diff --git a/lib/runner.js b/lib/runner.js
index ba4d7df97c..a2f5ea3696 100644
--- a/lib/runner.js
+++ b/lib/runner.js
@@ -532,7 +532,10 @@ Runner.prototype.runTests = function(suite, fn) {
           if (err instanceof Pending) {
             test.pending = true;
             self.emit('pending', test);
-          } else if (retry < test.retries()) {
+            return next();
+          }
+
+          if (retry < test.retries()) {
             var clonedTest = test.clone();
             clonedTest.currentRetry(retry + 1);
             tests.unshift(clonedTest);
@@ -540,22 +543,22 @@ Runner.prototype.runTests = function(suite, fn) {
             // Early return + hook trigger so that it doesn't
             // increment the count wrong
             return self.hookUp('afterEach', next);
-          } else {
-            self.fail(test, err);
           }
-          self.emit('test end', test);
 
-          if (err instanceof Pending) {
-            return next();
-          }
-
-          return self.hookUp('afterEach', next);
+          self.fail(test, err);
+        } else {
+          test.state = 'passed';
         }
-
-        test.state = 'passed';
-        self.emit('pass', test);
-        self.emit('test end', test);
-        self.hookUp('afterEach', next);
+        // Run the actual emit that the test passed after the forEach hooks,
+        // so they can still fail a test. And it's not already reported as
+        // passed.
+        self.hookUp('afterEach', function() {
+          if (test.state === 'passed') {
+            self.emit('pass', test);
+          }
+          self.emit('test end', test);
+          next();
+        });
       });
     });
   }
diff --git a/test/integration/fixtures/hooks/afterEach.hook.error.js b/test/integration/fixtures/hooks/afterEach.hook.error.js
index 9d28632fa3..83b37f5f1c 100644
--- a/test/integration/fixtures/hooks/afterEach.hook.error.js
+++ b/test/integration/fixtures/hooks/afterEach.hook.error.js
@@ -6,7 +6,7 @@ describe('spec 1', function () {
   it('should be called because error is in after each hook', function () {
     console.log('test 1');
   });
-  it('should not be called', function () {
+  it('should be called because error is in after each hook', function () {
     console.log('test 2');
   });
 });
diff --git a/test/integration/fixtures/hooks/afterEach.hook.failure.js b/test/integration/fixtures/hooks/afterEach.hook.failure.js
new file mode 100644
index 0000000000..408e1ad9e1
--- /dev/null
+++ b/test/integration/fixtures/hooks/afterEach.hook.failure.js
@@ -0,0 +1,16 @@
+describe('spec 1', function () {
+  afterEach(function () {
+    this.test.error(new Error('something went wrong'));
+  });
+  it('should be set to failure in the afterEach', function () {
+    console.log('test 1');
+  });
+  it('should be set to failure in the afterEach', function () {
+    console.log('test 2');
+  });
+});
+describe('spec 2', function () {
+  it('should succeed', function () {
+    console.log('test 3');
+  });
+});
diff --git a/test/integration/hook.err.js b/test/integration/hook.err.js
index ca1a8fe1bb..46acc6e5aa 100644
--- a/test/integration/hook.err.js
+++ b/test/integration/hook.err.js
@@ -51,7 +51,7 @@ describe('hook error handling', function() {
     it('should verify results', function() {
       assert.deepEqual(
         lines,
-        ['test 1', 'after', 'test 3']
+        ['test 1', 'after', 'test 2', 'after', 'test 3']
       );
     });
   });
@@ -77,8 +77,11 @@ describe('hook error handling', function() {
           '1.2 before each',
           '1.2 test 1',
           '1.2 after each',
-          '1 after each',
-          'root after each',
+          'root before each',
+          '1 before each',
+          '1.2 before each',
+          '1.2 test 2',
+          '1.2 after each',
           '1.2 after',
           '1 after',
           '2.1 before',
diff --git a/test/integration/hooks.js b/test/integration/hooks.js
index 4236c7f82d..376e536bcf 100644
--- a/test/integration/hooks.js
+++ b/test/integration/hooks.js
@@ -41,4 +41,21 @@ describe('hooks', function() {
       done();
     });
   });
+
+  describe('afterEach sets tests to fail', function() {
+    var res;
+    before(function(done) {
+      run('hooks/afterEach.hook.failure.js', args, function(err, result) {
+        res = result;
+        done(err);
+      });
+    });
+
+    it('afterEach can set a test to fail', function() {
+      assert.equal(res.pending, 0);
+      assert.equal(res.passing, 1);
+      assert.equal(res.failing, 2);
+      assert.equal(res.code, 2);
+    });
+  });
 });
diff --git a/test/integration/multiple.done.js b/test/integration/multiple.done.js
index 8bcedf6332..ae86ea2478 100644
--- a/test/integration/multiple.done.js
+++ b/test/integration/multiple.done.js
@@ -16,7 +16,7 @@ describe('multiple calls to done()', function() {
 
     it('results in failures', function() {
       assert.equal(res.stats.pending, 0);
-      assert.equal(res.stats.passes, 1);
+      assert.equal(res.stats.passes, 0);
       assert.equal(res.stats.failures, 1);
       assert.equal(res.code, 1);
     });