diff --git a/lambda-runtime/Cargo.toml b/lambda-runtime/Cargo.toml
index 788b3c89..96506022 100644
--- a/lambda-runtime/Cargo.toml
+++ b/lambda-runtime/Cargo.toml
@@ -41,3 +41,4 @@ tracing = { version = "0.1.37", features = ["log"] }
 tower = { version = "0.4", features = ["util"] }
 tokio-stream = "0.1.2"
 lambda_runtime_api_client = { version = "0.8", path = "../lambda-runtime-api-client" }
+serde_path_to_error = "0.1.11"
diff --git a/lambda-runtime/src/deserializer.rs b/lambda-runtime/src/deserializer.rs
new file mode 100644
index 00000000..1841c050
--- /dev/null
+++ b/lambda-runtime/src/deserializer.rs
@@ -0,0 +1,43 @@
+use std::{error::Error, fmt};
+
+use serde::Deserialize;
+
+use crate::{Context, LambdaEvent};
+
+const ERROR_CONTEXT: &str = "failed to deserialize the incoming data into the function's payload type";
+
+/// Event payload deserialization error.
+/// Returned when the data sent to the function cannot be deserialized
+/// into the type that the function receives.
+#[derive(Debug)]
+pub(crate) struct DeserializeError {
+    inner: serde_path_to_error::Error<serde_json::Error>,
+}
+
+impl fmt::Display for DeserializeError {
+    fn fmt(&self, f: &mut fmt::Formatter<'_>) -> fmt::Result {
+        let path = self.inner.path().to_string();
+        if path == "." {
+            writeln!(f, "{ERROR_CONTEXT}: {}", self.inner)
+        } else {
+            writeln!(f, "{ERROR_CONTEXT}: [{path}] {}", self.inner)
+        }
+    }
+}
+
+impl Error for DeserializeError {
+    fn source(&self) -> Option<&(dyn Error + 'static)> {
+        Some(&self.inner)
+    }
+}
+
+/// Deserialize the data sent to the function into the type that the function receives.
+pub(crate) fn deserialize<T>(body: &[u8], context: Context) -> Result<LambdaEvent<T>, DeserializeError>
+where
+    T: for<'de> Deserialize<'de>,
+{
+    let jd = &mut serde_json::Deserializer::from_slice(body);
+    serde_path_to_error::deserialize(jd)
+        .map(|payload| LambdaEvent::new(payload, context))
+        .map_err(|inner| DeserializeError { inner })
+}
diff --git a/lambda-runtime/src/lib.rs b/lambda-runtime/src/lib.rs
index 31c9297c..86a0848b 100644
--- a/lambda-runtime/src/lib.rs
+++ b/lambda-runtime/src/lib.rs
@@ -28,6 +28,7 @@ pub use tower::{self, service_fn, Service};
 use tower::{util::ServiceFn, ServiceExt};
 use tracing::{error, trace, Instrument};
 
+mod deserializer;
 mod requests;
 #[cfg(test)]
 mod simulated;
@@ -149,8 +150,8 @@ where
                     return Err(parts.status.to_string().into());
                 }
 
-                let body = match serde_json::from_slice(&body) {
-                    Ok(body) => body,
+                let lambda_event = match deserializer::deserialize(&body, ctx) {
+                    Ok(lambda_event) => lambda_event,
                     Err(err) => {
                         let req = build_event_error_request(request_id, err)?;
                         client.call(req).await.expect("Unable to send response to Runtime APIs");
@@ -161,8 +162,7 @@ where
                 let req = match handler.ready().await {
                     Ok(handler) => {
                         // Catches panics outside of a `Future`
-                        let task =
-                            panic::catch_unwind(panic::AssertUnwindSafe(|| handler.call(LambdaEvent::new(body, ctx))));
+                        let task = panic::catch_unwind(panic::AssertUnwindSafe(|| handler.call(lambda_event)));
 
                         let task = match task {
                             // Catches panics inside of the `Future`
diff --git a/lambda-runtime/src/streaming.rs b/lambda-runtime/src/streaming.rs
index 15cd210f..b9cf978b 100644
--- a/lambda-runtime/src/streaming.rs
+++ b/lambda-runtime/src/streaming.rs
@@ -1,6 +1,6 @@
 use crate::{
-    build_event_error_request, incoming, type_name_of_val, Config, Context, Error, EventErrorRequest, IntoRequest,
-    LambdaEvent, Runtime,
+    build_event_error_request, deserializer, incoming, type_name_of_val, Config, Context, Error, EventErrorRequest,
+    IntoRequest, LambdaEvent, Runtime,
 };
 use bytes::Bytes;
 use futures::FutureExt;
@@ -142,8 +142,8 @@ where
                     return Err(parts.status.to_string().into());
                 }
 
-                let body = match serde_json::from_slice(&body) {
-                    Ok(body) => body,
+                let lambda_event = match deserializer::deserialize(&body, ctx) {
+                    Ok(lambda_event) => lambda_event,
                     Err(err) => {
                         let req = build_event_error_request(request_id, err)?;
                         client.call(req).await.expect("Unable to send response to Runtime APIs");
@@ -154,8 +154,7 @@ where
                 let req = match handler.ready().await {
                     Ok(handler) => {
                         // Catches panics outside of a `Future`
-                        let task =
-                            panic::catch_unwind(panic::AssertUnwindSafe(|| handler.call(LambdaEvent::new(body, ctx))));
+                        let task = panic::catch_unwind(panic::AssertUnwindSafe(|| handler.call(lambda_event)));
 
                         let task = match task {
                             // Catches panics inside of the `Future`