diff --git a/packages/react-client/src/ReactFlightClient.js b/packages/react-client/src/ReactFlightClient.js
index ddc151654b769..bd78cd237640b 100644
--- a/packages/react-client/src/ReactFlightClient.js
+++ b/packages/react-client/src/ReactFlightClient.js
@@ -317,11 +317,6 @@ export function parseModelString(
       } else {
         const id = parseInt(value.substring(1), 16);
         const chunk = getChunk(response, id);
-        if (chunk._status === PENDING) {
-          throw new Error(
-            "We didn't expect to see a forward reference. This is a bug in the React Server.",
-          );
-        }
         return readChunk(chunk);
       }
     }
diff --git a/packages/react-server-dom-webpack/src/__tests__/ReactFlightDOM-test.js b/packages/react-server-dom-webpack/src/__tests__/ReactFlightDOM-test.js
index 4b6995a9edb9d..9de3843764152 100644
--- a/packages/react-server-dom-webpack/src/__tests__/ReactFlightDOM-test.js
+++ b/packages/react-server-dom-webpack/src/__tests__/ReactFlightDOM-test.js
@@ -19,6 +19,7 @@ global.setImmediate = cb => cb();
 
 let act;
 let clientExports;
+let clientModuleError;
 let webpackMap;
 let Stream;
 let React;
@@ -26,6 +27,7 @@ let ReactDOMClient;
 let ReactServerDOMWriter;
 let ReactServerDOMReader;
 let Suspense;
+let ErrorBoundary;
 
 describe('ReactFlightDOM', () => {
   beforeEach(() => {
@@ -33,6 +35,7 @@ describe('ReactFlightDOM', () => {
     act = require('jest-react').act;
     const WebpackMock = require('./utils/WebpackMock');
     clientExports = WebpackMock.clientExports;
+    clientModuleError = WebpackMock.clientModuleError;
     webpackMap = WebpackMock.webpackMap;
 
     Stream = require('stream');
@@ -41,6 +44,22 @@ describe('ReactFlightDOM', () => {
     ReactDOMClient = require('react-dom/client');
     ReactServerDOMWriter = require('react-server-dom-webpack/writer.node.server');
     ReactServerDOMReader = require('react-server-dom-webpack');
+
+    ErrorBoundary = class extends React.Component {
+      state = {hasError: false, error: null};
+      static getDerivedStateFromError(error) {
+        return {
+          hasError: true,
+          error,
+        };
+      }
+      render() {
+        if (this.state.hasError) {
+          return this.props.fallback(this.state.error);
+        }
+        return this.props.children;
+      }
+    };
   });
 
   function getTestStream() {
@@ -319,22 +338,6 @@ describe('ReactFlightDOM', () => {
 
     // Client Components
 
-    class ErrorBoundary extends React.Component {
-      state = {hasError: false, error: null};
-      static getDerivedStateFromError(error) {
-        return {
-          hasError: true,
-          error,
-        };
-      }
-      render() {
-        if (this.state.hasError) {
-          return this.props.fallback(this.state.error);
-        }
-        return this.props.children;
-      }
-    }
-
     function MyErrorBoundary({children}) {
       return (
         <ErrorBoundary fallback={e => <p>{e.message}</p>}>
@@ -605,22 +608,6 @@ describe('ReactFlightDOM', () => {
   it('should be able to complete after aborting and throw the reason client-side', async () => {
     const reportedErrors = [];
 
-    class ErrorBoundary extends React.Component {
-      state = {hasError: false, error: null};
-      static getDerivedStateFromError(error) {
-        return {
-          hasError: true,
-          error,
-        };
-      }
-      render() {
-        if (this.state.hasError) {
-          return this.props.fallback(this.state.error);
-        }
-        return this.props.children;
-      }
-    }
-
     const {writable, readable} = getTestStream();
     const {pipe, abort} = ReactServerDOMWriter.renderToPipeableStream(
       <div>
@@ -661,4 +648,159 @@ describe('ReactFlightDOM', () => {
 
