diff --git a/doc/src/sgml/ref/psql-ref.sgml b/doc/src/sgml/ref/psql-ref.sgml
index 9494f28063..2395678938 100644
--- a/doc/src/sgml/ref/psql-ref.sgml
+++ b/doc/src/sgml/ref/psql-ref.sgml
@@ -4143,7 +4143,9 @@ bar
         <para>
         By default, command processing continues after an error.  When this
         variable is set to <literal>on</literal>, processing will instead stop
-        immediately.  In interactive mode,
+        immediately. A nonzero exit status of a shell command, which indicates
+        failure, is also interpreted as an error that stops the processing.
+        In interactive mode,
         <application>psql</application> will return to the command prompt;
         otherwise, <application>psql</application> will exit, returning
         error code 3 to distinguish this case from fatal error
diff --git a/src/bin/psql/command.c b/src/bin/psql/command.c
index a141146e70..7445ca04ff 100644
--- a/src/bin/psql/command.c
+++ b/src/bin/psql/command.c
@@ -4989,6 +4989,10 @@ do_shell(const char *command)
 		pg_log_error("\\!: failed");
 		return false;
 	}
+	else if (result != 0) {
+		pg_log_error("command failed");
+		return false;
+	}
 	return true;
 }