diff --git a/src/vm.ts b/src/vm.ts
index 1c3bc34..0bd522c 100644
--- a/src/vm.ts
+++ b/src/vm.ts
@@ -148,14 +148,17 @@ export class VM {
 
       case OpCode.BREAK:
         // Unwind call stack until we find a frame marked as break target
+        let foundBreakTarget = false
         while (this.callStack.length) {
           const frame = this.callStack.pop()!
           this.scope = frame.returnScope
           this.pc = frame.returnAddress
-          if (frame.isBreakTarget)
+          if (frame.isBreakTarget) {
+            foundBreakTarget = true
             break
+          }
         }
-        if (this.callStack.length === 0)
+        if (!foundBreakTarget)
           throw new Error('BREAK: no break target found')
         break
 
diff --git a/tests/basic.test.ts b/tests/basic.test.ts
index dc1d898..4d81f7f 100644
--- a/tests/basic.test.ts
+++ b/tests/basic.test.ts
@@ -517,66 +517,57 @@ test("DICT_HAS - checks key missing", async () => {
   expect(await run(toBytecode(str))).toEqual({ type: 'boolean', value: false })
 })
 
-test("BREAK - exits from iterator function", async () => {
-  // Simulate a loop with iterator pattern: function calls can be broken out of
-  // We'll need to manually construct bytecode since we need CALL/RETURN
-  const { VM } = await import("#vm")
-  const { OpCode } = await import("#opcode")
-  const { toValue } = await import("#value")
+test("BREAK - throws error when no break target", async () => {
+  // BREAK requires a break target frame on the call stack
+  // A single function call has no previous frame to mark as break target
+  const bytecode = toBytecode(`
+    MAKE_FUNCTION () #3
+    CALL #0
+    HALT
+    BREAK
+  `)
 
-  const vm = new VM({
-    instructions: [
-      // 0: Push initial value
-      { op: OpCode.PUSH, operand: 0 },  // counter = 0
-      { op: OpCode.STORE, operand: 'counter' },
-
-      // 2: Create a simple "iterator" function
-      { op: OpCode.MAKE_FUNCTION, operand: 0 },
-      { op: OpCode.STORE, operand: 'iter' },
-      { op: OpCode.JUMP, operand: 7 },  // skip function body
-
-      // 5: Function body (will be called in a loop)
-      { op: OpCode.LOAD, operand: 'counter' },
-      { op: OpCode.PUSH, operand: 1 },  // index 1 = number 5
-      { op: OpCode.GTE },
-      { op: OpCode.JUMP_IF_TRUE, operand: 1 },  // if counter >= 5, break
-      { op: OpCode.BREAK },
-      { op: OpCode.LOAD, operand: 'counter' },
-      { op: OpCode.PUSH, operand: 2 },  // index 2 = number 1
-      { op: OpCode.ADD },
-      { op: OpCode.STORE, operand: 'counter' },
-      { op: OpCode.RETURN },
-
-      // 12: Main code - call iterator in a loop
-      { op: OpCode.LOAD, operand: 'iter' },
-      { op: OpCode.CALL, operand: 0 },  // Call with 0 args
-      { op: OpCode.JUMP, operand: -2 },  // loop back
-
-      // After break, we end up here
-      { op: OpCode.LOAD, operand: 'counter' },
-    ],
-    constants: [
-      toValue(0),  // index 0
-      toValue(5),  // index 1
-      toValue(1),  // index 2
-      {  // index 3 - function definition
-        type: 'function_def',
-        params: [],
-        defaults: {},
-        body: 5,
-        variadic: false,
-        kwargs: false
-      }
-    ]
-  })
-
-  // Note: This test would require CALL/RETURN to be implemented
-  // For now, let's skip this and test BREAK with a simpler approach
-  expect(true).toBe(true)  // placeholder
+  try {
+    await run(bytecode)
+    expect(true).toBe(false)  // Should not reach here
+  } catch (e: any) {
+    expect(e.message).toContain('no break target found')
+  }
 })
 
-test("CONTINUE - skips to loop start", async () => {
-  // CONTINUE requires function call frames with continueAddress set
-  // This will be tested once we implement CALL/RETURN
-  expect(true).toBe(true)  // placeholder
+test("BREAK - exits from nested function call", async () => {
+  // BREAK unwinds to the break target (the outer function's frame)
+  // Main calls outer, outer calls inner, inner BREAKs back to outer's caller (main)
+  const bytecode = toBytecode(`
+    MAKE_FUNCTION () #4
+    CALL #0
+    PUSH 42
+    HALT
+    MAKE_FUNCTION () #7
+    CALL #0
+    PUSH 99
+    RETURN
+    BREAK
+  `)
+
+  const result = await run(bytecode)
+  expect(result).toEqual({ type: 'number', value: 42 })
+})
+
+test("CONTINUE - throws error when no continue target", async () => {
+  // CONTINUE requires continueAddress to be set on a frame
+  // Since we have no instruction to set it yet, this should throw
+  const bytecode = toBytecode(`
+    MAKE_FUNCTION () #3
+    CALL #0
+    HALT
+    CONTINUE
+  `)
+
+  try {
+    await run(bytecode)
+    expect(true).toBe(false)  // Should not reach here
+  } catch (e: any) {
+    expect(e.message).toContain('no continue target found')
+  }
 })