diff --git a/spring-cloud-openfeign-core/src/main/java/org/springframework/cloud/openfeign/FeignCircuitBreakerInvocationHandler.java b/spring-cloud-openfeign-core/src/main/java/org/springframework/cloud/openfeign/FeignCircuitBreakerInvocationHandler.java
index da76d175..a85cf471 100644
--- a/spring-cloud-openfeign-core/src/main/java/org/springframework/cloud/openfeign/FeignCircuitBreakerInvocationHandler.java
+++ b/spring-cloud-openfeign-core/src/main/java/org/springframework/cloud/openfeign/FeignCircuitBreakerInvocationHandler.java
@@ -17,6 +17,7 @@
 package org.springframework.cloud.openfeign;
 
 import java.lang.reflect.InvocationHandler;
+import java.lang.reflect.InvocationTargetException;
 import java.lang.reflect.Method;
 import java.lang.reflect.Proxy;
 import java.util.LinkedHashMap;
@@ -29,6 +30,7 @@ import feign.Target;
 
 import org.springframework.cloud.client.circuitbreaker.CircuitBreaker;
 import org.springframework.cloud.client.circuitbreaker.CircuitBreakerFactory;
+import org.springframework.cloud.client.circuitbreaker.NoFallbackAvailableException;
 import org.springframework.web.context.request.RequestAttributes;
 import org.springframework.web.context.request.RequestContextHolder;
 
@@ -95,15 +97,29 @@ class FeignCircuitBreakerInvocationHandler implements InvocationHandler {
 				try {
 					return this.fallbackMethodMap.get(method).invoke(fallback, args);
 				}
-				catch (Exception e) {
-					throw new IllegalStateException(e);
+				catch (Exception exception) {
+					unwrapAndRethrow(exception);
 				}
+				return null;
 			};
 			return circuitBreaker.run(supplier, fallbackFunction);
 		}
 		return circuitBreaker.run(supplier);
 	}
 
+	private void unwrapAndRethrow(Exception exception) {
+		if (exception instanceof InvocationTargetException || exception instanceof NoFallbackAvailableException) {
+			Throwable underlyingException = exception.getCause();
+			if (underlyingException instanceof RuntimeException) {
+				throw (RuntimeException) underlyingException;
+			}
+			if (underlyingException != null) {
+				throw new IllegalStateException(underlyingException);
+			}
+			throw new IllegalStateException(exception);
+		}
+	}
+
 	private Supplier<Object> asSupplier(final Method method, final Object[] args) {
 		final RequestAttributes requestAttributes = RequestContextHolder.getRequestAttributes();
 		return () -> {
diff --git a/spring-cloud-openfeign-core/src/test/java/org/springframework/cloud/openfeign/circuitbreaker/CircuitBreakerTests.java b/spring-cloud-openfeign-core/src/test/java/org/springframework/cloud/openfeign/circuitbreaker/CircuitBreakerTests.java
index 87676464..da6dfa05 100644
--- a/spring-cloud-openfeign-core/src/test/java/org/springframework/cloud/openfeign/circuitbreaker/CircuitBreakerTests.java
+++ b/spring-cloud-openfeign-core/src/test/java/org/springframework/cloud/openfeign/circuitbreaker/CircuitBreakerTests.java
@@ -16,6 +16,7 @@
 
 package org.springframework.cloud.openfeign.circuitbreaker;
 
+import java.io.IOException;
 import java.util.function.Function;
 
 import org.apache.commons.logging.Log;
@@ -47,6 +48,7 @@ import org.springframework.web.bind.annotation.GetMapping;
 import org.springframework.web.bind.annotation.RestController;
 
 import static org.assertj.core.api.Assertions.assertThat;
+import static org.assertj.core.api.Assertions.assertThatExceptionOfType;
 
 /**
  * @author Spencer Gibb
@@ -63,6 +65,9 @@ class CircuitBreakerTests {
 	@Autowired
 	TestClient testClient;
 
+	@Autowired
+	ExceptionClient exceptionClient;
+
 	@Autowired
 	TestClientWithFactory testClientWithFactory;
 
@@ -109,6 +114,17 @@ class CircuitBreakerTests {
 		assertThat(testClientWithFactory.getException()).isEqualTo("Fixed response");
 	}
 
+	@Test
+	void testRuntimeExceptionUnwrapped() {
+		assertThatExceptionOfType(UnsupportedOperationException.class)
+				.isThrownBy(() -> exceptionClient.getRuntimeException());
+	}
+
+	@Test
+	void testCheckedExceptionWrapped() {
+		assertThatExceptionOfType(IllegalStateException.class).isThrownBy(() -> exceptionClient.getCheckedException());
+	}
+
 	@FeignClient(name = "test", url = "http://localhost:${server.port}/", fallback = Fallback.class)
 	protected interface TestClient {
 
@@ -120,6 +136,18 @@ class CircuitBreakerTests {
 
 	}
 
+	@FeignClient(name = "exceptionClient", url = "http://localhost:${server.port}/",
+			fallbackFactory = ExceptionThrowingFallbackFactory.class)
+	protected interface ExceptionClient {
+
+		@GetMapping("/runtimeException")
+		Hello getRuntimeException();
+
+		@GetMapping("/runtimeException")
+		Hello getCheckedException() throws IOException;
+
+	}
+
 	@Component
 	static class Fallback implements TestClient {
 
@@ -157,6 +185,25 @@ class CircuitBreakerTests {
 
 	}
 
+	static class ExceptionThrowingFallbackFactory implements FallbackFactory<ExceptionClient> {
+
+		@Override
+		public ExceptionClient create(Throwable cause) {
+			return new ExceptionClient() {
+				@Override
+				public Hello getRuntimeException() {
+					throw new UnsupportedOperationException("Not implemented!");
+				}
+
+				@Override
+				public Hello getCheckedException() throws IOException {
+					throw new IOException();
+				}
+			};
+		}
+
+	}
+
 	static class FallbackWithFactory implements TestClientWithFactory {
 
 		@Override
@@ -174,7 +221,7 @@ class CircuitBreakerTests {
 	@Configuration(proxyBeanMethods = false)
 	@EnableAutoConfiguration
 	@RestController
-	@EnableFeignClients(clients = { TestClient.class, TestClientWithFactory.class })
+	@EnableFeignClients(clients = { TestClient.class, TestClientWithFactory.class, ExceptionClient.class })
 	@Import(NoSecurityConfiguration.class)
 	protected static class Application implements TestClient {
 
@@ -226,6 +273,11 @@ class CircuitBreakerTests {
 			return new TestFallbackFactory();
 		}
 
+		@Bean
+		ExceptionThrowingFallbackFactory exceptionThrowingFallbackFactory() {
+			return new ExceptionThrowingFallbackFactory();
+		}
+
 	}
 
 }