     expect(reportedErrors).toEqual(['for reasons']);
   });
+
+  it('should be able to recover from a direct reference erroring client-side', async () => {
+    const reportedErrors = [];
+
+    const ClientComponent = clientExports(function({prop}) {
+      return 'This should never render';
+    });
+
+    const ClientReference = clientModuleError(new Error('module init error'));
+
+    const {writable, readable} = getTestStream();
+    const {pipe} = ReactServerDOMWriter.renderToPipeableStream(
+      <div>
+        <ClientComponent prop={ClientReference} />
+      </div>,
+      webpackMap,
+      {
+        onError(x) {
+          reportedErrors.push(x);
+        },
+      },
+    );
+    pipe(writable);
+    const response = ReactServerDOMReader.createFromReadableStream(readable);
+
+    const container = document.createElement('div');
+    const root = ReactDOMClient.createRoot(container);
+
+    function App({res}) {
+      return res.readRoot();
+    }
+
+    await act(async () => {
+      root.render(
+        <ErrorBoundary fallback={e => <p>{e.message}</p>}>
+          <Suspense fallback={<p>(loading)</p>}>
+            <App res={response} />
+          </Suspense>
+        </ErrorBoundary>,
+      );
+    });
+    expect(container.innerHTML).toBe('<p>module init error</p>');
+
+    expect(reportedErrors).toEqual([]);
+  });
+
+  it('should be able to recover from a direct reference erroring client-side async', async () => {
+    const reportedErrors = [];
+
+    const ClientComponent = clientExports(function({prop}) {
+      return 'This should never render';
+    });
+
+    let rejectPromise;
+    const ClientReference = await clientExports(
+      new Promise((resolve, reject) => {
+        rejectPromise = reject;
+      }),
+    );
+
+    const {writable, readable} = getTestStream();
+    const {pipe} = ReactServerDOMWriter.renderToPipeableStream(
+      <div>
+        <ClientComponent prop={ClientReference} />
+      </div>,
+      webpackMap,
+      {
+        onError(x) {
+          reportedErrors.push(x);
+        },
+      },
+    );
+    pipe(writable);
+    const response = ReactServerDOMReader.createFromReadableStream(readable);
+
+    const container = document.createElement('div');
+    const root = ReactDOMClient.createRoot(container);
+
+    function App({res}) {
+      return res.readRoot();
+    }
+
+    await act(async () => {
+      root.render(
+        <ErrorBoundary fallback={e => <p>{e.message}</p>}>
+          <Suspense fallback={<p>(loading)</p>}>
+            <App res={response} />
+          </Suspense>
+        </ErrorBoundary>,
+      );
+    });
+
+    expect(container.innerHTML).toBe('<p>(loading)</p>');
+
+    await act(async () => {
+      rejectPromise(new Error('async module init error'));
+    });
+
+    expect(container.innerHTML).toBe('<p>async module init error</p>');
+
+    expect(reportedErrors).toEqual([]);
+  });
+
+  it('should be able to recover from a direct reference erroring server-side', async () => {
+    const reportedErrors = [];
+
+    const ClientComponent = clientExports(function({prop}) {
+      return 'This should never render';
+    });
+
+    // We simulate a bug in the Webpack bundler which causes an error on the server.
+    for (const id in webpackMap) {
+      Object.defineProperty(webpackMap, id, {
+        get: () => {
+          throw new Error('bug in the bundler');
+        },
+      });
+    }
+
+    const {writable, readable} = getTestStream();
+    const {pipe} = ReactServerDOMWriter.renderToPipeableStream(
+      <div>
+        <ClientComponent />
+      </div>,
+      webpackMap,
+      {
+        onError(x) {
+          reportedErrors.push(x);
+        },
+      },
+    );
+    pipe(writable);
+
+    const response = ReactServerDOMReader.createFromReadableStream(readable);
+
+    const container = document.createElement('div');
+    const root = ReactDOMClient.createRoot(container);
+
+    function App({res}) {
+      return res.readRoot();
+    }
+
+    await act(async () => {
+      root.render(
+        <ErrorBoundary fallback={e => <p>{e.message}</p>}>
+          <Suspense fallback={<p>(loading)</p>}>
+            <App res={response} />
+          </Suspense>
+        </ErrorBoundary>,
+      );
+    });
+    expect(container.innerHTML).toBe('<p>bug in the bundler</p>');
+
+    expect(reportedErrors).toEqual([]);
+  });
 });
diff --git a/packages/react-server-dom-webpack/src/__tests__/utils/WebpackMock.js b/packages/react-server-dom-webpack/src/__tests__/utils/WebpackMock.js
index 78f78505b6b2a..93d06bf2649a6 100644
--- a/packages/react-server-dom-webpack/src/__tests__/utils/WebpackMock.js
+++ b/packages/react-server-dom-webpack/src/__tests__/utils/WebpackMock.js
@@ -12,8 +12,12 @@ const Module = require('module');
 
 let webpackModuleIdx = 0;
 const webpackModules = {};
+const webpackErroredModules = {};
 const webpackMap = {};
 global.__webpack_require__ = function(id) {
+  if (webpackErroredModules[id]) {
+    throw webpackErroredModules[id];
+  }
   return webpackModules[id];
 };
 
@@ -36,6 +40,27 @@ Module._extensions['.client.js'] = previousLoader;
 exports.webpackMap = webpackMap;
 exports.webpackModules = webpackModules;
 
+exports.clientModuleError = function clientModuleError(moduleError) {
+  const idx = '' + webpackModuleIdx++;
+  webpackErroredModules[idx] = moduleError;
+  const path = url.pathToFileURL(idx).href;
+  webpackMap[path] = {
+    '': {
+      id: idx,
+      chunks: [],
+      name: '',
+    },
+    '*': {
+      id: idx,
+      chunks: [],
+      name: '*',
+    },
+  };
+  const mod = {exports: {}};
+  nodeLoader(mod, idx);
+  return mod.exports;
+};
+
 exports.clientExports = function clientExports(moduleExports) {
   const idx = '' + webpackModuleIdx++;
   webpackModules[idx] = moduleExports;
@@ -53,17 +78,20 @@ exports.clientExports = function clientExports(moduleExports) {
     },
   };
   if (typeof moduleExports.then === 'function') {
-    moduleExports.then(asyncModuleExports => {
-      for (const name in asyncModuleExports) {
-        webpackMap[path] = {
-          [name]: {
-            id: idx,
-            chunks: [],
-            name: name,
-          },
-        };
-      }
-    });
+    moduleExports.then(
+      asyncModuleExports => {
+        for (const name in asyncModuleExports) {
+          webpackMap[path] = {
+            [name]: {
+              id: idx,
+              chunks: [],
+              name: name,
+            },
+          };
+        }
+      },
+      () => {},
+    );
   }
   for (const name in moduleExports) {
     webpackMap[path] = {