diff --git a/spring-batch-core/src/main/java/org/springframework/batch/core/step/item/StepHandlerStep.java b/spring-batch-core/src/main/java/org/springframework/batch/core/step/item/StepHandlerStep.java
index a82f22a13..af0317609 100644
--- a/spring-batch-core/src/main/java/org/springframework/batch/core/step/item/StepHandlerStep.java
+++ b/spring-batch-core/src/main/java/org/springframework/batch/core/step/item/StepHandlerStep.java
@@ -304,8 +304,15 @@ public class StepHandlerStep extends AbstractStep {
 						logger.error("Fatal error detected during commit.");
 						throw new FatalException("Fatal error detected during commit", e);
 					}
-
-					getJobRepository().update(stepExecution);
+					
+					try {
+						getJobRepository().update(stepExecution);
+					}
+					catch (Exception e) {
+						fatalException.setException(e);
+						stepExecution.setStatus(BatchStatus.UNKNOWN);
+						throw new FatalException("Fatal error detected during update of step execution", e);
+					}
 
 				}
 				catch (Error e) {
diff --git a/spring-batch-core/src/test/java/org/springframework/batch/core/step/item/StepHandlerStepTests.java b/spring-batch-core/src/test/java/org/springframework/batch/core/step/item/StepHandlerStepTests.java
index 9900805d3..635ce91f3 100644
--- a/spring-batch-core/src/test/java/org/springframework/batch/core/step/item/StepHandlerStepTests.java
+++ b/spring-batch-core/src/test/java/org/springframework/batch/core/step/item/StepHandlerStepTests.java
@@ -35,6 +35,7 @@ import org.springframework.batch.core.StepExecutionListener;
 import org.springframework.batch.core.UnexpectedJobExecutionException;
 import org.springframework.batch.core.job.JobSupport;
 import org.springframework.batch.core.listener.StepExecutionListenerSupport;
+import org.springframework.batch.core.repository.JobRepository;
 import org.springframework.batch.core.repository.dao.MapExecutionContextDao;
 import org.springframework.batch.core.repository.dao.MapJobExecutionDao;
 import org.springframework.batch.core.repository.dao.MapJobInstanceDao;
@@ -59,6 +60,7 @@ import org.springframework.batch.repeat.policy.DefaultResultCompletionPolicy;
 import org.springframework.batch.repeat.policy.SimpleCompletionPolicy;
 import org.springframework.batch.repeat.support.RepeatTemplate;
 import org.springframework.batch.support.transaction.ResourcelessTransactionManager;
+import org.springframework.dao.DataAccessResourceFailureException;
 import org.springframework.transaction.TransactionException;
 import org.springframework.transaction.support.DefaultTransactionStatus;
 
@@ -135,6 +137,9 @@ public class StepHandlerStepTests extends TestCase {
 		assertEquals(1, stepExecution.getItemCount());
 	}
 
+	/**
+	 * StepExecution should be updated after every chunk commit.
+	 */
 	public void testStepExecutionUpdates() throws Exception {
 
 		JobExecution jobExecution = new JobExecution(jobInstance);
@@ -152,6 +157,31 @@ public class StepHandlerStepTests extends TestCase {
 		assertTrue(3 <= jobRepository.updateCount);
 	}
 
+	/**
+	 * Failure to update StepExecution after chunk commit is fatal.
+	 */
+	public void testStepExecutionUpdateFailure() throws Exception {
+
+		JobExecution jobExecution = new JobExecution(jobInstance);
+		StepExecution stepExecution = new StepExecution(step.getName(), jobExecution);
+
+		JobRepository repository = new JobRepositoryFailedUpdateStub();
+
+		step.setJobRepository(repository);
+		step.afterPropertiesSet();
+
+		try {
+			step.execute(stepExecution);
+			fail();
+		}
+		catch (Exception e) {
+			assertEquals(BatchStatus.UNKNOWN, stepExecution.getStatus());
+			assertEquals("Fatal error detected during update of step execution", e.getMessage());
+			assertEquals("stub exception", e.getCause().getMessage());
+		}
+		
+	}
+
 	public void testChunkExecutor() throws Exception {
 
 		RepeatTemplate template = new RepeatTemplate();
@@ -810,8 +840,21 @@ public class StepHandlerStepTests extends TestCase {
 		}
 
 	}
+	
+	private static class JobRepositoryFailedUpdateStub extends JobRepositorySupport {
+		
+		private boolean firstCall = true;
+		
+		public void update(StepExecution stepExecution) {
+			if (firstCall) {
+				firstCall = false;
+				throw new DataAccessResourceFailureException("stub exception");
+			}
+		}
+	}
 
-	private class MockRestartableItemReader extends ItemStreamSupport implements ItemReader<String>, StepExecutionListener {
+	private class MockRestartableItemReader extends ItemStreamSupport implements ItemReader<String>,
+			StepExecutionListener {
 
 		private boolean getExecutionAttributesCalled = false;