diff --git a/Doc/whatsnew/3.12.rst b/Doc/whatsnew/3.12.rst
index 0eb16367267..c7fc7d229cd 100644
--- a/Doc/whatsnew/3.12.rst
+++ b/Doc/whatsnew/3.12.rst
@@ -192,6 +192,10 @@ Other Language Changes
 * :class:`slice` objects are now hashable, allowing them to be used as dict keys and
   set items. (Contributed by Will Bradshaw and Furkan Onder in :gh:`101264`.)
 
+* Exceptions raised in a typeobject's ``__set_name__`` method are no longer
+  wrapped by a :exc:`RuntimeError`. Context information is added to the
+  exception as a :pep:`678` note. (Contributed by Irit Katriel in :gh:`77757`.)
+
 New Modules
 ===========
 
diff --git a/Include/internal/pycore_pyerrors.h b/Include/internal/pycore_pyerrors.h
index 1bb4a9aa103..4620a269644 100644
--- a/Include/internal/pycore_pyerrors.h
+++ b/Include/internal/pycore_pyerrors.h
@@ -109,6 +109,8 @@ extern PyObject* _Py_Offer_Suggestions(PyObject* exception);
 PyAPI_FUNC(Py_ssize_t) _Py_UTF8_Edit_Cost(PyObject *str_a, PyObject *str_b,
                                           Py_ssize_t max_cost);
 
+void _PyErr_FormatNote(const char *format, ...);
+
 #ifdef __cplusplus
 }
 #endif
diff --git a/Lib/test/test_functools.py b/Lib/test/test_functools.py
index 57db96d37ee..af286052a7d 100644
--- a/Lib/test/test_functools.py
+++ b/Lib/test/test_functools.py
@@ -2980,7 +2980,7 @@ class TestCachedProperty(unittest.TestCase):
 
     def test_reuse_different_names(self):
         """Disallow this case because decorated function a would not be cached."""
-        with self.assertRaises(RuntimeError) as ctx:
+        with self.assertRaises(TypeError) as ctx:
             class ReusedCachedProperty:
                 @py_functools.cached_property
                 def a(self):
@@ -2989,7 +2989,7 @@ class TestCachedProperty(unittest.TestCase):
                 b = a
 
         self.assertEqual(
-            str(ctx.exception.__context__),
+            str(ctx.exception),
             str(TypeError("Cannot assign the same cached_property to two different names ('a' and 'b')."))
         )
 
diff --git a/Lib/test/test_subclassinit.py b/Lib/test/test_subclassinit.py
index 0ad7d17fbd4..310473a4a2f 100644
--- a/Lib/test/test_subclassinit.py
+++ b/Lib/test/test_subclassinit.py
@@ -134,30 +134,28 @@ class Test(unittest.TestCase):
             def __set_name__(self, owner, name):
                 1/0
 
-        with self.assertRaises(RuntimeError) as cm:
+        with self.assertRaises(ZeroDivisionError) as cm:
             class NotGoingToWork:
                 attr = Descriptor()
 
-        exc = cm.exception
-        self.assertRegex(str(exc), r'\bNotGoingToWork\b')
-        self.assertRegex(str(exc), r'\battr\b')
-        self.assertRegex(str(exc), r'\bDescriptor\b')
-        self.assertIsInstance(exc.__cause__, ZeroDivisionError)
+        notes = cm.exception.__notes__
+        self.assertRegex(str(notes), r'\bNotGoingToWork\b')
+        self.assertRegex(str(notes), r'\battr\b')
+        self.assertRegex(str(notes), r'\bDescriptor\b')
 
     def test_set_name_wrong(self):
         class Descriptor:
             def __set_name__(self):
                 pass
 
-        with self.assertRaises(RuntimeError) as cm:
+        with self.assertRaises(TypeError) as cm:
             class NotGoingToWork:
                 attr = Descriptor()
 
-        exc = cm.exception
-        self.assertRegex(str(exc), r'\bNotGoingToWork\b')
-        self.assertRegex(str(exc), r'\battr\b')
-        self.assertRegex(str(exc), r'\bDescriptor\b')
-        self.assertIsInstance(exc.__cause__, TypeError)
+        notes = cm.exception.__notes__
+        self.assertRegex(str(notes), r'\bNotGoingToWork\b')
+        self.assertRegex(str(notes), r'\battr\b')
+        self.assertRegex(str(notes), r'\bDescriptor\b')
 
