diff --git a/Lib/sqlite3/test/hooks.py b/Lib/sqlite3/test/hooks.py
index 43e3810d13df18..6d61b2c2e46e94 100644
--- a/Lib/sqlite3/test/hooks.py
+++ b/Lib/sqlite3/test/hooks.py
@@ -289,6 +289,15 @@ def trace(statement):
             con2.close()
         self.assertEqual(traced_statements, queries)
 
+    @with_tracebacks(["ZeroDivisionError", "division by zero"])
+    def test_trace_bad_handler(self):
+        cx = sqlite.connect(":memory:")
+        cx.set_trace_callback(lambda stmt: 5/0)
+        self.assertRaisesRegex(
+            sqlite.OperationalError, "trace callback raised an exception",
+            cx.execute, "select 1"
+        )
+
 
 def suite():
     tests = [
diff --git a/Misc/NEWS.d/next/Library/2021-09-02-23-06-56.bpo-45089.ZeU_ie.rst b/Misc/NEWS.d/next/Library/2021-09-02-23-06-56.bpo-45089.ZeU_ie.rst
new file mode 100644
index 00000000000000..904c35843e1a43
--- /dev/null
+++ b/Misc/NEWS.d/next/Library/2021-09-02-23-06-56.bpo-45089.ZeU_ie.rst
@@ -0,0 +1,2 @@
+The :mod:`sqlite3` trace callback now raise :exc:`~sqlite3.DataError` or
+:exc:`~sqlite3.OperationalError` on error. Patch by Erlend E. Aasland.
diff --git a/Modules/_sqlite/connection.c b/Modules/_sqlite/connection.c
index 0780d41c5a0c39..ae1a534ff98146 100644
--- a/Modules/_sqlite/connection.c
+++ b/Modules/_sqlite/connection.c
@@ -1011,27 +1011,33 @@ trace_callback(void *ctx, const char *statement_string)
 
     PyGILState_STATE gilstate = PyGILState_Ensure();
 
-    PyObject *py_statement = NULL;
-    PyObject *ret = NULL;
-    py_statement = PyUnicode_DecodeUTF8(statement_string,
+    PyObject *py_statement = PyUnicode_DecodeUTF8(statement_string,
             strlen(statement_string), "replace");
-    if (py_statement) {
-        ret = PyObject_CallOneArg((PyObject*)ctx, py_statement);
-        Py_DECREF(py_statement);
+    if (py_statement == NULL) {
+        pysqlite_state *state = pysqlite_get_state(NULL);
+        if (state->enable_callback_tracebacks) {
+            PyErr_Print();
+        }
+        PyErr_SetString(state->DataError,
+                        "trace callback unable to fetch statement string");
+        goto exit;
     }
 
-    if (ret) {
-        Py_DECREF(ret);
-    } else {
+    PyObject *ret = PyObject_CallOneArg((PyObject *)ctx, py_statement);
+    Py_DECREF(py_statement);
+    if (ret == NULL) {
         pysqlite_state *state = pysqlite_get_state(NULL);
         if (state->enable_callback_tracebacks) {
             PyErr_Print();
         }
-        else {
-            PyErr_Clear();
-        }
+        PyErr_SetString(state->OperationalError,
+                        "trace callback raised an exception");
+    }
+    else {
+        Py_DECREF(ret);
     }
 
+exit:
     PyGILState_Release(gilstate);
 #ifdef HAVE_TRACE_V2
     return 0;