diff --git a/doc/es.1 b/doc/es.1
index 3fb8e790..b2695a92 100644
--- a/doc/es.1
+++ b/doc/es.1
@@ -988,6 +988,24 @@ If any element of a list is not equal to
 (or the empty string), that list is considered false.
 .PP
 The return value of an assignment operation is the assigned value.
+.PP
+When
+.I es
+is invoked with the
+.Cr \-e
+option, false return values generate the
+.Cr false
+exception.
+(See the section entitled
+.B Exceptions
+for more information about the
+.Cr false
+exception.)
+The
+.Cr false
+exception is caught and treated as a return value by the
+.Cr "<="
+construct.
 .SS "Logical Operators"
 There are a number of operators in
 .I es
@@ -1543,6 +1561,20 @@ and the signal is listed in the variable
 .Cr signals .
 .I Signame
 is the name of the signal that was raised.
+.TP
+.Cr "exit \fIcode\fP"
+Raised by the
+.Cr exit
+command.
+Causes the shell to exit with the given
+.Cr code .
+.TP
+.Cr "false \fIvalue\fP"
+Raised by the
+.Cr $&exitonfalse
+primitive when a command exits with a falsey status.
+Causes the shell to exit if not caught.
+By default, this exception is caught in an interactive shell.
 .PP
 See the builtin commands
 .Cr catch
@@ -2071,6 +2103,13 @@ If none of the
 are true, the
 .I else
 command is run.
+The
+.Cr if
+function catches any
+.Cr false
+exceptions generated from
+.IR test s
+and treats them as a false return value.
 .TP
 .Cr "limit \fR[\fP-h\fR]\fP \fI\fR[\fPresource \fR[\fPvalue\fR]\fP\fR]\fP\fP"
 Similar to the
@@ -2367,14 +2406,18 @@ may provide a builtin version of this function to handle
 shell scripts if the kernel does not.
 .TP
 .Cr "%exit-on-false \fIcmd\fP"
-Runs the command, and exits if any command
-(except those executing as the tests of conditional statements)
+Runs the command, and throws the
+.Cr false
+exception if any command (except assignments)
 returns a non-zero status.
 (This function is used in the definition of
 .Cr %dispatch
 when the shell is invoked with the
 .Cr \-e
 option.)
+The uncaught
+.Cr false
+exception causes the shell to exit.
 .TP
 .Cr "%flatten \fIseparator list\fP"
 Concatenate the elements of
@@ -2871,8 +2914,10 @@ starts with a dash
 .Rc ( - ).
 .TP
 .Cr \-e
-Exit if any command (except those executing as the tests of
-conditional statements) returns a non-zero status.
+Throw a
+.Cr false
+exception if any command (other than assignments) returns a non-zero
+status.
 .TP
 .Cr \-v
 Echo all input to standard error.
diff --git a/es.h b/es.h
index cf298c09..592788b4 100644
--- a/es.h
+++ b/es.h
@@ -167,8 +167,8 @@ extern unsigned long evaldepth, maxevaldepth;
 
 /* glom.c */
 
-extern List *glom(Tree *tree, Binding *binding, Boolean globit);
-extern List *glom2(Tree *tree, Binding *binding, StrList **quotep);
+extern List *glom(Tree *tree, Binding *binding, Boolean globit, int evalflags);
+extern List *glom2(Tree *tree, Binding *binding, StrList **quotep, int evalflags);
 
 
 /* glob.c */
diff --git a/eval.c b/eval.c
index 4c1977a1..fb2a3b10 100644
--- a/eval.c
+++ b/eval.c
@@ -3,6 +3,7 @@
 #include "es.h"
 
 unsigned long evaldepth = 0, maxevaldepth = MAXmaxevaldepth;
+static Boolean did_assign;
 
 static Noreturn failexec(char *file, List *args) {
 	List *fn;
@@ -46,17 +47,17 @@ extern List *forkexec(char *file, List *list, Boolean inchild) {
 }
 
 /* assign -- bind a list of values to a list of variables */
-static List *assign(Tree *varform, Tree *valueform0, Binding *binding0) {
+static List *assign(Tree *varform, Tree *valueform0, Binding *binding0, int evalflags) {
 	Ref(List *, result, NULL);
 
