diff --git a/api/services/pipecat/event_handlers.py b/api/services/pipecat/event_handlers.py
index 3777db9..0304f9c 100644
--- a/api/services/pipecat/event_handlers.py
+++ b/api/services/pipecat/event_handlers.py
@@ -3,6 +3,7 @@ from loguru import logger
 from api.db import db_client
 from api.enums import WorkflowRunState
 from api.services.campaign.campaign_call_dispatcher import campaign_call_dispatcher
+from api.services.campaign.circuit_breaker import circuit_breaker
 from api.services.pipecat.audio_config import AudioConfig
 from api.services.pipecat.in_memory_buffers import (
     InMemoryAudioBuffer,
@@ -95,6 +96,22 @@ def register_event_handlers(
         ready_state["pipeline_started"] = True
         await maybe_trigger_llm()
 
+    @task.event_handler("on_pipeline_error")
+    async def on_pipeline_error(_task: PipelineTask, frame: Frame):
+        logger.warning(f"Pipeline error for workflow run {workflow_run_id}: {frame}")
+        try:
+            workflow_run = await db_client.get_workflow_run_by_id(workflow_run_id)
+            if workflow_run and workflow_run.campaign_id:
+                await circuit_breaker.record_and_evaluate(
+                    campaign_id=workflow_run.campaign_id, is_failure=True
+                )
+        except Exception as e:
+            logger.error(f"Error recording circuit breaker failure: {e}", exc_info=True)
+
+        await engine.end_call_with_reason(
+            EndTaskReason.PIPELINE_ERROR.value, abort_immediately=True
+        )
+
     @task.event_handler("on_pipeline_finished")
     async def on_pipeline_finished(
         task: PipelineTask,
diff --git a/api/services/pipecat/realtime_feedback_observer.py b/api/services/pipecat/realtime_feedback_observer.py
index bde6c6a..0f3010e 100644
--- a/api/services/pipecat/realtime_feedback_observer.py
+++ b/api/services/pipecat/realtime_feedback_observer.py
@@ -32,6 +32,7 @@ if TYPE_CHECKING:
 from pipecat.frames.frames import (
     CancelFrame,
     EndFrame,
+    ErrorFrame,
     FunctionCallInProgressFrame,
     FunctionCallResultFrame,
     InterimTranscriptionFrame,
@@ -272,6 +273,19 @@ class RealtimeFeedbackObserver(BaseObserver):
                                 },
                             }
                         )
+        # Handle pipeline errors
+        elif isinstance(frame, ErrorFrame):
+            processor_name = str(frame.processor) if frame.processor else None
+            await self._send_message(
+                {
+                    "type": RealtimeFeedbackType.PIPELINE_ERROR.value,
+                    "payload": {
+                        "error": frame.error,
+                        "fatal": frame.fatal,
+                        "processor": processor_name,
+                    },
+                }
+            )
 
     async def _send_ws(self, message: dict):
         """Send message via WebSocket only, handling errors gracefully."""
diff --git a/api/services/workflow/pipecat_engine.py b/api/services/workflow/pipecat_engine.py
index 59c4d59..f0398a6 100644
--- a/api/services/workflow/pipecat_engine.py
+++ b/api/services/workflow/pipecat_engine.py
@@ -536,10 +536,11 @@ class PipecatEngine:
         # Mute the pipeline
         self._mute_pipeline = True
 
-        # Perform final variable extraction synchronously before ending
-        await self._perform_variable_extraction_if_needed(
-            self._current_node, run_in_background=False
-        )
+        if reason != EndTaskReason.PIPELINE_ERROR.value:
+            # Perform final variable extraction synchronously before ending
+            await self._perform_variable_extraction_if_needed(
+                self._current_node, run_in_background=False
+            )
 
