diff --git a/CHANGELOG.md b/CHANGELOG.md
index ef9358793..298f3b443 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -25,6 +25,8 @@ This document follows the conventions laid out in [Keep a CHANGELOG][].
 
 ### Changed
 
+-   Reattach python exception traceback information (#545)
+
 ### Fixed
 
 -   Fixed secondary PythonEngine.Initialize call, all sensitive static variables now reseted.
@@ -697,4 +699,4 @@ This document follows the conventions laid out in [Keep a CHANGELOG][].
 [i131]: https://github.com/pythonnet/pythonnet/issues/131
 [p531]: https://github.com/pythonnet/pythonnet/pull/531
 [i755]: https://github.com/pythonnet/pythonnet/pull/755
-[p534]: https://github.com/pythonnet/pythonnet/pull/534
\ No newline at end of file
+[p534]: https://github.com/pythonnet/pythonnet/pull/534
diff --git a/src/runtime/exceptions.cs b/src/runtime/exceptions.cs
index 743b5416f..8bed0abfd 100644
--- a/src/runtime/exceptions.cs
+++ b/src/runtime/exceptions.cs
@@ -256,7 +256,10 @@ public static void SetError(Exception e)
             var pe = e as PythonException;
             if (pe != null)
             {
-                Runtime.PyErr_SetObject(pe.PyType, pe.PyValue);
+                Runtime.XIncref(pe.PyType);
+                Runtime.XIncref(pe.PyValue);
+                Runtime.XIncref(pe.PyTB);
+                Runtime.PyErr_Restore(pe.PyType, pe.PyValue, pe.PyTB);
                 return;
             }
 
diff --git a/src/tests/test_subclass.py b/src/tests/test_subclass.py
index 43d013c7c..ab440d429 100644
--- a/src/tests/test_subclass.py
+++ b/src/tests/test_subclass.py
@@ -128,6 +128,39 @@ def test_derived_class():
     assert id(x) == id(ob)
 
 
+def test_derived_traceback():
+    """Test python exception traceback in class derived from managed base"""
+    class DerivedClass(SubClassTest):
+        __namespace__ = "Python.Test.traceback"
+
+        def foo(self):
+            print (xyzname)
+            return None
+
+    import sys,traceback
+    ob = DerivedClass()
+
+    # direct call
+    try:
+        ob.foo()
+        assert False
+    except:
+        e = sys.exc_info()
+    assert "xyzname" in str(e[1])
+    location = traceback.extract_tb(e[2])[-1]
+    assert location[2] == "foo"
+
+    # call through managed code
+    try:
+        FunctionsTest.test_foo(ob)
+        assert False
+    except:
+        e = sys.exc_info()
+    assert "xyzname" in str(e[1])
+    location = traceback.extract_tb(e[2])[-1]
+    assert location[2] == "foo"
+
+
 def test_create_instance():
     """Test derived instances can be created from managed code"""
     DerivedClass = derived_class_fixture(test_create_instance.__name__)