diff --git a/public/js/staktrak.js b/public/js/staktrak.js
index ad8932e8c4..20295077b8 100644
--- a/public/js/staktrak.js
+++ b/public/js/staktrak.js
@@ -3573,8 +3573,10 @@ var userBehaviour = (() => {
         },
         getParentOrigin()
       );
+      return id;
     } catch (error) {
       console.error(`[Screenshot] Error capturing for actionIndex=${actionIndex}:`, error);
+      return null;
     }
   }
   function beginReplay(actions, testCode) {
@@ -3649,20 +3651,26 @@ var userBehaviour = (() => {
         executeNextPlaywrightAction();
       }, 500);
     } catch (error) {
-      state.errors.push(
-        `Action ${state.currentActionIndex + 1}: ${error instanceof Error ? error.message : "Unknown error"}`
+      const message = error instanceof Error ? error.message : "Unknown error";
+      state.errors.push(`Action ${state.currentActionIndex + 1}: ${message}`);
+      state.status = "error" /* ERROR */;
+      state.timeouts.forEach((id) => clearTimeout(id));
+      state.timeouts = [];
+      const screenshotId = await captureScreenshot(
+        state.currentActionIndex,
+        window.location.href
       );
-      state.currentActionIndex++;
       window.parent.postMessage(
         {
           type: "staktrak-playwright-replay-error",
-          error: error instanceof Error ? error.message : "Unknown error",
-          actionIndex: state.currentActionIndex - 1,
-          action
+          error: message,
+          actionIndex: state.currentActionIndex,
+          action,
+          fatal: true,
+          screenshotId
         },
         getParentOrigin()
       );
-      executeNextPlaywrightAction();
     }
   }
   function pausePlaywrightReplay() {
diff --git a/src/__tests__/unit/hooks/useStaktrakReplay.test.ts b/src/__tests__/unit/hooks/useStaktrakReplay.test.ts
index 56fbd88d10..2e307c344b 100644
--- a/src/__tests__/unit/hooks/useStaktrakReplay.test.ts
+++ b/src/__tests__/unit/hooks/useStaktrakReplay.test.ts
@@ -621,7 +621,7 @@ describe('usePlaywrightReplay', () => {
     });
 
     describe('staktrak-playwright-replay-error', () => {
-      test('should accumulate errors without stopping replay', async () => {
+      test('should accumulate non-fatal errors without stopping replay', async () => {
         const { result } = renderHook(() => usePlaywrightReplay(mockIframeRef));
 
         act(() => {
@@ -644,6 +644,39 @@ describe('usePlaywrightReplay', () => {
         });
       });
 
+      test('should halt replay on a fatal error (issue #756)', async () => {
+        const { result } = renderHook(() => usePlaywrightReplay(mockIframeRef));
+
+        // Put the hook into a playing state first.
+        act(() => {
+          TestUtils.simulateMessageEvent({
+            type: 'staktrak-playwright-replay-progress',
+            current: 2,
+            total: 5,
+            action: 'click button',
+          });
+        });
+
+        act(() => {
+          TestUtils.simulateMessageEvent({
+            type: 'staktrak-playwright-replay-error',
+            error: 'Element not found',
+            actionIndex: 2,
+            action: 'click button',
+            fatal: true,
+            screenshotId: 'shot-123',
+          });
+        });
+
+        await waitFor(() => {
+          expect(result.current.replayErrors).toHaveLength(1);
+          expect(result.current.isPlaywrightReplaying).toBe(false);
+          expect(result.current.isPlaywrightPaused).toBe(false);
+          expect(result.current.playwrightStatus).toBe('error');
+          expect(result.current.currentAction).toBeNull();
+        });
+      });
+
       test('should log error to console', async () => {
         renderHook(() => usePlaywrightReplay(mockIframeRef));
 
