diff --git a/src-json/define.json b/src-json/define.json
index 8a74e26e22c..bffcb26c02c 100644
--- a/src-json/define.json
+++ b/src-json/define.json
@@ -402,12 +402,6 @@
 		"doc": "Enable the jit compiler for lua (version 5.2 only).",
 		"platforms": ["lua"]
 	},
-	{
-		"name": "LuaStandalone",
-		"define": "lua-standalone",
-		"doc": "Print uncaught error before exiting the lua script.",
-		"platforms": ["lua"]
-	},
 	{
 		"name": "LuaVanilla",
 		"define": "lua-vanilla",
diff --git a/src/generators/genlua.ml b/src/generators/genlua.ml
index 65781d9653c..89071b721f4 100644
--- a/src/generators/genlua.ml
+++ b/src/generators/genlua.ml
@@ -47,7 +47,6 @@ type ctx = {
     mutable separator : bool;
     mutable found_expose : bool;
     mutable lua_jit : bool;
-    mutable lua_standalone : bool;
     mutable lua_vanilla : bool;
     mutable lua_ver : float;
 }
@@ -1884,7 +1883,6 @@ let alloc_ctx com =
         separator = false;
         found_expose = false;
         lua_jit = Common.defined com Define.LuaJit;
-        lua_standalone = Common.defined com Define.LuaStandalone;
         lua_vanilla = Common.defined com Define.LuaVanilla;
         lua_ver = try
                 float_of_string (Common.defined_value com Define.LuaVer)
@@ -2148,36 +2146,28 @@ let generate com =
         print_file (Common.find_file com "lua/_lua/_hx_dyn_add.lua");
     end;
 
-    if ctx.lua_standalone && Option.is_some com.main then begin
-        print_file (Common.find_file com "lua/_lua/_hx_handle_error.lua");
-    end;
+    print_file (Common.find_file com "lua/_lua/_hx_handle_error.lua");
 
     println ctx "_hx_static_init();";
 
     List.iter (generate_enumMeta_fields ctx) com.types;
 
     Option.may (fun e ->
-        let luv_run =
-            (* Runs libuv loop if needed *)
-            mk_lua_code ctx.com.basic "_hx_luv.run()" [] ctx.com.basic.tvoid Globals.null_pos
-        in
-        if ctx.lua_standalone then begin
-            spr ctx "_G.xpcall(";
-                let fn =
-                    {
-                        tf_args = [];
-                        tf_type = com.basic.tvoid;
-                        tf_expr = mk (TBlock [e;luv_run]) com.basic.tvoid e.epos;
-                    }
-                in
-                gen_value ctx { e with eexpr = TFunction fn; etype = TFun ([],com.basic.tvoid) };
-            spr ctx ", _hx_handle_error)";
-        end else begin
-            gen_expr ctx e;
-            newline ctx;
-            gen_expr ctx luv_run;
-        end;
-        newline ctx
+        spr ctx "local success, err = _G.xpcall(";
+            let luv_run =
+                (* Runs libuv loop if needed *)
+                mk_lua_code ctx.com.basic "_hx_luv.run()" [] ctx.com.basic.tvoid Globals.null_pos
+            in
+            let fn =
+                {
+                    tf_args = [];
+                    tf_type = com.basic.tvoid;
+                    tf_expr = mk (TBlock [e;luv_run]) com.basic.tvoid e.epos;
+                }
+            in
+            gen_value ctx { e with eexpr = TFunction fn; etype = TFun ([],com.basic.tvoid) };
+        println ctx ", _hx_handle_error)";
+        println ctx "if not success then _G.error(err) end";
     ) com.main;
 
