diff --git a/spring-webmvc/src/main/java/org/springframework/web/servlet/mvc/method/annotation/ResponseEntityExceptionHandler.java b/spring-webmvc/src/main/java/org/springframework/web/servlet/mvc/method/annotation/ResponseEntityExceptionHandler.java
index e7300c8686d..6bad41006e8 100644
--- a/spring-webmvc/src/main/java/org/springframework/web/servlet/mvc/method/annotation/ResponseEntityExceptionHandler.java
+++ b/spring-webmvc/src/main/java/org/springframework/web/servlet/mvc/method/annotation/ResponseEntityExceptionHandler.java
@@ -69,7 +69,7 @@ import org.springframework.web.util.WebUtils;
  * using view resolution (e.g., via {@code ContentNegotiatingViewResolver}),
  * then {@code DefaultHandlerExceptionResolver} is good enough.
  *
- * <p>Note that in order for an {@code @ControllerAdvice} sub-class to be
+ * <p>Note that in order for an {@code @ControllerAdvice} subclass to be
  * detected, {@link ExceptionHandlerExceptionResolver} must be configured.
  *
  * @author Rossen Stoyanchev
@@ -121,7 +121,7 @@ public abstract class ResponseEntityExceptionHandler {
 			NoHandlerFoundException.class,
 			AsyncRequestTimeoutException.class
 		})
-	public final ResponseEntity<Object> handleException(Exception ex, WebRequest request) {
+	public final ResponseEntity<Object> handleException(Exception ex, WebRequest request) throws Exception {
 		HttpHeaders headers = new HttpHeaders();
 		if (ex instanceof org.springframework.web.servlet.mvc.multiaction.NoSuchRequestHandlingMethodException) {
 			HttpStatus status = HttpStatus.NOT_FOUND;
@@ -185,38 +185,17 @@ public abstract class ResponseEntityExceptionHandler {
 		}
 		else if (ex instanceof AsyncRequestTimeoutException) {
 			HttpStatus status = HttpStatus.SERVICE_UNAVAILABLE;
-			return handleAsyncRequestTimeoutException(
-					(AsyncRequestTimeoutException) ex, headers, status, request);
+			return handleAsyncRequestTimeoutException((AsyncRequestTimeoutException) ex, headers, status, request);
 		}
 		else {
-			if (logger.isWarnEnabled()) {
-				logger.warn("Unknown exception type: " + ex.getClass().getName());
-			}
-			HttpStatus status = HttpStatus.INTERNAL_SERVER_ERROR;
-			return handleExceptionInternal(ex, null, headers, status, request);
+			// Unknown exception, typically a wrapper with a common MVC exception as cause
+			// (since @ExceptionHandler type declarations also match first-level causes):
+			// We only deal with top-level MVC exceptions here, so let's rethrow the given
+			// exception for further processing through the HandlerExceptionResolver chain.
+			throw ex;
 		}
 	}
 
-	/**
-	 * A single place to customize the response body of all Exception types.
-	 * <p>The default implementation sets the {@link WebUtils#ERROR_EXCEPTION_ATTRIBUTE}
-	 * request attribute and creates a {@link ResponseEntity} from the given
-	 * body, headers, and status.
-	 * @param ex the exception
-	 * @param body the body for the response
-	 * @param headers the headers for the response
-	 * @param status the response status
-	 * @param request the current request
-	 */
-	protected ResponseEntity<Object> handleExceptionInternal(Exception ex, Object body,
-			HttpHeaders headers, HttpStatus status, WebRequest request) {
-
-		if (HttpStatus.INTERNAL_SERVER_ERROR.equals(status)) {
-			request.setAttribute(WebUtils.ERROR_EXCEPTION_ATTRIBUTE, ex, WebRequest.SCOPE_REQUEST);
-		}
-		return new ResponseEntity<Object>(body, headers, status);
-	}
-
 	/**
 	 * Customize the response for NoSuchRequestHandlingMethodException.
 	 * <p>This method logs a warning and delegates to {@link #handleExceptionInternal}.
@@ -228,7 +207,8 @@ public abstract class ResponseEntityExceptionHandler {
 	 * @deprecated as of 4.3, along with {@link org.springframework.web.servlet.mvc.multiaction.NoSuchRequestHandlingMethodException}
 	 */
 	@Deprecated
-	protected ResponseEntity<Object> handleNoSuchRequestHandlingMethod(org.springframework.web.servlet.mvc.multiaction.NoSuchRequestHandlingMethodException ex,
+	protected ResponseEntity<Object> handleNoSuchRequestHandlingMethod(
+			org.springframework.web.servlet.mvc.multiaction.NoSuchRequestHandlingMethodException ex,
 			HttpHeaders headers, HttpStatus status, WebRequest request) {
 