         frame_to_push = (
             CancelFrame(reason=reason) if abort_immediately else EndFrame(reason=reason)
diff --git a/pipecat b/pipecat
index 791d241..927ed9b 160000
--- a/pipecat
+++ b/pipecat
@@ -1 +1 @@
-Subproject commit 791d24196f07b36d64beddda4a9c79aa6ccdb245
+Subproject commit 927ed9bae29e52c14230feb9f61e7ef2a551b0b8
diff --git a/ui/src/app/workflow/[workflowId]/run/[runId]/components/RealtimeFeedback.tsx b/ui/src/app/workflow/[workflowId]/run/[runId]/components/RealtimeFeedback.tsx
index 5cc5e67..9a0f031 100644
--- a/ui/src/app/workflow/[workflowId]/run/[runId]/components/RealtimeFeedback.tsx
+++ b/ui/src/app/workflow/[workflowId]/run/[runId]/components/RealtimeFeedback.tsx
@@ -20,6 +20,8 @@ interface RealtimeFeedbackEvent {
         ttfb_seconds?: number;
         processor?: string;
         model?: string;
+        error?: string;
+        fatal?: boolean;
     };
     timestamp: string;
     turn: number;
@@ -74,13 +76,16 @@ function convertLogEventsToTranscriptEvents(events: RealtimeFeedbackEvent[]): Tr
             case 'rtf-ttfb-metric':
                 type = 'ttfb-metric';
                 break;
+            case 'rtf-pipeline-error':
+                type = 'pipeline-error';
+                break;
             default:
                 type = 'bot-text';
         }
 
         return {
             type,
-            text: event.payload.text || event.payload.result || event.payload.function_name || event.payload.node_name || '',
+            text: event.payload.text || event.payload.error || event.payload.result || event.payload.function_name || event.payload.node_name || '',
             final: event.payload.final,
             timestamp: event.timestamp,
             turn: event.turn,
@@ -91,6 +96,7 @@ function convertLogEventsToTranscriptEvents(events: RealtimeFeedbackEvent[]): Tr
             ttfbSeconds: event.payload.ttfb_seconds,
             processor: event.payload.processor,
             model: event.payload.model,
+            fatal: event.payload.fatal,
         };
     });
 }
@@ -111,6 +117,7 @@ function convertLiveMessagesToTranscriptEvents(messages: FeedbackMessage[]): Tra
         ttfbSeconds: msg.ttfbSeconds,
         processor: msg.processor,
         model: msg.model,
+        fatal: msg.fatal,
     }));
 }
 
diff --git a/ui/src/app/workflow/[workflowId]/run/[runId]/components/UnifiedTranscript.tsx b/ui/src/app/workflow/[workflowId]/run/[runId]/components/UnifiedTranscript.tsx
index 635cb07..3fff78b 100644
--- a/ui/src/app/workflow/[workflowId]/run/[runId]/components/UnifiedTranscript.tsx
+++ b/ui/src/app/workflow/[workflowId]/run/[runId]/components/UnifiedTranscript.tsx
@@ -49,6 +49,7 @@ export const UnifiedTranscript = ({
         status: msg.status,
         nodeName: msg.nodeName,
         ttfbSeconds: msg.ttfbSeconds,
+        fatal: msg.fatal,
     }));
 
     // Default empty state
diff --git a/ui/src/app/workflow/[workflowId]/run/[runId]/components/shared/TranscriptMessage.tsx b/ui/src/app/workflow/[workflowId]/run/[runId]/components/shared/TranscriptMessage.tsx
index c41d4ee..19b430a 100644
--- a/ui/src/app/workflow/[workflowId]/run/[runId]/components/shared/TranscriptMessage.tsx
+++ b/ui/src/app/workflow/[workflowId]/run/[runId]/components/shared/TranscriptMessage.tsx
@@ -1,17 +1,18 @@
 'use client';
 
-import { Brain, GitBranch, Wrench } from 'lucide-react';
+import { AlertTriangle, Brain, GitBranch, Wrench } from 'lucide-react';
 
 import { cn } from '@/lib/utils';
 
 export interface TranscriptMessageData {
     id: string;
-    type: 'user-transcription' | 'bot-text' | 'function-call' | 'node-transition' | 'ttfb-metric';
+    type: 'user-transcription' | 'bot-text' | 'function-call' | 'node-transition' | 'ttfb-metric' | 'pipeline-error';
     text: string;
     final?: boolean;
     functionName?: string;
     nodeName?: string;
     ttfbSeconds?: number;
+    fatal?: boolean;
 }
 
 interface TranscriptMessageProps {
@@ -36,6 +37,23 @@ export function TranscriptMessage({ message, nextMessage }: TranscriptMessagePro
         );
     }
 
