diff --git a/cabal-install/src/Distribution/Client/CmdRun.hs b/cabal-install/src/Distribution/Client/CmdRun.hs
index 80d7ff48a6c..6de25f0d2e9 100644
--- a/cabal-install/src/Distribution/Client/CmdRun.hs
+++ b/cabal-install/src/Distribution/Client/CmdRun.hs
@@ -199,7 +199,9 @@ runCommand =
 -- For more details on how this works, see the module
 -- "Distribution.Client.ProjectOrchestration"
 runAction :: NixStyleFlags () -> [String] -> GlobalFlags -> IO ()
-runAction flags targetAndArgs globalFlags =
+runAction flags targetAndArgs globalFlags = do
+  fullArgs <- getFullArgs
+  let (targetStr, args) = splitTargetAndArgs fullArgs targetAndArgs
   withContextAndSelectors (cfgVerbosity normal flags) RejectNoTargets (Just ExeKind) flags targetStr globalFlags OtherCommand $ \targetCtx ctx targetSelectors -> do
     (baseCtx, defaultVerbosity) <- case targetCtx of
       ProjectContext -> return (ctx, normal)
@@ -213,7 +215,6 @@ runAction flags targetAndArgs globalFlags =
         when (buildSettingOnlyDeps (buildSettings baseCtx)) $
           dieWithException verbosity NoSupportForRunCommand
 
-        fullArgs <- getFullArgs
         when (occursOnlyOrBefore fullArgs "+RTS" "--") $
           warn verbosity $
             giveRTSWarning "run"
@@ -353,8 +354,62 @@ runAction flags targetAndArgs globalFlags =
                     (distDirLayout baseCtx)
                     elaboratedPlan
             }
-  where
-    (targetStr, args) = splitAt 1 targetAndArgs
+
+-- | Split @cabal run@ arguments (@exe cmd@ arguments in the examples) into
+-- target selectors and target executable arguments.
+--
+-- When a target is given it appears in both lists:
+--
+-- >>> splitTargetAndArgs ["exe", "cmd", "target"] ["target"]
+-- (["target"],[])
+--
+-- The @+RTS@ argument is passed to the executable so only appears in the first
+-- list:
+--
+-- >>> splitTargetAndArgs ["exe", "cmd", "target", "+RTS"] ["target"]
+-- (["target"],[])
+--
+-- The @--@ follows the @+RTS@ argument, so @+RTS@ is passed to the executable
+-- and only appears in the first list:
+--
+-- >>> splitTargetAndArgs ["exe", "cmd", "target", "+RTS", "--"] ["target"]
+-- (["target"],[])
+--
+-- The @--@ precedes the @+RTS@ argument, so @+RTS@ is included in the
+-- 'targetAndArgs' list as well:
+--
+-- >>> splitTargetAndArgs ["exe", "cmd", "target", "--", "+RTS"] ["target", "+RTS"]
+-- (["target"],["+RTS"])
+--
+-- Same examples as above but when no target is given:
+--
+-- >>> splitTargetAndArgs ["exe", "cmd"] []
+-- ([],[])
+-- >>> splitTargetAndArgs ["exe", "cmd", "+RTS"] []
+-- ([],[])
+-- >>> splitTargetAndArgs ["exe", "cmd", "+RTS", "--"] []
+-- ([],[])
+-- >>> splitTargetAndArgs ["exe", "cmd", "--", "+RTS"] ["+RTS"]
+-- ([],["+RTS"])
+splitTargetAndArgs
+  :: [String]
+  -- ^ Full command line arguments, the original command line from
+  -- 'getFullArgs', which is only used to detect whether a @--@ separator was
+  -- present so that @cabal run -- ...@ keeps the target empty.
+  -> [String]
+  -- ^ The second argument is the parser-produced list that combines targets and
+  -- their arguments.  These arguments do not include those passed to @cabal@
+  -- such as @+RTS@ preceding the @--@ separator.
+  -> ([String], [String])
+splitTargetAndArgs fullArgs targetAndArgs = case dropWhile (/= "--") fullArgs of
+  ("--" : exeArgs) ->
+    -- targetAndArgs contains targets (>=0) and args; exeArgs contains only args; so
+    -- the difference (>=0) is the number of targets
+    let numTargets = length targetAndArgs - length exeArgs
+     in splitAt numTargets targetAndArgs
+  _ ->
+    -- No '--': first element (if any) is the target.
+    splitAt 1 targetAndArgs
 
