diff --git a/doc/api/vm.markdown b/doc/api/vm.markdown
index 612d69945f..1b494a468c 100644
--- a/doc/api/vm.markdown
+++ b/doc/api/vm.markdown
@@ -32,10 +32,10 @@ The options when creating a script are:
   displayed in stack traces
 - `columnOffset`: allows you to add an offset to the column number that is
   displayed in stack traces
-- `displayErrors`: whether or not to print any errors to stderr, with the
-  line of code that caused them highlighted, before throwing an exception.
-  Applies only to syntax errors compiling the code; errors while running the
-  code are controlled by the options to the script's methods.
+- `displayErrors`: if `true`, on error, attach the line of code that caused
+  the error to the stack trace. Applies only to syntax errors compiling the
+  code; errors while running the code are controlled by the options to the
+  script's methods.
 - `timeout`: a number of milliseconds to execute `code` before terminating
   execution. If execution is terminated, an [`Error`][] will be thrown.
 - `cachedData`: an optional `Buffer` with V8's code cache data for the supplied
@@ -150,10 +150,10 @@ The options for running a script are:
   displayed in stack traces
 - `columnOffset`: allows you to add an offset to the column number that is
   displayed in stack traces
-- `displayErrors`: whether or not to print any errors to stderr, with the
-  line of code that caused them highlighted, before throwing an exception.
-  Applies only to runtime errors executing the code; it is impossible to create
-  a `Script` instance with syntax errors, as the constructor will throw.
+- `displayErrors`: if `true`, on error, attach the line of code that caused
+  the error to the stack trace. Applies only to runtime errors executing the
+  code; it is impossible to create a `Script` instance with syntax errors, as
+  the constructor will throw.
 - `timeout`: a number of milliseconds to execute the script before terminating
   execution. If execution is terminated, an [`Error`][] will be thrown.
 
@@ -290,10 +290,10 @@ e.g. `(0,eval)('code')`. However, it also has the following additional options:
   displayed in stack traces
 - `columnOffset`: allows you to add an offset to the column number that is
   displayed in stack traces
-- `displayErrors`: whether or not to print any errors to stderr, with the
-  line of code that caused them highlighted, before throwing an exception.
-  Will capture both syntax errors from compiling `code` and runtime errors
-  thrown by executing the compiled code. Defaults to `true`.
+- `displayErrors`: if `true`, on error, attach the line of code that caused
+  the error to the stack trace. Will capture both syntax errors from compiling
+  `code` and runtime errors thrown by executing the compiled code. Defaults to
+  `true`.
 - `timeout`: a number of milliseconds to execute `code` before terminating
   execution. If execution is terminated, an [`Error`][] will be thrown.
 
diff --git a/lib/module.js b/lib/module.js
index a068bffa7d..eabc27a0f8 100644
--- a/lib/module.js
+++ b/lib/module.js
@@ -23,16 +23,6 @@ function hasOwnProperty(obj, prop) {
 }
 
 
-function tryWrapper(wrapper, opts) {
-  try {
-    return runInThisContext(wrapper, opts);
-  } catch (e) {
-    internalUtil.decorateErrorStack(e);
-    throw e;
-  }
-}
-
-
 function stat(filename) {
   filename = path._makeLong(filename);
   const cache = stat.cache;
@@ -394,8 +384,12 @@ Module.prototype._compile = function(content, filename) {
   // create wrapper function
   var wrapper = Module.wrap(content);
 
-  var compiledWrapper = tryWrapper(wrapper,
-                                   { filename: filename, lineOffset: 0 });
+  var compiledWrapper = runInThisContext(wrapper, {
+    filename: filename,
+    lineOffset: 0,
+    displayErrors: true
+  });
+
   if (global.v8debug) {
     if (!resolvedArgv) {
       // we enter the repl if we're not given a filename argument.
diff --git a/src/node.js b/src/node.js
index 60bffc4540..1f29386a87 100644
--- a/src/node.js
+++ b/src/node.js
@@ -605,7 +605,7 @@
              'global.require = require;\n' +
              'return require("vm").runInThisContext(' +
              JSON.stringify(body) + ', { filename: ' +
-             JSON.stringify(name) + ' });\n';
+             JSON.stringify(name) + ', displayErrors: true });\n';
     // Defer evaluation for a tick.  This is a workaround for deferred
     // events not firing when evaluating scripts from the command line,
     // see https://github.com/nodejs/node/issues/1600.
@@ -988,7 +988,8 @@
 