 		pageNotFoundLogger.warn(ex.getMessage());
@@ -246,8 +226,8 @@ public abstract class ResponseEntityExceptionHandler {
 	 * @param request the current request
 	 * @return a {@code ResponseEntity} instance
 	 */
-	protected ResponseEntity<Object> handleHttpRequestMethodNotSupported(HttpRequestMethodNotSupportedException ex,
-			HttpHeaders headers, HttpStatus status, WebRequest request) {
+	protected ResponseEntity<Object> handleHttpRequestMethodNotSupported(
+			HttpRequestMethodNotSupportedException ex, HttpHeaders headers, HttpStatus status, WebRequest request) {
 
 		pageNotFoundLogger.warn(ex.getMessage());
 
@@ -268,8 +248,8 @@ public abstract class ResponseEntityExceptionHandler {
 	 * @param request the current request
 	 * @return a {@code ResponseEntity} instance
 	 */
-	protected ResponseEntity<Object> handleHttpMediaTypeNotSupported(HttpMediaTypeNotSupportedException ex,
-			HttpHeaders headers, HttpStatus status, WebRequest request) {
+	protected ResponseEntity<Object> handleHttpMediaTypeNotSupported(
+			HttpMediaTypeNotSupportedException ex, HttpHeaders headers, HttpStatus status, WebRequest request) {
 
 		List<MediaType> mediaTypes = ex.getSupportedMediaTypes();
 		if (!CollectionUtils.isEmpty(mediaTypes)) {
@@ -288,8 +268,8 @@ public abstract class ResponseEntityExceptionHandler {
 	 * @param request the current request
 	 * @return a {@code ResponseEntity} instance
 	 */
-	protected ResponseEntity<Object> handleHttpMediaTypeNotAcceptable(HttpMediaTypeNotAcceptableException ex,
-			HttpHeaders headers, HttpStatus status, WebRequest request) {
+	protected ResponseEntity<Object> handleHttpMediaTypeNotAcceptable(
+			HttpMediaTypeNotAcceptableException ex, HttpHeaders headers, HttpStatus status, WebRequest request) {
 
 		return handleExceptionInternal(ex, null, headers, status, request);
 	}
@@ -304,8 +284,8 @@ public abstract class ResponseEntityExceptionHandler {
 	 * @return a {@code ResponseEntity} instance
 	 * @since 4.2
 	 */
-	protected ResponseEntity<Object> handleMissingPathVariable(MissingPathVariableException ex,
-			HttpHeaders headers, HttpStatus status, WebRequest request) {
+	protected ResponseEntity<Object> handleMissingPathVariable(
+			MissingPathVariableException ex, HttpHeaders headers, HttpStatus status, WebRequest request) {
 
 		return handleExceptionInternal(ex, null, headers, status, request);
 	}
@@ -319,8 +299,8 @@ public abstract class ResponseEntityExceptionHandler {
 	 * @param request the current request
 	 * @return a {@code ResponseEntity} instance
 	 */
-	protected ResponseEntity<Object> handleMissingServletRequestParameter(MissingServletRequestParameterException ex,
-			HttpHeaders headers, HttpStatus status, WebRequest request) {
+	protected ResponseEntity<Object> handleMissingServletRequestParameter(
+			MissingServletRequestParameterException ex, HttpHeaders headers, HttpStatus status, WebRequest request) {
 
