diff --git a/examples/counter.rs b/examples/counter.rs
index b38b163..4861ae2 100644
--- a/examples/counter.rs
+++ b/examples/counter.rs
@@ -3,10 +3,10 @@ use restate_sdk::prelude::*;
 #[restate_sdk::object]
 trait Counter {
     #[shared]
-    async fn get() -> HandlerResult<u64>;
-    async fn add(val: u64) -> HandlerResult<u64>;
-    async fn increment() -> HandlerResult<u64>;
-    async fn reset() -> HandlerResult<()>;
+    async fn get() -> Result<u64, TerminalError>;
+    async fn add(val: u64) -> Result<u64, TerminalError>;
+    async fn increment() -> Result<u64, TerminalError>;
+    async fn reset() -> Result<(), TerminalError>;
 }
 
 struct CounterImpl;
@@ -14,22 +14,22 @@ struct CounterImpl;
 const COUNT: &str = "count";
 
 impl Counter for CounterImpl {
-    async fn get(&self, ctx: SharedObjectContext<'_>) -> HandlerResult<u64> {
+    async fn get(&self, ctx: SharedObjectContext<'_>) -> Result<u64, TerminalError> {
         Ok(ctx.get::<u64>(COUNT).await?.unwrap_or(0))
     }
 
-    async fn add(&self, ctx: ObjectContext<'_>, val: u64) -> HandlerResult<u64> {
+    async fn add(&self, ctx: ObjectContext<'_>, val: u64) -> Result<u64, TerminalError> {
         let current = ctx.get::<u64>(COUNT).await?.unwrap_or(0);
         let new = current + val;
         ctx.set(COUNT, new);
         Ok(new)
     }
 
-    async fn increment(&self, ctx: ObjectContext<'_>) -> HandlerResult<u64> {
+    async fn increment(&self, ctx: ObjectContext<'_>) -> Result<u64, TerminalError> {
         self.add(ctx, 1).await
     }
 
-    async fn reset(&self, ctx: ObjectContext<'_>) -> HandlerResult<()> {
+    async fn reset(&self, ctx: ObjectContext<'_>) -> Result<(), TerminalError> {
         ctx.clear(COUNT);
         Ok(())
     }
diff --git a/examples/failures.rs b/examples/failures.rs
index 0ab4251..62379cf 100644
--- a/examples/failures.rs
+++ b/examples/failures.rs
@@ -4,7 +4,7 @@ use restate_sdk::prelude::*;
 #[restate_sdk::service]
 trait FailureExample {
     #[name = "doRun"]
-    async fn do_run() -> HandlerResult<()>;
+    async fn do_run() -> Result<(), TerminalError>;
 }
 
 struct FailureExampleImpl;
@@ -14,14 +14,14 @@ struct FailureExampleImpl;
 struct MyError;
 
 impl FailureExample for FailureExampleImpl {
-    async fn do_run(&self, context: Context<'_>) -> HandlerResult<()> {
+    async fn do_run(&self, context: Context<'_>) -> Result<(), TerminalError> {
         context
             .run(|| async move {
                 if rand::thread_rng().next_u32() % 4 == 0 {
-                    return Err(TerminalError::new("Failed!!!").into());
+                    Err(TerminalError::new("Failed!!!"))?
                 }
 
-                Err(MyError.into())
+                Err(MyError)?
             })
             .await?;
 
diff --git a/examples/greeter.rs b/examples/greeter.rs
index 3d4011b..ec07e0f 100644
--- a/examples/greeter.rs
+++ b/examples/greeter.rs
@@ -1,14 +1,15 @@
 use restate_sdk::prelude::*;
+use std::convert::Infallible;
 
 #[restate_sdk::service]
 trait Greeter {
-    async fn greet(name: String) -> HandlerResult<String>;
+    async fn greet(name: String) -> Result<String, Infallible>;
 }
 
 struct GreeterImpl;
 
 impl Greeter for GreeterImpl {
-    async fn greet(&self, _: Context<'_>, name: String) -> HandlerResult<String> {
+    async fn greet(&self, _: Context<'_>, name: String) -> Result<String, Infallible> {
         Ok(format!("Greetings {name}"))
     }
 }
diff --git a/examples/run.rs b/examples/run.rs
index f6127d7..e87a979 100644
--- a/examples/run.rs
+++ b/examples/run.rs
@@ -3,13 +3,16 @@ use std::collections::HashMap;
 
