diff --git a/test-framework/junit5/src/main/java/io/quarkus/test/junit/AbstractTestWithCallbacksExtension.java b/test-framework/junit5/src/main/java/io/quarkus/test/junit/AbstractTestWithCallbacksExtension.java
index 2717fe0fa4a40..c48fdc5624a9e 100644
--- a/test-framework/junit5/src/main/java/io/quarkus/test/junit/AbstractTestWithCallbacksExtension.java
+++ b/test-framework/junit5/src/main/java/io/quarkus/test/junit/AbstractTestWithCallbacksExtension.java
@@ -158,7 +158,12 @@ private void invokeCallbacks(List<Object> callbacks, String methodName, Class<?>
                         .invoke(callback, classInstance);
             }
         } catch (InvocationTargetException e) {
-            throw e.getCause() instanceof Exception ? (Exception) e.getCause() : e;
+            if (e.getCause() instanceof Exception) {
+                throw (Exception) e.getCause();
+            } else if (e.getCause() instanceof AssertionError) {
+                throw (AssertionError) e.getCause();
+            }
+            throw e;
         }
     }
 }
diff --git a/test-framework/junit5/src/test/java/io/quarkus/test/junit/ErrorThrowingCallback.java b/test-framework/junit5/src/test/java/io/quarkus/test/junit/ErrorThrowingCallback.java
new file mode 100644
index 0000000000000..a87f495c8ad8d
--- /dev/null
+++ b/test-framework/junit5/src/test/java/io/quarkus/test/junit/ErrorThrowingCallback.java
@@ -0,0 +1,34 @@
+package io.quarkus.test.junit;
+
+import java.io.IOException;
+import java.io.UncheckedIOException;
+
+import org.junit.jupiter.api.AssertionFailureBuilder;
+
+import io.quarkus.test.junit.callback.QuarkusTestAfterEachCallback;
+import io.quarkus.test.junit.callback.QuarkusTestMethodContext;
+
+/**
+ * Test handling of {@link AssertionError}s and {@link RuntimeException} in callbacks.
+ *
+ * @see QuarkusTestCallbacksErrorHandlingTest
+ */
+public class ErrorThrowingCallback implements QuarkusTestAfterEachCallback {
+    @Override
+    public void afterEach(QuarkusTestMethodContext context) {
+        String throwableType = System.getProperty("quarkus.test.callback.throwableType");
+
+        if ("AssertionError".equalsIgnoreCase(throwableType)) {
+            AssertionFailureBuilder
+                    .assertionFailure()
+                    .expected("a")
+                    .actual("b")
+                    .reason("Oh no, it broke! Here's an assertion error")
+                    .buildAndThrow();
+        }
+
+        if ("RuntimeException".equalsIgnoreCase(throwableType)) {
+            throw new UncheckedIOException(new IOException("Oh dear, it broke again"));
+        }
+    }
+}
diff --git a/test-framework/junit5/src/test/java/io/quarkus/test/junit/QuarkusTestCallbacksErrorHandlingTest.java b/test-framework/junit5/src/test/java/io/quarkus/test/junit/QuarkusTestCallbacksErrorHandlingTest.java
new file mode 100644
index 0000000000000..c56ff9877b43f
--- /dev/null
+++ b/test-framework/junit5/src/test/java/io/quarkus/test/junit/QuarkusTestCallbacksErrorHandlingTest.java
@@ -0,0 +1,50 @@
+package io.quarkus.test.junit;
+
+import java.io.UncheckedIOException;
+import java.util.List;
+
+import org.junit.jupiter.api.Assertions;
+import org.junit.jupiter.api.Test;
+
+import io.quarkus.test.junit.callback.QuarkusTestMethodContext;
+
+/**
+ * Generally, {@link AssertionError} is thrown by testing frameworks such as JUnit. However,
+ * it does not derive from {@link RuntimeException} hierarchy, and hence separate unwrapping of each type
+ * must be handled in {@link io.quarkus.test.junit.AbstractTestWithCallbacksExtension}.
+ * <p>
+ * Ensuring that <code>AssertionError</code> is at the top of any stack track allows tooling to properly
+ * parse and display expected vs actual diffs, etc.
+ *
+ * @see ErrorThrowingCallback
+ */
+public class QuarkusTestCallbacksErrorHandlingTest {
+
+    @Test
+    public void testAssertionErrorsAreUnwrappedFromCallback() {
+        Assertions.assertThrows(AssertionError.class, () -> {
+            System.setProperty("quarkus.test.callback.throwableType", "AssertionError");
+            MockCallbackExtension extension = new MockCallbackExtension();
+            QuarkusTestMethodContext mockContext = new QuarkusTestMethodContext(new Object(), List.of(), null, null);
+            extension.invokeAfterEachCallbacks(mockContext);
+        });
+    }
+
+    @Test
+    public void testRuntimeExceptionsAreUnwrappedFromCallback() {
+        Assertions.assertThrows(UncheckedIOException.class, () -> {
+            System.setProperty("quarkus.test.callback.throwableType", "RuntimeException");
+            MockCallbackExtension extension = new MockCallbackExtension();
+            QuarkusTestMethodContext mockContext = new QuarkusTestMethodContext(new Object(), List.of(), null, null);
+            extension.invokeAfterEachCallbacks(mockContext);
+        });
+    }
+
+    public static class MockCallbackExtension extends AbstractTestWithCallbacksExtension {
+
+        public MockCallbackExtension() throws ClassNotFoundException {
+            populateCallbacks(Thread.currentThread().getContextClassLoader());
+        }
+
+    }
+}
diff --git a/test-framework/junit5/src/test/resources/META-INF/services/io.quarkus.test.junit.callback.QuarkusTestAfterEachCallback b/test-framework/junit5/src/test/resources/META-INF/services/io.quarkus.test.junit.callback.QuarkusTestAfterEachCallback
new file mode 100644
index 0000000000000..833d325d836f8
--- /dev/null
+++ b/test-framework/junit5/src/test/resources/META-INF/services/io.quarkus.test.junit.callback.QuarkusTestAfterEachCallback
@@ -0,0 +1 @@
+io.quarkus.test.junit.ErrorThrowingCallback