diff --git a/packages/core/primitives/signals/src/linked_signal.ts b/packages/core/primitives/signals/src/linked_signal.ts
index 14434c58581f..5f3328681c3f 100644
--- a/packages/core/primitives/signals/src/linked_signal.ts
+++ b/packages/core/primitives/signals/src/linked_signal.ts
@@ -17,6 +17,7 @@ import {
   REACTIVE_NODE,
   ReactiveNode,
   runPostProducerCreatedFn,
+  setActiveConsumer,
   SIGNAL,
 } from './graph';
 import {signalSetFn, signalUpdateFn} from './signal';
@@ -151,17 +152,22 @@ export const LINKED_SIGNAL_NODE: object = /* @__PURE__ */ (() => {
 
       const prevConsumer = consumerBeforeComputation(node);
       let newValue: unknown;
+      let wasEqual = false;
       try {
         const newSourceValue = node.source();
-        const prev =
-          oldValue === UNSET || oldValue === ERRORED
-            ? undefined
-            : {
-                source: node.sourceValue,
-                value: oldValue,
-              };
+        const oldValueValid = oldValue !== UNSET && oldValue !== ERRORED;
+        const prev = oldValueValid
+          ? {
+              source: node.sourceValue,
+              value: oldValue,
+            }
+          : undefined;
         newValue = node.computation(newSourceValue, prev);
         node.sourceValue = newSourceValue;
+        // We want to mark this node as errored if calling `equal` throws; however, we don't want
+        // to track any reactive reads inside `equal`.
+        setActiveConsumer(null);
+        wasEqual = oldValueValid && newValue !== ERRORED && node.equal(oldValue, newValue);
       } catch (err) {
         newValue = ERRORED;
         node.error = err;
@@ -169,7 +175,7 @@ export const LINKED_SIGNAL_NODE: object = /* @__PURE__ */ (() => {
         consumerAfterComputation(node, prevConsumer);
       }
 
-      if (oldValue !== UNSET && newValue !== ERRORED && node.equal(oldValue, newValue)) {
+      if (wasEqual) {
         // No change to `valueVersion` - old and new values are
         // semantically equivalent.
         node.value = oldValue;
diff --git a/packages/core/test/signals/linked_signal_spec.ts b/packages/core/test/signals/linked_signal_spec.ts
index 848d57e5e28b..4ccdfc24cc77 100644
--- a/packages/core/test/signals/linked_signal_spec.ts
+++ b/packages/core/test/signals/linked_signal_spec.ts
@@ -7,7 +7,7 @@
  */
 
 import {isSignal, linkedSignal, signal, computed} from '../../src/core';
-import {setPostProducerCreatedFn} from '../../primitives/signals';
+import {defaultEquals, setPostProducerCreatedFn} from '../../primitives/signals';
 import {testingEffect} from './effect_util';
 
 describe('linkedSignal', () => {
@@ -319,4 +319,125 @@ describe('linkedSignal', () => {
     expect(producers).toBe(2);
     setPostProducerCreatedFn(prev);
   });
+
+  describe('with custom equal', () => {
+    it('should cache exceptions thrown by equal', () => {
+      const s = signal(0);
+
+      let computedRunCount = 0;
+      let equalRunCount = 0;
+      const c = linkedSignal(
+        () => {
+          computedRunCount++;
+          return s();
+        },
+        {
+          equal: () => {
+            equalRunCount++;
+            throw new Error('equal');
+          },
+        },
+      );
+
+      // equal() isn't run for the initial computation.
+      expect(c()).toBe(0);
+      expect(computedRunCount).toBe(1);
+      expect(equalRunCount).toBe(0);
+
+      s.set(1);
+
+      // Error is thrown by equal().
+      expect(() => c()).toThrowError('equal');
+      expect(computedRunCount).toBe(2);
+      expect(equalRunCount).toBe(1);
+
+      // Error is cached; c throws again without needing to rerun computation or equal().
+      expect(() => c()).toThrowError('equal');
+      expect(computedRunCount).toBe(2);
+      expect(equalRunCount).toBe(1);
+    });
+
+    it('should not track signal reads inside equal', () => {
+      const value = signal(1);
+      const epsilon = signal(0.5);
+
+      let innerRunCount = 0;
+      let equalRunCount = 0;
+      const inner = linkedSignal(
+        () => {
+          innerRunCount++;
+          return value();
+        },
+        {
+          equal: (a, b) => {
+            equalRunCount++;
+            return Math.abs(a - b) < epsilon();
+          },
+        },
+      );
+
+      let outerRunCount = 0;
+      const outer = linkedSignal(() => {
+        outerRunCount++;
+        return inner();
+      });
+
+      // Everything runs the first time.
+      expect(outer()).toBe(1);
+      expect(innerRunCount).toBe(1);
+      expect(outerRunCount).toBe(1);
+
+      // Difference is less than epsilon().
+      value.set(1.2);
+
+      // `inner` reruns because `value` was changed, and `equal` is called for the first time.
+      expect(outer()).toBe(1);
+      expect(innerRunCount).toBe(2);
+      expect(equalRunCount).toBe(1);
+      // `outer does not rerun because `equal` determined that `inner` had not changed.
+      expect(outerRunCount).toBe(1);
+
+      // Previous difference is now greater than epsilon().
+      epsilon.set(0.1);
+
+      // While changing `epsilon` would change the outcome of the `inner`, we don't rerun it
+      // because we intentionally don't track reactive reads in `equal`.
+      expect(outer()).toBe(1);
+      expect(innerRunCount).toBe(2);
+      expect(equalRunCount).toBe(1);
+      // Equally important is that the signal read in `equal` doesn't leak into the outer reactive
+      // context either.
+      expect(outerRunCount).toBe(1);
+    });
+
+    it('should recover from exception', () => {
+      let shouldThrow = true;
+      const source = signal(0);
+      const derived = linkedSignal({
+        source,
+        computation: (value, previous) => {
+          return `${value}, hasPrevious: ${previous !== undefined}`;
+        },
+        equal: (a, b) => {
+          if (shouldThrow) {
+            throw new Error('equal');
+          }
+          return defaultEquals(a, b);
+        },
+      });
+
+      // Initial read doesn't throw because it doesn't call `equal`.
+      expect(derived()).toBe('0, hasPrevious: false');
+
+      // Update `source` to begin throwing.
+      source.set(1);
+      expect(() => derived()).toThrowError('equal');
+
+      // Stop throwing and update `source` to cause `derived` to recompute. No previous value
+      // should be made available as the linked signal transitions from an error state.
+      shouldThrow = false;
+      source.set(2);
+      expect(derived()).toBe('2, hasPrevious: false');
+    });
+  });
 });