 		return handleExceptionInternal(ex, null, headers, status, request);
 	}
@@ -334,8 +314,8 @@ public abstract class ResponseEntityExceptionHandler {
 	 * @param request the current request
 	 * @return a {@code ResponseEntity} instance
 	 */
-	protected ResponseEntity<Object> handleServletRequestBindingException(ServletRequestBindingException ex,
-			HttpHeaders headers, HttpStatus status, WebRequest request) {
+	protected ResponseEntity<Object> handleServletRequestBindingException(
+			ServletRequestBindingException ex, HttpHeaders headers, HttpStatus status, WebRequest request) {
 
 		return handleExceptionInternal(ex, null, headers, status, request);
 	}
@@ -349,8 +329,8 @@ public abstract class ResponseEntityExceptionHandler {
 	 * @param request the current request
 	 * @return a {@code ResponseEntity} instance
 	 */
-	protected ResponseEntity<Object> handleConversionNotSupported(ConversionNotSupportedException ex,
-			HttpHeaders headers, HttpStatus status, WebRequest request) {
+	protected ResponseEntity<Object> handleConversionNotSupported(
+			ConversionNotSupportedException ex, HttpHeaders headers, HttpStatus status, WebRequest request) {
 
 		return handleExceptionInternal(ex, null, headers, status, request);
 	}
@@ -364,8 +344,8 @@ public abstract class ResponseEntityExceptionHandler {
 	 * @param request the current request
 	 * @return a {@code ResponseEntity} instance
 	 */
-	protected ResponseEntity<Object> handleTypeMismatch(TypeMismatchException ex, HttpHeaders headers,
-			HttpStatus status, WebRequest request) {
+	protected ResponseEntity<Object> handleTypeMismatch(
+			TypeMismatchException ex, HttpHeaders headers, HttpStatus status, WebRequest request) {
 
 		return handleExceptionInternal(ex, null, headers, status, request);
 	}
@@ -379,8 +359,8 @@ public abstract class ResponseEntityExceptionHandler {
 	 * @param request the current request
 	 * @return a {@code ResponseEntity} instance
 	 */
-	protected ResponseEntity<Object> handleHttpMessageNotReadable(HttpMessageNotReadableException ex,
-			HttpHeaders headers, HttpStatus status, WebRequest request) {
+	protected ResponseEntity<Object> handleHttpMessageNotReadable(
+			HttpMessageNotReadableException ex, HttpHeaders headers, HttpStatus status, WebRequest request) {
 
 		return handleExceptionInternal(ex, null, headers, status, request);
 	}
@@ -394,8 +374,8 @@ public abstract class ResponseEntityExceptionHandler {
 	 * @param request the current request
 	 * @return a {@code ResponseEntity} instance
 	 */
-	protected ResponseEntity<Object> handleHttpMessageNotWritable(HttpMessageNotWritableException ex,
-			HttpHeaders headers, HttpStatus status, WebRequest request) {
+	protected ResponseEntity<Object> handleHttpMessageNotWritable(
+			HttpMessageNotWritableException ex, HttpHeaders headers, HttpStatus status, WebRequest request) {
 
 		return handleExceptionInternal(ex, null, headers, status, request);
 	}
@@ -409,8 +389,8 @@ public abstract class ResponseEntityExceptionHandler {
 	 * @param request the current request
 	 * @return a {@code ResponseEntity} instance
 	 */
-	protected ResponseEntity<Object> handleMethodArgumentNotValid(MethodArgumentNotValidException ex,
-			HttpHeaders headers, HttpStatus status, WebRequest request) {
+	protected ResponseEntity<Object> handleMethodArgumentNotValid(
+			MethodArgumentNotValidException ex, HttpHeaders headers, HttpStatus status, WebRequest request) {
 
 		return handleExceptionInternal(ex, null, headers, status, request);
 	}
@@ -424,8 +404,8 @@ public abstract class ResponseEntityExceptionHandler {
 	 * @param request the current request
 	 * @return a {@code ResponseEntity} instance
 	 */
-	protected ResponseEntity<Object> handleMissingServletRequestPart(MissingServletRequestPartException ex,
-			HttpHeaders headers, HttpStatus status, WebRequest request) {
+	protected ResponseEntity<Object> handleMissingServletRequestPart(
+			MissingServletRequestPartException ex, HttpHeaders headers, HttpStatus status, WebRequest request) {
 
 		return handleExceptionInternal(ex, null, headers, status, request);
 	}
@@ -439,8 +419,8 @@ public abstract class ResponseEntityExceptionHandler {
 	 * @param request the current request
 	 * @return a {@code ResponseEntity} instance
 	 */
-	protected ResponseEntity<Object> handleBindException(BindException ex, HttpHeaders headers,
-			HttpStatus status, WebRequest request) {
+	protected ResponseEntity<Object> handleBindException(
+			BindException ex, HttpHeaders headers, HttpStatus status, WebRequest request) {
 
 		return handleExceptionInternal(ex, null, headers, status, request);
 	}
@@ -489,4 +469,24 @@ public abstract class ResponseEntityExceptionHandler {
 		return handleExceptionInternal(ex, null, headers, status, webRequest);
 	}
 
+	/**
+	 * A single place to customize the response body of all Exception types.
+	 * <p>The default implementation sets the {@link WebUtils#ERROR_EXCEPTION_ATTRIBUTE}
+	 * request attribute and creates a {@link ResponseEntity} from the given
+	 * body, headers, and status.
+	 * @param ex the exception
+	 * @param body the body for the response
+	 * @param headers the headers for the response
+	 * @param status the response status
+	 * @param request the current request
+	 */
+	protected ResponseEntity<Object> handleExceptionInternal(
+			Exception ex, Object body, HttpHeaders headers, HttpStatus status, WebRequest request) {
+
+		if (HttpStatus.INTERNAL_SERVER_ERROR.equals(status)) {
+			request.setAttribute(WebUtils.ERROR_EXCEPTION_ATTRIBUTE, ex, WebRequest.SCOPE_REQUEST);
+		}
+		return new ResponseEntity<Object>(body, headers, status);
+	}
+
 }
diff --git a/spring-webmvc/src/test/java/org/springframework/web/servlet/mvc/method/annotation/ResponseEntityExceptionHandlerTests.java b/spring-webmvc/src/test/java/org/springframework/web/servlet/mvc/method/annotation/ResponseEntityExceptionHandlerTests.java
index c35b6218f25..1352582bef4 100644
--- a/spring-webmvc/src/test/java/org/springframework/web/servlet/mvc/method/annotation/ResponseEntityExceptionHandlerTests.java
+++ b/spring-webmvc/src/test/java/org/springframework/web/servlet/mvc/method/annotation/ResponseEntityExceptionHandlerTests.java
@@ -1,5 +1,5 @@
 /*
- * Copyright 2002-2016 the original author or authors.
+ * Copyright 2002-2018 the original author or authors.
  *
  * Licensed under the Apache License, Version 2.0 (the "License");
  * you may not use this file except in compliance with the License.
@@ -20,6 +20,7 @@ import java.lang.reflect.Method;
 import java.util.Arrays;
 import java.util.EnumSet;
 import java.util.List;
+import javax.servlet.ServletException;
 
 import org.junit.Before;
 import org.junit.Test;
@@ -38,6 +39,8 @@ import org.springframework.http.converter.HttpMessageNotWritableException;
 import org.springframework.http.server.ServletServerHttpRequest;
 import org.springframework.mock.web.test.MockHttpServletRequest;
 import org.springframework.mock.web.test.MockHttpServletResponse;
+import org.springframework.mock.web.test.MockServletConfig;
+import org.springframework.stereotype.Controller;
 import org.springframework.validation.BindException;
 import org.springframework.web.HttpMediaTypeNotAcceptableException;
 import org.springframework.web.HttpMediaTypeNotSupportedException;
@@ -48,11 +51,13 @@ import org.springframework.web.bind.MissingServletRequestParameterException;
 import org.springframework.web.bind.ServletRequestBindingException;
 import org.springframework.web.bind.annotation.ControllerAdvice;
 import org.springframework.web.bind.annotation.ExceptionHandler;
+import org.springframework.web.bind.annotation.RequestMapping;
 import org.springframework.web.context.request.ServletWebRequest;
 import org.springframework.web.context.request.WebRequest;
 import org.springframework.web.context.request.async.AsyncRequestTimeoutException;
 import org.springframework.web.context.support.StaticWebApplicationContext;
 import org.springframework.web.multipart.support.MissingServletRequestPartException;
+import org.springframework.web.servlet.DispatcherServlet;
 import org.springframework.web.servlet.NoHandlerFoundException;
 import org.springframework.web.servlet.mvc.multiaction.NoSuchRequestHandlingMethodException;
 import org.springframework.web.servlet.mvc.support.DefaultHandlerExceptionResolver;
@@ -87,9 +92,9 @@ public class ResponseEntityExceptionHandlerTests {
 		this.defaultExceptionResolver = new DefaultHandlerExceptionResolver();
 	}
 
+
 	@Test
 	public void supportsAllDefaultHandlerExceptionResolverExceptionTypes() throws Exception {
-
 		Class<ResponseEntityExceptionHandler> clazz = ResponseEntityExceptionHandler.class;
 		Method handleExceptionMethod = clazz.getMethod("handleException", Exception.class, WebRequest.class);
 		ExceptionHandler annotation = handleExceptionMethod.getAnnotation(ExceptionHandler.class);
@@ -106,7 +111,7 @@ public class ResponseEntityExceptionHandlerTests {
 
 	@Test
 	public void noSuchRequestHandlingMethod() {
-		Exception ex = new NoSuchRequestHandlingMethodException("GET", TestController.class);
+		Exception ex = new NoSuchRequestHandlingMethodException("GET", getClass());
 		testException(ex);
 	}
 
@@ -117,7 +122,6 @@ public class ResponseEntityExceptionHandlerTests {
 
 		ResponseEntity<Object> responseEntity = testException(ex);
 		assertEquals(EnumSet.of(HttpMethod.POST, HttpMethod.DELETE), responseEntity.getHeaders().getAllow());
-
 	}
 
 	@Test
@@ -213,54 +217,131 @@ public class ResponseEntityExceptionHandlerTests {
 
 	@Test
 	public void controllerAdvice() throws Exception {
-		StaticWebApplicationContext cxt = new StaticWebApplicationContext();
-		cxt.registerSingleton("exceptionHandler", ApplicationExceptionHandler.class);
-		cxt.refresh();
+		StaticWebApplicationContext ctx = new StaticWebApplicationContext();
+		ctx.registerSingleton("exceptionHandler", ApplicationExceptionHandler.class);
+		ctx.refresh();
 
 		ExceptionHandlerExceptionResolver resolver = new ExceptionHandlerExceptionResolver();
-		resolver.setApplicationContext(cxt);
+		resolver.setApplicationContext(ctx);
 		resolver.afterPropertiesSet();
 
 		ServletRequestBindingException ex = new ServletRequestBindingException("message");
-		resolver.resolveException(this.servletRequest, this.servletResponse, null, ex);
+		assertNotNull(resolver.resolveException(this.servletRequest, this.servletResponse, null, ex));
 
 		assertEquals(400, this.servletResponse.getStatus());
 		assertEquals("error content", this.servletResponse.getContentAsString());
 		assertEquals("someHeaderValue", this.servletResponse.getHeader("someHeader"));
 	}
 
