diff --git a/watch/watch.py b/watch/watch.py
index 3058ed9a..b432778e 100644
--- a/watch/watch.py
+++ b/watch/watch.py
@@ -151,7 +151,9 @@ def stream(self, func, *args, **kwargs):
         if 'resource_version' in kwargs:
             self.resource_version = kwargs['resource_version']
 
-        timeouts = ('timeout_seconds' in kwargs)
+        # Do not attempt retries if user specifies a timeout.
+        # We want to ensure we are returning within that timeout.
+        disable_retries = ('timeout_seconds' in kwargs)
         retry_after_410 = False
         while True:
             resp = func(*args, **kwargs)
@@ -164,9 +166,9 @@ def stream(self, func, *args, **kwargs):
                         if isinstance(event, dict) \
                                 and event['type'] == 'ERROR':
                             obj = event['raw_object']
-                            # Current request expired, let's retry,
+                            # Current request expired, let's retry, (if enabled)
                             # but only if we have not already retried.
-                            if not retry_after_410 and \
+                            if not disable_retries and not retry_after_410 and \
                                     obj['code'] == HTTP_STATUS_GONE:
                                 retry_after_410 = True
                                 break
@@ -190,5 +192,5 @@ def stream(self, func, *args, **kwargs):
                 else:
                     self._stop = True
 
-            if timeouts or self._stop:
+            if self._stop or disable_retries:
                 break
diff --git a/watch/watch_test.py b/watch/watch_test.py
index b8cefd20..32cf6334 100644
--- a/watch/watch_test.py
+++ b/watch/watch_test.py
@@ -287,15 +287,65 @@ def test_watch_with_error_event(self):
         fake_api = Mock()
         fake_api.get_thing = Mock(return_value=fake_resp)
 
+        w = Watch()
+        # No events are generated when no initial resourceVersion is passed
+        # No retry is attempted either, preventing an ApiException
+        assert not list(w.stream(fake_api.get_thing))
+
+        fake_api.get_thing.assert_called_once_with(
+            _preload_content=False, watch=True)
+        fake_resp.read_chunked.assert_called_once_with(decode_content=False)
+        fake_resp.close.assert_called_once()
+        fake_resp.release_conn.assert_called_once()
+
+    def test_watch_retries_on_error_event(self):
+        fake_resp = Mock()
+        fake_resp.close = Mock()
+        fake_resp.release_conn = Mock()
+        fake_resp.read_chunked = Mock(
+            return_value=[
+                '{"type": "ERROR", "object": {"code": 410, '
+                '"reason": "Gone", "message": "error message"}}\n'])
+
+        fake_api = Mock()
+        fake_api.get_thing = Mock(return_value=fake_resp)
+
         w = Watch()
         try:
-            for _ in w.stream(fake_api.get_thing):
+            for _ in w.stream(fake_api.get_thing, resource_version=0):
+                self.fail(self, "Should fail with ApiException.")
+        except client.rest.ApiException:
+            pass
+
+        # Two calls should be expected during a retry
+        fake_api.get_thing.assert_has_calls(
+            [call(resource_version=0, _preload_content=False, watch=True)] * 2)
+        fake_resp.read_chunked.assert_has_calls(
+            [call(decode_content=False)] * 2)
+        assert fake_resp.close.call_count == 2
+        assert fake_resp.release_conn.call_count == 2
+
+    def test_watch_with_error_event_and_timeout_param(self):
+        fake_resp = Mock()
+        fake_resp.close = Mock()
+        fake_resp.release_conn = Mock()
+        fake_resp.read_chunked = Mock(
+            return_value=[
+                '{"type": "ERROR", "object": {"code": 410, '
+                '"reason": "Gone", "message": "error message"}}\n'])
+
+        fake_api = Mock()
+        fake_api.get_thing = Mock(return_value=fake_resp)
+
+        w = Watch()
+        try:
+            for _ in w.stream(fake_api.get_thing, timeout_seconds=10):
                 self.fail(self, "Should fail with ApiException.")
         except client.rest.ApiException:
             pass
 
         fake_api.get_thing.assert_called_once_with(
-            _preload_content=False, watch=True)
+            _preload_content=False, watch=True, timeout_seconds=10)
         fake_resp.read_chunked.assert_called_once_with(decode_content=False)
         fake_resp.close.assert_called_once()
         fake_resp.release_conn.assert_called_once()