diff --git a/CHANGELOG.md b/CHANGELOG.md
index 007e04d9..86b649bf 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -2,6 +2,9 @@
 
 ## Unreleased
 
+### Added
+- Display captured test output on assertion failures when `--show-output` is enabled (#637)
+
 ## [0.35.0](https://github.com/TypedDevs/bashunit/compare/0.34.1...0.35.0) - 2026-04-26
 
 ### Added
diff --git a/docs/command-line.md b/docs/command-line.md
index f06f8a51..055a2338 100644
--- a/docs/command-line.md
+++ b/docs/command-line.md
@@ -371,11 +371,12 @@ The `--log-gha` flag writes GitHub Actions workflow commands (`::error`, `::warn
 > `bashunit test --show-output`
 > `bashunit test --no-output-on-failure`
 
-Control whether test output (stdout/stderr) is displayed when tests fail with runtime errors.
+Control whether test output (stdout/stderr) is displayed when tests fail with runtime errors or assertion failures.
 
 By default (`--show-output`), when a test fails due to a runtime error (command not found,
-unbound variable, permission denied, etc.), bashunit displays the captured output in an
-"Output:" section to help debug the failure.
+unbound variable, permission denied, etc.) or a failed assertion after the test printed
+diagnostics, bashunit displays the captured output in an "Output:" section to help debug
+the failure.
 
 Use `--no-output-on-failure` to suppress this output.
 
diff --git a/docs/configuration.md b/docs/configuration.md
index 2b515ef9..fbed64ce 100644
--- a/docs/configuration.md
+++ b/docs/configuration.md
@@ -424,10 +424,11 @@ BASHUNIT_NO_PROGRESS=true
 
 > `BASHUNIT_SHOW_OUTPUT_ON_FAILURE=true|false`
 
-Display captured stdout/stderr output when tests fail with runtime errors. `true` by default.
+Display captured stdout/stderr output when tests fail with runtime errors or assertion failures. `true` by default.
 
-When a test fails due to a runtime error (command not found, unbound variable, etc.),
-bashunit displays the test's output in an "Output:" section to help debug the failure.
+When a test fails due to a runtime error (command not found, unbound variable, etc.) or
+a failed assertion after the test printed diagnostics, bashunit displays the test's output
+in an "Output:" section to help debug the failure.
 
 Similar as using `--show-output` or `--no-output-on-failure` options on the [command line](/command-line#show-output-on-failure).
 
diff --git a/src/runner.sh b/src/runner.sh
index 02b01694..8f6c0e39 100755
--- a/src/runner.sh
+++ b/src/runner.sh
@@ -814,7 +814,12 @@ function bashunit::runner::run_test() {
   if [ "$current_assertions_failed" != "$_BASHUNIT_ASSERTIONS_FAILED" ]; then
     bashunit::state::add_tests_failed
     bashunit::reports::add_test_failed "$test_file" "$label" "$duration" "$total_assertions" "$subshell_output"
-    bashunit::runner::write_failure_result_output "$test_file" "$fn_name" "$subshell_output"
+    local assertion_runtime_output
+    assertion_runtime_output="$(
+      bashunit::runner::extract_assertion_runtime_output "$runtime_output" "$subshell_output"
+    )"
+    bashunit::runner::write_failure_result_output \
+      "$test_file" "$fn_name" "$subshell_output" "$assertion_runtime_output"
 
     bashunit::internal_log "Test failed" "$label"
 
@@ -949,6 +954,111 @@ function bashunit::runner::decode_subshell_output() {
   bashunit::helper::decode_base64 "$test_output_base64"
 }
 