 	Ref(Tree *, valueform, valueform0);
 	Ref(Binding *, binding, binding0);
-	Ref(List *, vars, glom(varform, binding, FALSE));
+	Ref(List *, vars, glom(varform, binding, FALSE, evalflags));
 
 	if (vars == NULL)
 		fail("es:assign", "null variable name");
 
-	Ref(List *, values, glom(valueform, binding, TRUE));
+	Ref(List *, values, glom(valueform, binding, TRUE, evalflags));
 	result = values;
 
 	for (; vars != NULL; vars = vars->next) {
@@ -76,12 +77,13 @@ static List *assign(Tree *varform, Tree *valueform0, Binding *binding0) {
 	}
 
 	RefEnd4(values, vars, binding, valueform);
+	did_assign = TRUE;
 	RefReturn(result);
 }
 
 /* letbindings -- create a new Binding containing let-bound variables */
 static Binding *letbindings(Tree *defn0, Binding *outer0,
-			    Binding *context0, int UNUSED evalflags) {
+			    Binding *context0, int evalflags) {
 	Ref(Binding *, binding, outer0);
 	Ref(Binding *, context, context0);
 	Ref(Tree *, defn, defn0);
@@ -93,8 +95,8 @@ static Binding *letbindings(Tree *defn0, Binding *outer0,
 
 		Ref(Tree *, assign, defn->u[0].p);
 		assert(assign->kind == nAssign);
-		Ref(List *, vars, glom(assign->u[0].p, context, FALSE));
-		Ref(List *, values, glom(assign->u[1].p, context, TRUE));
+		Ref(List *, vars, glom(assign->u[0].p, context, FALSE, evalflags));
+		Ref(List *, values, glom(assign->u[1].p, context, TRUE, evalflags));
 
 		if (vars == NULL)
 			fail("es:let", "null variable name");
@@ -175,8 +177,8 @@ static List *forloop(Tree *defn0, Tree *body0,
 			continue;
 		Ref(Tree *, assign, defn->u[0].p);
 		assert(assign->kind == nAssign);
-		Ref(List *, vars, glom(assign->u[0].p, outer, FALSE));
-		Ref(List *, list, glom(assign->u[1].p, outer, TRUE));
+		Ref(List *, vars, glom(assign->u[0].p, outer, FALSE, evalflags));
+		Ref(List *, list, glom(assign->u[1].p, outer, TRUE, evalflags));
 		if (vars == NULL)
 			fail("es:for", "null variable name");
 		for (; vars != NULL; vars = vars->next) {
@@ -235,14 +237,14 @@ static List *forloop(Tree *defn0, Tree *body0,
 
 /* matchpattern -- does the text match a pattern? */
 static List *matchpattern(Tree *subjectform0, Tree *patternform0,
-			  Binding *binding) {
+			  Binding *binding, int evalflags) {
 	Boolean result;
 	List *pattern;
 	Ref(Binding *, bp, binding);
 	Ref(Tree *, patternform, patternform0);
-	Ref(List *, subject, glom(subjectform0, bp, TRUE));
+	Ref(List *, subject, glom(subjectform0, bp, TRUE, evalflags));
 	Ref(StrList *, quote, NULL);
-	pattern = glom2(patternform, bp, &quote);
+	pattern = glom2(patternform, bp, &quote, evalflags);
 	result = listmatch(subject, pattern, quote);
 	RefEnd4(quote, subject, patternform, bp);
 	return result ? ltrue : lfalse;
@@ -250,14 +252,14 @@ static List *matchpattern(Tree *subjectform0, Tree *patternform0,
 
 /* extractpattern -- Like matchpattern, but returns matches */
 static List *extractpattern(Tree *subjectform0, Tree *patternform0,
-			    Binding *binding) {
+			    Binding *binding, int evalflags) {
 	List *pattern;
 	Ref(List *, result, NULL);
 	Ref(Binding *, bp, binding);
 	Ref(Tree *, patternform, patternform0);
-	Ref(List *, subject, glom(subjectform0, bp, TRUE));
+	Ref(List *, subject, glom(subjectform0, bp, TRUE, evalflags));
 	Ref(StrList *, quote, NULL);
-	pattern = glom2(patternform, bp, &quote);
+	pattern = glom2(patternform, bp, &quote, evalflags);
 	result = (List *) extractmatches(subject, pattern, quote);
 	RefEnd4(quote, subject, patternform, bp);
 	RefReturn(result);
@@ -280,14 +282,14 @@ extern List *walk(Tree *tree0, Binding *binding0, int flags) {
 	    case nWord: case nThunk: case nLambda: case nCall: case nPrim: {
 		List *list;
 		Ref(Binding *, bp, binding);
-		list = glom(tree, binding, TRUE);
+		list = glom(tree, binding, TRUE, flags);
 		binding = bp;
 		RefEnd(bp);
 		return eval(list, binding, flags);
 	    }
 
