diff --git a/src/hotspot/share/prims/jvm.cpp b/src/hotspot/share/prims/jvm.cpp
index 13d89b396fa40..66f2a6da7a6b0 100644
--- a/src/hotspot/share/prims/jvm.cpp
+++ b/src/hotspot/share/prims/jvm.cpp
@@ -2893,15 +2893,16 @@ JVM_ENTRY(void, JVM_SleepNanos(JNIEnv* env, jclass threadClass, jlong nanos))
   } else {
     ThreadState old_state = thread->osthread()->get_state();
     thread->osthread()->set_state(SLEEPING);
-    if (!thread->sleep_nanos(nanos)) { // interrupted
+    if (!thread->sleep_nanos(nanos)) { // interrupted or async exception was installed
       // An asynchronous exception could have been thrown on
       // us while we were sleeping. We do not overwrite those.
       if (!HAS_PENDING_EXCEPTION) {
         HOTSPOT_THREAD_SLEEP_END(1);
-
-        // TODO-FIXME: THROW_MSG returns which means we will not call set_state()
-        // to properly restore the thread state.  That's likely wrong.
-        THROW_MSG(vmSymbols::java_lang_InterruptedException(), "sleep interrupted");
+        if (!thread->has_async_exception_condition()) {
+          // TODO-FIXME: THROW_MSG returns which means we will not call set_state()
+          // to properly restore the thread state.  That's likely wrong.
+          THROW_MSG(vmSymbols::java_lang_InterruptedException(), "sleep interrupted");
+        }
       }
     }
     thread->osthread()->set_state(old_state);
diff --git a/src/hotspot/share/runtime/javaThread.cpp b/src/hotspot/share/runtime/javaThread.cpp
index b84cf6e901113..3d9421fc94c78 100644
--- a/src/hotspot/share/runtime/javaThread.cpp
+++ b/src/hotspot/share/runtime/javaThread.cpp
@@ -1146,7 +1146,6 @@ void JavaThread::install_async_exception(AsyncExceptionHandshakeClosure* aehc) {
   oop vt_oop = vthread();
   if (vt_oop == nullptr || !vt_oop->is_a(vmClasses::BaseVirtualThread_klass())) {
     // Interrupt thread so it will wake up from a potential wait()/sleep()/park()
-    java_lang_Thread::set_interrupted(threadObj(), true);
     this->interrupt();
   }
 }
@@ -2098,7 +2097,7 @@ bool JavaThread::sleep(jlong millis) {
 
 // java.lang.Thread.sleep support
 // Returns true if sleep time elapsed as expected, and false
-// if the thread was interrupted.
+// if the thread was interrupted or async exception was installed.
 bool JavaThread::sleep_nanos(jlong nanos) {
   assert(this == Thread::current(),  "thread consistency check");
   assert(nanos >= 0, "nanos are in range");
@@ -2118,6 +2117,9 @@ bool JavaThread::sleep_nanos(jlong nanos) {
   jlong nanos_remaining = nanos;
 
   for (;;) {
+    if (has_async_exception_condition()) {
+      return false;
+    }
     // interruption has precedence over timing out
     if (this->is_interrupted(true)) {
       return false;
diff --git a/test/hotspot/jtreg/serviceability/jvmti/vthread/StopThreadTest/StopThreadTest.java b/test/hotspot/jtreg/serviceability/jvmti/vthread/StopThreadTest/StopThreadTest.java
index 4693040fa6b11..e130c3c7e6bef 100644
--- a/test/hotspot/jtreg/serviceability/jvmti/vthread/StopThreadTest/StopThreadTest.java
+++ b/test/hotspot/jtreg/serviceability/jvmti/vthread/StopThreadTest/StopThreadTest.java
@@ -211,7 +211,6 @@ public void run() {
                 log("TestTask.run: caught expected AssertionError from method A()");
                 seenExceptionFromA = true;
             }
-            Thread.interrupted();
             if (!seenExceptionFromA && !preemptableVirtualThread()) {
                 StopThreadTest.setFailed("TestTask.run: expected AssertionError from method A()");
             }
@@ -224,7 +223,6 @@ public void run() {
                 log("TestTask.run: caught expected AssertionError from method B()");
                 seenExceptionFromB = true;
             }
-            Thread.interrupted();
             if (!seenExceptionFromB) {
                 StopThreadTest.setFailed("TestTask.run: expected AssertionError from method B()");
             }
@@ -237,7 +235,6 @@ public void run() {
                 log("TestTask.run: caught expected AssertionError from method C()");
                 seenExceptionFromC = true;
             }
-            Thread.interrupted();
             if (!seenExceptionFromC) {
                 StopThreadTest.setFailed("TestTask.run: expected AssertionError from method C()");
             }