+function bashunit::runner::is_simple_progress_output() {
+  local output="$1"
+
+  [ -n "$output" ] || return 1
+
+  local color
+  for color in \
+    "$_BASHUNIT_COLOR_DEFAULT" \
+    "$_BASHUNIT_COLOR_PASSED" \
+    "$_BASHUNIT_COLOR_FAILED" \
+    "$_BASHUNIT_COLOR_SKIPPED" \
+    "$_BASHUNIT_COLOR_INCOMPLETE" \
+    "$_BASHUNIT_COLOR_SNAPSHOT" \
+    "$_BASHUNIT_COLOR_RISKY"; do
+    [ -n "$color" ] && output="${output//"$color"/}"
+  done
+
+  local i
+  local char
+  for ((i = 0; i < ${#output}; i++)); do
+    char="${output:$i:1}"
+    case "$char" in
+    "." | "F" | "S" | "I" | "N" | "R" | "E" | "?") ;;
+    *) return 1 ;;
+    esac
+  done
+
+  return 0
+}
+
+function bashunit::runner::line_starts_with_result_marker() {
+  local line="$1"
+  local marker
+  local -a result_markers
+  result_markers=(
+    "${_BASHUNIT_COLOR_PASSED}✓ Passed"
+    "${_BASHUNIT_COLOR_FAILED}✗ Failed"
+    "${_BASHUNIT_COLOR_FAILED}✗ Error"
+    "${_BASHUNIT_COLOR_SKIPPED}↷ Skipped"
+    "${_BASHUNIT_COLOR_INCOMPLETE}✒ Incomplete"
+    "${_BASHUNIT_COLOR_SNAPSHOT}✎ Snapshot"
+    "${_BASHUNIT_COLOR_RISKY}⚠ Risky"
+    "✓ Passed"
+    "✗ Failed"
+    "✗ Error"
+    "↷ Skipped"
+    "✒ Incomplete"
+    "✎ Snapshot"
+    "⚠ Risky"
+  )
+
+  for marker in "${result_markers[@]}"; do
+    case "$line" in
+    "$marker"*) return 0 ;;
+    esac
+  done
+
+  return 1
+}
+
+function bashunit::runner::line_exists_in_output() {
+  local needle="$1"
+  local haystack="$2"
+  local line
+
+  while IFS= read -r line || [ -n "$line" ]; do
+    [ "$line" = "$needle" ] && return 0
+  done <<<"$haystack"
+
+  return 1
+}
+
+function bashunit::runner::extract_assertion_runtime_output() {
+  local runtime_output="$1"
+  local rendered_assertion_output="$2"
+  local filtered_output=""
+  local line
+
+  while IFS= read -r line || [ -n "$line" ]; do
+    if bashunit::runner::line_exists_in_output "$line" "$rendered_assertion_output"; then
+      continue
+    fi
+    if bashunit::runner::is_simple_progress_output "$line"; then
+      continue
+    fi
+    if bashunit::runner::line_starts_with_result_marker "$line"; then
+      continue
+    fi
+
+    [ -n "$filtered_output" ] && filtered_output="$filtered_output"$'\n'
+    filtered_output="$filtered_output$line"
+  done <<<"$runtime_output"
+
+  runtime_output="$filtered_output"
+
+  while [ -n "$runtime_output" ]; do
+    case "$runtime_output" in
+    *$'\n') runtime_output="${runtime_output%$'\n'}" ;;
+    *) break ;;
+    esac
+  done
+
+  echo "$runtime_output"
+}
+
 function bashunit::runner::parse_result() {
   local fn_name=$1
   shift
diff --git a/tests/acceptance/bashunit_show_output_on_failure_test.sh b/tests/acceptance/bashunit_show_output_on_failure_test.sh
index 59dcef0e..865a1e2c 100644
--- a/tests/acceptance/bashunit_show_output_on_failure_test.sh
+++ b/tests/acceptance/bashunit_show_output_on_failure_test.sh
@@ -51,3 +51,23 @@ function test_show_output_flag_overrides_env() {
   assert_contains "Output:" "$actual"
   assert_contains "Debug: Starting test" "$actual"
 }
+
+function test_show_output_on_assertion_failure_enabled_by_default() {
+  local test_file=./tests/acceptance/fixtures/test_bashunit_show_assertion_failure_output.sh
+
+  local actual
+  actual="$(./bashunit --no-parallel --env "$TEST_ENV_FILE" "$test_file" 2>&1 || true)"
+
+  assert_contains "Output:" "$actual"
+  assert_contains "function_being_tested requires at least 3 arguments." "$actual"
+}
+
+function test_show_output_on_assertion_failure_disabled_via_flag() {
+  local test_file=./tests/acceptance/fixtures/test_bashunit_show_assertion_failure_output.sh
+
+  local actual
+  actual="$(./bashunit --no-parallel --env "$TEST_ENV_FILE" --no-output-on-failure "$test_file" 2>&1 || true)"
+
+  assert_not_contains "Output:" "$actual"
+  assert_not_contains "function_being_tested requires at least 3 arguments." "$actual"
+}
diff --git a/tests/acceptance/fixtures/test_bashunit_show_assertion_failure_output.sh b/tests/acceptance/fixtures/test_bashunit_show_assertion_failure_output.sh
new file mode 100644
index 00000000..d59fb5fd
--- /dev/null
+++ b/tests/acceptance/fixtures/test_bashunit_show_assertion_failure_output.sh
@@ -0,0 +1,16 @@
+#!/usr/bin/env bash
+
+function function_being_tested() {
+  if [ "$#" -lt 3 ]; then
+    echo "function_being_tested requires at least 3 arguments." >&2
+    return 1
+  fi
+
+  return 0
+}
+
+function test_assertion_failure_with_stderr_output() {
+  function_being_tested 1 2
+
+  assert_exit_code 0
+}
diff --git a/tests/unit/runner_test.sh b/tests/unit/runner_test.sh
new file mode 100644
index 00000000..20b5620c
--- /dev/null
+++ b/tests/unit/runner_test.sh
@@ -0,0 +1,37 @@
+#!/usr/bin/env bash
+
+function test_extract_assertion_runtime_output_keeps_user_output() {
+  local runtime_output
+  runtime_output=$'diagnostic from stderr\n✗ Failed: Example\n    Expected '\''1'\'''
+  local rendered_assertion_output
+  rendered_assertion_output=$'✗ Failed: Example\n    Expected '\''1'\'''
+
+  local actual
+  actual="$(bashunit::runner::extract_assertion_runtime_output "$runtime_output" "$rendered_assertion_output")"
+
+  assert_same "diagnostic from stderr" "$actual"
+}
+
+function test_extract_assertion_runtime_output_ignores_bashunit_status_output_before_failure() {
+  local runtime_output
+  runtime_output=$'✒ Incomplete: Example    pending\n✗ Failed: Example\n    Expected '\''1'\'''
+  local rendered_assertion_output
+  rendered_assertion_output=$'✒ Incomplete: Example    pending\n✗ Failed: Example\n    Expected '\''1'\'''
+
+  local actual
+  actual="$(bashunit::runner::extract_assertion_runtime_output "$runtime_output" "$rendered_assertion_output")"
+
+  assert_empty "$actual"
+}
+
+function test_extract_assertion_runtime_output_keeps_user_output_after_status_output() {
+  local runtime_output
+  runtime_output=$'✓ Passed: Previous assertion\ndiagnostic after pass\n✗ Failed: Example'
+  local rendered_assertion_output
+  rendered_assertion_output=$'✓ Passed: Previous assertion\n✗ Failed: Example'
+
+  local actual
+  actual="$(bashunit::runner::extract_assertion_runtime_output "$runtime_output" "$rendered_assertion_output")"
+
+  assert_same "diagnostic after pass" "$actual"
+}