diff --git a/pkg/vm/context.go b/pkg/vm/context.go
index aff90f0a5..f2cf01ab1 100644
--- a/pkg/vm/context.go
+++ b/pkg/vm/context.go
@@ -221,7 +221,7 @@ func (c *Context) Equals(s stackitem.Item) bool {
 
 func (c *Context) atBreakPoint() bool {
 	for _, n := range c.breakPoints {
-		if n == c.ip {
+		if n == c.nextip {
 			return true
 		}
 	}
diff --git a/pkg/vm/debug_test.go b/pkg/vm/debug_test.go
new file mode 100644
index 000000000..7e6a8877e
--- /dev/null
+++ b/pkg/vm/debug_test.go
@@ -0,0 +1,42 @@
+package vm
+
+import (
+	"math/big"
+	"testing"
+
+	"github.com/nspcc-dev/neo-go/pkg/vm/opcode"
+	"github.com/stretchr/testify/require"
+)
+
+func TestVM_Debug(t *testing.T) {
+	prog := makeProgram(opcode.CALL, 3, opcode.RET,
+		opcode.PUSH2, opcode.PUSH3, opcode.ADD, opcode.RET)
+	t.Run("BreakPoint", func(t *testing.T) {
+		v := load(prog)
+		v.AddBreakPoint(3)
+		v.AddBreakPoint(5)
+		require.NoError(t, v.Run())
+		require.Equal(t, 3, v.Context().NextIP())
+		require.NoError(t, v.Run())
+		require.Equal(t, 5, v.Context().NextIP())
+		require.NoError(t, v.Run())
+		require.Equal(t, 1, v.estack.len)
+		require.Equal(t, big.NewInt(5), v.estack.Top().Value())
+	})
+	t.Run("StepInto", func(t *testing.T) {
+		v := load(prog)
+		require.NoError(t, v.StepInto())
+		require.Equal(t, 3, v.Context().NextIP())
+		require.NoError(t, v.StepOut())
+		require.Equal(t, 2, v.Context().NextIP())
+		require.Equal(t, 1, v.estack.len)
+		require.Equal(t, big.NewInt(5), v.estack.Top().Value())
+	})
+	t.Run("StepOver", func(t *testing.T) {
+		v := load(prog)
+		require.NoError(t, v.StepOver())
+		require.Equal(t, 2, v.Context().NextIP())
+		require.Equal(t, 1, v.estack.len)
+		require.Equal(t, big.NewInt(5), v.estack.Top().Value())
+	})
+}
diff --git a/pkg/vm/vm.go b/pkg/vm/vm.go
index ac19b20e4..af9cfff6e 100644
--- a/pkg/vm/vm.go
+++ b/pkg/vm/vm.go
@@ -89,7 +89,7 @@ func New() *VM {
 // NewWithTrigger returns a new VM for executions triggered by t.
 func NewWithTrigger(t trigger.Type) *VM {
 	vm := &VM{
-		state:   HaltState,
+		state:   NoneState,
 		istack:  NewStack("invocation"),
 		refs:    newRefCounter(),
 		keys:    make(map[string]*keys.PublicKey),
@@ -358,11 +358,6 @@ func (v *VM) Run() error {
 	// HaltState (the default) or BreakState are safe to continue.
 	v.state = NoneState
 	for {
-		// check for breakpoint before executing the next instruction
-		ctx := v.Context()
-		if ctx != nil && ctx.atBreakPoint() {
-			v.state = BreakState
-		}
 		switch {
 		case v.state.HasFlag(FaultState):
 			// Should be caught and reported already by the v.Step(),
@@ -379,6 +374,11 @@ func (v *VM) Run() error {
 			v.state = FaultState
 			return errors.New("unknown state")
 		}
+		// check for breakpoint before executing the next instruction
+		ctx := v.Context()
+		if ctx != nil && ctx.atBreakPoint() {
+			v.state = BreakState
+		}
 	}
 }
 
@@ -430,14 +430,15 @@ func (v *VM) StepOut() error {
 	var err error
 	if v.state == BreakState {
 		v.state = NoneState
-	} else {
-		v.state = BreakState
 	}
 
 	expSize := v.istack.len
 	for v.state == NoneState && v.istack.len >= expSize {
 		err = v.StepInto()
 	}
+	if v.state == NoneState {
+		v.state = BreakState
+	}
 	return err
 }
 
@@ -451,8 +452,6 @@ func (v *VM) StepOver() error {
 
 	if v.state == BreakState {
 		v.state = NoneState
-	} else {
-		v.state = BreakState
 	}
 
 	expSize := v.istack.len