 	    case nAssign:
-		return assign(tree->u[0].p, tree->u[1].p, binding);
+		return assign(tree->u[0].p, tree->u[1].p, binding, flags);
 
 	    case nLet: case nClosure:
 		Ref(Tree *, body, tree->u[1].p);
@@ -301,12 +303,12 @@ extern List *walk(Tree *tree0, Binding *binding0, int flags) {
 
 	    case nFor:
 		return forloop(tree->u[0].p, tree->u[1].p, binding, flags);
-	
+
 	    case nMatch:
-		return matchpattern(tree->u[0].p, tree->u[1].p, binding);
+		return matchpattern(tree->u[0].p, tree->u[1].p, binding, flags);
 
 	    case nExtract:
-		return extractpattern(tree->u[0].p, tree->u[1].p, binding);
+		return extractpattern(tree->u[0].p, tree->u[1].p, binding, flags);
 
 	    default:
 		panic("walk: bad node kind %d", tree->kind);
@@ -378,6 +380,7 @@ extern List *eval(List *list0, Binding *binding0, int flags) {
 		return ltrue;
 	}
 	assert(list->term != NULL);
+	did_assign = FALSE;
 
 	if ((cp = getclosure(list->term)) != NULL) {
 		switch (cp->tree->kind) {
@@ -418,7 +421,7 @@ extern List *eval(List *list0, Binding *binding0, int flags) {
 			EndExceptionHandler
 			break;
 		    case nList: {
-			Ref(List *, lp, glom(cp->tree, cp->binding, TRUE));
+			Ref(List *, lp, glom(cp->tree, cp->binding, TRUE, flags));
 			list = append(lp, list->next);
 			RefEnd(lp);
 			goto restart;
@@ -478,8 +481,10 @@ extern List *eval(List *list0, Binding *binding0, int flags) {
 
 done:
 	--evaldepth;
-	if ((flags & eval_exitonfalse) && !istrue(list))
-		esexit(exitstatus(list));
+	if ((flags & eval_exitonfalse) && !istrue(list) && !did_assign) {
+		Term *t = mkstr("false");
+		throw(mklist(t, list));
+	}
 	RefEnd2(funcname, binding);
 	RefReturn(list);
 }
diff --git a/glom.c b/glom.c
index 28bfb48e..f1beb0df 100644
--- a/glom.c
+++ b/glom.c
@@ -149,7 +149,7 @@ static List *subscript(List *list, List *subs) {
 }
 
 /* glom1 -- glom when we don't need to produce a quote list */
-static List *glom1(Tree *tree, Binding *binding) {
+static List *glom1(Tree *tree, Binding *binding, int evalflags) {
 	Ref(List *, result, NULL);
 	Ref(List *, tail, NULL);
 	Ref(Tree *, tp, tree);
@@ -179,7 +179,7 @@ static List *glom1(Tree *tree, Binding *binding) {
 			tp = NULL;
 			break;
 		case nVar:
-			Ref(List *, var, glom1(tp->u[0].p, bp));
+			Ref(List *, var, glom1(tp->u[0].p, bp, evalflags));
 			tp = NULL;
 			for (; var != NULL; var = var->next) {
 				list = listcopy(varlookup(getstr(var->term), bp));
@@ -196,29 +196,36 @@ static List *glom1(Tree *tree, Binding *binding) {
 			RefEnd(var);
 			break;
 		case nVarsub:
-			list = glom1(tp->u[0].p, bp);
+			list = glom1(tp->u[0].p, bp, evalflags);
 			if (list == NULL)
 				fail("es:glom", "null variable name in subscript");
 			if (list->next != NULL)
 				fail("es:glom", "multi-word variable name in subscript");
 			Ref(char *, name, getstr(list->term));
 			list = varlookup(name, bp);
-			Ref(List *, sub, glom1(tp->u[1].p, bp));
+			Ref(List *, sub, glom1(tp->u[1].p, bp, evalflags));
 			tp = NULL;
 			list = subscript(list, sub);
 			RefEnd2(sub, name);
 			break;
 		case nCall:
-			list = listcopy(walk(tp->u[0].p, bp, 0));
+			ExceptionHandler
+				list = listcopy(walk(tp->u[0].p, bp, evalflags & eval_exitonfalse));
+			CatchException (e)
+				if (!termeq(e->term, "false"))
+					throw(e);
+				else
+					list = e->next;
+			EndExceptionHandler
 			tp = NULL;
 			break;
 		case nList:
-			list = glom1(tp->u[0].p, bp);
+			list = glom1(tp->u[0].p, bp, evalflags);
 			tp = tp->u[1].p;
 			break;
 		case nConcat:
-			Ref(List *, l, glom1(tp->u[0].p, bp));
-			Ref(List *, r, glom1(tp->u[1].p, bp));
+			Ref(List *, l, glom1(tp->u[0].p, bp, evalflags));
+			Ref(List *, r, glom1(tp->u[1].p, bp, evalflags));
 			tp = NULL;
 			list = concat(l, r);
 			RefEnd2(r, l);
@@ -243,7 +250,7 @@ static List *glom1(Tree *tree, Binding *binding) {
 }
 
