diff --git a/src/LoweredCodeUtils.jl b/src/LoweredCodeUtils.jl
index f79495b..ee907e1 100644
--- a/src/LoweredCodeUtils.jl
+++ b/src/LoweredCodeUtils.jl
@@ -12,10 +12,12 @@ module LoweredCodeUtils
 using CodeTracking: MethodInfoKey
 
 using JuliaInterpreter
-using JuliaInterpreter: SSAValue, SlotNumber, Frame, Interpreter, RecursiveInterpreter
-using JuliaInterpreter: codelocation, is_global_ref, is_global_ref_egal, is_quotenode_egal, is_return,
-                        lookup, lookup_return, linetable, moduleof, next_until!, nstatements, pc_expr,
-                        step_expr!, whichtt, extract_method_table
+using JuliaInterpreter:
+    BreakpointRef, Frame, Interpreter, RecursiveInterpreter, SSAValue, SlotNumber
+using JuliaInterpreter:
+    codelocation, extract_method_table, is_global_ref, is_global_ref_egal,
+    is_quotenode_egal, is_return, linetable, lookup, lookup_return, moduleof, next_until!,
+    nstatements, pc_expr, step_expr!, whichtt
 using Compiler: Compiler as CC
 
 include("packagedef.jl")
diff --git a/src/signatures.jl b/src/signatures.jl
index 375bf5a..0f90bcb 100644
--- a/src/signatures.jl
+++ b/src/signatures.jl
@@ -60,7 +60,7 @@ function signature(interp::Interpreter, frame::Frame, @nospecialize(stmt), pc::I
             return nothing, pc
         else
             lastpc = pc
-            pc = step_expr!(interp, frame, stmt, true)
+            pc = throw_if_breakpoint(step_expr!(interp, frame, stmt, true))
             pc === nothing && return nothing, lastpc
         end
         stmt = pc_expr(frame, pc)
@@ -119,11 +119,12 @@ function signature_top(frame, stmt::Expr, pc)
 end
 
 function step_through_methoddef(interp::Interpreter, frame::Frame, @nospecialize(stmt))
-    while !ismethod(stmt)
-        pc = step_expr!(interp, frame, stmt, true)
+    while true
+        pc = throw_if_breakpoint(step_expr!(interp, frame, stmt, true))
+        pc === nothing && error("frame terminated before reaching a `:method` expression")
+        ismethod(stmt) && return pc  # `stmt` was the `:method` expression, so the method is now defined
         stmt = pc_expr(frame, pc)
     end
-    return step_expr!(interp, frame, stmt, true)  # also define the method
 end
 
 """
@@ -462,6 +463,7 @@ function get_running_name(interp::Interpreter, frame::Frame, pc::Int, name::Glob
     nameinfo = find_name_caller_sig(interp, frame, pc, name)
     if nameinfo === nothing
         pc = skip_until(@nospecialize(stmt)->ismethod3(stmt), frame, pc)
+        pc === nothing && return name, nothing, nothing  # no `:method` remains in `frame`
         pc = next_or_nothing(interp, frame, pc)
         return name, pc, nothing
     end
@@ -517,6 +519,21 @@ function next_or_nothing!(::Interpreter, frame::Frame)
     return nothing
 end
 
+# `step_expr!` and `next_until!` return a `BreakpointRef` when execution hits a breakpoint, or when
+# `JuliaInterpreter.break_on(:error)`/`break_on(:throw)` is active and a statement throws.
+# The method-definition walkers in this file are not debugger commands and cannot pause, so a
+# `BreakpointRef` is never a valid program counter here: if it carries the error that triggered it,
+# that error is rethrown (i.e., what would have propagated had `break_on` been inactive); otherwise
+# an error is raised. Either way `pc` is narrowed to `Union{Int,Nothing}` for the callers.
+function throw_if_breakpoint(pc)
+    if pc isa BreakpointRef
+        err = pc.err
+        err === nothing && error("unexpected breakpoint while processing method definitions: ", pc)
+        throw(err)
+    end
+    return pc
+end
+
 """
     nextpc = skip_until(predicate, [interp::Interpreter=RecursiveInterpreter()], frame, pc)
     nextpc = skip_until!(predicate, [interp::Interpreter=RecursiveInterpreter()], frame)
@@ -567,22 +584,26 @@ occurs for "empty method" expressions, e.g., `:(function foo end)`. `pc` will be
 
 By default the method will be defined (evaluated). You can prevent this by setting `define=false`.
 This is recommended if you are simply extracting signatures from code that has already been evaluated.
+
+`pc` is never a `BreakpointRef`: hitting a breakpoint while stepping (or a statement throwing while
+`JuliaInterpreter.break_on(:error)` is active) raises an error instead.
 """
 function methoddef!(interp::Interpreter, signatures::Vector{MethodInfoKey}, frame::Frame, @nospecialize(stmt), pc::Int; define::Bool=true)
     framecode = frame.framecode
     if ismethod3(stmt)
         pc3 = pc
         arg1 = method_name(stmt)
-        (mt, sigt), pc = signature(interp, frame, stmt, pc)
+        methinfo, pc = signature(interp, frame, stmt, pc)
+        mt, sigt = methinfo::MethodInfoKey  # `stmt` is already the 3-arg `:method`, so a signature is always found
         # Resolve the signature against the live method tables at the latest committed world.
         # `whichtt`'s default world is the caller's task world, which is too old here: the method
         # may have just been defined by `step_expr!` (advancing the world past `frame.world`), and
         # a caller may be driving this in a task pinned to an older world (e.g. Revise revising).
         meth = whichtt(sigt, mt; world=Base.get_world_counter())
         if isa(meth, Method) && (meth.sig <: sigt && sigt <: meth.sig)
-            pc = define ? step_expr!(interp, frame, stmt, true) : next_or_nothing!(interp, frame)
+            pc = define ? throw_if_breakpoint(step_expr!(interp, frame, stmt, true)) : next_or_nothing!(interp, frame)
         elseif define
-            pc = step_expr!(interp, frame, stmt, true)
+            pc = throw_if_breakpoint(step_expr!(interp, frame, stmt, true))
             meth = whichtt(sigt, mt; world=Base.get_world_counter())
         end
         if isa(meth, Method) && (meth.sig <: sigt && sigt <: meth.sig)
@@ -590,14 +611,14 @@ function methoddef!(interp::Interpreter, signatures::Vector{MethodInfoKey}, fram
         else
             if arg1 === false || arg1 === nothing || isa(mt, MethodTable)
                 # If it's anonymous and not defined, define it
-                pc = step_expr!(interp, frame, stmt, true)
+                pc = throw_if_breakpoint(step_expr!(interp, frame, stmt, true))
                 meth = whichtt(sigt, mt; world=Base.get_world_counter())
                 isa(meth, Method) && push!(signatures, MethodInfoKey(mt, meth.sig))
                 return pc, pc3
             else
                 # guard against busted lookup, e.g., https://github.com/JuliaLang/julia/issues/31112
                 code = framecode.src
-                codeloc = codelocation(code, pc)
+                codeloc = codelocation(code, pc3)
                 loc = linetable(code, codeloc)
                 ft = Base.unwrap_unionall((Base.unwrap_unionall(sigt)::DataType).parameters[1])
                 if !startswith(String((ft.name::Core.TypeName).name), "##") && loc !== nothing
@@ -608,7 +629,7 @@ function methoddef!(interp::Interpreter, signatures::Vector{MethodInfoKey}, fram
                 end
             end
         end
-        frame.pc = pc
+        # `frame.pc` is already up to date: `step_expr!` and `next_or_nothing!` both advance it
         return pc, pc3
     end
     ismethod1(stmt) || Base.invokelatest(error, "expected method opening, got ", stmt)
@@ -664,11 +685,13 @@ function methoddef!(interp::Interpreter, signatures::Vector{MethodInfoKey}, fram
         # Methods like f(x::Ref{<:Real}) that use gensymmed typevars will not have the *exact*
         # signature of the active method. So let's get the active signature.
         frame.pc = pc
-        pc = define ? step_expr!(interp, frame, stmt, true) : next_or_nothing!(interp, frame)
+        pc = define ? throw_if_breakpoint(step_expr!(interp, frame, stmt, true)) : next_or_nothing!(interp, frame)
         meth = whichtt(sigt, mt; world=Base.get_world_counter())
         isa(meth, Method) && push!(signatures, MethodInfoKey(mt, meth.sig)) # inner methods are not visible
         name === name3 && return pc, pc3     # if this was an inner method we should keep going
-        stmt = pc_expr(frame, pc)  # there *should* be more statements in this frame
+        # this was an inner method, so the frame must still contain the outer method
+        pc === nothing && error("frame terminated after inner method ", name3, " without defining ", name)
+        stmt = pc_expr(frame, pc)
     end
 end
 methoddef!(interp::Interpreter, signatures::Vector{MethodInfoKey}, frame::Frame, pc::Int; define::Bool=true) =
@@ -677,7 +700,7 @@ function methoddef!(interp::Interpreter, signatures::Vector{MethodInfoKey}, fram
     pc = frame.pc
     stmt = pc_expr(frame, pc)
     if !ismethod(stmt)
-        pc = next_until!(is_frame_at_method, interp, frame, true)
+        pc = throw_if_breakpoint(next_until!(is_frame_at_method, interp, frame, true))
     end
     pc === nothing && error("pc at end of frame without finding a method")
     methoddef!(interp, signatures, frame, pc; define)
@@ -712,11 +735,11 @@ methoddefs!(signatures::Vector{MethodInfoKey}, frame::Frame, pc::Int; define::Bo
 methoddefs!(signatures::Vector{MethodInfoKey}, frame::Frame; define::Bool=true) =
     methoddefs!(RecursiveInterpreter(), signatures, frame; define)
 
