diff --git a/tests/_Deferred/tests/test.py b/tests/_Deferred/tests/test.py
index da6b5d7c..3782da8f 100644
--- a/tests/_Deferred/tests/test.py
+++ b/tests/_Deferred/tests/test.py
@@ -46,16 +46,3 @@ def condition():
         yield condition
 
         self.assertEqual(x[0], 1)
-
-    def test_condition_timeout(self):
-        x = []
-
-        def append():
-            x.append(1)
-
-        sublime.set_timeout(append, 100)
-
-        # wait until condition timeout
-        yield {"condition": lambda: False, "timeout": 500}
-
-        self.assertEqual(x[0], 1)
diff --git a/tests/test_yield_condition.py b/tests/test_yield_condition.py
new file mode 100644
index 00000000..a6ad7e4d
--- /dev/null
+++ b/tests/test_yield_condition.py
@@ -0,0 +1,30 @@
+from unittesting import DeferrableTestCase
+
+
+class TestYieldConditionsHandlingInDeferredTestCase(DeferrableTestCase):
+    def test_reraises_errors_raised_in_conditions(self):
+        try:
+            yield lambda: 1 / 0
+            self.fail('Did not reraise the exception from the condition')
+        except ZeroDivisionError:
+            pass
+        except Exception:
+            self.fail('Did not throw the original exception')
+
+    def test_returns_condition_value(self):
+        rv = yield lambda: 'Hans Peter'
+
+        self.assertEqual(rv, 'Hans Peter')
+
+    def test_handle_condition_timeout_as_failure(self):
+        try:
+            yield {
+                'condition': lambda: True is False,
+                'timeout': 100
+            }
+            self.fail('Unmet condition should have thrown')
+        except TimeoutError as e:
+            self.assertEqual(
+                str(e),
+                'Condition not fulfilled within 0.10 seconds'
+            )
diff --git a/unittesting/core/st3/runner.py b/unittesting/core/st3/runner.py
index 89623f86..4ce206b4 100644
--- a/unittesting/core/st3/runner.py
+++ b/unittesting/core/st3/runner.py
@@ -45,9 +45,13 @@ def _start_testing():
                 except Exception as e:
                     _handle_error(e)
 
-        def _continue_testing(deferred):
+        def _continue_testing(deferred, send_value=None, throw_value=None):
             try:
-                condition = next(deferred)
+                if throw_value:
+                    condition = deferred.throw(throw_value)
+                else:
+                    condition = deferred.send(send_value)
+
                 if callable(condition):
                     defer(100, _wait_condition, deferred, condition)
                 elif isinstance(condition, dict) and "condition" in condition and \
@@ -70,11 +74,20 @@ def _wait_condition(deferred, condition, period=100, timeout=10000, start_time=N
             if start_time is None:
                 start_time = time.time()
 
-            if condition():
-                defer(10, _continue_testing, deferred)
+            try:
+                send_value = condition()
+            except Exception as e:
+                defer(10, _continue_testing, deferred, throw_value=e)
+                return
+
+            if send_value:
+                defer(10, _continue_testing, deferred, send_value=send_value)
             elif (time.time() - start_time) * 1000 >= timeout:
-                self.stream.writeln("Condition timeout, continue anyway.")
-                defer(10, _continue_testing, deferred)
+                error = TimeoutError(
+                    'Condition not fulfilled within {:.2f} seconds'
+                    .format(timeout / 1000)
+                )
+                defer(10, _continue_testing, deferred, throw_value=error)
             else:
                 defer(period, _wait_condition, deferred, condition, period, timeout, start_time)