 /* glom2 -- glom and produce a quoting list */
-extern List *glom2(Tree *tree, Binding *binding, StrList **quotep) {
+extern List *glom2(Tree *tree, Binding *binding, StrList **quotep, int evalflags) {
 	Ref(List *, result, NULL);
 	Ref(List *, tail, NULL);
 	Ref(StrList *, qtail, NULL);
@@ -270,7 +277,7 @@ extern List *glom2(Tree *tree, Binding *binding, StrList **quotep) {
 			tp = NULL;
 			break;
 		case nList:
-			list = glom2(tp->u[0].p, bp, &qlist);
+			list = glom2(tp->u[0].p, bp, &qlist, evalflags);
 			tp = tp->u[1].p;
 			break;
 		case nConcat:
@@ -278,14 +285,14 @@ extern List *glom2(Tree *tree, Binding *binding, StrList **quotep) {
 			Ref(List *, r, NULL);
 			Ref(StrList *, ql, NULL);
 			Ref(StrList *, qr, NULL);
-			l = glom2(tp->u[0].p, bp, &ql);
-			r = glom2(tp->u[1].p, bp, &qr);
+			l = glom2(tp->u[0].p, bp, &ql, evalflags);
+			r = glom2(tp->u[1].p, bp, &qr, evalflags);
 			list = qconcat(l, r, ql, qr, &qlist);
 			RefEnd4(qr, ql, r, l);
 			tp = NULL;
 			break;
 		default:
-			list = glom1(tp, bp);
+			list = glom1(tp, bp, evalflags);
 			Ref(List *, lp, list);
 			for (; lp != NULL; lp = lp->next)
 				qlist = mkstrlist(QUOTED, qlist);
@@ -316,14 +323,14 @@ extern List *glom2(Tree *tree, Binding *binding, StrList **quotep) {
 }
 
 /* glom -- top level glom dispatching */
-extern List *glom(Tree *tree, Binding *binding, Boolean globit) {
+extern List *glom(Tree *tree, Binding *binding, Boolean globit, int evalflags) {
 	if (globit) {
 		Ref(List *, list, NULL);
 		Ref(StrList *, quote, NULL);
-		list = glom2(tree, binding, &quote);
+		list = glom2(tree, binding, &quote, evalflags);
 		list = glob(list, quote);
 		RefEnd(quote);
 		RefReturn(list);
 	} else
-		return glom1(tree, binding);
+		return glom1(tree, binding, evalflags);
 }
diff --git a/initial.es b/initial.es
index 987919a0..5ec3470a 100644
--- a/initial.es
+++ b/initial.es
@@ -178,20 +178,30 @@ fn whatis {
 #	does not catch the return exception.  It does, however, catch break.
 
 fn-while = $&noreturn @ cond body {
+	let (result = <=true)
 	catch @ e value {
-		if {!~ $e break} {
+		if {~ $e caught-false} {
+			throw false $value
+		} {!~ $e break} {
 			throw $e $value
 		}
-		result $value
+		result = $value
 	} {
-		let (result = <=true)
-			forever {
-				if {!$cond} {
-					throw break $result
+		forever {
+			if {!$cond} {
+				throw break $result
+			} {
+				result = <={catch @ e rest {
+					if {~ $e false} {
+						throw caught-false $rest
+					} {
+						throw $e $rest
+					}
 				} {
-					result = <=$body
-				}
+					$body
+				}}
 			}
+		}
 	}
 }
 