+    // Pipeline error - show as a red alert
+    if (message.type === 'pipeline-error') {
+        return (
+            <div className="flex items-start gap-2 px-3 py-2 rounded-lg bg-red-500/10 border border-red-500/20">
+                <AlertTriangle className="h-4 w-4 text-red-500 mt-0.5 shrink-0" />
+                <div className="flex-1 min-w-0">
+                    <div className="text-xs font-medium text-red-700 dark:text-red-400">
+                        {message.fatal ? 'Fatal Pipeline Error' : 'Pipeline Error'}
+                    </div>
+                    <div className="text-sm text-red-600 dark:text-red-300 mt-0.5 break-words">
+                        {message.text}
+                    </div>
+                </div>
+            </div>
+        );
+    }
+
     // TTFB metric - don't render standalone, it'll be shown with bot messages and function calls
     if (message.type === 'ttfb-metric') {
         return null;
diff --git a/ui/src/app/workflow/[workflowId]/run/[runId]/hooks/useWebSocketRTC.tsx b/ui/src/app/workflow/[workflowId]/run/[runId]/hooks/useWebSocketRTC.tsx
index 8e6c120..1143732 100644
--- a/ui/src/app/workflow/[workflowId]/run/[runId]/hooks/useWebSocketRTC.tsx
+++ b/ui/src/app/workflow/[workflowId]/run/[runId]/hooks/useWebSocketRTC.tsx
@@ -18,7 +18,7 @@ interface UseWebSocketRTCProps {
 
 export interface FeedbackMessage {
     id: string;
-    type: 'user-transcription' | 'bot-text' | 'function-call' | 'node-transition' | 'ttfb-metric';
+    type: 'user-transcription' | 'bot-text' | 'function-call' | 'node-transition' | 'ttfb-metric' | 'pipeline-error';
     text: string;
     final?: boolean;
     timestamp: string;
@@ -31,6 +31,8 @@ export interface FeedbackMessage {
     ttfbSeconds?: number;
     processor?: string;
     model?: string;
+    // Pipeline error fields
+    fatal?: boolean;
 }
 
 export const useWebSocketRTC = ({ workflowId, workflowRunId, accessToken, initialContextVariables }: UseWebSocketRTCProps) => {
@@ -400,6 +402,19 @@ export const useWebSocketRTC = ({ workflowId, workflowRunId, accessToken, initia
                             break;
                         }
 
+                        case 'rtf-pipeline-error': {
+                            const { error, fatal, processor: errorProcessor } = message.payload;
+                            setFeedbackMessages(prev => [...prev, {
+                                id: `error-${Date.now()}`,
+                                type: 'pipeline-error',
+                                text: error,
+                                fatal,
+                                processor: errorProcessor,
+                                timestamp: new Date().toISOString(),
+                            }]);
+                            break;
+                        }
+
                         default:
                             logger.warn('Unknown message type:', message.type);
                     }
diff --git a/ui/src/app/workflow/[workflowId]/run/[runId]/utils/processTranscriptEvents.ts b/ui/src/app/workflow/[workflowId]/run/[runId]/utils/processTranscriptEvents.ts
index 25a6f36..76f6321 100644
--- a/ui/src/app/workflow/[workflowId]/run/[runId]/utils/processTranscriptEvents.ts
+++ b/ui/src/app/workflow/[workflowId]/run/[runId]/utils/processTranscriptEvents.ts
@@ -4,7 +4,7 @@
  */
 
 export interface TranscriptEvent {
-    type: 'user-transcription' | 'bot-text' | 'function-call' | 'node-transition' | 'ttfb-metric';
+    type: 'user-transcription' | 'bot-text' | 'function-call' | 'node-transition' | 'ttfb-metric' | 'pipeline-error';
     text: string;
     final?: boolean;
     timestamp: string;
@@ -16,6 +16,7 @@ export interface TranscriptEvent {
     ttfbSeconds?: number;
     processor?: string;
     model?: string;
+    fatal?: boolean;
 }
 
 export interface ProcessedMessage {
@@ -28,6 +29,7 @@ export interface ProcessedMessage {
     status?: 'running' | 'completed';
     nodeName?: string;
     ttfbSeconds?: number;
+    fatal?: boolean;
 }
 
 /**
@@ -143,5 +145,6 @@ function convertToProcessedMessage(event: TranscriptEvent, overrideText?: string
         status: event.status,
         nodeName: event.nodeName,
         ttfbSeconds: event.ttfbSeconds,
+        fatal: event.fatal,
     };
 }