diff --git a/temporal-sdk/src/main/java/io/temporal/internal/sync/WorkflowExecutionHandler.java b/temporal-sdk/src/main/java/io/temporal/internal/sync/WorkflowExecutionHandler.java
index 1a78df46f..ebb87604a 100644
--- a/temporal-sdk/src/main/java/io/temporal/internal/sync/WorkflowExecutionHandler.java
+++ b/temporal-sdk/src/main/java/io/temporal/internal/sync/WorkflowExecutionHandler.java
@@ -29,6 +29,7 @@
 import io.temporal.failure.CanceledFailure;
 import io.temporal.failure.TemporalFailure;
 import io.temporal.internal.replay.ReplayWorkflowContext;
+import io.temporal.internal.statemachines.UnsupportedContinueAsNewRequest;
 import io.temporal.internal.worker.WorkflowExecutionException;
 import io.temporal.worker.WorkflowImplementationOptions;
 import io.temporal.workflow.Workflow;
@@ -123,6 +124,9 @@ public Optional<Payloads> handleExecuteUpdate(
       io.temporal.api.common.v1.Header header) {
     try {
       return context.handleExecuteUpdate(updateName, input, eventId, new Header(header));
+    } catch (UnsupportedContinueAsNewRequest e) {
+      // Re-throw to fail the workflow task
+      throw e;
     } catch (Throwable e) {
       applyWorkflowFailurePolicyAndRethrow(e);
     }
diff --git a/temporal-sdk/src/test/java/io/temporal/workflow/updateTest/UpdateContinueAsNewInHandlerTest.java b/temporal-sdk/src/test/java/io/temporal/workflow/updateTest/UpdateContinueAsNewInHandlerTest.java
index 9ab6e3b7e..8757abc64 100644
--- a/temporal-sdk/src/test/java/io/temporal/workflow/updateTest/UpdateContinueAsNewInHandlerTest.java
+++ b/temporal-sdk/src/test/java/io/temporal/workflow/updateTest/UpdateContinueAsNewInHandlerTest.java
@@ -20,10 +20,12 @@
 
 package io.temporal.workflow.updateTest;
 
+import static org.junit.Assert.assertEquals;
 import static org.junit.Assert.assertThrows;
 
 import io.temporal.api.common.v1.WorkflowExecution;
 import io.temporal.client.*;
+import io.temporal.failure.ApplicationFailure;
 import io.temporal.internal.statemachines.UnsupportedContinueAsNewRequest;
 import io.temporal.testing.internal.SDKTestOptions;
 import io.temporal.testing.internal.SDKTestWorkflowRule;
@@ -66,7 +68,11 @@ public void continueAsNewInUpdateHandler() {
             .setUpdateName("update")
             .setWaitForStage(WorkflowUpdateStage.ACCEPTED)
             .build());
-    assertThrows(WorkflowFailedException.class, () -> stub.getResult(String.class));
+    WorkflowFailedException e =
+        assertThrows(WorkflowFailedException.class, () -> stub.getResult(String.class));
+    assertEquals(
+        "io.temporal.internal.statemachines.UnsupportedContinueAsNewRequest",
+        ((ApplicationFailure) e.getCause()).getType());
   }
 
   public static class TestUpdateWorkflowImpl implements WorkflowWithUpdate {