diff --git a/spec/Observable-spec.ts b/spec/Observable-spec.ts
index 1e6bb3972e..9279850d8c 100644
--- a/spec/Observable-spec.ts
+++ b/spec/Observable-spec.ts
@@ -2,7 +2,7 @@ import { expect } from 'chai';
 import * as sinon from 'sinon';
 import { Observer, TeardownLogic } from '../src/internal/types';
 import { Observable, config, Subscription, noop, Subscriber, Operator, NEVER, Subject, of, throwError, empty } from 'rxjs';
-import { map, multicast, refCount, filter, count, tap, combineLatest, concat, merge, race, zip, catchError, concatMap, switchMap, publish, publishLast, publishBehavior, share} from 'rxjs/operators';
+import { map, multicast, refCount, filter, count, tap, combineLatest, concat, merge, race, zip, catchError, concatMap, switchMap, publish, publishLast, publishBehavior, share, finalize} from 'rxjs/operators';
 import { TestScheduler } from 'rxjs/testing';
 import { observableMatcher } from './helpers/observableMatcher';
 
@@ -633,7 +633,137 @@ describe('Observable', () => {
             .pipe(switchMap(() => throwError(new Error('Avast! Thar be a new error!'))))
             .subscribe(console.log);
         }).to.throw('Avast! Thar be a new error!');
-      })
+      });
+
+      it('should teardown even with a synchronous error', () => {
+        let called = false;
+        const badObservable = new Observable((subscriber) => {
+          subscriber.add(() => {
+            called = true;
+          });
+
+          subscriber.error(new Error('bad'));
+        });
+
+        try {
+          badObservable.subscribe();
+        } catch (err) {
+          // do nothing
+        }
+        expect(called).to.be.true;
+      });
+
+      it('should teardown even with a synchronous thrown error', () => {
+        let called = false;
+        const badObservable = new Observable((subscriber) => {
+          subscriber.add(() => {
+            called = true;
+          });
+
+          throw new Error('bad');
+        });
+
+        try {
+          badObservable.subscribe();
+        } catch (err) {
+          // do nothing
+        }
+        expect(called).to.be.true;
+      });
+
+      
+      it('should handle empty string sync errors', () => {
+        const badObservable = new Observable(() => {
+          throw '';
+        });
+
+        let caught = false;
+        try {
+          badObservable.subscribe();
+        } catch (err) {
+          caught = true;
+          expect(err).to.equal('');
+        }
+        expect(caught).to.be.true;
+      });
+
+      it('should execute finalize even with a sync error', () => {
+        let called = false;
+        const badObservable = new Observable((subscriber) => {
+          subscriber.error(new Error('bad'));
+        }).pipe(
+          finalize(() => {
+            called = true;
+          })
+        );
+
+        try {
+          badObservable.subscribe();
+        } catch (err) {
+          // do nothing
+        }
+        expect(called).to.be.true;
+      });
+      
+      it('should execute finalize even with a sync thrown error', () => {
+        let called = false;
+        const badObservable = new Observable(() => {
+          throw new Error('bad');
+        }).pipe(
+          finalize(() => {
+            called = true;
+          })
+        );
+
+        try {
+          badObservable.subscribe();
+        } catch (err) {
+          // do nothing
+        }
+        expect(called).to.be.true;
+      });
+      
+      it('should execute finalize in order even with a sync error', () => {
+        const results: any[] = [];
+        const badObservable = new Observable((subscriber) => {
+          subscriber.error(new Error('bad'));
+        }).pipe(
+          finalize(() => {
+            results.push(1);
+          }),
+          finalize(() => {
+            results.push(2)
+          })
+        );
+
+        try {
+          badObservable.subscribe();
+        } catch (err) {
+          // do nothing
+        }
+        expect(results).to.deep.equal([1, 2]);
+      });
+
+      it('should execute finalize in order even with a sync thrown error', () => {
+        const results: any[] = [];
+        const badObservable = new Observable(() => {
+          throw new Error('bad');
+        }).pipe(
+          finalize(() => {
+            results.push(1);
+          }),
+          finalize(() => {
+            results.push(2)
+          })
+        );
+
+        try {
+          badObservable.subscribe();
+        } catch (err) {
+          // do nothing
+        }
+        expect(results).to.deep.equal([1, 2]);
+      });
 
       afterEach(() => {
         config.useDeprecatedSynchronousErrorHandling = false;
diff --git a/src/internal/Observable.ts b/src/internal/Observable.ts
index 1e5d027274..67b1c6a669 100644
--- a/src/internal/Observable.ts
+++ b/src/internal/Observable.ts
@@ -215,43 +215,67 @@ export class Observable<T> implements Subscribable<T> {
   ): Subscription {
     const subscriber = isSubscriber(observerOrNext) ? observerOrNext : new SafeSubscriber(observerOrNext, error, complete);
 
