diff --git a/avocado/test.py b/avocado/test.py
index b5dd8cfe26225467607937d48db22c4d5af8a32b..ea73462651192e10c5f0458a3543f50025e458c5 100644
--- a/avocado/test.py
+++ b/avocado/test.py
@@ -270,17 +270,30 @@ class Test(unittest.TestCase):
         sysinfo_logger = sysinfo.SysInfo(basedir=self.sysinfodir)
         self.start_logging()
         sysinfo_logger.start_job_hook()
+        action_exception = None
+        cleanup_exception = None
         try:
             self.setup()
         except Exception, details:
             log_exc_info(sys.exc_info())
             raise exceptions.TestSetupFail(details)
-        self.action()
         try:
-            self.cleanup()
+            self.action()
         except Exception, details:
             log_exc_info(sys.exc_info())
-            raise exceptions.TestSetupFail(details)
+            action_exception = details
+        finally:
+            try:
+                self.cleanup()
+            except Exception, details:
+                log_exc_info(sys.exc_info())
+                cleanup_exception = details
+        # pylint: disable=E0702
+        if action_exception is not None:
+            raise action_exception
+        elif cleanup_exception is not None:
+            raise exceptions.TestSetupFail(cleanup_exception)
+
         self.status = 'PASS'
 
     def run_avocado(self, result=None):
diff --git a/selftests/all/functional/avocado/basic_tests.py b/selftests/all/functional/avocado/basic_tests.py
index f64ee0254f59e6f28efd6f8999138a3a50a0aa8e..b4eb4972f025b180635a02fafa23c38c8307dbb3 100644
--- a/selftests/all/functional/avocado/basic_tests.py
+++ b/selftests/all/functional/avocado/basic_tests.py
@@ -64,6 +64,23 @@ class RunnerOperationTest(unittest.TestCase):
         self.assertEqual(result.exit_status, expected_rc,
                          "Avocado did not return rc %d:\n%s" % (expected_rc, result))
 
+    def test_runner_doublefail(self):
+        os.chdir(basedir)
+        cmd_line = './scripts/avocado --xunit run doublefail'
+        result = process.run(cmd_line, ignore_status=True)
+        output = result.stdout
+        expected_rc = 1
+        unexpected_rc = 3
+        self.assertNotEqual(result.exit_status, unexpected_rc,
+                            "Avocado crashed (rc %d):\n%s" % (unexpected_rc, result))
+        self.assertEqual(result.exit_status, expected_rc,
+                         "Avocado did not return rc %d:\n%s" % (expected_rc, result))
+        self.assertIn("TestError: Failing during cleanup. Yay!", output,
+                      "Cleanup exception not printed to log output")
+        self.assertIn("FAIL doublefail.1 -> TestFail: This test is supposed to fail",
+                      output,
+                      "Test did not fail with action exception")
+
 
 class RunnerDropinTest(unittest.TestCase):
 
diff --git a/tests/doublefail/doublefail.py b/tests/doublefail/doublefail.py
new file mode 100755
index 0000000000000000000000000000000000000000..394504ad516fa49a8ca6e62bd21c2dee206f6fa4
--- /dev/null
+++ b/tests/doublefail/doublefail.py
@@ -0,0 +1,43 @@
+#!/usr/bin/python
+
+# This program is free software; you can redistribute it and/or modify
+# it under the terms of the GNU General Public License as published by
+# the Free Software Foundation; either version 2 of the License, or
+# (at your option) any later version.
+#
+# This program is distributed in the hope that it will be useful,
+# but WITHOUT ANY WARRANTY; without even the implied warranty of
+# MERCHANTABILITY or FITNESS FOR A PARTICULAR PURPOSE.
+#
+# See LICENSE for more details.
+#
+# Copyright: Red Hat Inc. 2013-2014
+# Author: Lucas Meneghel Rodrigues <lmr@redhat.com>
+
+
+from avocado import test
+from avocado import job
+from avocado.core import exceptions
+
+
+class doublefail(test.Test):
+
+    """
+    Functional test for avocado. Straight up fail the test.
+    """
+
+    def action(self):
+        """
+        Should fail.
+        """
+        raise exceptions.TestFail('This test is supposed to fail')
+
+    def cleanup(self):
+        """
+        Should also fail.
+        """
+        raise exceptions.TestError('Failing during cleanup. Yay!')
+
+
+if __name__ == "__main__":
+    job.main()