diff --git a/lib/mercurial-ruby/command.rb b/lib/mercurial-ruby/command.rb
index c0f1a36..6b4eac1 100644
--- a/lib/mercurial-ruby/command.rb
+++ b/lib/mercurial-ruby/command.rb
@@ -47,8 +47,8 @@ def execute_without_caching
     def execution_proc
       Proc.new do
         debug(command)
-        result, error = '', ''        
-        Open3.popen3(command) do |_, stdout, stderr|
+        result, error, status = '', '', nil
+        Open3.popen3(command) do |_, stdout, stderr, wait_thr|
           Timeout.timeout(timeout) do
             while tmp = stdout.read(102400)
               result += tmp
@@ -58,14 +58,15 @@ def execution_proc
           while tmp = stderr.read(1024)
             error += tmp
           end
+          status = wait_thr.value
         end
-        raise_error_if_needed(error)
+        raise_error_if_needed(error, status)
         result
       end
     end
     
-    def raise_error_if_needed(error)
-      if error && error != ''
+    def raise_error_if_needed(error, status = nil)
+      if (status.nil? || status.exitstatus != 0) && error && error != ''
         raise CommandError, error
       end
     end
diff --git a/test/test_command.rb b/test/test_command.rb
index 7036d3b..f46b0ef 100644
--- a/test/test_command.rb
+++ b/test/test_command.rb
@@ -16,6 +16,18 @@
       Mercurial::Command.new("cd #{ @repository.path } && hg shikaka").execute
     }.must_raise Mercurial::CommandError
   end
+
+  it "should not translate exit status of zero with shell errors to ruby exceptions" do
+    lambda{
+      Mercurial::Command.new("echo stderr >&2 && echo stdout && exit 0").execute
+    }.must_equal "stdout"
+  end
+
+  it "should translate exit status of non-zero with shell errors to ruby exceptions" do
+    lambda{
+      Mercurial::Command.new("echo stderr >&2 && echo stdout && exit 1").execute
+    }.must_raise Mercurial::CommandError
+  end
   
   it "should execute commands with timeout" do
     Mercurial.configuration.stubs(:shell_timeout).returns(1)