diff --git a/src/pl/plpgsql/src/expected/plpgsql_control.out b/src/pl/plpgsql/src/expected/plpgsql_control.out
index fbfc939eae..328bd48586 100644
--- a/src/pl/plpgsql/src/expected/plpgsql_control.out
+++ b/src/pl/plpgsql/src/expected/plpgsql_control.out
@@ -413,6 +413,17 @@ begin
   raise notice 'should get here';
 end$$;
 NOTICE:  should get here
+-- check exit out of outermost block
+do $$
+<<outerblock>>
+begin
+  <<innerblock>>
+  begin
+    exit outerblock;
+    raise notice 'should not get here';
+  end;
+  raise notice 'should not get here, either';
+end$$;
 -- unlabeled exit does match a while loop
 do $$
 begin
diff --git a/src/pl/plpgsql/src/pl_comp.c b/src/pl/plpgsql/src/pl_comp.c
index a68a2077c3..f5b1d5c4fa 100644
--- a/src/pl/plpgsql/src/pl_comp.c
+++ b/src/pl/plpgsql/src/pl_comp.c
@@ -1038,9 +1038,11 @@ add_dummy_return(PLpgSQL_function *function)
 	/*
 	 * If the outer block has an EXCEPTION clause, we need to make a new outer
 	 * block, since the added RETURN shouldn't act like it is inside the
-	 * EXCEPTION clause.
+	 * EXCEPTION clause.  Likewise, if it has a label, wrap it in a new outer
+	 * block so that EXIT doesn't skip the RETURN.
 	 */
-	if (function->action->exceptions != NULL)
+	if (function->action->exceptions != NULL ||
+		function->action->label != NULL)
 	{
 		PLpgSQL_stmt_block *new;
 
diff --git a/src/pl/plpgsql/src/sql/plpgsql_control.sql b/src/pl/plpgsql/src/sql/plpgsql_control.sql
index 61d6ca6451..ed7231134f 100644
--- a/src/pl/plpgsql/src/sql/plpgsql_control.sql
+++ b/src/pl/plpgsql/src/sql/plpgsql_control.sql
@@ -311,6 +311,18 @@ begin
   raise notice 'should get here';
 end$$;
 
+-- check exit out of outermost block
+do $$
+<<outerblock>>
+begin
+  <<innerblock>>
+  begin
+    exit outerblock;
+    raise notice 'should not get here';
+  end;
+  raise notice 'should not get here, either';
+end$$;
+
 -- unlabeled exit does match a while loop
 do $$
 begin