diff --git a/src/lua/init.c b/src/lua/init.c
index ca4b47f3a0139f21a065648284372b20a379515b..d18c8af94a668965bf6d9aee77c331713d0944f6 100644
--- a/src/lua/init.c
+++ b/src/lua/init.c
@@ -664,7 +664,8 @@ tarantool_lua_run_script(char *path, bool interactive,
 	 * Run an auxiliary event loop to re-schedule run_script fiber.
 	 * When this fiber finishes, it will call ev_break to stop the loop.
 	 */
-	ev_run(loop(), 0);
+	if (start_loop)
+		ev_run(loop(), 0);
 	/* The fiber running the startup script has ended. */
 	script_fiber = NULL;
 }
diff --git a/test/box-py/args.result b/test/box-py/args.result
index fe9ac3448b426150aeb1413a6ee467133158ccc2..54629edea58c1c77cd0384499baa484b7c8577fd 100644
--- a/test/box-py/args.result
+++ b/test/box-py/args.result
@@ -118,6 +118,12 @@ Compiler: cc
 C_FLAGS: flags
 CXX_FLAGS: flags
 
+tarantool -e print(1) os.exit() print(2)
+1
+
+tarantool -e print(1) -e os.exit() -e print(1) -e os.exit() -e print(1)
+1
+
 tarantool -e print('Hello') ${SOURCEDIR}/test/box-py/args.lua 1 2 3
 Hello
 arg[-1] => tarantool
diff --git a/test/box-py/args.test.py b/test/box-py/args.test.py
index ab6f8f2e7ce718921a56c741ebade7d5fac6e938..f89c5bb0941e0946b5d9ffe536d06a02fe342c70 100644
--- a/test/box-py/args.test.py
+++ b/test/box-py/args.test.py
@@ -37,6 +37,10 @@ server.test_option(script + " 1 2 3 --help")
 server.test_option(script + " --help 1 2 3")
 server.test_option("-V " + script + " 1 2 3")
 
+# gh-3966: os.exit() hangs if called by a command from the argument list.
+server.test_option("-e \"print(1) os.exit() print(2)\"")
+server.test_option("-e \"print(1)\" -e \"os.exit()\" -e \"print(1)\" -e \"os.exit()\" -e \"print(1)\"")
+
 server.test_option("-e \"print('Hello')\" " + script + " 1 2 3")
 server.test_option("-e \"a = 10\" " + \
                    "-e print(a) " + \
@@ -50,5 +54,3 @@ server.test_option("-e \"print(rawget(_G, 'log') == nil)\" " + \
                    " 1 2 3 --help")
 
 sys.stdout.clear_all_filters()
-# Args filter cleanup
-# vim: syntax=python