diff --git a/packages/next/client/components/react-dev-overlay/hot-reloader-client.tsx b/packages/next/client/components/react-dev-overlay/hot-reloader-client.tsx
index 09d90f1fb27871f..3e7b3c85602d3c5 100644
--- a/packages/next/client/components/react-dev-overlay/hot-reloader-client.tsx
+++ b/packages/next/client/components/react-dev-overlay/hot-reloader-client.tsx
@@ -435,6 +435,9 @@ export default function HotReload({
       frames: parseStack(reason.stack!),
     })
   }, [])
+  const handleOnReactError = useCallback(() => {
+    RuntimeErrorHandler.hadRuntimeError = true
+  }, [])
   useErrorHandler(handleOnUnhandledError, handleOnUnhandledRejection)
 
   const webSocketRef = useWebsocket(assetPrefix)
@@ -467,5 +470,9 @@ export default function HotReload({
     return () => websocket && websocket.removeEventListener('message', handler)
   }, [sendMessage, router, webSocketRef, dispatcher])
 
-  return <ReactDevOverlay state={state}>{children}</ReactDevOverlay>
+  return (
+    <ReactDevOverlay onReactError={handleOnReactError} state={state}>
+      {children}
+    </ReactDevOverlay>
+  )
 }
diff --git a/packages/next/client/components/react-dev-overlay/internal/ReactDevOverlay.tsx b/packages/next/client/components/react-dev-overlay/internal/ReactDevOverlay.tsx
index 5d0c233240fb2f7..9d9eee98ea12e36 100644
--- a/packages/next/client/components/react-dev-overlay/internal/ReactDevOverlay.tsx
+++ b/packages/next/client/components/react-dev-overlay/internal/ReactDevOverlay.tsx
@@ -21,6 +21,7 @@ class ReactDevOverlay extends React.PureComponent<
   {
     state: OverlayState
     children: React.ReactNode
+    onReactError: (error: Error) => void
   },
   ReactDevOverlayState
 > {
@@ -40,6 +41,10 @@ class ReactDevOverlay extends React.PureComponent<
     return { reactError: errorEvent }
   }
 
+  componentDidCatch(componentErr: Error) {
+    this.props.onReactError(componentErr)
+  }
+
   render() {
     const { state, children } = this.props
     const { reactError } = this.state
diff --git a/packages/next/client/components/react-dev-overlay/internal/helpers/use-error-handler.ts b/packages/next/client/components/react-dev-overlay/internal/helpers/use-error-handler.ts
index fa86bc92f4434ca..f22ea0b9f7d8982 100644
--- a/packages/next/client/components/react-dev-overlay/internal/helpers/use-error-handler.ts
+++ b/packages/next/client/components/react-dev-overlay/internal/helpers/use-error-handler.ts
@@ -44,8 +44,6 @@ if (typeof window !== 'undefined') {
       return
     }
 
-    RuntimeErrorHandler.hadRuntimeError = true
-
     const error = ev?.error
     if (
       !error ||
@@ -69,8 +67,6 @@ if (typeof window !== 'undefined') {
   window.addEventListener(
     'unhandledrejection',
     (ev: WindowEventMap['unhandledrejection']): void => {
-      RuntimeErrorHandler.hadRuntimeError = true
-
       const reason = ev?.reason
       if (
         !reason ||
diff --git a/test/development/acceptance-app/ReactRefreshLogBox.test.ts b/test/development/acceptance-app/ReactRefreshLogBox.test.ts
index 9fa41067ff307ba..b11f6b5fa285a50 100644
--- a/test/development/acceptance-app/ReactRefreshLogBox.test.ts
+++ b/test/development/acceptance-app/ReactRefreshLogBox.test.ts
@@ -114,8 +114,7 @@ describe('ReactRefreshLogBox app', () => {
     await cleanup()
   })
 
-  // TODO-APP: re-enable when error recovery doesn't reload the page.
-  test.skip('logbox: can recover from a event handler error', async () => {
+  test('logbox: can recover from a event handler error', async () => {
     const { session, cleanup } = await sandbox(next)
 
     await session.patch(
@@ -147,7 +146,7 @@ describe('ReactRefreshLogBox app', () => {
       await session.evaluate(() => document.querySelector('p').textContent)
     ).toBe('1')
 
-    expect(await session.hasRedbox(true)).toBe(true)
+    await session.waitForAndOpenRuntimeError()
     if (process.platform === 'win32') {
       expect(await session.getRedboxSource()).toMatchSnapshot()
     } else {
@@ -173,6 +172,7 @@ describe('ReactRefreshLogBox app', () => {
     )
 
     expect(await session.hasRedbox()).toBe(false)
+    expect(await session.hasErrorToast()).toBe(false)
 
     expect(
       await session.evaluate(() => document.querySelector('p').textContent)
@@ -183,6 +183,7 @@ describe('ReactRefreshLogBox app', () => {
     ).toBe('Count: 2')
 
     expect(await session.hasRedbox()).toBe(false)
+    expect(await session.hasErrorToast()).toBe(false)
 
     await cleanup()
   })
diff --git a/test/development/acceptance-app/__snapshots__/ReactRefreshLogBox.test.ts.snap b/test/development/acceptance-app/__snapshots__/ReactRefreshLogBox.test.ts.snap
index 831fe30c3b32a7d..5cf2a2113c4af11 100644
--- a/test/development/acceptance-app/__snapshots__/ReactRefreshLogBox.test.ts.snap
+++ b/test/development/acceptance-app/__snapshots__/ReactRefreshLogBox.test.ts.snap
@@ -66,6 +66,18 @@ exports[`ReactRefreshLogBox app logbox: can recover from a component error 1`] =
   6 | "
 `;
 
+exports[`ReactRefreshLogBox app logbox: can recover from a event handler error 1`] = `
+"index.js (8:18) @ eval
+
+   6 | const increment = useCallback(() => {
+   7 |   setCount(c => c + 1)
+>  8 |   throw new Error('oops')
+     |        ^
+   9 | }, [setCount])
+  10 | return (
+  11 |   <main>"
+`;
+
 exports[`ReactRefreshLogBox app logbox: can recover from a syntax error without losing state 1`] = `
 "./index.js
 Error: 
diff --git a/test/development/acceptance-app/helpers.ts b/test/development/acceptance-app/helpers.ts
index c97d311cb6bc74f..4fd63ce976889bb 100644
--- a/test/development/acceptance-app/helpers.ts
+++ b/test/development/acceptance-app/helpers.ts
@@ -100,6 +100,15 @@ export async function sandbox(
       async hasRedbox(expected = false) {
         return hasRedbox(browser, expected)
       },
+      async hasErrorToast() {
+        return browser.eval(() => {
+          return Boolean(
+            Array.from(document.querySelectorAll('nextjs-portal')).find((p) =>
+              p.shadowRoot.querySelector('[data-nextjs-toast]')
+            )
+          )
+        })
+      },
       async getRedboxDescription() {
         return getRedboxDescription(browser)
       },