diff --git a/src/app/w/[slug]/task/[...taskParams]/artifacts/browser.tsx b/src/app/w/[slug]/task/[...taskParams]/artifacts/browser.tsx
index 598e45aae4..46c01e99b6 100644
--- a/src/app/w/[slug]/task/[...taskParams]/artifacts/browser.tsx
+++ b/src/app/w/[slug]/task/[...taskParams]/artifacts/browser.tsx
@@ -120,10 +120,29 @@ export function BrowserArtifactPanel({
     stopPlaywrightReplay,
     replayScreenshots,
     replayActions,
+    replayErrors = [],
   } = usePlaywrightReplay(iframeRef, workspaceId, taskId, featureId, (message) => {
     showActionToast("Screenshot Error", message);
   });
 
+  // Surface replay failures: when a step errors the library halts the replay
+  // (issue #756), so let the user know which step broke instead of failing
+  // silently in the console.
+  const lastNotifiedErrorRef = useRef<string | null>(null);
+  useEffect(() => {
+    if (replayErrors.length === 0) {
+      lastNotifiedErrorRef.current = null;
+      return;
+    }
+    const latest = replayErrors[replayErrors.length - 1];
+    if (lastNotifiedErrorRef.current === latest.timestamp) return;
+    lastNotifiedErrorRef.current = latest.timestamp;
+    showActionToast(
+      `Replay stopped at action ${latest.actionIndex + 1}`,
+      latest.message,
+    );
+  }, [replayErrors, showActionToast]);
+
   // Auto-show actions list when replay starts
   useEffect(() => {
     if (isPlaywrightReplaying && !showActions && (replayActions.length > 0 || capturedActions.length > 0)) {
@@ -452,6 +471,11 @@ export function BrowserArtifactPanel({
                     currentActionIndex={playwrightProgress.current - 1}
                     totalActions={playwrightProgress.total}
                     screenshots={replayScreenshots}
+                    failedActionIndex={
+                      replayErrors.length > 0
+                        ? replayErrors[replayErrors.length - 1].actionIndex
+                        : -1
+                    }
                     onReplayToggle={
                       capturedActions.length > 0 || isPlaywrightReplaying ? handleReplayToggle : undefined
                     }
diff --git a/src/components/ActionsList.tsx b/src/components/ActionsList.tsx
index d1c1e14304..8d850865a9 100644
--- a/src/components/ActionsList.tsx
+++ b/src/components/ActionsList.tsx
@@ -1,5 +1,5 @@
 import { Button } from "@/components/ui/button";
-import { X, CheckCircle2, Loader2, Camera, Play, Square } from "lucide-react";
+import { X, CheckCircle2, Loader2, Camera, Play, Square, XCircle } from "lucide-react";
 import { useRef, useEffect, useState } from "react";
 import { Screenshot } from "@/types/common";
 import { ScreenshotModal } from "@/components/ScreenshotModal";
@@ -31,6 +31,8 @@ interface ActionsListProps {
   screenshots?: Screenshot[];
   title?: string;
   onReplayToggle?: () => void;
+  // Index of the action the replay failed on (issue #756). -1 / undefined = none.
+  failedActionIndex?: number;
 }
 
 // Helper function to extract the most descriptive element identifier
@@ -181,6 +183,7 @@ export function ActionsList({
   screenshots = [],
   title,
   onReplayToggle,
+  failedActionIndex = -1,
 }: ActionsListProps) {
   const actionRefs = useRef<(HTMLDivElement | null)[]>([]);
   const scrollContainerRef = useRef<HTMLDivElement>(null);
@@ -203,7 +206,12 @@ export function ActionsList({
   }, [isReplaying, currentActionIndex]);
 
