diff --git a/lib/runner.js b/lib/runner.js
index 6f7e28ca77..f01fc6aeee 100644
--- a/lib/runner.js
+++ b/lib/runner.js
@@ -201,10 +201,18 @@ Runner.prototype.fail = function(test, err){
 /**
  * Fail the given `hook` with `err`.
  *
- * Hook failures (currently) hard-end due
- * to that fact that a failing hook will
- * surely cause subsequent tests to fail,
- * causing jumbled reporting.
+ * Hook failures work in the following pattern:
+ * - If bail, then exit
+ * - Failed `before` hook skips all tests in a suite and subsuites,
+ *   but jumps to corresponding `after` hook
+ * - Failed `before each` hook skips remaining tests in a 
+ *   suite and jumps to corresponding `after each` hook,
+ *   which is run only once
+ * - Failed `after` hook does not alter
+ *   execution order
+ * - Failed `after each` hook skips remaining tests in a 
+ *   suite and subsuites, but executes other `after each`
+ *   hooks
  *
  * @param {Hook} hook
  * @param {Error} err
@@ -213,7 +221,9 @@ Runner.prototype.fail = function(test, err){
 
 Runner.prototype.failHook = function(hook, err){
   this.fail(hook, err);
-  this.emit('end');
+  if (this.suite.bail()) {
+    this.emit('end');
+  }
 };
 
 /**
@@ -248,7 +258,12 @@ Runner.prototype.hook = function(name, fn){
       hook.removeAllListeners('error');
       var testError = hook.error();
       if (testError) self.fail(self.test, testError);
-      if (err) return self.failHook(hook, err);
+      if (err) {
+        self.failHook(hook, err); 
+
+        // stop executing hooks, notify callee of hook err
+        return fn(err);
+      }
       self.emit('hook end', hook);
       delete hook.ctx.currentTest;
       next(++i);
@@ -262,7 +277,7 @@ Runner.prototype.hook = function(name, fn){
 
 /**
  * Run hook `name` for the given array of `suites`
- * in order, and callback `fn(err)`.
+ * in order, and callback `fn(err, errSuite)`.
  *
  * @param {String} name
  * @param {Array} suites
@@ -284,8 +299,9 @@ Runner.prototype.hooks = function(name, suites, fn){
 
     self.hook(name, function(err){
       if (err) {
+        var errSuite = self.suite;
         self.suite = orig;
-        return fn(err);
+        return fn(err, errSuite);
       }
 
       next(suites.pop());
@@ -373,10 +389,37 @@ Runner.prototype.runTests = function(suite, fn){
     , tests = suite.tests.slice()
     , test;
 
-  function next(err) {
+
+  function hookErr(err, errSuite, after) {
+    // before/after Each hook for errSuite failed:
+    var orig = self.suite;
+
+    // for failed 'after each' hook start from errSuite parent,
+    // otherwise start from errSuite itself
+    self.suite = after ? errSuite.parent : errSuite;
+    
+    if (self.suite) {
+      // call hookUp afterEach
+      self.hookUp('afterEach', function(err2, errSuite2) {
+        self.suite = orig;
+        // some hooks may fail even now
+        if (err2) return hookErr(err2, errSuite2, true);
+        // report error suite
+        fn(errSuite);
+      });
+    } else {
+      // there is no need calling other 'after each' hooks 
+      self.suite = orig;
+      fn(errSuite);
+    }
+  }
+
+  function next(err, errSuite) {
     // if we bail after first err
     if (self.failures && suite._bail) return fn();
 
+    if (err) return hookErr(err, errSuite, true);
+
     // next test
     test = tests.shift();
 
@@ -397,7 +440,10 @@ Runner.prototype.runTests = function(suite, fn){
 
     // execute test and hook(s)
     self.emit('test', self.test = test);
-    self.hookDown('beforeEach', function(){
+    self.hookDown('beforeEach', function(err, errSuite){
+
+      if (err) return hookErr(err, errSuite, false);
+
       self.currentRunnable = self.test;
       self.runTest(function(err){
         test = self.test;
@@ -440,21 +486,35 @@ Runner.prototype.runSuite = function(suite, fn){
 
   this.emit('suite', this.suite = suite);
 
