diff --git a/news/pr-5066.rst b/news/pr-5066.rst
new file mode 100644
index 000000000..135d2fd3c
--- /dev/null
+++ b/news/pr-5066.rst
@@ -0,0 +1,23 @@
+**Added:**
+
+* <news item>
+
+**Changed:**
+
+* <news item>
+
+**Deprecated:**
+
+* <news item>
+
+**Removed:**
+
+* <news item>
+
+**Fixed:**
+
+* Suppress subprocess traceback on exception in case ``$XONSH_SHOW_TRACEBACK=False`` with ``$RAISE_SUBPROC_ERROR=True``.
+
+**Security:**
+
+* <news item>
diff --git a/xonsh/main.py b/xonsh/main.py
index 838b1fe91..89d111a30 100644
--- a/xonsh/main.py
+++ b/xonsh/main.py
@@ -558,7 +558,8 @@ def main_xonsh(args):
             if err_type is SystemExit:
                 raise err
             else:
-                traceback.print_exception(*exc_info)
+                if XSH.env.get("XONSH_SHOW_TRACEBACK"):
+                    traceback.print_exception(*exc_info)
                 exit_code = 1
         events.on_exit.fire()
         postmain(args)
diff --git a/xonsh/procs/pipelines.py b/xonsh/procs/pipelines.py
index 623b3a8f7..16128e58b 100644
--- a/xonsh/procs/pipelines.py
+++ b/xonsh/procs/pipelines.py
@@ -594,12 +594,15 @@ class CommandPipeline:
         """Raises a subprocess error, if we are supposed to."""
         spec = self.spec
         rtn = self.returncode
-        if rtn is not None and rtn != 0 and XSH.env.get("RAISE_SUBPROC_ERROR"):
-            try:
-                raise subprocess.CalledProcessError(rtn, spec.args, output=self.output)
-            finally:
-                # this is need to get a working terminal in interactive mode
-                self._return_terminal()
+
+        if rtn is None or rtn == 0 or not XSH.env.get("RAISE_SUBPROC_ERROR"):
+            return
+
+        try:
+            raise subprocess.CalledProcessError(rtn, spec.args, output=self.output)
+        finally:
+            # this is need to get a working terminal in interactive mode
+            self._return_terminal()
 
     #
     # Properties