@@ -661,11 +671,13 @@ fn %interactive-loop {
 				throw $e $type $msg
 			} {~ $e error} {
 				echo >[1=2] $msg
-				$fn-%dispatch false
 			} {~ $e signal} {
 				if {!~ $type sigint sigterm sigquit} {
 					echo >[1=2] caught unexpected signal: $type
 				}
+			} {~ $e (false caught-false)} {
+				result = $type $msg
+				echo >[1=2] result '=' $result
 			} {
 				echo >[1=2] uncaught exception: $e $type $msg
 			}
@@ -677,7 +689,15 @@ fn %interactive-loop {
 				}
 				let (code = <={%parse $prompt}) {
 					if {!~ $#code 0} {
-						result = <={$fn-%dispatch $code}
+						result = <={catch @ e rest {
+							if {~ $e false} {
+								throw caught-false $rest
+							} {
+								throw $e $rest
+							}
+						} {
+							$fn-%dispatch $code
+						}}
 					}
 				}
 			}
diff --git a/main.c b/main.c
index f8f19ad4..4f92d2df 100644
--- a/main.c
+++ b/main.c
@@ -54,7 +54,7 @@ static void runesrc(void) {
 		ExceptionHandler
 			runfd(fd, esrc, 0);
 		CatchException (e)
-			if (termeq(e->term, "exit"))
+			if (termeq(e->term, "exit") || termeq(e->term, "false"))
 				exit(exitstatus(e->next));
 			else if (termeq(e->term, "error")) {
 				eprint("%L\n",
@@ -221,7 +221,7 @@ int main(int argc, char **argv0) {
 
 	CatchException (e)
 
-		if (termeq(e->term, "exit")) {
+		if (termeq(e->term, "exit") || termeq(e->term, "false")) {
 			status = exitstatus(e->next);
 			goto return_main;
 		} else if (termeq(e->term, "error")) {
diff --git a/prim-ctl.c b/prim-ctl.c
index d8d4e31c..5b0a680a 100644
--- a/prim-ctl.c
+++ b/prim-ctl.c
@@ -17,7 +17,14 @@ PRIM(if) {
 	for (; lp != NULL; lp = lp->next) {
 		List *cond = ltrue;
 		if (lp->next != NULL) {
-			cond = eval1(lp->term, 0);
+			ExceptionHandler
+				cond = eval1(lp->term, evalflags &~ (lp->next == NULL ? 0 : eval_inchild));
+			CatchException (e)
+				if (termeq(e->term, "false"))
+					cond = e->next;
+				else
+					throw(e);
+			EndExceptionHandler
 			lp = lp->next;
 		}
 		if (istrue(cond)) {
diff --git a/share/status.es b/share/status.es
index faf5ae3b..50243b6d 100644
--- a/share/status.es
+++ b/share/status.es
@@ -23,10 +23,21 @@ fn %interactive-loop {
 			catch @ e rest {
 				if {~ $e return} {
 					status = $rest
+				} {~ $e caught-false} {
+					status = $rest
+					e = false
 				}
 				throw $e $rest
 			} {
-				status = <={$d $*}
+				status = <={catch @ e rest {
+					if {~ $e false} {
+						throw caught-false $rest
+					} {
+						throw $e $rest
+					}
+				} {
+					$d $*
+				}}
 			}
 		}
 	) $loop $*
diff --git a/test/tests/option.es b/test/tests/option.es
index 600b172d..29d208ec 100644
--- a/test/tests/option.es
+++ b/test/tests/option.es
@@ -18,11 +18,15 @@ test 'es -e' {
 			'if {true} {false; true}'		false
 			'if {false} {true} {false; true}'	false
 			'{true; {true; {false; true}}}'		false
+			'let (fn-x = {false; true})
+				if {x} {true} {false}'		false
+			'let (n=;o=a b) while {!~ $o ()} {
+				o=$o(2 ...); n=$n $o}'		true
 
 			# assignments
-			'x = false'				false
-			'fn x {false}'				false
-			'{true; {true; {x = false}; true}}'	false
+			'x = false'				true
+			'fn x {false}'				true
+			'{true; {true; {x = false}; true}}'	true
 			'let (x = false) true'			true
 			'local (x = false) true'		true
 		)) {