-  function next() {
+  function next(errSuite) {
+    if (errSuite) {
+      // current suite failed on a hook from errSuite
+      if (errSuite == suite) {
+        // if errSuite is current suite
+        // continue to the next sibling suite
+        return done();
+      } else {
+        // errSuite is among the parents of current suite
+        // stop execution of errSuite and all sub-suites
+        return done(errSuite);
+      }
+    }
+
     var curr = suite.suites[i++];
     if (!curr) return done();
     self.runSuite(curr, next);
   }
 
-  function done() {
+  function done(errSuite) {
     self.suite = suite;
     self.hook('afterAll', function(){
       self.emit('suite end', suite);
-      fn();
+      fn(errSuite);
     });
   }
 
-  this.hook('beforeAll', function(){
+  this.hook('beforeAll', function(err){
+    if (err) return done();
     self.runTests(suite, next);
   });
 };
diff --git a/mocha.js b/mocha.js
index 9b7c1fa56d..16fbb8a305 100644
--- a/mocha.js
+++ b/mocha.js
@@ -4422,9 +4422,7 @@ Runner.prototype.globalProps = function() {
 Runner.prototype.globals = function(arr){
   if (0 == arguments.length) return this._globals;
   debug('globals %j', arr);
-  utils.forEach(arr, function(arr){
-    this._globals.push(arr);
-  }, this);
+  this._globals = this._globals.concat(arr);
   return this;
 };
 
@@ -4480,10 +4478,18 @@ Runner.prototype.fail = function(test, err){
 /**
  * Fail the given `hook` with `err`.
  *
- * Hook failures (currently) hard-end due
- * to that fact that a failing hook will
- * surely cause subsequent tests to fail,
- * causing jumbled reporting.
+ * Hook failures work in the following pattern:
+ * - If bail, then exit
+ * - Failed `before` hook skips all tests in a suite and subsuites,
+ *   but jumps to corresponding `after` hook
+ * - Failed `before each` hook skips remaining tests in a 
+ *   suite and jumps to corresponding `after each` hook,
+ *   which is run only once
+ * - Failed `after` hook does not alter
+ *   execution order
+ * - Failed `after each` hook skips remaining tests in a 
+ *   suite and subsuites, but executes other `after each`
+ *   hooks
  *
  * @param {Hook} hook
  * @param {Error} err
@@ -4492,7 +4498,9 @@ Runner.prototype.fail = function(test, err){
 
 Runner.prototype.failHook = function(hook, err){
   this.fail(hook, err);
-  this.emit('end');
+  if (this.suite.bail()) {
+    this.emit('end');
+  }
 };
 
 /**
@@ -4527,7 +4535,12 @@ Runner.prototype.hook = function(name, fn){
       hook.removeAllListeners('error');
       var testError = hook.error();
       if (testError) self.fail(self.test, testError);
-      if (err) return self.failHook(hook, err);
+      if (err) {
+        self.failHook(hook, err); 
+
+        // stop executing hooks, notify callee of hook err
+        return fn(err);
+      }
       self.emit('hook end', hook);
       delete hook.ctx.currentTest;
       next(++i);
@@ -4541,7 +4554,7 @@ Runner.prototype.hook = function(name, fn){
 
 /**
  * Run hook `name` for the given array of `suites`
- * in order, and callback `fn(err)`.
+ * in order, and callback `fn(err, errSuite)`.
  *
  * @param {String} name
  * @param {Array} suites
@@ -4563,8 +4576,9 @@ Runner.prototype.hooks = function(name, suites, fn){
 
     self.hook(name, function(err){
       if (err) {
+        var errSuite = self.suite;
         self.suite = orig;
-        return fn(err);
+        return fn(err, errSuite);
       }
 
       next(suites.pop());
@@ -4652,10 +4666,37 @@ Runner.prototype.runTests = function(suite, fn){
     , tests = suite.tests.slice()
     , test;
 
-  function next(err) {
+
+  function hookErr(err, errSuite, after) {
+    // before/after Each hook for errSuite failed:
+    var orig = self.suite;
+
+    // for failed 'after each' hook start from errSuite parent,
+    // otherwise start from errSuite itself
+    self.suite = after ? errSuite.parent : errSuite;
+    
+    if (self.suite) {
+      // call hookUp afterEach
+      self.hookUp('afterEach', function(err2, errSuite2) {
+        self.suite = orig;
+        // some hooks may fail even now
+        if (err2) return hookErr(err2, errSuite2, true);
+        // report error suite
+        fn(errSuite);
+      });
+    } else {
+      // there is no need calling other 'after each' hooks 
+      self.suite = orig;
+      fn(errSuite);
+    }
+  }
+
+  function next(err, errSuite) {
     // if we bail after first err
     if (self.failures && suite._bail) return fn();
 
+    if (err) return hookErr(err, errSuite, true);
+
     // next test
     test = tests.shift();
 
@@ -4676,7 +4717,10 @@ Runner.prototype.runTests = function(suite, fn){
 
     // execute test and hook(s)
     self.emit('test', self.test = test);
-    self.hookDown('beforeEach', function(){
+    self.hookDown('beforeEach', function(err, errSuite){
+
+      if (err) return hookErr(err, errSuite, false);
+
       self.currentRunnable = self.test;
       self.runTest(function(err){
         test = self.test;
@@ -4719,21 +4763,35 @@ Runner.prototype.runSuite = function(suite, fn){
 
   this.emit('suite', this.suite = suite);
 
-  function next() {
+  function next(errSuite) {
+    if (errSuite) {
+      // current suite failed on a hook from errSuite
+      if (errSuite == suite) {
+        // if errSuite is current suite
+        // continue to the next sibling suite
+        return done();
+      } else {
+        // errSuite is among the parents of current suite
+        // stop execution of errSuite and all sub-suites
+        return done(errSuite);
+      }
+    }
+
     var curr = suite.suites[i++];
     if (!curr) return done();
     self.runSuite(curr, next);
   }
 
-  function done() {
+  function done(errSuite) {
     self.suite = suite;
     self.hook('afterAll', function(){
       self.emit('suite end', suite);
-      fn();
+      fn(errSuite);
     });
   }
 