     if anyExposed then
diff --git a/std/lua/_lua/_hx_handle_error.lua b/std/lua/_lua/_hx_handle_error.lua
index 5f7fa0e0e79..52f9740899d 100644
--- a/std/lua/_lua/_hx_handle_error.lua
+++ b/std/lua/_lua/_hx_handle_error.lua
@@ -1,12 +1,8 @@
 function _hx_handle_error(obj)
-    if obj.value then
-        _G.print("runtime error:\n " .. _hx_tostring(obj.value));
-    else
-        _G.print("runtime error:\n " .. tostring(obj));
-    end
-
-    if _G.debug and _G.debug.traceback then
-        _G.print(_G.debug.traceback());
-    end
-    _G.os.exit(1)
+  local message = tostring(obj)
+  if _G.debug and _G.debug.traceback then
+    -- level 2 to skip _hx_handle_error
+    message = _G.debug.traceback(message, 2)
+  end
+  return setmetatable({}, { __tostring = function() return message end })
 end
diff --git a/std/lua/_std/haxe/Exception.hx b/std/lua/_std/haxe/Exception.hx
index 0a99bd3eb9c..c267a7e6e95 100644
--- a/std/lua/_std/haxe/Exception.hx
+++ b/std/lua/_std/haxe/Exception.hx
@@ -49,6 +49,7 @@ class Exception {
 		return __nativeException;
 	}
 
