A translating software emulator designed for converting code from a legacy system to a target system and fully preserving the synchronous exception state while still allowing for full and aggressive optimization in the translation. A user application is translated to a target system using full optimization techniques. The translation may be done dynamically by an emulator emulating the legacy system on the target system, or the translation may be a static translation or a compilation, fully generating a new executable program operable on the target system. The invention recovers from the exception properly by restoring the target machine state to the machine state expected by the legacy system. This recovery is done by using an exception delivery mechanism to restore the machine state of the target system before executing the exception handling code. The restoration of the machine state is done by executing a recovery block generated by the translation that modifies the machine state to match the legacy machine state.