-    // If we have an operator, it's the result of a lift, and we let the lift
-    // mechanism do the subscription for us in the operator call. Otherwise,
-    // if we have a source, it's a trusted observable we own, and we can call
-    // the `_subscribe` without wrapping it in a try/catch. If we are supposed to
-    // use the deprecated sync error handling, then we don't need the try/catch either
-    // otherwise, it may be from a user-made observable instance, and we want to
-    // wrap it in a try/catch so we can handle errors appropriately.
-    const { operator, source } = this;
-
-    let dest: any = subscriber;
     if (config.useDeprecatedSynchronousErrorHandling) {
-      dest._syncErrorHack_isSubscribing = true;
+      this._deprecatedSyncErrorSubscribe(subscriber);
+    } else {
+      const { operator, source } = this;
+      subscriber.add(
+        operator
+          ? // We're dealing with a subscription in the
+            // operator chain to one of our lifted operators.
+            operator.call(subscriber, source)
+          : source
+          ? // If `source` has a value, but `operator` does not, something that
+            // had intimate knowledge of our API, like our `Subject`, must have
+            // set it. We're going to just call `_subscribe` directly.
+            this._subscribe(subscriber)
+          : // In all other cases, we're likely wrapping a user-provided initializer
+            // function, so we need to catch errors and handle them appropriately.
+            this._trySubscribe(subscriber)
+      );
     }
+    return subscriber;
+  }
 
-    subscriber.add(
-      operator
-        ? operator.call(subscriber, source)
-        : source || config.useDeprecatedSynchronousErrorHandling
-        ? this._subscribe(subscriber)
-        : this._trySubscribe(subscriber)
-    );
+  /**
+   * REMOVE THIS ENTIRE METHOD IN VERSION 8.
+   */
+  private _deprecatedSyncErrorSubscribe(subscriber: Subscriber<unknown>) {
+    let dest: any = subscriber;
+    dest._syncErrorHack_isSubscribing = true;
+    const { operator } = this;
+    if (operator) {
+      // We don't need to try/catch on operators, as they
+      // are doing their own try/catching, and will
+      // properly decorate the subscriber with `__syncError`.
+      subscriber.add(operator.call(subscriber, this.source));
+    } else {
+      try {
+        this._subscribe(subscriber);
+      } catch (err) {
+        dest.__syncError = err;
+      }
+    }
 
-    if (config.useDeprecatedSynchronousErrorHandling) {
-      dest._syncErrorHack_isSubscribing = false;
-      // In the case of the deprecated sync error handling,
-      // we need to crawl forward through our subscriber chain and
-      // look to see if there's any synchronously thrown errors.
-      // Does this suck for perf? Yes. So stop using the deprecated sync
-      // error handling already. We're removing this in v8.
-      while (dest) {
-        if (dest.__syncError) {
+    // In the case of the deprecated sync error handling,
+    // we need to crawl forward through our subscriber chain and
+    // look to see if there's any synchronously thrown errors.
+    // Does this suck for perf? Yes. So stop using the deprecated sync
+    // error handling already. We're removing this in v8.
+    while (dest) {
+      // Technically, someone could throw something falsy, like 0, or "",
+      // so we need to check to see if anything was thrown, and we know
+      // that by the mere existence of `__syncError`.
+      if ('__syncError' in dest) {
+        try {
           throw dest.__syncError;
+        } finally {
+          subscriber.unsubscribe();
         }
-        dest = dest.destination;
       }
+      dest = dest.destination;
     }
-    return subscriber;
+    dest._syncErrorHack_isSubscribing = false;
   }
 
   /** @internal */
diff --git a/src/internal/operators/finalize.ts b/src/internal/operators/finalize.ts
index 4602f79045..436fb45f43 100644
--- a/src/internal/operators/finalize.ts
+++ b/src/internal/operators/finalize.ts
@@ -58,7 +58,12 @@ import { operate } from '../util/lift';
  */
 export function finalize<T>(callback: () => void): MonoTypeOperatorFunction<T> {
   return operate((source, subscriber) => {
-    source.subscribe(subscriber);
-    subscriber.add(callback);
+    // TODO: This try/finally was only added for `useDeprecatedSynchronousErrorHandling`.
+    // REMOVE THIS WHEN THAT HOT GARBAGE IS REMOVED IN V8.
+    try {
+      source.subscribe(subscriber);
+    } finally {
+      subscriber.add(callback);
+    }
   });
 }