+	@Test
+	public void controllerAdviceWithNestedException() {
+		StaticWebApplicationContext ctx = new StaticWebApplicationContext();
+		ctx.registerSingleton("exceptionHandler", ApplicationExceptionHandler.class);
+		ctx.refresh();
+
+		ExceptionHandlerExceptionResolver resolver = new ExceptionHandlerExceptionResolver();
+		resolver.setApplicationContext(ctx);
+		resolver.afterPropertiesSet();
+
+		IllegalStateException ex = new IllegalStateException(new ServletRequestBindingException("message"));
+		assertNull(resolver.resolveException(this.servletRequest, this.servletResponse, null, ex));
+	}
+
+	@Test
+	public void controllerAdviceWithinDispatcherServlet() throws Exception {
+		StaticWebApplicationContext ctx = new StaticWebApplicationContext();
+		ctx.registerSingleton("controller", ExceptionThrowingController.class);
+		ctx.registerSingleton("exceptionHandler", ApplicationExceptionHandler.class);
+		ctx.registerSingleton("exceptionResolver", ExceptionHandlerExceptionResolver.class);
+		ctx.registerSingleton("handlerMapping", RequestMappingHandlerMapping.class);
+		ctx.registerSingleton("handlerAdapter", RequestMappingHandlerAdapter.class);
+		ctx.refresh();
+
+		DispatcherServlet servlet = new DispatcherServlet(ctx);
+		servlet.init(new MockServletConfig());
+		servlet.service(this.servletRequest, this.servletResponse);
+
+		assertEquals(400, this.servletResponse.getStatus());
+		assertEquals("error content", this.servletResponse.getContentAsString());
+		assertEquals("someHeaderValue", this.servletResponse.getHeader("someHeader"));
+	}
+
+	@Test
+	public void controllerAdviceWithNestedExceptionWithinDispatcherServlet() throws Exception {
+		StaticWebApplicationContext ctx = new StaticWebApplicationContext();
+		ctx.registerSingleton("controller", NestedExceptionThrowingController.class);
+		ctx.registerSingleton("exceptionHandler", ApplicationExceptionHandler.class);
+		ctx.registerSingleton("exceptionResolver", ExceptionHandlerExceptionResolver.class);
+		ctx.registerSingleton("handlerMapping", RequestMappingHandlerMapping.class);
+		ctx.registerSingleton("handlerAdapter", RequestMappingHandlerAdapter.class);
+		ctx.refresh();
+
+		DispatcherServlet servlet = new DispatcherServlet(ctx);
+		servlet.init(new MockServletConfig());
+		try {
+			servlet.service(this.servletRequest, this.servletResponse);
+		}
+		catch (ServletException ex) {
+			assertTrue(ex.getCause() instanceof IllegalStateException);
+			assertTrue(ex.getCause().getCause() instanceof ServletRequestBindingException);
+		}
+	}
+
 
 	private ResponseEntity<Object> testException(Exception ex) {
-		ResponseEntity<Object> responseEntity = this.exceptionHandlerSupport.handleException(ex, this.request);
+		try {
+			ResponseEntity<Object> responseEntity = this.exceptionHandlerSupport.handleException(ex, this.request);
+
+			// SPR-9653
+			if (HttpStatus.INTERNAL_SERVER_ERROR.equals(responseEntity.getStatusCode())) {
+				assertSame(ex, this.servletRequest.getAttribute("javax.servlet.error.exception"));
+			}
+
+			this.defaultExceptionResolver.resolveException(this.servletRequest, this.servletResponse, null, ex);
 
-		// SPR-9653
-		if (HttpStatus.INTERNAL_SERVER_ERROR.equals(responseEntity.getStatusCode())) {
-			assertSame(ex, this.servletRequest.getAttribute("javax.servlet.error.exception"));
+			assertEquals(this.servletResponse.getStatus(), responseEntity.getStatusCode().value());
+
+			return responseEntity;
+		}
+		catch (Exception ex2) {
+			throw new IllegalStateException("handleException threw exception", ex2);
 		}
+	}
 
-		this.defaultExceptionResolver.resolveException(this.servletRequest, this.servletResponse, null, ex);
 
-		assertEquals(this.servletResponse.getStatus(), responseEntity.getStatusCode().value());
+	@Controller
+	private static class ExceptionThrowingController {
 
-		return responseEntity;
+		@RequestMapping("/")
+		public void handleRequest() throws Exception {
+			throw new ServletRequestBindingException("message");
+		}
 	}
 
 
-	private static class TestController {
+	@Controller
+	private static class NestedExceptionThrowingController {
+
+		@RequestMapping("/")
+		public void handleRequest() throws Exception {
+			throw new IllegalStateException(new ServletRequestBindingException("message"));
+		}
 	}
 
+
 	@ControllerAdvice
 	private static class ApplicationExceptionHandler extends ResponseEntityExceptionHandler {
 
 		@Override
-		protected ResponseEntity<Object> handleServletRequestBindingException(ServletRequestBindingException ex,
-				HttpHeaders headers, HttpStatus status, WebRequest request) {
+		protected ResponseEntity<Object> handleServletRequestBindingException(
+				ServletRequestBindingException ex, HttpHeaders headers, HttpStatus status, WebRequest request) {
 
 			headers.set("someHeader", "someHeaderValue");
 			return handleExceptionInternal(ex, "error content", headers, status, request);
 		}
 	}
 
+
 	@SuppressWarnings("unused")
 	void handle(String arg) {
 	}