Thanks for response; unfortunately my problem was a bit deeper. Note to self: try to verify all code snippets before posting ;-) The problem is that code on line 4 is useless. If one of the arguments a or b is Nothing, computation will just return Nothing and will not bother to execute lines 4-5: 1 foo a b = do 2 output "before" 3 let r = liftM2 (+) a b 4 when (r == Nothing) $ output "error" 5 return r -- ??? "lift r" I guess it does make perfect sense. It just was not intuitive to me that as soon as I use Maybe monad in my monad transformation I will loose ability to do output *after* error occurred. But, anyway, I think I was able to find a nice solution to that: type M2 a = OuptutMonadT Maybe String a whenError:: M2 a -> M2 a -> M2 a … 1 foo a b = do 2 output "before" 3 let r = liftM2 (+) a b 4 `whenError` $ reportError "error" 5 return r whenError combines two computations so that if first fails it will use second instead. Thanks, Pavel.