 -- | Used by the main CLI parser as heuristic to decide whether @cabal@ was
 -- invoked as a script interpreter, i.e. via
diff --git a/cabal-testsuite/PackageTests/NewBuild/CmdRun/WarningRTS/cabal.no-target.out b/cabal-testsuite/PackageTests/NewBuild/CmdRun/WarningRTS/cabal.no-target.out
new file mode 100644
index 00000000000..a7f6033bb1d
--- /dev/null
+++ b/cabal-testsuite/PackageTests/NewBuild/CmdRun/WarningRTS/cabal.no-target.out
@@ -0,0 +1,12 @@
+# cabal run
+Resolving dependencies...
+Warning: Your RTS options are applied to cabal, not the executable. Use '--' to separate cabal options from your executable options. For example, use 'cabal run -- +RTS -N to pass the '-N' RTS option to your executable.
+Build profile: -w ghc-<GHCVER> -O1
+In order, the following will be built:
+ - WarningRTS-1.0 (exe:foo) (first run)
+Configuring executable 'foo' for WarningRTS-1.0...
+Preprocessing executable 'foo' for WarningRTS-1.0...
+Building executable 'foo' for WarningRTS-1.0...
+# cabal run
+Warning: Your RTS options are applied to cabal, not the executable. Use '--' to separate cabal options from your executable options. For example, use 'cabal run -- +RTS -N to pass the '-N' RTS option to your executable.
+# cabal run
diff --git a/cabal-testsuite/PackageTests/NewBuild/CmdRun/WarningRTS/cabal.test.hs b/cabal-testsuite/PackageTests/NewBuild/CmdRun/WarningRTS/cabal.test.hs
index 99b9f2008a2..39994589144 100644
--- a/cabal-testsuite/PackageTests/NewBuild/CmdRun/WarningRTS/cabal.test.hs
+++ b/cabal-testsuite/PackageTests/NewBuild/CmdRun/WarningRTS/cabal.test.hs
@@ -1,6 +1,7 @@
 import Test.Cabal.Prelude
 
-main = cabalTest $ do
+main = do
+  cabalTest $ do
     res <- cabal' "run" ["foo", "+RTS"]
     assertOutputContains "Warning: Your RTS options" res
 
@@ -9,3 +10,16 @@ main = cabalTest $ do
 
     res <- cabal' "run" ["foo", "--", "+RTS"]
     assertOutputDoesNotContain "Warning: Your RTS options" res
+
+  -- Regression tests for https://github.com/haskell/cabal/issues/10487:
+  -- 'cabal run -- +RTS' should not fail with "Unrecognised target '+RTS'"
+  cabalTest' "no-target" $ do
+    res <- cabal' "run" ["+RTS"]
+    assertOutputContains "Warning: Your RTS options" res
+
+    res <- cabal' "run" ["+RTS", "--"]
+    assertOutputContains "Warning: Your RTS options" res
+
+    res <- cabal' "run" ["--", "+RTS"]
+    assertOutputDoesNotContain "Warning: Your RTS options" res
+    assertOutputDoesNotContain "Unrecognised target" res
diff --git a/changelog.d/pr-10487.md b/changelog.d/pr-10487.md
new file mode 100644
index 00000000000..ea0e3064bb9
--- /dev/null
+++ b/changelog.d/pr-10487.md
@@ -0,0 +1,18 @@
+---
+synopsis: Fix `cabal run` handling of `--` with empty targets
+packages: [cabal-install]
+prs: 10487
+issues: 10487
+---
+
+Previously, when using `--` to separate cabal options from executable
+arguments, without an explicit target, the first argument after `--` was
+incorrectly treated as a target selector.
+
+For example, the following now works as expected while it failed before
+thinking that `+RTS` is a target:
+
+```
+$ cabal run -- +RTS -s
+$ cabal run -w /path/to/ghc -- +RTS -s
+```
diff --git a/doc/cabal-commands.rst b/doc/cabal-commands.rst
index 06a1e082373..ca05df1b42b 100644
--- a/doc/cabal-commands.rst
+++ b/doc/cabal-commands.rst
@@ -1212,8 +1212,9 @@ When ``TARGET`` is one of the following:
 - Empty target: Same as package target, implicitly using the package from the current
   working directory.
 
-Except in the case of the empty target, the strings after it will be
-passed to the executable as arguments.
+With a non-empty target, the strings after it are passed to the
+executable as arguments.  With an empty target you must use ``--`` to
+separate executable arguments from cabal flags.
 
 If one of the arguments starts with ``-`` it will be interpreted as
 a cabal flag, so if you need to pass flags to the executable you
@@ -1222,6 +1223,10 @@ have to separate them with ``--``.
 ::
 
     $ cabal run target -- -a -bcd --argument
+    $ cabal run -- +RTS -s -RTS
+
+The second form (empty target with ``--``) runs the single executable
+in the current package and passes the RTS options to it.
 
 ``run`` supports running script files that use a certain format.
 Scripts look like: