diff --git a/.changeset/xtjpqj-ah-fix.md b/.changeset/xtjpqj-ah-fix.md
new file mode 100644
index 000000000..5e951644d
--- /dev/null
+++ b/.changeset/xtjpqj-ah-fix.md
@@ -0,0 +1,19 @@
+---
+'@tanstack/db': patch
+'@tanstack/react-db': patch
+---
+
+fix(db): reject preload() promise when collection transitions to error state
+
+Previously, `preload()` only resolved when the collection became ready. If
+the collection transitioned to the `error` state while the promise was pending
+(e.g. because the `queryFn` threw), the promise would hang forever, keeping
+any `<Suspense>` boundary suspended indefinitely and preventing the error from
+reaching an `<ErrorBoundary>`.
+
+Now `preload()` subscribes to `status:change` events and rejects the promise
+when the collection enters the `error` state. `useLiveSuspenseQuery` is also
+updated to re-throw the actual error from `collection.utils?.lastError` instead
+of a generic fallback message, so `<ErrorBoundary>` receives the original error.
+
+Fixes #1343
diff --git a/packages/db/src/collection/sync.ts b/packages/db/src/collection/sync.ts
index 4b71e4afd..844c606d3 100644
--- a/packages/db/src/collection/sync.ts
+++ b/packages/db/src/collection/sync.ts
@@ -271,8 +271,20 @@ export class CollectionSyncManager<
         return
       }
 
+      // Subscribe to status changes to reject the promise when collection errors.
+      // This is necessary because onFirstReady only fires on success, but if the
+      // collection transitions to 'error' while the promise is pending it would
+      // hang forever and keep the Suspense boundary suspended indefinitely.
+      const unsubscribeError = this._events.on(`status:change`, (event) => {
+        if (event.status === `error`) {
+          unsubscribeError()
+          reject(new CollectionIsInErrorStateError())
+        }
+      })
+
       // Register callback BEFORE starting sync to avoid race condition
       this.lifecycle.onFirstReady(() => {
+        unsubscribeError()
         resolve()
       })
 
diff --git a/packages/react-db/src/useLiveSuspenseQuery.ts b/packages/react-db/src/useLiveSuspenseQuery.ts
index c35e7e11a..0d869ec66 100644
--- a/packages/react-db/src/useLiveSuspenseQuery.ts
+++ b/packages/react-db/src/useLiveSuspenseQuery.ts
@@ -193,9 +193,13 @@ export function useLiveSuspenseQuery(
   // After success, errors surface as stale data (matches TanStack Query behavior)
   if (result.status === `error` && !hasBeenReadyRef.current) {
     promiseRef.current = null
-    // TODO: Once collections hold a reference to their last error object (#671),
-    // we should rethrow that actual error instead of creating a generic message
-    throw new Error(`Collection "${result.collection.id}" failed to load`)
+    // Re-throw the actual error from the collection if available (e.g. from
+    // query-db-collection's utils.lastError), otherwise fall back to a generic
+    // message. Throwing here propagates the error to the nearest ErrorBoundary.
+    const lastError = (result.collection as any).utils?.lastError
+    throw lastError instanceof Error
+      ? lastError
+      : new Error(`Collection "${result.collection.id}" failed to load`)
   }
 
   if (result.status === `loading` || result.status === `idle`) {