diff --git a/x-pack/plugin/ilm/src/main/java/org/elasticsearch/xpack/indexlifecycle/ExecuteStepsUpdateTask.java b/x-pack/plugin/ilm/src/main/java/org/elasticsearch/xpack/indexlifecycle/ExecuteStepsUpdateTask.java
index 36aedaccbe4..9e5ef7b01c5 100644
--- a/x-pack/plugin/ilm/src/main/java/org/elasticsearch/xpack/indexlifecycle/ExecuteStepsUpdateTask.java
+++ b/x-pack/plugin/ilm/src/main/java/org/elasticsearch/xpack/indexlifecycle/ExecuteStepsUpdateTask.java
@@ -92,7 +92,11 @@ public class ExecuteStepsUpdateTask extends ClusterStateUpdateTask {
                     // move the cluster state to the next step
                     logger.trace("[{}] performing cluster state action ({}) [{}], next: [{}]",
                         index.getName(), currentStep.getClass().getSimpleName(), currentStep.getKey(), currentStep.getNextStepKey());
-                    state = ((ClusterStateActionStep) currentStep).performAction(index, state);
+                    try {
+                        state = ((ClusterStateActionStep) currentStep).performAction(index, state);
+                    } catch (Exception exception) {
+                        return moveToErrorStep(state, currentStep.getKey(), exception);
+                    }
                     if (currentStep.getNextStepKey() == null) {
                         return state;
                     } else {
@@ -108,7 +112,12 @@ public class ExecuteStepsUpdateTask extends ClusterStateUpdateTask {
                     // condition again
                     logger.trace("[{}] waiting for cluster state step condition ({}) [{}], next: [{}]",
                         index.getName(), currentStep.getClass().getSimpleName(), currentStep.getKey(), currentStep.getNextStepKey());
-                    ClusterStateWaitStep.Result result = ((ClusterStateWaitStep) currentStep).isConditionMet(index, state);
+                    ClusterStateWaitStep.Result result;
+                    try {
+                        result = ((ClusterStateWaitStep) currentStep).isConditionMet(index, state);
+                    } catch (Exception exception) {
+                        return moveToErrorStep(state, currentStep.getKey(), exception);
+                    }
                     if (result.isComplete()) {
                         logger.trace("[{}] cluster state step condition met successfully ({}) [{}], moving to next step {}",
                             index.getName(), currentStep.getClass().getSimpleName(), currentStep.getKey(), currentStep.getNextStepKey());
@@ -172,4 +181,12 @@ public class ExecuteStepsUpdateTask extends ClusterStateUpdateTask {
         throw new ElasticsearchException(
                 "policy [" + policy + "] for index [" + index.getName() + "] failed on step [" + startStep.getKey() + "].", e);
     }
+
+    private ClusterState moveToErrorStep(final ClusterState state, Step.StepKey currentStepKey, Exception cause) throws IOException {
+        logger.error("policy [{}] for index [{}] failed on cluster state step [{}]. Moving to ERROR step", policy, index.getName(),
+            currentStepKey);
+        MoveToErrorStepUpdateTask moveToErrorStepUpdateTask = new MoveToErrorStepUpdateTask(index, policy, currentStepKey, cause,
+            nowSupplier);
+        return moveToErrorStepUpdateTask.execute(state);
+    }
 }
diff --git a/x-pack/plugin/ilm/src/test/java/org/elasticsearch/xpack/indexlifecycle/ExecuteStepsUpdateTaskTests.java b/x-pack/plugin/ilm/src/test/java/org/elasticsearch/xpack/indexlifecycle/ExecuteStepsUpdateTaskTests.java
index c059188b7ea..21f2b0e7093 100644
--- a/x-pack/plugin/ilm/src/test/java/org/elasticsearch/xpack/indexlifecycle/ExecuteStepsUpdateTaskTests.java
