diff --git a/src/reader.cpp b/src/reader.cpp
index 5edf3c30e..88a481ce7 100644
--- a/src/reader.cpp
+++ b/src/reader.cpp
@@ -3932,6 +3932,11 @@ maybe_t<wcstring> reader_data_t::readline(int nchars_or_0) {
             }
         }
 
+        // If we ran `exit` anywhere, exit.
+        exit_loop_requested |= parser().libdata().exit_current_script;
+        parser().libdata().exit_current_script = false;
+        if (exit_loop_requested) continue;
+
         if (!event_needing_handling || event_needing_handling->is_check_exit()) {
             continue;
         } else if (event_needing_handling->is_eof()) {
diff --git a/tests/pexpects/bind.py b/tests/pexpects/bind.py
index 68e16d8b6..c1bcebe09 100644
--- a/tests/pexpects/bind.py
+++ b/tests/pexpects/bind.py
@@ -317,3 +317,19 @@ sendline('bind \cz "echo bound ctrl-z"')
 expect_prompt()
 send("\x1A")
 expect_str("bound ctrl-z")
+
+# Check that the builtin version of `exit` works
+# (for obvious reasons this MUST BE LAST)
+sendline('function myexit; echo exit; exit; end; bind \cz myexit')
+expect_prompt()
+send("\x1A")
+expect_str("exit")
+
+for t in range(0, 5):
+    if not sp.spawn.isalive():
+        break
+    # This is cheesy, but on CI with thread-sanitizer this can be slow enough that the process is still running, so we sleep for a bit.
+    time.sleep(1)
+else:
+    print("Fish did not exit via binding!")
+    sys.exit(1)