     def test_set_name_lookup(self):
         resolved = []
diff --git a/Misc/NEWS.d/next/Core and Builtins/2023-04-09-22-21-57.gh-issue-77757._Ow-u2.rst b/Misc/NEWS.d/next/Core and Builtins/2023-04-09-22-21-57.gh-issue-77757._Ow-u2.rst
new file mode 100644
index 00000000000..85c8ecf7de8
--- /dev/null
+++ b/Misc/NEWS.d/next/Core and Builtins/2023-04-09-22-21-57.gh-issue-77757._Ow-u2.rst	
@@ -0,0 +1,3 @@
+Exceptions raised in a typeobject's ``__set_name__`` method are no longer
+wrapped by a :exc:`RuntimeError`. Context information is added to the
+exception as a :pep:`678` note.
diff --git a/Objects/typeobject.c b/Objects/typeobject.c
index 995547e7915..9ea458f3039 100644
--- a/Objects/typeobject.c
+++ b/Objects/typeobject.c
@@ -9137,13 +9137,15 @@ type_new_set_names(PyTypeObject *type)
         Py_DECREF(set_name);
 
         if (res == NULL) {
-            _PyErr_FormatFromCause(PyExc_RuntimeError,
+            _PyErr_FormatNote(
                 "Error calling __set_name__ on '%.100s' instance %R "
                 "in '%.100s'",
                 Py_TYPE(value)->tp_name, key, type->tp_name);
             goto error;
         }
-        Py_DECREF(res);
+        else {
+            Py_DECREF(res);
+        }
     }
 
     Py_DECREF(names_to_set);
diff --git a/Python/codecs.c b/Python/codecs.c
index 9d800f9856c..1983f56ba20 100644
--- a/Python/codecs.c
+++ b/Python/codecs.c
@@ -11,6 +11,7 @@ Copyright (c) Corporation for National Research Initiatives.
 #include "Python.h"
 #include "pycore_call.h"          // _PyObject_CallNoArgs()
 #include "pycore_interp.h"        // PyInterpreterState.codec_search_path
+#include "pycore_pyerrors.h"       // _PyErr_FormatNote()
 #include "pycore_pystate.h"       // _PyInterpreterState_GET()
 #include "pycore_ucnhash.h"       // _PyUnicode_Name_CAPI
 #include <ctype.h>
@@ -382,29 +383,6 @@ PyObject *PyCodec_StreamWriter(const char *encoding,
     return codec_getstreamcodec(encoding, stream, errors, 3);
 }
 
-static void
-add_note_to_codec_error(const char *operation,
-                        const char *encoding)
-{
-    PyObject *exc = PyErr_GetRaisedException();
-    if (exc == NULL) {
-        return;
-    }
-    PyObject *note = PyUnicode_FromFormat("%s with '%s' codec failed",
-                                          operation, encoding);
-    if (note == NULL) {
-        _PyErr_ChainExceptions1(exc);
-        return;
-    }
-    int res = _PyException_AddNote(exc, note);
-    Py_DECREF(note);
-    if (res < 0) {
-        _PyErr_ChainExceptions1(exc);
-        return;
-    }
-    PyErr_SetRaisedException(exc);
-}
-
 /* Encode an object (e.g. a Unicode object) using the given encoding
    and return the resulting encoded object (usually a Python string).
 
@@ -425,7 +403,7 @@ _PyCodec_EncodeInternal(PyObject *object,
 
     result = PyObject_Call(encoder, args, NULL);
     if (result == NULL) {
-        add_note_to_codec_error("encoding", encoding);
+        _PyErr_FormatNote("%s with '%s' codec failed", "encoding", encoding);
         goto onError;
     }
 
@@ -470,7 +448,7 @@ _PyCodec_DecodeInternal(PyObject *object,
 
     result = PyObject_Call(decoder, args, NULL);
     if (result == NULL) {
-        add_note_to_codec_error("decoding", encoding);
+        _PyErr_FormatNote("%s with '%s' codec failed", "decoding", encoding);
         goto onError;
     }
     if (!PyTuple_Check(result) ||
diff --git a/Python/errors.c b/Python/errors.c
index ab14770c6e8..0ff6a0d5985 100644
--- a/Python/errors.c
+++ b/Python/errors.c
@@ -1200,6 +1200,33 @@ PyErr_Format(PyObject *exception, const char *format, ...)
 }
 
 
+/* Adds a note to the current exception (if any) */
+void
+_PyErr_FormatNote(const char *format, ...)
+{
+    PyObject *exc = PyErr_GetRaisedException();
+    if (exc == NULL) {
+        return;
+    }
+    va_list vargs;
+    va_start(vargs, format);
+    PyObject *note = PyUnicode_FromFormatV(format, vargs);
+    va_end(vargs);
+    if (note == NULL) {
+        goto error;
+    }
+    int res = _PyException_AddNote(exc, note);
+    Py_DECREF(note);
+    if (res < 0) {
+        goto error;
+    }
+    PyErr_SetRaisedException(exc);
+    return;
+error:
+    _PyErr_ChainExceptions1(exc);
+}
+
+
 PyObject *
 PyErr_NewException(const char *name, PyObject *base, PyObject *dict)
 {