diff --git a/packages/playwright-core/src/server/dispatchers/dispatcher.ts b/packages/playwright-core/src/server/dispatchers/dispatcher.ts
index 6fffb9d83b..9881a9eeea 100644
--- a/packages/playwright-core/src/server/dispatchers/dispatcher.ts
+++ b/packages/playwright-core/src/server/dispatchers/dispatcher.ts
@@ -346,10 +346,12 @@ export class DispatcherConnection {
     }
 
     await sdkObject?.instrumentation.onBeforeCall(sdkObject, callMetadata);
+    const response: any = { id };
     try {
       const result = await dispatcher._handleCommand(callMetadata, method, validParams);
       const validator = findValidator(dispatcher._type, method, 'Result');
-      callMetadata.result = validator(result, '', { tChannelImpl: this._tChannelImplToWire.bind(this), binary: this._isLocal ? 'buffer' : 'toBase64' });
+      response.result = validator(result, '', { tChannelImpl: this._tChannelImplToWire.bind(this), binary: this._isLocal ? 'buffer' : 'toBase64' });
+      callMetadata.result = response.result;
     } catch (e) {
       if (isTargetClosedError(e) && sdkObject) {
         const reason = closeReason(sdkObject);
@@ -363,19 +365,16 @@ export class DispatcherConnection {
           rewriteErrorMessage(e, 'Target crashed ' + e.browserLogMessage());
         }
       }
-      callMetadata.error = serializeError(e);
+      response.error = serializeError(e);
+      // The command handler could have set error in the metada, do not reset it if there was no exception.
+      callMetadata.error = response.error;
     } finally {
       callMetadata.endTime = monotonicTime();
       await sdkObject?.instrumentation.onAfterCall(sdkObject, callMetadata);
     }
 
-    const response: any = { id };
-    if (callMetadata.result)
-      response.result = callMetadata.result;
-    if (callMetadata.error) {
-      response.error = callMetadata.error;
+    if (response.error)
       response.log = callMetadata.log;
-    }
     this.onmessage(response);
   }
 }
diff --git a/packages/playwright-core/src/server/dispatchers/frameDispatcher.ts b/packages/playwright-core/src/server/dispatchers/frameDispatcher.ts
index 6782926e7b..b335f27ea0 100644
--- a/packages/playwright-core/src/server/dispatchers/frameDispatcher.ts
+++ b/packages/playwright-core/src/server/dispatchers/frameDispatcher.ts
@@ -262,8 +262,6 @@ export class FrameDispatcher extends Dispatcher<Frame, channels.FrameChannel, Br
     const result = await this._frame.expect(metadata, params.selector, { ...params, expectedValue });
     if (result.received !== undefined)
       result.received = serializeResult(result.received);
-    if (result.matches === params.isNot)
-      metadata.error = { error: { name: 'Expect', message: 'Expect failed' } };
     return result;
   }
 }
diff --git a/packages/playwright-core/src/server/frames.ts b/packages/playwright-core/src/server/frames.ts
index f7d0f5cbf7..e99ed29177 100644
--- a/packages/playwright-core/src/server/frames.ts
+++ b/packages/playwright-core/src/server/frames.ts
@@ -1372,6 +1372,14 @@ export class Frame extends SdkObject {
   }
 
   async expect(metadata: CallMetadata, selector: string, options: FrameExpectParams): Promise<{ matches: boolean, received?: any, log?: string[], timedOut?: boolean }> {
+    const result = await this._expectImpl(metadata, selector, options);
+    // Library mode special case for the expect errors which are return values, not exceptions.
+    if (result.matches === options.isNot)
+      metadata.error = { error: { name: 'Expect', message: 'Expect failed' } };
+    return result;
+  }
+
+  private async _expectImpl(metadata: CallMetadata, selector: string, options: FrameExpectParams): Promise<{ matches: boolean, received?: any, log?: string[], timedOut?: boolean }> {
     let timeout = this._page._timeoutSettings.timeout(options);
     const start = timeout > 0 ? monotonicTime() : 0;
     const lastIntermediateResult: { received?: any, isSet: boolean } = { isSet: false };
diff --git a/tests/config/traceViewerFixtures.ts b/tests/config/traceViewerFixtures.ts
index 6c43f1a4d3..995233e4d6 100644
--- a/tests/config/traceViewerFixtures.ts
+++ b/tests/config/traceViewerFixtures.ts
@@ -39,6 +39,7 @@ class TraceViewerPage {
   callLines: Locator;
   consoleLines: Locator;
   logLines: Locator;
+  errorMessages: Locator;
   consoleLineMessages: Locator;
   consoleStacks: Locator;
   stackFrames: Locator;
@@ -51,6 +52,7 @@ class TraceViewerPage {
     this.logLines = page.getByTestId('log-list').locator('.list-view-entry');
     this.consoleLines = page.locator('.console-line');
     this.consoleLineMessages = page.locator('.console-line-message');
+    this.errorMessages = page.locator('.error-message');
     this.consoleStacks = page.locator('.console-stack');
     this.stackFrames = page.getByTestId('stack-trace-list').locator('.list-view-entry');
     this.networkRequests = page.getByTestId('network-list').locator('.list-view-entry');
@@ -75,6 +77,10 @@ class TraceViewerPage {
     await this.page.click(`.snapshot-tab .tabbed-pane-tab-label:has-text("${name}")`);
   }
 
+  async showErrorsTab() {
+    await this.page.click('text="Errors"');
+  }
+
   async showConsoleTab() {
     await this.page.click('text="Console"');
   }
diff --git a/tests/library/trace-viewer.spec.ts b/tests/library/trace-viewer.spec.ts
index ff8f049921..3bd3c11288 100644
--- a/tests/library/trace-viewer.spec.ts
+++ b/tests/library/trace-viewer.spec.ts
@@ -686,6 +686,21 @@ test('should highlight target element in shadow dom', async ({ page, server, run
   await expect(frameExpect.locator('h1')).toHaveCSS('background-color', 'rgba(111, 168, 220, 0.498)');
 });
 
+test('should highlight expect failure', async ({ page, server, runAndTrace }) => {
+  test.info().annotations.push({ type: 'issue', description: 'https://github.com/microsoft/playwright-python/issues/2258' });
+  const traceViewer = await runAndTrace(async () => {
+    try {
+      await page.goto(server.EMPTY_PAGE);
+      await expect(page).toHaveTitle('foo', { timeout: 100 });
+    } catch (e) {
+    }
+  });
+
+  await expect(traceViewer.actionTitles.getByText('expect.toHaveTitle')).toHaveCSS('color', 'rgb(176, 16, 17)');
+  await traceViewer.showErrorsTab();
+  await expect(traceViewer.errorMessages.nth(0)).toHaveText('Expect failed');
+});
+
 test('should show action source', async ({ showTraceViewer }) => {
   const traceViewer = await showTraceViewer([traceFile]);
   await traceViewer.selectAction('locator.click');