diff --git a/NEWS b/NEWS
index a1324acd8..82f453eb4 100644
--- a/NEWS
+++ b/NEWS
@@ -3,6 +3,12 @@ For full details, see the git log at: https://github.com/ksh93/ksh/tree/1.0
 
 Any uppercase BUG_* names are modernish shell bug IDs.
 
+2022-07-02:
+
+- Fixed a bug where, if the last command in a subshell was an external
+  command that was terminated by a signal, the exit status ($?) of the
+  subshell did not reflect this by adding 256 to the signal number.
+
 2022-07-01:
 
 - In scripts, $COLUMNS and $LINES are now kept up to date in scripts at
diff --git a/src/cmd/ksh93/include/shell.h b/src/cmd/ksh93/include/shell.h
index 94379ec72..406b9b424 100644
--- a/src/cmd/ksh93/include/shell.h
+++ b/src/cmd/ksh93/include/shell.h
@@ -319,6 +319,7 @@ struct Shell_s
 	char		indebug; 	/* set when in debug trap */
 	unsigned char	ignsig;		/* ignored signal in subshell */
 	unsigned char	lastsig;	/* last signal received */
+	char		chldexitsig;	/* set if the last command was a child process that exited due to a signal */
 	char		pathinit;	/* pathinit called from subshell */
 	char		comsub;		/* set to 1 when in `...`, 2 when in ${ ...; }, 3 when in $(...) */
 	char		subshare;	/* set when comsub==2 (shared-state ${ ...; } command substitution) */
diff --git a/src/cmd/ksh93/include/version.h b/src/cmd/ksh93/include/version.h
index 7c6f09017..06a605bc3 100644
--- a/src/cmd/ksh93/include/version.h
+++ b/src/cmd/ksh93/include/version.h
@@ -23,7 +23,7 @@
 
 #define SH_RELEASE_FORK	"93u+m"		/* only change if you develop a new ksh93 fork */
 #define SH_RELEASE_SVER	"1.0.0-beta.2"	/* semantic version number: https://semver.org */
-#define SH_RELEASE_DATE	"2022-07-01"	/* must be in this format for $((.sh.version)) */
+#define SH_RELEASE_DATE	"2022-07-02"	/* must be in this format for $((.sh.version)) */
 #define SH_RELEASE_CPYR	"(c) 2020-2022 Contributors to ksh " SH_RELEASE_FORK
 