-  this.hook('beforeAll', function(){
+  this.hook('beforeAll', function(err){
+    if (err) return done();
     self.runTests(suite, next);
   });
 };
diff --git a/test/hook.err.js b/test/hook.err.js
new file mode 100644
index 0000000000..f28ecdd501
--- /dev/null
+++ b/test/hook.err.js
@@ -0,0 +1,296 @@
+describe('hook error handling', function(){
+  // Lines in this test should be uncommented to see actual behavior
+  // You will also see errors in hooks
+  describe('before hook error', function() {
+    var calls = [];
+    describe('spec 1', function () {
+      describe('spec 1 nested', function () {
+        it('should not be called, because hook error was in a parent suite', function() {
+          calls.push('test nested');
+        })
+      })
+      before(function(){
+        calls.push('before');
+        // throw new Error('before hook error');
+      })
+      after(function(){
+        calls.push('after');
+      })
+      it('should not be called because of error in before hook', function() {
+        calls.push('test');
+      })
+    })
+    describe('spec 2', function () {
+      before(function(){
+        calls.push('before 2');
+      })
+      after(function(){
+        calls.push('after 2');
+      })
+      it('should be called, because hook error was in a sibling suite', function() {
+        calls.push('test 2');
+      })
+    })
+    after(function () {
+      // calls.should.eql(['before', 'after', 'before 2', 'test 2', 'after 2']);
+    })
+  })
+
+  describe('before each hook error', function() {
+    var calls = [];
+    describe('spec 1', function () {
+      describe('spec 1 nested', function () {
+        it('should not be called, because hook error was in a parent suite', function() {
+          calls.push('test nested');
+        })
+      })
+      beforeEach(function(){
+        calls.push('before');
+        // throw new Error('before each hook error');
+      })
+      afterEach(function(){
+        calls.push('after');
+      })
+      it('should not be called because of error in before each hook', function() {
+        calls.push('test');
+      })
+    })
+    describe('spec 2', function () {
+      before(function(){
+        calls.push('before 2');
+      })
+      after(function(){
+        calls.push('after 2');
+      })
+      it('should be called, because hook error was in a sibling suite', function() {
+        calls.push('test 2');
+      })
+    })
+    after(function () {
+      // This should be called !
+      // calls.should.eql(['before', 'after', 'before 2', 'test 2', 'after 2']);
+    })
+  })
+
+  describe('after hook error', function() {
+    var calls = [];
+    describe('spec 1', function () {
+      describe('spec 1 nested', function () {
+        it('should be called, because hook error will happen after parent suite', function() {
+          calls.push('test nested');
+        })
+      })
+      before(function(){
+        calls.push('before');
+      })
+      after(function(){
+        calls.push('after');
+        // throw new Error('after hook error');
+      })
+      it('should be called because error is in after hook', function() {
+        calls.push('test');
+      })
+    })
+    describe('spec 2', function () {
+      before(function(){
+        calls.push('before 2');
+      })
+      after(function(){
+        calls.push('after 2');
+      })
+      it('should be called, because hook error was in a sibling suite', function() {
+        calls.push('test 2');
+      })
+    })
+    after(function () {
+      // Even this should be called !
+      // calls.should.eql(['before', 'test', 'test nested', 'after', 'before 2', 'test 2', 'after 2']);
+    })
+  })
+
+  describe('after each hook error', function() {
+    var calls = [];
+    describe('spec 1', function () {
+      describe('spec 1 nested', function () {
+        it('should not be called, because hook error has already happened in parent suite', function() {
+          calls.push('test nested');
+        })
+      })
+      beforeEach(function(){
+        calls.push('before');
+      })
+      afterEach(function(){
+        calls.push('after');
+        // throw new Error('after each hook error');
+      })
+      it('should be called because error is in after each hook, and this is the first test', function() {
+        calls.push('test');
+      })
+      it('should not be called because error is in after each hook, and this is the second test', function() {
+        calls.push('another test');
+      })
+    })
+    describe('spec 2', function () {
+      before(function(){
+        calls.push('before 2');
+      })
+      after(function(){
+        calls.push('after 2');
+      })
+      it('should be called, because hook error was in a sibling suite', function() {
+        calls.push('test 2');
+      })
+    })
+    after(function () {
+      // This should be called !
+      // calls.should.eql(['before', 'test', 'after', 'before 2', 'test 2', 'after 2']);
+    })
+  })
+
