diff --git a/atom/src/member.cpp b/atom/src/member.cpp
index ce184fb5..f5881fa1 100644
--- a/atom/src/member.cpp
+++ b/atom/src/member.cpp
@@ -1077,7 +1077,9 @@ Member::notify( CAtom* atom, PyObject* args, PyObject* kwargs )
                 callable = *it;
             }
             if( !callable( argsptr, kwargsptr ) )
-                return false;
+            {
+                PyErr_Print();
+            }
         }
     }
     return true;
diff --git a/atom/src/modifyguard.h b/atom/src/modifyguard.h
index b1f78e07..dc6ef0ac 100644
--- a/atom/src/modifyguard.h
+++ b/atom/src/modifyguard.h
@@ -30,16 +30,6 @@ class ModifyGuard
 
     ~ModifyGuard()
     {
-        // If an exception occurred we store it and restore it after the
-        // modification have been done as otherwise it can (Python 3) cause
-        // boolean tests (PyObject_IsTrue) to fail for wrong reasons.
-        bool exception_set = false;
-        PyObject *type, *value, *traceback;
-        if( PyErr_Occurred() ){
-            PyErr_Fetch(&type, &value, &traceback);
-            exception_set = true;
-        }
-
         if( m_owner.get_modify_guard() == this )
         {
             m_owner.set_modify_guard( 0 );
@@ -51,10 +41,6 @@ class ModifyGuard
                 delete *it;
             }
         }
-
-        // Restore previous exception if one was set.
-        if( exception_set )
-            PyErr_Restore(type, value, traceback);
     }
 
     void add_task( ModifyTask* task ) { m_tasks.push_back( task ); }
diff --git a/atom/src/observerpool.cpp b/atom/src/observerpool.cpp
index f80fda02..185055c7 100644
--- a/atom/src/observerpool.cpp
+++ b/atom/src/observerpool.cpp
@@ -7,7 +7,6 @@
 |----------------------------------------------------------------------------*/
 #include "observerpool.h"
 
-
 namespace
 {
 
@@ -220,7 +219,9 @@ ObserverPool::notify( PyObjectPtr& topic, PyObjectPtr& args, PyObjectPtr& kwargs
                 if( obs_it->is_true() )
                 {
                     if( !obs_it->operator()( args, kwargs ) )
-                        return false;
+                    {
+                        PyErr_Print();
+                    }
                 }
                 else
                 {
diff --git a/atom/src/utils.h b/atom/src/utils.h
index 264c772c..410b2866 100644
--- a/atom/src/utils.h
+++ b/atom/src/utils.h
@@ -19,7 +19,6 @@ namespace utils
     #define STR_CHECK_EXACT( obj ) PyString_CheckExact( obj ) || PyUnicode_CheckExact( obj )
 #endif
 
-
 inline bool
 basestring_check( PyObject* obj )
 {
diff --git a/tests/test_observe.py b/tests/test_observe.py
index 223b2461..80f9d086 100644
--- a/tests/test_observe.py
+++ b/tests/test_observe.py
@@ -12,7 +12,7 @@
 from atom.api import Atom, Int, List, Value, Event, Signal, observe
 
 
-def test_static_observers():
+def test_static_observers(capsys):
     """Test using static observers.
 
     """
@@ -72,8 +72,9 @@ def react(self, change):
     del ot.ext
     assert not ext2.has_observer('val', ot.react)
 
-    with pytest.raises(TypeError):
-        ot.ext = 12
+    assert not capsys.readouterr()[1]
+    ot.ext = 12
+    assert capsys.readouterr()[1]
 
 
 def test_dynamic_observers():
@@ -230,5 +231,66 @@ def react(self, change):
     with pytest.raises(TypeError):
         observe(['a.b.c'])
 
+
+def test_handling_of_exceptions_in_observers(capsys):
+    """Test that we properly print exception occuring in observers.
+
+    """
+    class Observer(object):
+
+        def __init__(self):
+            self.count = 0
+            self.exc_cls = ValueError
+
+        def react(self, change):
+            self.count += 1
+            raise self.exc_cls()
+
+    class NotifTest(Atom):
+
+        val = Int()
+
+        count = Int()
+
+        exc_cls = Value(ValueError)
+
+        def _observe_val(self, change):
+            self.count += 1
+            raise self.exc_cls()
+
+    ob = Observer()
+    nt = NotifTest()
+    nt.observe('val', ob.react)
+
+    assert not capsys.readouterr()[1]
+
+    # Check both static and dynamic notifiers are called even when raising
+    nt.val = 1
+    assert ob.count == 1
+    assert nt.count == 1
+
+    # Check we did print to stderr
+    assert capsys.readouterr()[1]
+
+    class MyException(Exception):
+
+        def __str__(self):
+            raise ValueError()
+
+    ob.exc_cls = MyException
+    nt.exc_cls = MyException
+
+    assert not capsys.readouterr()[1]
+
+    # Check both static and dynamic notifiers are called even when raising
+    nt.val += 1
+    assert ob.count == 2
+    assert nt.count == 2
+
+    # Check we did print to stderr
+    err = capsys.readouterr()[1]
+    print(err)
+    assert err
+
 # XXX add a test catching the SystemError of Python 3
 # For the time being I known how to write one only using enaml