diff --git a/Lib/test/test_frame.py b/Lib/test/test_frame.py
index 18ade18d1a1708c..5c58ceeb69f441c 100644
--- a/Lib/test/test_frame.py
+++ b/Lib/test/test_frame.py
@@ -18,6 +18,11 @@
 from test import mapping_tests
 
 
+class FailingKeysDict(dict):
+    def keys(self):
+        raise RuntimeError("keys() failed")
+
+
 class ClearTest(unittest.TestCase):
     """
     Tests for frame.clear().
@@ -380,6 +385,9 @@ def test_as_dict(self):
         self.assertEqual(d['x'], 3)
         self.assertEqual(d['z'], 4)
 
+        with self.assertRaisesRegex(RuntimeError, r"keys\(\) failed"):
+            d.update(FailingKeysDict())
+
         with self.assertRaises(TypeError):
             d.update([1, 2])
 
@@ -399,6 +407,8 @@ def test_as_number(self):
         self.assertEqual(d['z'], 3)
         d |= {'y': 3}
         self.assertEqual(d['y'], 3)
+        with self.assertRaisesRegex(RuntimeError, r"keys\(\) failed"):
+            d |= FailingKeysDict()
         with self.assertRaises(TypeError):
             d |= 3
         with self.assertRaises(TypeError):
diff --git a/Misc/NEWS.d/next/Core_and_Builtins/2026-07-09-00-00-00.gh-issue-153418.framelocalsproxy-errors.rst b/Misc/NEWS.d/next/Core_and_Builtins/2026-07-09-00-00-00.gh-issue-153418.framelocalsproxy-errors.rst
new file mode 100644
index 000000000000000..e0afa3e629782df
--- /dev/null
+++ b/Misc/NEWS.d/next/Core_and_Builtins/2026-07-09-00-00-00.gh-issue-153418.framelocalsproxy-errors.rst
@@ -0,0 +1,3 @@
+Fix ``frame.f_locals |= ...`` mishandling exceptions raised by the right-hand
+mapping, and fix ``frame.f_locals.update()`` unconditionally replacing any
+exception with :exc:`TypeError`.
diff --git a/Objects/frameobject.c b/Objects/frameobject.c
index e7ac59379dcfbcc..3fa9b6494d4144b 100644
--- a/Objects/frameobject.c
+++ b/Objects/frameobject.c
@@ -573,7 +573,7 @@ framelocalsproxy_inplace_or(PyObject *self, PyObject *other)
     }
 
     if (framelocalsproxy_merge(self, other) < 0) {
-        Py_RETURN_NOTIMPLEMENTED;
+        return NULL;
     }
 
     return Py_NewRef(self);
@@ -720,11 +720,15 @@ static PyObject* framelocalsproxy___contains__(PyObject *self, PyObject *key)
 static PyObject*
 framelocalsproxy_update(PyObject *self, PyObject *other)
 {
-    if (framelocalsproxy_merge(self, other) < 0) {
+    if (!PyDict_Check(other) && !PyFrameLocalsProxy_Check(other)) {
         PyErr_SetString(PyExc_TypeError, "update() argument must be dict or another FrameLocalsProxy");
         return NULL;
     }
 
+    if (framelocalsproxy_merge(self, other) < 0) {
+        return NULL;
+    }
+
     Py_RETURN_NONE;
 }