+++ b/x-pack/plugin/ilm/src/test/java/org/elasticsearch/xpack/indexlifecycle/ExecuteStepsUpdateTaskTests.java
@@ -22,6 +22,7 @@ import org.elasticsearch.common.xcontent.NamedXContentRegistry;
 import org.elasticsearch.index.Index;
 import org.elasticsearch.node.Node;
 import org.elasticsearch.test.ESTestCase;
+import org.elasticsearch.xpack.core.indexlifecycle.ErrorStep;
 import org.elasticsearch.xpack.core.indexlifecycle.LifecycleExecutionState;
 import org.elasticsearch.xpack.core.indexlifecycle.IndexLifecycleMetadata;
 import org.elasticsearch.xpack.core.indexlifecycle.LifecyclePolicy;
@@ -253,6 +254,44 @@ public class ExecuteStepsUpdateTaskTests extends ESTestCase {
         assertSame(expectedException, exception.getCause());
     }
 
+    public void testClusterActionStepThrowsException() throws IOException {
+        RuntimeException thrownException = new RuntimeException("error");
+        firstStep.setException(thrownException);
+        setStateToKey(firstStepKey);
+        Step startStep = policyStepsRegistry.getStep(indexMetaData, firstStepKey);
+        long now = randomNonNegativeLong();
+        ExecuteStepsUpdateTask task = new ExecuteStepsUpdateTask(mixedPolicyName, index, startStep, policyStepsRegistry, null, () -> now);
+        ClusterState newState = task.execute(clusterState);
+        LifecycleExecutionState lifecycleState = LifecycleExecutionState.fromIndexMetadata(newState.getMetaData().index(index));
+        StepKey currentStepKey = IndexLifecycleRunner.getCurrentStepKey(lifecycleState);
+        assertThat(currentStepKey, equalTo(new StepKey(firstStepKey.getPhase(), firstStepKey.getAction(), ErrorStep.NAME)));
+        assertThat(firstStep.getExecuteCount(), equalTo(1L));
+        assertThat(secondStep.getExecuteCount(), equalTo(0L));
+        assertThat(task.getNextStepKey(), equalTo(secondStep.getKey()));
+        assertThat(lifecycleState.getPhaseTime(), nullValue());
+        assertThat(lifecycleState.getActionTime(), nullValue());
+        assertThat(lifecycleState.getStepInfo(), equalTo("{\"type\":\"runtime_exception\",\"reason\":\"error\"}"));
+    }
+
+    public void testClusterWaitStepThrowsException() throws IOException {
+        RuntimeException thrownException = new RuntimeException("error");
+        secondStep.setException(thrownException);
+        setStateToKey(firstStepKey);
+        Step startStep = policyStepsRegistry.getStep(indexMetaData, firstStepKey);
+        long now = randomNonNegativeLong();
+        ExecuteStepsUpdateTask task = new ExecuteStepsUpdateTask(mixedPolicyName, index, startStep, policyStepsRegistry, null, () -> now);
+        ClusterState newState = task.execute(clusterState);
+        LifecycleExecutionState lifecycleState = LifecycleExecutionState.fromIndexMetadata(newState.getMetaData().index(index));
+        StepKey currentStepKey = IndexLifecycleRunner.getCurrentStepKey(lifecycleState);
+        assertThat(currentStepKey, equalTo(new StepKey(firstStepKey.getPhase(), firstStepKey.getAction(), ErrorStep.NAME)));
+        assertThat(firstStep.getExecuteCount(), equalTo(1L));
+        assertThat(secondStep.getExecuteCount(), equalTo(1L));
+        assertThat(task.getNextStepKey(), equalTo(thirdStepKey));
+        assertThat(lifecycleState.getPhaseTime(), nullValue());
+        assertThat(lifecycleState.getActionTime(), nullValue());
+        assertThat(lifecycleState.getStepInfo(), equalTo("{\"type\":\"runtime_exception\",\"reason\":\"error\"}"));
+    }
+
     private void setStateToKey(StepKey stepKey) throws IOException {
         LifecycleExecutionState.Builder lifecycleState = LifecycleExecutionState.builder(
             LifecycleExecutionState.fromIndexMetadata(clusterState.getMetaData().index(index)));