diff --git a/ci/vscode.patch b/ci/vscode.patch
index 9393be35..85868212 100644
--- a/ci/vscode.patch
+++ b/ci/vscode.patch
@@ -541,10 +541,10 @@ index eab8591492..26668701f7 100644
  					options.logService.error(`${logPrefix} socketFactory.connect() failed. Error:`);
 diff --git a/src/vs/server/browser/client.ts b/src/vs/server/browser/client.ts
 new file mode 100644
-index 0000000000..4f8543d975
+index 0000000000..649cf32f0a
 --- /dev/null
 +++ b/src/vs/server/browser/client.ts
-@@ -0,0 +1,266 @@
+@@ -0,0 +1,264 @@
 +import { Emitter } from 'vs/base/common/event';
 +import { URI } from 'vs/base/common/uri';
 +import { localize } from 'vs/nls';
@@ -720,11 +720,10 @@ index 0000000000..4f8543d975
 +		const response = await fetch(normalize(`${options.base}/update/apply`), {
 +			headers: { "content-type": "application/json" },
 +		});
-+		if (response.status !== 200) {
-+			throw new Error(response.statusText);
-+		}
-+
 +		const json = await response.json();
++		if (response.status !== 200 || json.error) {
++			throw new Error(json.error || response.statusText);
++		}
 +		(services.get(INotificationService) as INotificationService).info(`Updated to ${json.version}`);
 +	};
 +
@@ -734,11 +733,10 @@ index 0000000000..4f8543d975
 +		const response = await fetch(normalize(`${options.base}/update`), {
 +			headers: { "content-type": "application/json" },
 +		});
-+		if (response.status !== 200) {
-+			throw new Error("unexpected response");
-+		}
-+
 +		const json = await response.json();
++		if (response.status !== 200 || json.error) {
++			throw new Error(json.error || response.statusText);
++		}
 +		if (json.isLatest) {
 +			return;
 +		}
diff --git a/package.json b/package.json
index ffd7d67f..0ead146d 100644
--- a/package.json
+++ b/package.json
@@ -1,7 +1,7 @@
 {
   "name": "code-server",
   "license": "MIT",
-  "version": "3.1.1",
+  "version": "3.1.2",
   "scripts": {
     "clean": "ci/clean.sh",
     "vscode": "ci/vscode.sh",
diff --git a/src/node/app/update.ts b/src/node/app/update.ts
index 6acbc571..588e5201 100644
--- a/src/node/app/update.ts
+++ b/src/node/app/update.ts
@@ -87,8 +87,7 @@ export class UpdateHttpProvider extends HttpProvider {
   public async getRoot(
     route: Route,
     request: http.IncomingMessage,
-    appliedUpdate?: string,
-    error?: Error,
+    errorOrUpdate?: Update | Error,
   ): Promise<HttpResponse> {
     if (request.headers["content-type"] === "application/json") {
       if (!this.enabled) {
@@ -108,8 +107,13 @@ export class UpdateHttpProvider extends HttpProvider {
     }
     const response = await this.getUtf8Resource(this.rootPath, "src/browser/pages/update.html")
     response.content = response.content
-      .replace(/{{UPDATE_STATUS}}/, appliedUpdate ? `Updated to ${appliedUpdate}` : await this.getUpdateHtml())
-      .replace(/{{ERROR}}/, error ? `<div class="error">${error.message}</div>` : "")
+      .replace(
+        /{{UPDATE_STATUS}}/,
+        errorOrUpdate && !(errorOrUpdate instanceof Error)
+          ? `Updated to ${errorOrUpdate.version}`
+          : await this.getUpdateHtml(),
+      )
+      .replace(/{{ERROR}}/, errorOrUpdate instanceof Error ? `<div class="error">${errorOrUpdate.message}</div>` : "")
     return this.replaceTemplates(route, response)
   }
 
@@ -186,11 +190,16 @@ export class UpdateHttpProvider extends HttpProvider {
       const update = await this.getUpdate()
       if (!this.isLatestVersion(update)) {
         await this.downloadAndApplyUpdate(update)
-        return this.getRoot(route, request, update.version)
+        return this.getRoot(route, request, update)
       }
       return this.getRoot(route, request)
     } catch (error) {
-      return this.getRoot(route, request, undefined, error)
+      // For JSON requests propagate the error. Otherwise catch it so we can
+      // show the error inline with the update button instead of an error page.
+      if (request.headers["content-type"] === "application/json") {
+        throw error
+      }
+      return this.getRoot(route, error)
     }
   }
 
@@ -362,7 +371,7 @@ export class UpdateHttpProvider extends HttpProvider {
           }
 
           if (!response.statusCode || response.statusCode < 200 || response.statusCode >= 400) {
-            return reject(new Error(`${response.statusCode || "500"}`))
+            return reject(new Error(`${uri}: ${response.statusCode || "500"}`))
           }
 
           resolve(response)
diff --git a/src/node/http.ts b/src/node/http.ts
index dd5ff581..5c065374 100644
--- a/src/node/http.ts
+++ b/src/node/http.ts
@@ -646,11 +646,19 @@ export class HttpServer {
       if (code >= HttpCode.ServerError) {
         logger.error(error.stack)
       }
-      const payload = await route.provider.getErrorRoot(route, code, code, e.message)
-      write({
-        code,
-        ...payload,
-      })
+      if (request.headers["content-type"] === "application/json") {
+        write({
+          code,
+          content: {
+            error: e.message,
+          },
+        })
+      } else {
+        write({
+          code,
+          ...(await route.provider.getErrorRoot(route, code, code, e.message)),
+        })
+      }
     }
   }