     var fn = runInThisContext(source, {
       filename: this.filename,
-      lineOffset: 0
+      lineOffset: 0,
+      displayErrors: true
     });
     fn(this.exports, NativeModule.require, this, this.filename);
 
diff --git a/src/node_contextify.cc b/src/node_contextify.cc
index 31d98853d3..7ca622de43 100644
--- a/src/node_contextify.cc
+++ b/src/node_contextify.cc
@@ -541,7 +541,7 @@ class ContextifyScript : public BaseObject {
 
     if (v8_script.IsEmpty()) {
       if (display_errors) {
-        AppendExceptionLine(env, try_catch.Exception(), try_catch.Message());
+        DecorateErrorStack(env, try_catch);
       }
       try_catch.ReThrow();
       return;
@@ -640,6 +640,30 @@ class ContextifyScript : public BaseObject {
     }
   }
 
+  static void DecorateErrorStack(Environment* env, const TryCatch& try_catch) {
+    Local<Value> exception = try_catch.Exception();
+
+    if (!exception->IsObject())
+      return;
+
+    Local<Object> err_obj = exception.As<Object>();
+
+    if (IsExceptionDecorated(env, err_obj))
+      return;
+
+    AppendExceptionLine(env, exception, try_catch.Message());
+    Local<Value> stack = err_obj->Get(env->stack_string());
+    Local<Value> arrow = err_obj->GetHiddenValue(env->arrow_message_string());
+
+    if (!(stack->IsString() && arrow->IsString()))
+      return;
+
+    Local<String> decorated_stack = String::Concat(arrow.As<String>(),
+                                                   stack.As<String>());
+    err_obj->Set(env->stack_string(), decorated_stack);
+    err_obj->SetHiddenValue(env->decorated_string(), True(env->isolate()));
+  }
+
   static int64_t GetTimeoutArg(const FunctionCallbackInfo<Value>& args,
                                const int i) {
     if (args[i]->IsUndefined() || args[i]->IsString()) {
@@ -816,7 +840,7 @@ class ContextifyScript : public BaseObject {
     if (result.IsEmpty()) {
       // Error occurred during execution of the script.
       if (display_errors) {
-        AppendExceptionLine(env, try_catch.Exception(), try_catch.Message());
+        DecorateErrorStack(env, try_catch);
       }
       try_catch.ReThrow();
       return false;
diff --git a/src/node_internals.h b/src/node_internals.h
index c720f70eda..ea83d4d9fc 100644
--- a/src/node_internals.h
+++ b/src/node_internals.h
@@ -125,6 +125,8 @@ inline static int snprintf(char *buffer, size_t n, const char *format, ...) {
 # define NO_RETURN
 #endif
 
+bool IsExceptionDecorated(Environment* env, v8::Local<v8::Value> er);
+
 void AppendExceptionLine(Environment* env,
                          v8::Local<v8::Value> er,
                          v8::Local<v8::Message> message);
diff --git a/test/message/vm_display_syntax_error.js b/test/message/vm_display_syntax_error.js
index 23525c14d8..62bbd432a2 100644
--- a/test/message/vm_display_syntax_error.js
+++ b/test/message/vm_display_syntax_error.js
@@ -4,6 +4,12 @@ var vm = require('vm');
 
 console.error('beginning');
 
+try {
+  vm.runInThisContext('var 4;', { filename: 'foo.vm', displayErrors: true });
+} catch (err) {
+  console.error(err.stack);
+}
+
 vm.runInThisContext('var 5;', { filename: 'test.vm' });
 
 console.error('end');
diff --git a/test/message/vm_display_syntax_error.out b/test/message/vm_display_syntax_error.out
index 0869448702..14df3a8284 100644
--- a/test/message/vm_display_syntax_error.out
+++ b/test/message/vm_display_syntax_error.out
@@ -1,5 +1,18 @@
 beginning
 
+foo.vm:1
+var 4;
+    ^
+SyntaxError: Unexpected number
+    at Object.exports.runInThisContext (vm.js:*)
+    at Object.<anonymous> (*test*message*vm_display_syntax_error.js:*)
+    at Module._compile (module.js:*)
+    at Object.Module._extensions..js (module.js:*)
+    at Module.load (module.js:*)
+    at Function.Module._load (module.js:*)
+    at Function.Module.runMain (module.js:*)
+    at startup (node.js:*)
+    at node.js:*
 test.vm:1
 var 5;
     ^