diff --git a/deno/lib/__tests__/transformer.test.ts b/deno/lib/__tests__/transformer.test.ts
index 818aa49cb..0fe586aa7 100644
--- a/deno/lib/__tests__/transformer.test.ts
+++ b/deno/lib/__tests__/transformer.test.ts
@@ -212,6 +212,73 @@ test("async preprocess", async () => {
   expect(value).toEqual(["asdf"]);
 });
 
+test("preprocess ctx.addIssue with parse", () => {
+  expect(() => {
+    z.preprocess((data, ctx) => {
+      ctx?.addIssue({
+        code: "custom",
+        message: `${data} is not one of our allowed strings`,
+      });
+      return data;
+    }, z.string()).parse("asdf");
+  }).toThrow(
+    JSON.stringify(
+      [
+        {
+          code: "custom",
+          message: "asdf is not one of our allowed strings",
+          path: [],
+        },
+      ],
+      null,
+      2
+    )
+  );
+});
+
+test("preprocess ctx.addIssue with parseAsync", async () => {
+  const result = await z
+    .preprocess((data, ctx) => {
+      ctx?.addIssue({
+        code: "custom",
+        message: `${data} is not one of our allowed strings`,
+      });
+      return data;
+    }, z.string())
+    .safeParseAsync("asdf");
+
+  expect(JSON.parse(JSON.stringify(result))).toEqual({
+    success: false,
+    error: {
+      issues: [
+        {
+          code: "custom",
+          message: "asdf is not one of our allowed strings",
+          path: [],
+        },
+      ],
+      name: "ZodError",
+    },
+  });
+});
+
+test("z.NEVER in preprocess", async () => {
+  const foo = z.preprocess((val, ctx) => {
+    if (!val) {
+      ctx?.addIssue({ code: z.ZodIssueCode.custom, message: "bad" });
+      return z.NEVER;
+    }
+    return val;
+  }, z.number());
+
+  type foo = z.infer<typeof foo>;
+  util.assertEqual<foo, number>(true);
+  const arg = foo.safeParse(undefined);
+  if (!arg.success) {
+    expect(arg.error.issues[0].message).toEqual("bad");
+  }
+});
+
 test("short circuit on dirty", () => {
   const schema = z
     .string()
diff --git a/deno/lib/types.ts b/deno/lib/types.ts
index 1dfea62c2..3e9e686f8 100644
--- a/deno/lib/types.ts
+++ b/deno/lib/types.ts
@@ -4186,7 +4186,7 @@ export type TransformEffect<T> = {
 };
 export type PreprocessEffect<T> = {
   type: "preprocess";
-  transform: (arg: T) => any;
+  transform: (arg: T, ctx: RefinementCtx) => any;
 };
 export type Effect<T> =
   | RefinementEffect<T>
@@ -4220,8 +4220,30 @@ export class ZodEffects<
 
     const effect = this._def.effect || null;
 
+    const checkCtx: RefinementCtx = {
+      addIssue: (arg: IssueData) => {
+        addIssueToContext(ctx, arg);
+        if (arg.fatal) {
+          status.abort();
+        } else {
+          status.dirty();
+        }
+      },
+      get path() {
+        return ctx.path;
+      },
+    };
+
+    checkCtx.addIssue = checkCtx.addIssue.bind(checkCtx);
+
     if (effect.type === "preprocess") {
-      const processed = effect.transform(ctx.data);
+      const processed = effect.transform(ctx.data, checkCtx);
+      if (ctx.common.issues.length) {
+        return {
+          status: "dirty",
+          value: ctx.data,
+        };
+      }
 
       if (ctx.common.async) {
         return Promise.resolve(processed).then((processed) => {
@@ -4239,22 +4261,6 @@ export class ZodEffects<
         });
       }
     }
-
-    const checkCtx: RefinementCtx = {
-      addIssue: (arg: IssueData) => {
-        addIssueToContext(ctx, arg);
-        if (arg.fatal) {
-          status.abort();
-        } else {
-          status.dirty();
-        }
-      },
-      get path() {
-        return ctx.path;
-      },
-    };
-
-    checkCtx.addIssue = checkCtx.addIssue.bind(checkCtx);
     if (effect.type === "refinement") {
       const executeRefinement = (
         acc: unknown
@@ -4346,7 +4352,7 @@ export class ZodEffects<
   };
 