 #[restate_sdk::service]
 trait RunExample {
-    async fn do_run() -> HandlerResult<Json<HashMap<String, String>>>;
+    async fn do_run() -> Result<Json<HashMap<String, String>>, HandlerError>;
 }
 
 struct RunExampleImpl(reqwest::Client);
 
 impl RunExample for RunExampleImpl {
-    async fn do_run(&self, context: Context<'_>) -> HandlerResult<Json<HashMap<String, String>>> {
+    async fn do_run(
+        &self,
+        context: Context<'_>,
+    ) -> Result<Json<HashMap<String, String>>, HandlerError> {
         let res = context
             .run(|| async move {
                 let req = self.0.get("https://httpbin.org/ip").build()?;
diff --git a/macros/src/ast.rs b/macros/src/ast.rs
index 9756762..7a9aadf 100644
--- a/macros/src/ast.rs
+++ b/macros/src/ast.rs
@@ -145,7 +145,8 @@ pub(crate) struct Handler {
     pub(crate) restate_name: String,
     pub(crate) ident: Ident,
     pub(crate) arg: Option<PatType>,
-    pub(crate) output: Type,
+    pub(crate) output_ok: Type,
+    pub(crate) output_err: Type,
 }
 
 impl Parse for Handler {
@@ -192,17 +193,18 @@ impl Parse for Handler {
         let return_type: ReturnType = input.parse()?;
         input.parse::<Token![;]>()?;
 
-        let output: Type = match &return_type {
-            ReturnType::Default => {
-                parse_quote!(())
-            }
+        let (ok_ty, err_ty) = match &return_type {
+            ReturnType::Default =>    return Err(Error::new(
+                return_type.span(),
+                "The return type cannot be empty, only Result or restate_sdk::prelude::HandlerResult is supported as return type",
+            )),
             ReturnType::Type(_, ty) => {
-                if let Some(ty) = extract_handler_result_parameter(ty) {
-                    ty
+                if let Some((ok_ty, err_ty)) = extract_handler_result_parameter(ty) {
+                    (ok_ty, err_ty)
                 } else {
                     return Err(Error::new(
                         return_type.span(),
-                        "Only restate_sdk::prelude::HandlerResult is supported as return type",
+                        "Only Result or restate_sdk::prelude::HandlerResult is supported as return type",
                     ));
                 }
             }
@@ -229,7 +231,8 @@ impl Parse for Handler {
             restate_name,
             ident,
             arg: args.pop(),
-            output,
+            output_ok: ok_ty,
+            output_err: err_ty,
         })
     }
 }
@@ -263,14 +266,16 @@ fn read_literal_attribute_name(attr: &Attribute) -> Result<Option<String>> {
         .transpose()
 }
 
-fn extract_handler_result_parameter(ty: &Type) -> Option<Type> {
+fn extract_handler_result_parameter(ty: &Type) -> Option<(Type, Type)> {
     let path = match ty {
         Type::Path(ty) => &ty.path,
         _ => return None,
     };
 
     let last = path.segments.last().unwrap();
-    if last.ident != "HandlerResult" {
+    let is_result = last.ident == "Result";
+    let is_handler_result = last.ident == "HandlerResult";
+    if !is_result && !is_handler_result {
         return None;
     }
 
@@ -279,12 +284,22 @@ fn extract_handler_result_parameter(ty: &Type) -> Option<Type> {
         _ => return None,
     };
 
-    if bracketed.args.len() != 1 {
-        return None;
-    }
-
-    match &bracketed.args[0] {
-        GenericArgument::Type(arg) => Some(arg.clone()),
-        _ => None,
+    if is_handler_result && bracketed.args.len() == 1 {
+        match &bracketed.args[0] {
+            GenericArgument::Type(arg) => Some((
+                arg.clone(),
+                parse_quote!(::restate_sdk::prelude::HandlerError),
+            )),
+            _ => None,
+        }
+    } else if is_result && bracketed.args.len() == 2 {
+        match (&bracketed.args[0], &bracketed.args[1]) {
+            (GenericArgument::Type(ok_arg), GenericArgument::Type(err_arg)) => {
+                Some((ok_arg.clone(), err_arg.clone()))
+            }
+            _ => None,
+        }
+    } else {
+        None
     }
 }
diff --git a/macros/src/gen.rs b/macros/src/gen.rs
index f67435d..a882b4d 100644
--- a/macros/src/gen.rs
+++ b/macros/src/gen.rs
@@ -55,7 +55,7 @@ impl<'a> ServiceGenerator<'a> {
         let handler_fns = handlers
             .iter()
             .map(
-                |Handler { attrs, ident, arg, is_shared, output, .. }| {
+                |Handler { attrs, ident, arg, is_shared, output_ok, output_err, .. }| {
                     let args = arg.iter();
 
