diff --git a/scripts/winterm/test-shell-integration.ps1 b/scripts/winterm/test-shell-integration.ps1
index 04db5d18e..c57bdacda 100644
--- a/scripts/winterm/test-shell-integration.ps1
+++ b/scripts/winterm/test-shell-integration.ps1
@@ -108,6 +108,61 @@ function Test-PowerShellModule
     }
 }
 
+function Test-PowerShellPromptExitCodes
+{
+    param(
+        [Parameter(Mandatory)]
+        [string]$ModulePath
+    )
+
+    $originalSessionId = $env:WINTERM_SESSION_ID
+    $env:WINTERM_SESSION_ID = 'test-shell-integration'
+    $temporaryDirectory = Join-Path ([System.IO.Path]::GetTempPath()) ('winterm-prompt-' + [guid]::NewGuid().ToString('N'))
+    $escape = [char]27
+
+    try
+    {
+        Import-Module $ModulePath -Force
+        New-Item -ItemType Directory -Path $temporaryDirectory | Out-Null
+        $enabled = Enable-WinTermShellIntegration -Force
+        Assert-Condition -Condition $enabled -Message 'Shell integration could not be enabled for the prompt exit code test.'
+
+        # The wrapper installed as the global prompt function must observe the
+        # $? produced by the statement directly before each prompt call, the
+        # same way the console host invokes it after a finished command line.
+        $firstPrompt = prompt
+        Assert-Condition -Condition $firstPrompt.Contains("$escape]133;A") -Message 'The first prompt did not emit a prompt-start mark.'
+        Assert-Condition -Condition (-not $firstPrompt.Contains("$escape]133;D")) -Message 'The first prompt emitted a finished mark before any command ran.'
+
+        $null = Get-Command -Name prompt
+        $successPrompt = prompt
+        Assert-Condition -Condition $successPrompt.Contains("$escape]133;D;0") -Message 'A successful command was not reported as exit code 0.'
+
+        & $env:ComSpec /c exit 0
+        Get-Item -LiteralPath (Join-Path $temporaryDirectory 'missing.txt') -ErrorAction SilentlyContinue
+        $cmdletFailurePrompt = prompt
+        Assert-Condition -Condition $cmdletFailurePrompt.Contains("$escape]133;D;1") -Message 'A failed cmdlet was not reported as exit code 1.'
+
+        & $env:ComSpec /c exit 5
+        $nativeFailurePrompt = prompt
+        Assert-Condition -Condition $nativeFailurePrompt.Contains("$escape]133;D;5") -Message 'A native command exit code was not propagated to the finished mark.'
+
+        $null = Get-Command -Name prompt
+        $recoveredPrompt = prompt
+        Assert-Condition -Condition $recoveredPrompt.Contains("$escape]133;D;0") -Message 'A success after a failure was not reported as exit code 0.'
+    }
+    finally
+    {
+        Disable-WinTermShellIntegration | Out-Null
+        Remove-Module -Name winTerm.Shell -Force -ErrorAction SilentlyContinue
+        if (Test-Path -LiteralPath $temporaryDirectory)
+        {
+            Remove-Item -LiteralPath $temporaryDirectory -Recurse -Force
+        }
+        $env:WINTERM_SESSION_ID = $originalSessionId
+    }
+}
+
 function Test-PowerShellNativeCommandPrecedence
 {
     param(
@@ -181,6 +236,7 @@ $cmdInitPath = Join-Path $repositoryRoot 'shell\cmd\winterm-init.cmd'
 if ($Shell -in @('WindowsPowerShell', 'All'))
 {
     Test-PowerShellModule -ModulePath $modulePath
+    Test-PowerShellPromptExitCodes -ModulePath $modulePath
     Test-PowerShellNativeCommandPrecedence -ModulePath $modulePath
     Write-Host 'PASS: Windows PowerShell shell module' -ForegroundColor Green
 }
diff --git a/shell/powershell/winTerm.Shell/Private/Prompt.ps1 b/shell/powershell/winTerm.Shell/Private/Prompt.ps1
index 97242f16c..268545386 100644
--- a/shell/powershell/winTerm.Shell/Private/Prompt.ps1
+++ b/shell/powershell/winTerm.Shell/Private/Prompt.ps1
@@ -4,9 +4,19 @@
 function Invoke-WinTermPrompt
 {
     [CmdletBinding()]
-    param()
+    param(
+        # The caller's $? captured before any other command ran. The prompt
+        # wrapper must supply this because its own statements (Get-Module,
+        # the module-scoped call) reset $? to $true before this function
+        # could read it.
+        [object]$LastSuccess = $null
+    )
 
-    $lastSuccess = $?
+    if ($null -eq $LastSuccess)
+    {
+        $LastSuccess = $?
+    }
+    $lastSuccess = [bool]$LastSuccess
 
     # The marks are embedded in the returned prompt string rather than written
     # as side effects. The console host writes a prompt function's console
@@ -73,10 +83,14 @@ function Enable-WinTermShellIntegration
     $originalPrompt = Get-Command -Name prompt -CommandType Function -ErrorAction SilentlyContinue | Select-Object -First 1
     $script:WinTermOriginalPrompt = if ($null -ne $originalPrompt) { $originalPrompt.ScriptBlock } else { { 'PS> ' } }
     $script:WinTermPromptWrapper = {
+        # $? must be captured before any other statement: every command the
+        # wrapper runs (including Get-Module) would overwrite it and turn
+        # every finished command into a false success report.
+        $winTermLastSuccess = $?
         $module = Get-Module -Name 'winTerm.Shell'
         if ($null -ne $module)
         {
-            return & $module { Invoke-WinTermPrompt }
+            return & $module { param($s) Invoke-WinTermPrompt -LastSuccess $s } $winTermLastSuccess
         }
         return 'PS> '
     }