   static createWithPreprocess = <I extends ZodTypeAny>(
-    preprocess: (arg: unknown) => unknown,
+    preprocess: (arg: unknown, ctx: RefinementCtx) => unknown,
     schema: I,
     params?: RawCreateParams
   ): ZodEffects<I, I["_output"], unknown> => {
diff --git a/playground.ts b/playground.ts
index a135d7707..d17b18eb4 100644
--- a/playground.ts
+++ b/playground.ts
@@ -1,49 +1,2 @@
 import { z } from "./src";
 z;
-
-console.log(
-  z
-    .string()
-    .toUpperCase()
-    .pipe(z.enum(["DE", "EN"]))
-    .parse("de")
-);
-
-function recursive<T extends z.ZodTypeAny>(
-  callback: <G extends z.ZodTypeAny>(schema: G) => T
-): T {
-  return "asdf" as any;
-}
-
-z.string();
-
-const cat = recursive((type) => {
-  return z.object({
-    name: z.string(),
-    subcategories: type,
-  });
-});
-type cat = z.infer<typeof cat>; //["subcategories"];
-declare let fido: cat;
-fido;
-fido.subcategories![0];
-
-declare const __nominal__type: unique symbol;
-declare const __nominal__type2: unique symbol;
-
-const arg = {
-  a: "asdf",
-  b: "asdf",
-  c: "asdf",
-  ["$type"]: () => {},
-  ["@@type"]: () => {},
-  ["{type}"]: 1324,
-};
-
-arg;
-
-const kwarg = {
-  [__nominal__type2]: "asdf",
-};
-
-type aklmdf = typeof arg extends typeof kwarg ? true : false;
diff --git a/src/__tests__/transformer.test.ts b/src/__tests__/transformer.test.ts
index 8e1f2a598..5cf606c84 100644
--- a/src/__tests__/transformer.test.ts
+++ b/src/__tests__/transformer.test.ts
@@ -211,6 +211,73 @@ test("async preprocess", async () => {
   expect(value).toEqual(["asdf"]);
 });
 
+test("preprocess ctx.addIssue with parse", () => {
+  expect(() => {
+    z.preprocess((data, ctx) => {
+      ctx?.addIssue({
+        code: "custom",
+        message: `${data} is not one of our allowed strings`,
+      });
+      return data;
+    }, z.string()).parse("asdf");
+  }).toThrow(
+    JSON.stringify(
+      [
+        {
+          code: "custom",
+          message: "asdf is not one of our allowed strings",
+          path: [],
+        },
+      ],
+      null,
+      2
+    )
+  );
+});
+
+test("preprocess ctx.addIssue with parseAsync", async () => {
+  const result = await z
+    .preprocess((data, ctx) => {
+      ctx?.addIssue({
+        code: "custom",
+        message: `${data} is not one of our allowed strings`,
+      });
+      return data;
+    }, z.string())
+    .safeParseAsync("asdf");
+
+  expect(JSON.parse(JSON.stringify(result))).toEqual({
+    success: false,
+    error: {
+      issues: [
+        {
+          code: "custom",
+          message: "asdf is not one of our allowed strings",
+          path: [],
+        },
+      ],
+      name: "ZodError",
+    },
+  });
+});
+
+test("z.NEVER in preprocess", async () => {
+  const foo = z.preprocess((val, ctx) => {
+    if (!val) {
+      ctx?.addIssue({ code: z.ZodIssueCode.custom, message: "bad" });
+      return z.NEVER;
+    }
+    return val;
+  }, z.number());
+
+  type foo = z.infer<typeof foo>;
+  util.assertEqual<foo, number>(true);
+  const arg = foo.safeParse(undefined);
+  if (!arg.success) {
+    expect(arg.error.issues[0].message).toEqual("bad");
+  }
+});
+
 test("short circuit on dirty", () => {
   const schema = z
     .string()
diff --git a/src/types.ts b/src/types.ts
index f084b0ded..537e361f0 100644
--- a/src/types.ts
+++ b/src/types.ts
@@ -4186,7 +4186,7 @@ export type TransformEffect<T> = {
 };
 export type PreprocessEffect<T> = {
   type: "preprocess";
-  transform: (arg: T) => any;
+  transform: (arg: T, ctx: RefinementCtx) => any;
 };
 export type Effect<T> =
   | RefinementEffect<T>
@@ -4220,8 +4220,30 @@ export class ZodEffects<
 
     const effect = this._def.effect || null;
 
+    const checkCtx: RefinementCtx = {
+      addIssue: (arg: IssueData) => {
+        addIssueToContext(ctx, arg);
+        if (arg.fatal) {
+          status.abort();
+        } else {
+          status.dirty();
+        }
+      },
+      get path() {
+        return ctx.path;
+      },
+    };
+
+    checkCtx.addIssue = checkCtx.addIssue.bind(checkCtx);
+
     if (effect.type === "preprocess") {
-      const processed = effect.transform(ctx.data);
+      const processed = effect.transform(ctx.data, checkCtx);
+      if (ctx.common.issues.length) {
+        return {
+          status: "dirty",
+          value: ctx.data,
+        };
+      }
 
       if (ctx.common.async) {
         return Promise.resolve(processed).then((processed) => {
@@ -4239,22 +4261,6 @@ export class ZodEffects<
         });
       }
     }
-
-    const checkCtx: RefinementCtx = {
-      addIssue: (arg: IssueData) => {
-        addIssueToContext(ctx, arg);
-        if (arg.fatal) {
-          status.abort();
-        } else {
-          status.dirty();
-        }
-      },
-      get path() {
-        return ctx.path;
-      },
-    };
-
-    checkCtx.addIssue = checkCtx.addIssue.bind(checkCtx);
     if (effect.type === "refinement") {
       const executeRefinement = (
         acc: unknown
@@ -4346,7 +4352,7 @@ export class ZodEffects<
   };
 
   static createWithPreprocess = <I extends ZodTypeAny>(
-    preprocess: (arg: unknown) => unknown,
+    preprocess: (arg: unknown, ctx: RefinementCtx) => unknown,
     schema: I,
     params?: RawCreateParams
   ): ZodEffects<I, I["_output"], unknown> => {