diff --git a/releasenotes.md b/releasenotes.md
index f85bd6502..4eab1377e 100644
--- a/releasenotes.md
+++ b/releasenotes.md
@@ -86,6 +86,7 @@
 - Assigning a const zero to an aliased distinct caused an error.
 - `--path` is now properly respected.
 - `--test` will now provide the full filename and the column.
+- Fix of bug in `defer (catch err)` with a direct return error.
 
 ### Stdlib changes
 
diff --git a/src/compiler/llvm_codegen_stmt.c b/src/compiler/llvm_codegen_stmt.c
index 735149698..30b68fc0d 100644
--- a/src/compiler/llvm_codegen_stmt.c
+++ b/src/compiler/llvm_codegen_stmt.c
@@ -223,7 +223,11 @@ static inline void llvm_emit_return(GenContext *c, Ast *ast)
 		if (ast->return_stmt.cleanup_fail)
 		{
 			llvm_value_rvalue(c, &be_value);
+			LLVMValueRef error_out = llvm_emit_alloca_aligned(c, type_anyfault, "reterr");
+			llvm_store_to_ptr(c, error_out, &be_value);
+			c->defer_error_var = error_out;
 			llvm_emit_statement_chain(c, ast->return_stmt.cleanup_fail);
+			c->defer_error_var = NULL;
 		}
 		llvm_emit_return_abi(c, NULL, &be_value);
 		return;
diff --git a/test/src/tester.py b/test/src/tester.py
index cff92f73e..66a4fdbdc 100644
--- a/test/src/tester.py
+++ b/test/src/tester.py
@@ -105,8 +105,8 @@ class Issues:
                 self.exit_error("Illegal error result: " + line)
             if not self.check_line(parts[0], parts[1], parts[2], parts[3], parts[4]):
                 self.set_failed()
-                print("Unexpected " + parts[0].lower() + " in " + parts[1] + " line " + parts[2] + ":", end="")
-                print('"' + parts[3] + '"')
+                print("Unexpected " + parts[0].lower() + " in " + os.path.basename(parts[1]) + " line " + parts[2] + ":", end="")
+                print('"' + parts[4] + '"')
         if len(self.errors) > 0:
             self.set_failed()
             print("Expected errors that never occurred:")
diff --git a/test/test_suite/defer/defer_catch_direct_error.c3t b/test/test_suite/defer/defer_catch_direct_error.c3t
new file mode 100644
index 000000000..98c0d06be
--- /dev/null
+++ b/test/test_suite/defer/defer_catch_direct_error.c3t
@@ -0,0 +1,29 @@
+// #target: macos-x64
+module test;
+import std::io;
+fn void! example_fn()
+{
+    defer try {
+        int a = 1;
+    }
+
+    defer (catch err) {
+        anyfault f = err;
+    }
+    return io::IoError.FILE_NOT_FOUND?;
+}
+
+/* #expect: test.ll
+
+define i64 @test.example_fn() #0 {
+entry:
+  %reterr = alloca i64, align 8
+  %err = alloca i64, align 8
+  %f = alloca i64, align 8
+  store i64 ptrtoint (ptr @"std.io.IoError$FILE_NOT_FOUND" to i64), ptr %reterr, align 8
+  %0 = load i64, ptr %reterr, align 8
+  store i64 %0, ptr %err, align 8
+  %1 = load i64, ptr %err, align 8
+  store i64 %1, ptr %f, align 8
+  ret i64 ptrtoint (ptr @"std.io.IoError$FILE_NOT_FOUND" to i64)
+}