+	@:keep // required for uncaught error handling
 	public function toString():String {
 		return message;
 	}
diff --git a/tests/misc/lua/projects/Issue10979/HaxeException.hx b/tests/misc/lua/projects/Issue10979/HaxeException.hx
new file mode 100644
index 00000000000..0d1aceb257a
--- /dev/null
+++ b/tests/misc/lua/projects/Issue10979/HaxeException.hx
@@ -0,0 +1,5 @@
+class HaxeException {
+	static function main() {
+		throw "Exception thrown from Haxe";
+	}
+}
diff --git a/tests/misc/lua/projects/Issue10979/NativeError.hx b/tests/misc/lua/projects/Issue10979/NativeError.hx
new file mode 100644
index 00000000000..4bd4bf2b395
--- /dev/null
+++ b/tests/misc/lua/projects/Issue10979/NativeError.hx
@@ -0,0 +1,6 @@
+class NativeError {
+	static function main() {
+		final object:Dynamic = null;
+		trace(object.value);
+	}
+}
diff --git a/tests/misc/lua/projects/Issue10979/RunScript.hx b/tests/misc/lua/projects/Issue10979/RunScript.hx
new file mode 100644
index 00000000000..adfd292b1bb
--- /dev/null
+++ b/tests/misc/lua/projects/Issue10979/RunScript.hx
@@ -0,0 +1,38 @@
+using StringTools;
+
+function isLua5_1() {
+	final proc = new sys.io.Process("lua", ["-v"]);
+	final out = proc.stderr.readLine();
+	proc.close();
+	return out.startsWith("Lua 5.1.");
+}
+
+function matchesExpectedMessage(actual:String) {
+	// lua 5.1 doesn't print custom error objects
+	if (actual == "(error object is not a string)") {
+		return true;
+	}
+	return new EReg(Sys.args()[1], "").match(actual);
+}
+
+function main() {
+	final proc = new sys.io.Process("lua", [Sys.args()[0]]);
+
+	// ignore "lua: "
+	final exceptionMessage = proc.stderr.readLine().substr(5);
+
+	final hasExpectedMessage = matchesExpectedMessage(exceptionMessage);
+	// we don't want a bare error without a stack trace
+	final hasStackTrace = try {
+		proc.stderr.readLine().contains('stack traceback');
+	} catch (_:haxe.io.Eof) {
+		false;
+	};
+
+	Sys.println('Error code: ${proc.exitCode()}');
+	Sys.println('Has expected exception message: ${hasExpectedMessage}');
+	// 5.1 interpreter doesn't handle custom objects
+	Sys.println('Has call stack: ${hasStackTrace || isLua5_1()}');
+
+	proc.close();
+}
diff --git a/tests/misc/lua/projects/Issue10979/embedded-native.hxml b/tests/misc/lua/projects/Issue10979/embedded-native.hxml
new file mode 100644
index 00000000000..b9acfcbd68f
--- /dev/null
+++ b/tests/misc/lua/projects/Issue10979/embedded-native.hxml
@@ -0,0 +1,4 @@
+--lua bin/native-error.lua
+--main NativeError
+
+--cmd lua runner.lua 'bin/native-error' '%./bin/native%-error%.lua:%d+: attempt to index .+'
diff --git a/tests/misc/lua/projects/Issue10979/embedded-native.hxml.stdout b/tests/misc/lua/projects/Issue10979/embedded-native.hxml.stdout
new file mode 100644
index 00000000000..b530e9b2b9e
--- /dev/null
+++ b/tests/misc/lua/projects/Issue10979/embedded-native.hxml.stdout
@@ -0,0 +1,3 @@
+Success: false
+Has expected exception message: true
+Has call stack: true
diff --git a/tests/misc/lua/projects/Issue10979/embedded.hxml b/tests/misc/lua/projects/Issue10979/embedded.hxml
new file mode 100644
index 00000000000..7e648a43705
--- /dev/null
+++ b/tests/misc/lua/projects/Issue10979/embedded.hxml
@@ -0,0 +1,4 @@
+--lua bin/haxe-exception.lua
+--main HaxeException
+
+--cmd lua runner.lua 'bin/haxe-exception' 'Exception thrown from Haxe'
diff --git a/tests/misc/lua/projects/Issue10979/embedded.hxml.stdout b/tests/misc/lua/projects/Issue10979/embedded.hxml.stdout
new file mode 100644
index 00000000000..b530e9b2b9e
--- /dev/null
+++ b/tests/misc/lua/projects/Issue10979/embedded.hxml.stdout
@@ -0,0 +1,3 @@
+Success: false
+Has expected exception message: true
+Has call stack: true
diff --git a/tests/misc/lua/projects/Issue10979/runner.lua b/tests/misc/lua/projects/Issue10979/runner.lua
new file mode 100644
index 00000000000..56c6baeb33c
--- /dev/null
+++ b/tests/misc/lua/projects/Issue10979/runner.lua
@@ -0,0 +1,10 @@
+-- error in loaded script should be caught here, instead of exiting everything
+local success, err = pcall(require, arg[1])
+
+local exception_message = string.match(tostring(err), '^[^\n]+')
+local has_expected_message = string.match(exception_message, arg[2]) ~= nil
+local has_stack_trace = string.match(tostring(err), 'stack traceback') ~= nil
+
+print('Success: '..tostring(success))
+print('Has expected exception message: '..tostring(has_expected_message))
+print('Has call stack: '..tostring(has_stack_trace))
diff --git a/tests/misc/lua/projects/Issue10979/standalone-native.hxml b/tests/misc/lua/projects/Issue10979/standalone-native.hxml
new file mode 100644
index 00000000000..65d3ea8c4e7
--- /dev/null
+++ b/tests/misc/lua/projects/Issue10979/standalone-native.hxml
@@ -0,0 +1,7 @@
+--lua bin/native-error.lua
+--main NativeError
+
+--next
+--run RunScript
+bin/native-error.lua
+bin/native-error\.lua:\d+: attempt to index .*
diff --git a/tests/misc/lua/projects/Issue10979/standalone-native.hxml.stdout b/tests/misc/lua/projects/Issue10979/standalone-native.hxml.stdout
new file mode 100644
index 00000000000..5cdbdc6e67d
--- /dev/null
+++ b/tests/misc/lua/projects/Issue10979/standalone-native.hxml.stdout
@@ -0,0 +1,3 @@
+Error code: 1
+Has expected exception message: true
+Has call stack: true
diff --git a/tests/misc/lua/projects/Issue10979/standalone.hxml b/tests/misc/lua/projects/Issue10979/standalone.hxml
new file mode 100644
index 00000000000..1505c2308e6
--- /dev/null
+++ b/tests/misc/lua/projects/Issue10979/standalone.hxml
@@ -0,0 +1,7 @@
+--lua bin/haxe-exception.lua
+--main HaxeException
+
+--next
+--run RunScript
+bin/haxe-exception.lua
+Exception thrown from Haxe
diff --git a/tests/misc/lua/projects/Issue10979/standalone.hxml.stdout b/tests/misc/lua/projects/Issue10979/standalone.hxml.stdout
new file mode 100644
index 00000000000..5cdbdc6e67d
--- /dev/null
+++ b/tests/misc/lua/projects/Issue10979/standalone.hxml.stdout
@@ -0,0 +1,3 @@
+Error code: 1
+Has expected exception message: true
+Has call stack: true