+  describe('multiple hook errors', function() {
+    var calls = [];
+    before(function(){
+      calls.push("root before");
+    });
+    beforeEach(function(){
+      calls.push("root before each");
+    });
+    describe('1', function(){
+      beforeEach(function() {
+        calls.push('1 before each')
+      })
+
+      describe('1.1', function(){
+        before(function() {
+          calls.push('1.1 before');
+        });
+        beforeEach(function() {
+          calls.push('1.1 before each')
+          // throw new Error('1.1 before each hook failed')
+        });
+        it('1.1 test 1', function () {calls.push('1.1 test 1')});
+        it('1.1 test 2', function () {calls.push('1.1 test 2')});
+        afterEach(function() {
+          calls.push("1.1 after each");
+        });
+        after(function(){
+          calls.push("1.1 after");
+          // throw new Error('1.1 after hook failed')
+        });
+      });
+
+      describe('1.2', function(){
+        before(function() {
+          calls.push('1.2 before');
+        });
+        beforeEach(function() {
+          calls.push('1.2 before each')
+        });
+        it('1.2 test 1', function () {calls.push('1.2 test 1')});
+        it('1.2 test 2', function () {calls.push('1.2 test 2')});
+        afterEach(function() {
+          calls.push("1.2 after each");
+          // throw new Error('1.2 after each hook failed')
+        });
+        after(function(){
+          calls.push("1.2 after");
+        });
+      });  
+
+      afterEach(function() {
+        calls.push('1 after each')
+      })
+
+      after(function(){
+        calls.push("1 after");
+      });
+    })
+
+    describe('2', function(){
+      beforeEach(function() {
+        calls.push('2 before each')
+        // throw new Error('2 before each hook failed')
+      })
+
+      describe('2.1', function(){
+        before(function() {
+          calls.push('2.1 before');
+        });
+        beforeEach(function() {
+          calls.push('2.1 before each')
+        });
+        it('2.1 test 1', function () {calls.push('2.1 test 1')});
+        it('2.1 test 2', function () {calls.push('2.1 test 2')});
+        afterEach(function() {
+          calls.push("2.1 after each");
+        });
+        after(function(){
+          calls.push("2.1 after");
+        });
+      });
+
+      describe('2.2', function(){
+        before(function() {
+          calls.push('2.2 before');
+        });
+        beforeEach(function() {
+          calls.push('2.2 before each')
+        });
+        it('2.2 test 1', function () {calls.push('2.2 test 1')});
+        it('2.2 test 2', function () {calls.push('2.2 test 2')});
+        afterEach(function() {
+          calls.push("2.2 after each");
+        });
+        after(function(){
+          calls.push("2.2 after");
+        });
+      });  
+
+      afterEach(function() {
+        calls.push('2 after each')
+        // throw new Error('2 after each hook failed')
+      })
+
+      after(function(){
+        calls.push("2 after");
+      });
+    })
+
+    after(function(){
+      calls.push("root after");
+      /* calls.should.eql([
+        "root before",
+        "1.1 before",
+        "root before each",
+        "1 before each",
+        "1.1 before each",
+        "1.1 after each",
+        "1 after each",
+        "root after each",
+        "1.1 after",
+        "1.2 before",
+        "root before each",
+        "1 before each",
+        "1.2 before each",
+        "1.2 test 1",
+        "1.2 after each",
+        "1 after each",
+        "root after each",
+        "1.2 after",
+        "1 after",
+        "2.1 before",
+        "root before each",
+        "2 before each",
+        "2 after each",
+        "root after each",
+        "2.1 after",
+        "2 after",
+        "root after"
+      ]); */
+    });
+    afterEach(function(){
+      calls.push("root after each");
+    });
+  })
+
+})
\ No newline at end of file
diff --git a/test/runner.js b/test/runner.js
index 54d574c9de..98137399c8 100644
--- a/test/runner.js
+++ b/test/runner.js
@@ -160,7 +160,7 @@ describe('Runner', function(){
     })
   })
 
-  describe('.failHook(hoot, err)', function(){
+  describe('.failHook(hook, err)', function(){
     it('should increment .failures', function(){
       runner.failures.should.equal(0);
       runner.failHook({}, {});
@@ -179,10 +179,19 @@ describe('Runner', function(){
       runner.failHook(hook, err);
     })
 
-    it('should emit "end"', function(done){
+    it('should emit "end" if suite bail is true', function(done){
       var hook = {}, err = {};
+      suite.bail(true);
       runner.on('end', done);
       runner.failHook(hook, err);
     })
+
+    it('should not emit "end" if suite bail is not true', function(done){
+      var hook = {}, err = {};
+      suite.bail(false);
+      runner.on('end', function() { throw new Error('"end" was emit, but the bail is false'); });
+      runner.failHook(hook, err);
+      done();
+    })
   })
 })