-function _methoddefs!(interp::Interpreter, signatures::Vector{MethodInfoKey}, frame::Frame, pc::Int; define::Bool=true)
+function _methoddefs!(interp::Interpreter, signatures::Vector{MethodInfoKey}, frame::Frame, pc::Union{Int,Nothing}; define::Bool=true)
     while pc !== nothing
         stmt = pc_expr(frame, pc)
         if !ismethod(stmt)
-            pc = next_until!(is_frame_at_method, interp, frame, true)
+            pc = throw_if_breakpoint(next_until!(is_frame_at_method, interp, frame, true))
         end
         pc === nothing && break
         ret = methoddef!(interp, signatures, frame, pc; define)
diff --git a/test/signatures.jl b/test/signatures.jl
index 3199467..1839039 100644
--- a/test/signatures.jl
+++ b/test/signatures.jl
@@ -5,6 +5,7 @@ using InteractiveUtils
 using CodeTracking: MethodInfoKey
 using JuliaInterpreter
 using Core: CodeInfo
+using Pkg: Pkg
 using Test
 
 module Lowering
@@ -472,7 +473,6 @@ bodymethtest5(x, y=Dict(1=>2)) = 5
     rename_framemethods!(frame)
 
     # https://github.com/timholy/Revise.jl/issues/550
-    using Pkg
     oldenv = Pkg.project().path
     try
         # we test with the old version of CBinding, let's do it in an isolated environment
@@ -627,4 +627,34 @@ end
     @test LoweredCodeUtils.identify_framemethod_calls(frame) isa Any  # must not throw
 end
 
+module BreakpointRefTest end
+
+@testset "BreakpointRef from JuliaInterpreter is an error, not a pc" begin
+    # With `break_on(:error)` active, `step_expr!` returns a `BreakpointRef` carrying the error
+    # instead of throwing. The method walkers cannot pause, so that error must surface unchanged
+    # rather than failing later on the `BreakpointRef` being used as a program counter.
+    ex = :(f_bp(x::UndefinedType_bp) = 1)
+    JuliaInterpreter.break_on(:error)
+    try
+        frame = Frame(BreakpointRefTest, ex)
+        @test_throws UndefVarError methoddefs!(MethodInfoKey[], frame)
+    finally
+        JuliaInterpreter.break_off(:error)
+    end
+
+    # An (error-free) breakpoint on a statement of the frame is reported as an error.
+    ex = quote
+        g_bp(x) = 1
+        h_bp(x) = 2
+    end
+    frame = Frame(BreakpointRefTest, ex)
+    idx = findfirst(frame.framecode.src.code) do stmt
+        LoweredCodeUtils.ismethod1(stmt) || return false
+        name = LoweredCodeUtils.normalize_defsig(LoweredCodeUtils.method_name(stmt), frame)
+        return name isa GlobalRef && name.name === :h_bp
+    end
+    frame.framecode.breakpoints[idx] = JuliaInterpreter.BreakpointState(true, JuliaInterpreter.truecondition)
+    @test_throws ErrorException methoddefs!(MethodInfoKey[], frame)
+end
+
 end # module signatures