--- a/mercurial/bundle2.py	Thu Apr 23 14:54:45 2015 +0100
+++ b/mercurial/bundle2.py	Thu Apr 23 16:36:18 2015 +0100
@@ -285,7 +285,7 @@
     to be created"""
     raise TransactionUnavailable()
 
-def processbundle(repo, unbundler, transactiongetter=None):
+def processbundle(repo, unbundler, transactiongetter=None, op=None):
     """This function process a bundle, apply effect to/from a repo
 
     It iterates over each part then searches for and uses the proper handling
@@ -295,10 +295,16 @@
     before final usage.
 
     Unknown Mandatory part will abort the process.
+
+    It is temporarily possible to provide a prebuilt bundleoperation to the
+    function. This is used to ensure output is properly propagated in case of
+    an error during the unbundling. This output capturing part will likely be
+    reworked and this ability will probably go away in the process.
     """
-    if transactiongetter is None:
-        transactiongetter = _notransaction
-    op = bundleoperation(repo, transactiongetter)
+    if op is None:
+        if transactiongetter is None:
+            transactiongetter = _notransaction
+        op = bundleoperation(repo, transactiongetter)
     # todo:
     # - replace this is a init function soon.
     # - exception catching

--- a/mercurial/exchange.py	Thu Apr 23 14:54:45 2015 +0100
+++ b/mercurial/exchange.py	Thu Apr 23 16:36:18 2015 +0100
@@ -1297,11 +1297,15 @@
                 tr.hookargs['source'] = source
                 tr.hookargs['url'] = url
                 tr.hookargs['bundle2'] = '1'
-                r = bundle2.processbundle(repo, cg, lambda: tr).reply
-                if r is not None:
-                    repo.ui.pushbuffer(error=True, subproc=True)
-                    def recordout(output):
-                        r.newpart('output', data=output, mandatory=False)
+                op = bundle2.bundleoperation(repo, lambda: tr)
+                try:
+                    r = bundle2.processbundle(repo, cg, op=op)
+                finally:
+                    r = op.reply
+                    if r is not None:
+                        repo.ui.pushbuffer(error=True, subproc=True)
+                        def recordout(output):
+                            r.newpart('output', data=output, mandatory=False)
                 tr.close()
             except Exception, exc:
                 exc.duringunbundle2 = True

--- a/tests/test-bundle2-exchange.t	Thu Apr 23 14:54:45 2015 +0100
+++ b/tests/test-bundle2-exchange.t	Thu Apr 23 16:36:18 2015 +0100
@@ -619,3 +619,51 @@
   $ ls -1 other/.hg/store/00changelog.i*
   other/.hg/store/00changelog.i
 
+Check error from hook during the unbundling process itself
+
+  $ cat << EOF >> $HGRCPATH
+  > pretxnchangegroup = echo "Fail early!"; false
+  > EOF
+  $ "$TESTDIR/killdaemons.py" $DAEMON_PIDS # reload http config
+  $ hg -R other serve -p $HGPORT2 -d --pid-file=other.pid -E other-error.log
+  $ cat other.pid >> $DAEMON_PIDS
+
+  $ hg -R main push other -r e7ec4e813ba6
+  pushing to other
+  searching for changes
+  remote: adding changesets
+  remote: adding manifests
+  remote: adding file changes
+  remote: added 1 changesets with 1 changes to 1 files
+  remote: Fail early!
+  remote: transaction abort!
+  remote: Cleaning up the mess...
+  remote: rollback completed
+  abort: pretxnchangegroup hook exited with status 1
+  [255]
+  $ hg -R main push ssh://user@dummy/other -r e7ec4e813ba6
+  pushing to ssh://user@dummy/other
+  searching for changes
+  remote: adding changesets
+  remote: adding manifests
+  remote: adding file changes
+  remote: added 1 changesets with 1 changes to 1 files
+  remote: Fail early!
+  remote: transaction abort!
+  remote: Cleaning up the mess...
+  remote: rollback completed
+  abort: pretxnchangegroup hook exited with status 1
+  [255]
+  $ hg -R main push http://localhost:$HGPORT2/ -r e7ec4e813ba6
+  pushing to http://localhost:$HGPORT2/
+  searching for changes
+  remote: adding changesets
+  remote: adding manifests
+  remote: adding file changes
+  remote: added 1 changesets with 1 changes to 1 files
+  remote: Fail early!
+  remote: transaction abort!
+  remote: Cleaning up the mess...
+  remote: rollback completed
+  abort: pretxnchangegroup hook exited with status 1
+  [255]