   // Get action status based on replay progress
-  const getActionStatus = (index: number): "pending" | "active" | "completed" => {
+  const getActionStatus = (
+    index: number,
+  ): "pending" | "active" | "completed" | "error" => {
+    // The failed step is marked even after replay stops, so this check comes
+    // first and is independent of isReplaying (issue #756).
+    if (failedActionIndex >= 0 && index === failedActionIndex) return "error";
     if (!isReplaying) return "pending";
     if (index < currentActionIndex) return "completed";
     if (index === currentActionIndex) return "active";
@@ -211,12 +219,16 @@ export function ActionsList({
   };
 
   // Get status icon for action
-  const getStatusIcon = (status: "pending" | "active" | "completed") => {
+  const getStatusIcon = (
+    status: "pending" | "active" | "completed" | "error",
+  ) => {
     switch (status) {
       case "completed":
         return <CheckCircle2 className="h-3 w-3 text-green-500 flex-shrink-0" />;
       case "active":
         return <Loader2 className="h-3 w-3 text-blue-500 animate-spin flex-shrink-0" />;
+      case "error":
+        return <XCircle className="h-3 w-3 text-red-500 flex-shrink-0" />;
       default:
         return null;
     }
@@ -281,6 +293,7 @@ export function ActionsList({
               const status = getActionStatus(index);
               const isActive = status === "active";
               const isCompleted = status === "completed";
+              const isError = status === "error";
               const screenshot = getScreenshotForAction(index);
               const actionType = action.type;
               // Only waitForURL actions get screenshots (goto is skipped)
@@ -296,16 +309,18 @@ export function ActionsList({
                   className={`flex items-center gap-2 rounded border-l-4 ${getActionBorderColor(
                     actionType,
                   )} p-1.5 transition-all duration-200 ${
-                    isActive
-                      ? "bg-blue-100 dark:bg-blue-900/30 shadow-md ring-2 ring-blue-400 dark:ring-blue-600"
-                      : isCompleted
-                        ? "bg-green-50 dark:bg-green-900/20 opacity-70"
-                        : "bg-muted/50 hover:bg-muted"
+                    isError
+                      ? "bg-red-100 dark:bg-red-900/30 shadow-md ring-2 ring-red-400 dark:ring-red-600"
+                      : isActive
+                        ? "bg-blue-100 dark:bg-blue-900/30 shadow-md ring-2 ring-blue-400 dark:ring-blue-600"
+                        : isCompleted
+                          ? "bg-green-50 dark:bg-green-900/20 opacity-70"
+                          : "bg-muted/50 hover:bg-muted"
                   }`}
                   title={`${actionType}: ${action.url || action.locator?.text || action.locator?.primary || action.value || ""}`}
                   data-testid={`action-item-${index}`}
                 >
-                  {isReplaying && getStatusIcon(status)}
+                  {(isReplaying || isError) && getStatusIcon(status)}
                   {hasScreenshot && (
                     <button
                       onClick={() => setSelectedScreenshot(screenshot)}
diff --git a/src/hooks/useStaktrakReplay.ts b/src/hooks/useStaktrakReplay.ts
index 5055864364..ee3ea7da2e 100644
--- a/src/hooks/useStaktrakReplay.ts
+++ b/src/hooks/useStaktrakReplay.ts
@@ -166,8 +166,23 @@ export function usePlaywrightReplay(
             },
           ]);
 
-          // Don't stop replay on error, just log it
           console.warn("Playwright replay error:", errorMsg);
+
+          // A fatal error means the library halted the replay at this step
+          // (issue #756). Tear down the replaying state — mirroring the
+          // `replay-stopped` cleanup — so the UI reflects that it stopped, and
+          // surface the failure to the caller.
+          if (data.fatal) {
+            setIsPlaywrightReplaying(false);
+            setIsPlaywrightPaused(false);
+            setPlaywrightStatus("error");
+            setCurrentAction(null);
+
+            const errContainer = document.querySelector(".iframe-container");
+            if (errContainer) {
+              errContainer.classList.remove("playwright-replaying");
+            }
+          }
           break;
 
         case "staktrak-playwright-replay-paused":