 /* Scripts sometimes field-split ${.sh.version}, so don't change amount of whitespace. */
diff --git a/src/cmd/ksh93/sh/fault.c b/src/cmd/ksh93/sh/fault.c
index a4976747b..5c46187fe 100644
--- a/src/cmd/ksh93/sh/fault.c
+++ b/src/cmd/ksh93/sh/fault.c
@@ -482,6 +482,7 @@ int sh_trap(const char *trap, int mode)
 	int	jmpval, savxit = sh.exitval, savxit_return;
 	int	was_history = sh_isstate(SH_HISTORY);
 	int	was_verbose = sh_isstate(SH_VERBOSE);
+	char	save_chldexitsig = sh.chldexitsig;
 	int	staktop = staktell();
 	char	*savptr = stakfreeze(0);
 	struct	checkpt buff;
@@ -529,6 +530,7 @@ int sh_trap(const char *trap, int mode)
 		sh_onstate(SH_HISTORY);
 	if(was_verbose)
 		sh_onstate(SH_VERBOSE);
+	sh.chldexitsig = save_chldexitsig;
 	exitset();
 	if(jmpval>SH_JMPTRAP && (((struct checkpt*)sh.jmpbuffer)->prev || ((struct checkpt*)sh.jmpbuffer)->mode==SH_JMPSCRIPT))
 		siglongjmp(*sh.jmplist,jmpval);
@@ -682,7 +684,7 @@ noreturn void sh_done(register int sig)
 	sfsync((Sfio_t*)sfstdin);
 	sfsync((Sfio_t*)sh.outpool);
 	sfsync((Sfio_t*)sfstdout);
-	if(savxit&SH_EXITSIG && (savxit&SH_EXITMASK) == sh.lastsig)
+	if((sh.chldexitsig && sh.realsubshell) || (savxit&SH_EXITSIG && (savxit&SH_EXITMASK) == sh.lastsig))
 		sig = savxit&SH_EXITMASK;
 	if(sig)
 	{
@@ -707,10 +709,8 @@ noreturn void sh_done(register int sig)
 	if(sh_isoption(SH_NOEXEC))
 		kiaclose((Lex_t*)sh.lex_context);
 #endif /* SHOPT_KIA */
-
 	/* Exit with portable 8-bit status (128 + signum) if last child process exits due to signal */
-	if (savxit & SH_EXITSIG)
+	if(sh.chldexitsig)
 		savxit = savxit & ~SH_EXITSIG | 0200;
-
 	exit(savxit&SH_EXITMASK);
 }
diff --git a/src/cmd/ksh93/sh/jobs.c b/src/cmd/ksh93/sh/jobs.c
index 4938f26cc..974330b2e 100644
--- a/src/cmd/ksh93/sh/jobs.c
+++ b/src/cmd/ksh93/sh/jobs.c
@@ -1508,7 +1508,10 @@ int	job_wait(register pid_t pid)
 					{
 						sh.exitval=px->p_exit;
 						if(px->p_flag&P_SIGNALLED)
+						{
 							sh.exitval |= SH_EXITSIG;
+							sh.chldexitsig = 1;
+						}
 						if(intr)
 							px->p_flag &= ~P_EXITSAVE;
 					}
diff --git a/src/cmd/ksh93/sh/subshell.c b/src/cmd/ksh93/sh/subshell.c
index 92b2a78a7..ab91f76dc 100644
--- a/src/cmd/ksh93/sh/subshell.c
+++ b/src/cmd/ksh93/sh/subshell.c
@@ -680,6 +680,8 @@ Sfio_t *sh_subshell(Shnode_t *t, volatile int flags, int comsub)
 		if(jmpval==SH_JMPSCRIPT)
 			siglongjmp(*sh.jmplist,jmpval);
 		sh.exitval &= SH_EXITMASK;
+		if(sh.chldexitsig)
+			sh.exitval |= SH_EXITSIG;
 		sh_done(0);
 	}
 	if(!sh.savesig)
@@ -873,6 +875,8 @@ Sfio_t *sh_subshell(Shnode_t *t, volatile int flags, int comsub)
 		/* Real subshells have their exit status truncated to 8 bits by the kernel.
 		 * Since virtual subshells should be indistinguishable, do the same here. */
 		sh.exitval &= SH_EXITMASK;
+		if(sh.chldexitsig)
+			sh.exitval |= SH_EXITSIG;
 	}
 	sh.subshare = sp->subshare;
 	sh.subdup = sp->subdup;
diff --git a/src/cmd/ksh93/sh/xec.c b/src/cmd/ksh93/sh/xec.c
index 68bb5a9b6..910fcdcc5 100644
--- a/src/cmd/ksh93/sh/xec.c
+++ b/src/cmd/ksh93/sh/xec.c
@@ -952,6 +952,7 @@ int sh_exec(register const Shnode_t *t, int flags)
 			sh_offstate(SH_ERREXIT);
 		sh.exitval=0;
 		sh.lastsig = 0;
+		sh.chldexitsig = 0;
 		sh.lastpath = 0;
 		switch(type&COMMSK)
 		{
@@ -1854,8 +1855,6 @@ int sh_exec(register const Shnode_t *t, int flags)
 				sh_popcontext(buffp);
 				if(jmpval > SH_JMPEXIT)
 					siglongjmp(*sh.jmplist,jmpval);
-				if(sh.exitval > 256)
-					sh.exitval -= 128;
 				sh_done(0);
 			}
 			else
diff --git a/src/cmd/ksh93/tests/subshell.sh b/src/cmd/ksh93/tests/subshell.sh
index 4bcf5b5f4..43f461aff 100755
--- a/src/cmd/ksh93/tests/subshell.sh
+++ b/src/cmd/ksh93/tests/subshell.sh
@@ -1153,5 +1153,23 @@ exp=OK0
 [[ $got == $exp ]] || err_exit "capturing output from ksh when piped doesn't work correctly" \
 	"(expected $(printf %q "$exp"), got $(printf %q "$got"))"
 
+# ======
+# A virtual subshell should trim its exit status to 8 bits just like a real subshell, but if
+# its last command was killed by a signal then that should still be reflected in the 9th bit.
+sig=USR1
+exp=$((${ kill -l "$sig"; }|0x100))
+{ (:; "$SHELL" -c "kill -s $sig \$\$"); } 2>/dev/null
+let "(got=$?)==exp" || err_exit "command killed by signal in virtual subshell: expected status $exp, got status $got"
+{ (ulimit -t unlimited; "$SHELL" -c "kill -s $sig \$\$"); } 2>/dev/null
+let "(got=$?)==exp" || err_exit "command killed by signal in real subshell: expected status $exp, got status $got"
+{ (trap : EXIT; "$SHELL" -c "kill -s $sig \$\$"); } 2>/dev/null
+let "(got=$?)==exp" || err_exit "command killed by signal in virtual subshell with trap: expected status $exp, got status $got"
+{ (ulimit -t unlimited; trap : EXIT; "$SHELL" -c "kill -s $sig \$\$"); } 2>/dev/null
+let "(got=$?)==exp" || err_exit "command killed by signal in real subshell with trap: expected status $exp, got status $got"
+(:; exit "$exp")
+let "(got=$?)==(exp&0xFF)" || err_exit "fake signal exit from virtual subshell: expected status $((exp&0xFF)), got status $got"
+(ulimit -t unlimited 2>/dev/null; exit "$exp")
+let "(got=$?)==(exp&0xFF)" || err_exit "fake signal exit from real subshell: expected status $((exp&0xFF)), got status $got"
+
 # ======
 exit $((Errors<125?Errors:125))