diff --git a/.changeset/short-worlds-enter.md b/.changeset/short-worlds-enter.md
new file mode 100644
index 0000000000..96e0f80370
--- /dev/null
+++ b/.changeset/short-worlds-enter.md
@@ -0,0 +1,5 @@
+---
+'svelte': patch
+---
+
+fix: propagate `$effect` errors to `<svelte:boundary>`
diff --git a/packages/svelte/src/internal/client/error-handling.js b/packages/svelte/src/internal/client/error-handling.js
index 4736333d1a..5d16759266 100644
--- a/packages/svelte/src/internal/client/error-handling.js
+++ b/packages/svelte/src/internal/client/error-handling.js
@@ -3,7 +3,7 @@
 import { DEV } from 'esm-env';
 import { FILENAME } from '../../constants.js';
 import { is_firefox } from './dom/operations.js';
-import { ERROR_VALUE, BOUNDARY_EFFECT, REACTION_RAN } from './constants.js';
+import { ERROR_VALUE, BOUNDARY_EFFECT, REACTION_RAN, EFFECT } from './constants.js';
 import { define_property, get_descriptor } from '../shared/utils.js';
 import { active_effect, active_reaction } from './runtime.js';
 
@@ -25,22 +25,19 @@ export function handle_error(error) {
 		adjustments.set(error, get_adjustments(error, effect));
 	}
 
-	if ((effect.f & REACTION_RAN) === 0) {
-		// if the error occurred while creating this subtree, we let it
-		// bubble up until it hits a boundary that can handle it
-		if ((effect.f & BOUNDARY_EFFECT) === 0) {
-			if (DEV && !effect.parent && error instanceof Error) {
-				apply_adjustments(error);
-			}
-
-			throw error;
+	// if the error occurred while creating this subtree, we let it
+	// bubble up until it hits a boundary that can handle it, unless
+	// it's an $effect in which case it doesn't run immediately
+	if ((effect.f & REACTION_RAN) === 0 && (effect.f & EFFECT) === 0) {
+		if (DEV && !effect.parent && error instanceof Error) {
+			apply_adjustments(error);
 		}
 
-		/** @type {Boundary} */ (effect.b).error(error);
-	} else {
-		// otherwise we bubble up the effect tree ourselves
-		invoke_error_boundary(error, effect);
+		throw error;
 	}
+
+	// otherwise we bubble up the effect tree ourselves
+	invoke_error_boundary(error, effect);
 }
 
 /**
@@ -50,6 +47,11 @@ export function handle_error(error) {
 export function invoke_error_boundary(error, effect) {
 	while (effect !== null) {
 		if ((effect.f & BOUNDARY_EFFECT) !== 0) {
+			if ((effect.f & REACTION_RAN) === 0) {
+				// we are still creating the boundary effect
+				throw error;
+			}
+
 			try {
 				/** @type {Boundary} */ (effect.b).error(error);
 				return;
diff --git a/packages/svelte/tests/runtime-runes/samples/boundary-effect-error/Test.svelte b/packages/svelte/tests/runtime-runes/samples/boundary-effect-error/Test.svelte
new file mode 100644
index 0000000000..4aec88b712
--- /dev/null
+++ b/packages/svelte/tests/runtime-runes/samples/boundary-effect-error/Test.svelte
@@ -0,0 +1,5 @@
+<script>
+  $effect(() => {
+    throw new Error('boom');
+  });
+</script>
diff --git a/packages/svelte/tests/runtime-runes/samples/boundary-effect-error/_config.js b/packages/svelte/tests/runtime-runes/samples/boundary-effect-error/_config.js
new file mode 100644
index 0000000000..4d2728abc1
--- /dev/null
+++ b/packages/svelte/tests/runtime-runes/samples/boundary-effect-error/_config.js
@@ -0,0 +1,10 @@
+import { test } from '../../test';
+
+export default test({
+	async test({ assert, target }) {
+		// allow effects to run / microtasks to flush
+		await Promise.resolve();
+
+		assert.htmlEqual(target.innerHTML, '<p>caught: boom</p>');
+	}
+});
diff --git a/packages/svelte/tests/runtime-runes/samples/boundary-effect-error/main.svelte b/packages/svelte/tests/runtime-runes/samples/boundary-effect-error/main.svelte
new file mode 100644
index 0000000000..63968f6b35
--- /dev/null
+++ b/packages/svelte/tests/runtime-runes/samples/boundary-effect-error/main.svelte
@@ -0,0 +1,11 @@
+<script>
+  import Test from './Test.svelte';
+</script>
+
+<svelte:boundary>
+  <Test />
+
+  {#snippet failed(e)}
+    <p>caught: {e.message}</p>
+  {/snippet}
+</svelte:boundary>