                     let ctx = match (&service_ty, is_shared) {
@@ -68,7 +68,7 @@ impl<'a> ServiceGenerator<'a> {
 
                     quote! {
                         #( #attrs )*
-                        fn #ident(&self, context: #ctx, #( #args ),*) -> impl std::future::Future<Output=::restate_sdk::prelude::HandlerResult<#output>> + ::core::marker::Send;
+                        fn #ident(&self, context: #ctx, #( #args ),*) -> impl std::future::Future<Output=Result<#output_ok, #output_err>> + ::core::marker::Send;
                     }
                 },
             );
@@ -130,7 +130,7 @@ impl<'a> ServiceGenerator<'a> {
             quote! {
                 #handler_literal => {
                     #get_input_and_call
-                    let res = fut.await;
+                    let res = fut.await.map_err(::restate_sdk::errors::HandlerError::from);
                     ctx.handle_handler_result(res);
                     ctx.end();
                     Ok(())
@@ -302,7 +302,7 @@ impl<'a> ServiceGenerator<'a> {
                          ty, ..
                      }) => quote! { #ty }
             };
-            let res_ty = &handler.output;
+            let res_ty = &handler.output_ok;
             let input =  match &handler.arg {
                 None => quote! { () },
                 Some(_) => quote! { req }
diff --git a/src/endpoint/context.rs b/src/endpoint/context.rs
index 892ba2e..af5dfc1 100644
--- a/src/endpoint/context.rs
+++ b/src/endpoint/context.rs
@@ -527,14 +527,14 @@ impl ContextInternal {
             .sys_complete_promise(id.to_owned(), NonEmptyValue::Failure(failure.into()));
     }
 
-    pub fn run<'a, Run, Fut, Res>(
+    pub fn run<'a, Run, Fut, Out>(
         &'a self,
         run_closure: Run,
-    ) -> impl crate::context::RunFuture<Result<Res, TerminalError>> + Send + Sync + 'a
+    ) -> impl crate::context::RunFuture<Result<Out, TerminalError>> + Send + Sync + 'a
     where
-        Run: RunClosure<Fut = Fut, Output = Res> + Send + Sync + 'a,
-        Fut: Future<Output = HandlerResult<Res>> + Send + Sync + 'a,
-        Res: Serialize + Deserialize + 'static,
+        Run: RunClosure<Fut = Fut, Output = Out> + Send + Sync + 'a,
+        Fut: Future<Output = HandlerResult<Out>> + Send + Sync + 'a,
+        Out: Serialize + Deserialize + 'static,
     {
         let this = Arc::clone(&self.inner);
 
@@ -631,12 +631,12 @@ impl<Run, Fut, Ret> RunFuture<Run, Fut, Ret> {
     }
 }
 
-impl<Run, Fut, Ret> crate::context::RunFuture<Result<Result<Ret, TerminalError>, Error>>
-    for RunFuture<Run, Fut, Ret>
+impl<Run, Fut, Out> crate::context::RunFuture<Result<Result<Out, TerminalError>, Error>>
+    for RunFuture<Run, Fut, Out>
 where
-    Run: RunClosure<Fut = Fut, Output = Ret> + Send + Sync,
-    Fut: Future<Output = HandlerResult<Ret>> + Send + Sync,
-    Ret: Serialize + Deserialize,
+    Run: RunClosure<Fut = Fut, Output = Out> + Send + Sync,
+    Fut: Future<Output = HandlerResult<Out>> + Send + Sync,
+    Out: Serialize + Deserialize,
 {
     fn with_retry_policy(mut self, retry_policy: RunRetryPolicy) -> Self {
         self.retry_policy = RetryPolicy::Exponential {
@@ -655,13 +655,13 @@ where
     }
 }
 
