A method and apparatus for processing exceptions in a microprocessor having a plurality of pipelined stages. The method comprises the steps of generating an exception processing code at a given stage to indicate the occurrence of an exception at the given stage; temporarily stopping processing at the given stage; transferring the exception processing code to a special stage; decoding said exception processing code at the special stage; and causing the pipeline to execute exception processing when the exception processing code is decoded at the special stage. Using the invention, the microprocessor can avoid much of the delay and complexity resulting from using an external circuit to control exception processing and can cope with the occurrence of an exception at any stage without prematurely cancelling or reexecuting processing steps. The invention is simplified in both hardware and software, and can easily cope with expansion of the number of stages.