diff --git a/src/Concerns/ManagesTransactions.php b/src/Concerns/ManagesTransactions.php
index 6403cc45d..289d4d6ca 100644
--- a/src/Concerns/ManagesTransactions.php
+++ b/src/Concerns/ManagesTransactions.php
@@ -9,8 +9,12 @@
 use MongoDB\Driver\Exception\RuntimeException;
 use MongoDB\Driver\Session;
 use Throwable;
+use TypeError;
 
+use function assert;
+use function get_debug_type;
 use function MongoDB\with_transaction;
+use function sprintf;
 
 /**
  * @internal
@@ -78,15 +82,27 @@ public function rollBack($toLevel = null): void
     }
 
     /**
-     * Static transaction function realize the with_transaction functionality provided by MongoDB.
+     * Static transaction function realize the {@see with_transaction} functionality provided by MongoDB.
      *
-     * @param  int $attempts
+     * @param  int                $attempts
+     * @param  array|Closure|null $options
      */
-    public function transaction(Closure $callback, $attempts = 1, array $options = []): mixed
+    public function transaction(Closure $callback, $attempts = 1, array|Closure|null $options = null): mixed
     {
+        $options ??= [];
+        $onFailure = null;
+        /** $onFailure is a 3rd parameter introduced in Laravel 12.9.0 to {@see \Illuminate\Database\ConnectionInterface} */
+        if ($options instanceof Closure) {
+            $onFailure = $options;
+            $options = [];
+        } elseif (isset($options['onFailure'])) {
+            assert($options['onFailure'] instanceof Closure, new TypeError(sprintf('Expected "onFailure" option to be a Closure or null, got %s', get_debug_type($options['onFailure']))));
+            $onFailure = $options['onFailure'];
+            unset($options['onFailure']);
+        }
+
         $attemptsLeft   = $attempts;
         $callbackResult = null;
-        $throwable      = null;
 
         $callbackFunction = function (Session $session) use ($callback, &$attemptsLeft, &$callbackResult, &$throwable) {
             $attemptsLeft--;
@@ -110,6 +126,10 @@ public function transaction(Closure $callback, $attempts = 1, array $options = [
         with_transaction($this->getSessionOrCreate(), $callbackFunction, $options);
 
         if ($attemptsLeft < 0 && $throwable) {
+            if ($onFailure) {
+                $onFailure($throwable);
+            }
+
             throw $throwable;
         }
 
diff --git a/tests/TransactionTest.php b/tests/TransactionTest.php
index f6a3cd509..506f0f88b 100644
--- a/tests/TransactionTest.php
+++ b/tests/TransactionTest.php
@@ -446,6 +446,52 @@ public function testRollBackWithoutSession(): void
         DB::rollback();
     }
 
+    public function testOnErrorCallbackIsCalled()
+    {
+        $executed = 0;
+        try {
+            DB::connection('mongodb')->transaction(function () {
+                throw new class extends \MongoDB\Driver\Exception\RuntimeException {
+                    protected $errorLabels = ['TransientTransactionError'];
+                };
+            }, 1, function () use (&$executed) {
+                $executed++;
+            });
+
+            self::fail('Expected an exception to be thrown.');
+        } catch (\MongoDB\Driver\Exception\RuntimeException) {
+        }
+
+        $this->assertSame(1, $executed);
+    }
+
+    public function testOnErrorCallbackIsCalledWithDeadlockRetry()
+    {
+        $executed = $attempts = 0;
+
+        $connection = DB::connection('mongodb');
+        self::assertInstanceOf(Connection::class, $connection);
+
+        try {
+            $connection->transaction(function () use (&$attempts) {
+                $attempts += 1;
+                throw new class extends \MongoDB\Driver\Exception\RuntimeException {
+                    protected $errorLabels = ['TransientTransactionError'];
+                };
+            }, 3, [
+                'onFailure' => function () use (&$executed) {
+                    $executed++;
+                },
+            ]);
+
+            self::fail('Expected an exception to be thrown.');
+        } catch (\MongoDB\Driver\Exception\RuntimeException) {
+        }
+
+        $this->assertSame(3, $attempts);
+        $this->assertSame(1, $executed);
+    }
+
     private function getPrimaryServerType(): int
     {
         return DB::getMongoClient()->getManager()->selectServer()->getType();