-impl<Run, Fut, Res> Future for RunFuture<Run, Fut, Res>
+impl<Run, Fut, Out> Future for RunFuture<Run, Fut, Out>
 where
-    Run: RunClosure<Fut = Fut, Output = Res> + Send + Sync,
-    Res: Serialize + Deserialize,
-    Fut: Future<Output = HandlerResult<Res>> + Send + Sync,
+    Run: RunClosure<Fut = Fut, Output = Out> + Send + Sync,
+    Out: Serialize + Deserialize,
+    Fut: Future<Output = HandlerResult<Out>> + Send + Sync,
 {
-    type Output = Result<Result<Res, TerminalError>, Error>;
+    type Output = Result<Result<Out, TerminalError>, Error>;
 
     fn poll(self: Pin<&mut Self>, cx: &mut Context<'_>) -> Poll<Self::Output> {
         let mut this = self.project();
@@ -681,7 +681,7 @@ where
                     // Enter the side effect
                     match enter_result.map_err(ErrorInner::VM)? {
                         RunEnterResult::Executed(NonEmptyValue::Success(mut v)) => {
-                            let t = Res::deserialize(&mut v).map_err(|e| {
+                            let t = Out::deserialize(&mut v).map_err(|e| {
                                 ErrorInner::Deserialization {
                                     syscall: "run",
                                     err: Box::new(e),
@@ -707,7 +707,7 @@ where
                 }
                 RunStateProj::ClosureRunning { start_time, fut } => {
                     let res = match ready!(fut.poll(cx)) {
-                        Ok(t) => RunExitResult::Success(Res::serialize(&t).map_err(|e| {
+                        Ok(t) => RunExitResult::Success(Out::serialize(&t).map_err(|e| {
                             ErrorInner::Serialization {
                                 syscall: "run",
                                 err: Box::new(e),
@@ -752,7 +752,7 @@ where
                         }
                         .into()),
                         Value::Success(mut s) => {
-                            let t = Res::deserialize(&mut s).map_err(|e| {
+                            let t = Out::deserialize(&mut s).map_err(|e| {
                                 ErrorInner::Deserialization {
                                     syscall: "run",
                                     err: Box::new(e),
diff --git a/src/errors.rs b/src/errors.rs
index 276f903..dc7f2ff 100644
--- a/src/errors.rs
+++ b/src/errors.rs
@@ -144,6 +144,4 @@ impl From<TerminalError> for Failure {
 }
 
 /// Result type for a Restate handler.
-///
-/// All Restate handlers *MUST* use this type as return type for their handlers.
 pub type HandlerResult<T> = Result<T, HandlerError>;
diff --git a/test-services/src/failing.rs b/test-services/src/failing.rs
index a6249e1..bdcad82 100644
--- a/test-services/src/failing.rs
+++ b/test-services/src/failing.rs
@@ -72,7 +72,7 @@ impl Failing for FailingImpl {
         error_message: String,
     ) -> HandlerResult<()> {
         context
-            .run(|| async move { Err::<(), _>(TerminalError::new(error_message).into()) })
+            .run(|| async move { Err(TerminalError::new(error_message))? })
             .await?;
 
         unreachable!("This should be unreachable")
@@ -92,7 +92,7 @@ impl Failing for FailingImpl {
                     cloned_counter.store(0, Ordering::SeqCst);
                     Ok(current_attempt)
                 } else {
-                    Err(anyhow!("Failed at attempt {current_attempt}").into())
+                    Err(anyhow!("Failed at attempt {current_attempt}"))?
                 }
             })
             .with_retry_policy(
diff --git a/tests/service.rs b/tests/service.rs
index 0fffe07..55bdec1 100644
--- a/tests/service.rs
+++ b/tests/service.rs
@@ -10,6 +10,12 @@ trait MyService {
     async fn no_output() -> HandlerResult<()>;
 
     async fn no_input_no_output() -> HandlerResult<()>;
+
+    async fn std_result() -> Result<(), std::io::Error>;
+
+    async fn std_result_with_terminal_error() -> Result<(), TerminalError>;
+
+    async fn std_result_with_handler_error() -> Result<(), HandlerError>;
 }
 
 #[restate_sdk::object]