 // Single use seems to be the standard pattern, and we need to release our strong refs to event handlers.
                 m_eventHandlerRefs.clear();
-            })
-            .then(arcana::inline_scheduler, arcana::cancellation::none(), [env = info.Env()](arcana::expected<void, std::exception_ptr> result) {
-                if (result.has_error())
-                {
-                    Napi::Error::New(env, result.error()).ThrowAsJavaScriptException();
-                }
             });
     }
 
diff --git a/Tests/UnitTests/Scripts/tests.ts b/Tests/UnitTests/Scripts/tests.ts
index 764c838b..8f7e7295 100644
--- a/Tests/UnitTests/Scripts/tests.ts
+++ b/Tests/UnitTests/Scripts/tests.ts
@@ -121,6 +121,31 @@ describe("XMLHTTPRequest", function () {
         expect(xhr.status).to.equal(404);
     });
 
+    it("should fire 'error' event for a remote URL that returns HTTP 404", async function () {
+        // Regression test: previously the success-only continuation in XMLHttpRequest::Send
+        // skipped 'error' on async failures including non-2xx HTTP responses, so onerror
+        // observers never ran. See https://github.com/BabylonJS/JsRuntimeHost/pull/165.
+        this.timeout(30000);
+        const result = await new Promise<{ errorFired: boolean; loadendFired: boolean; status: number; readyState: number }>((resolve, reject) => {
+            const xhr = new XMLHttpRequest();
+            let errorFired = false;
+            let loadendFired = false;
+            const guard = setTimeout(() => reject(new Error("XHR neither errored nor loadended within 25s")), 25000);
+            xhr.addEventListener("error", () => { errorFired = true; });
+            xhr.addEventListener("loadend", () => {
+                loadendFired = true;
+                clearTimeout(guard);
+                resolve({ errorFired, loadendFired, status: xhr.status, readyState: xhr.readyState });
+            });
+            xhr.open("GET", "https://github.com/babylonJS/BabylonNative404");
+            xhr.send();
+        });
+        expect(result.status).to.equal(404);
+        expect(result.errorFired).to.equal(true);
+        expect(result.loadendFired).to.equal(true);
+        expect(result.readyState).to.equal(4);
+    });
+
     it("should throw something when opening //", async function () {
         function openDoubleSlash() {
             const xhr = new XMLHttpRequest();