diff --git a/pkg/kvcache/indexer.go b/pkg/kvcache/indexer.go
index 483a61464..38268acfc 100644
--- a/pkg/kvcache/indexer.go
+++ b/pkg/kvcache/indexer.go
@@ -135,7 +135,10 @@ func (k *Indexer) GetPodScores(ctx context.Context, renderReq *preprocessing.Ren
 	traceLogger := log.FromContext(ctx).V(logging.TRACE).WithName("kvcache.GetPodScores")
 
 	// 1. tokenize prompt
-	tokens := k.tokenizersPool.Tokenize(renderReq, prompt, modelName)
+	tokens, err := k.tokenizersPool.Tokenize(renderReq, prompt, modelName)
+	if err != nil {
+		return nil, fmt.Errorf("failed to tokenize: %w", err)
+	}
 
 	// 2. get block keys
 	blockKeys := k.tokensProcessor.TokensToKVBlockKeys(nil, tokens, modelName)
diff --git a/pkg/tokenization/pool.go b/pkg/tokenization/pool.go
index b1f9f0dd0..ad1927752 100644
--- a/pkg/tokenization/pool.go
+++ b/pkg/tokenization/pool.go
@@ -18,6 +18,7 @@ package tokenization
 
 import (
 	"context"
+	"errors"
 	"fmt"
 	"sync"
 
@@ -62,6 +63,7 @@ func DefaultConfig() (*Config, error) {
 
 // tokenizationResponse holds the result of a tokenization operation.
 type tokenizationResponse struct {
+	err    error
 	Tokens []uint32
 }
 
@@ -146,7 +148,7 @@ func (pool *Pool) EnqueueTokenization(prompt, modelName string) {
 }
 
 // Tokenize queues a task and blocks until the final result is available.
-func (pool *Pool) Tokenize(renderReq *preprocessing.RenderJinjaTemplateRequest, prompt, modelName string) []uint32 {
+func (pool *Pool) Tokenize(renderReq *preprocessing.RenderJinjaTemplateRequest, prompt, modelName string) ([]uint32, error) {
 	resultCh := make(chan tokenizationResponse, 1)
 	pool.queue.Add(Task{
 		RenderReq: renderReq,
@@ -156,8 +158,7 @@ func (pool *Pool) Tokenize(renderReq *preprocessing.RenderJinjaTemplateRequest,
 	})
 
 	res := <-resultCh
-	tokens := res.Tokens
-	return tokens
+	return res.Tokens, res.err
 }
 
 // Run launches worker goroutines that process tasks until the context is
@@ -184,7 +185,9 @@ func (pool *Pool) workerLoop(_ int) {
 		}
 
 		// Process the task.
-		if err := pool.processTask(task); err == nil {
+		var fatalErr FatalInitError
+		// If the error is fatal, remove the task from the queue.
+		if err := pool.processTask(task); err == nil || errors.As(err, &fatalErr) {
 			pool.queue.Forget(task)
 		} else {
 			pool.queue.AddRateLimited(task)
@@ -193,14 +196,36 @@ func (pool *Pool) workerLoop(_ int) {
 	}
 }
 
+// FatalInitError is an unrecoverable failure while initializing the target tokenizer.
+type FatalInitError struct {
+	err error
+}
+
+func (fe FatalInitError) Error() string {
+	return fmt.Sprintf("fatal init error: %s", fe.err.Error())
+}
+
+func (fe FatalInitError) Unwrap() error {
+	return fe.err
+}
 // processTask tokenizes the prompt and updates the indexer.
 // It sends exactly one response (success or error) if ResultCh is provided.
 func (pool *Pool) processTask(task Task) error {
+	reportErr := func(task Task, err error) {
+		if task.ResultCh != nil {
+			// On failure, send the response if a channel is provided and close the channel.
+			resp := tokenizationResponse{err: err}
+			task.ResultCh <- resp
+			close(task.ResultCh)
+		}
+	}
+
 	if task.RenderReq != nil {
 		var err error
 		task.Prompt, err = pool.tokenizer.RenderChatTemplate(task.ModelName, task.RenderReq)
 		if err != nil {
 			log.Log.Error(err, "failed to render chat template", "modelName", task.ModelName)
+			reportErr(task, err)
 			return err
 		}
 	}
@@ -212,12 +237,14 @@ func (pool *Pool) processTask(task Task) error {
 		tokens, offsets, err := pool.tokenizer.Encode(task.Prompt, task.ModelName)
 		if err != nil {
 			log.Log.Error(err, "failed to encode tokens", "prompt", task.Prompt, "modelName", task.ModelName)
+			reportErr(task, err)
 			return err
 		}
 
 		// update the indexer with the new tokenization
 		if e := pool.indexer.AddTokenization(task.Prompt, tokens, offsets); e != nil {
 			err = fmt.Errorf("tokenization failed for model %s: %w", task.ModelName, e)
+			reportErr(task, err)
 			return err
 		}
 
diff --git a/pkg/tokenization/pool_test.go b/pkg/tokenization/pool_test.go
index a0d85ceb8..7cfcb7c83 100644
--- a/pkg/tokenization/pool_test.go
+++ b/pkg/tokenization/pool_test.go
@@ -83,6 +83,17 @@ func (m *MockIndexer) FindLongestContainedTokens(prompt string) ([]uint32, float
 	return tokens, 0.0
 }
 
+type FailingMockIndexer struct {
+	MockIndexer
+}
+
+//nolint:gocritic // unnamedResult: tokens and overlapRatio are self-explanatory from context
+func (m *FailingMockIndexer) FindLongestContainedTokens(prompt string) ([]uint32, float64) {
+	args := m.Called(prompt)
+	tokens := args.Get(0).([]uint32) //nolint:errcheck // unused mock
+	return tokens, defaultMinPrefixOverlapRatio - .1
+}
+
 func TestPool_ProcessTask(t *testing.T) {
 	mockIndexer := &MockIndexer{}
 	mockTokenizer := &MockTokenizer{}
@@ -169,6 +180,58 @@ func TestPool_RunIntegration(t *testing.T) {
 	mockIndexer.AssertExpectations(t)
 }
 
+func TestPool_RunIntegrationFailed(t *testing.T) {
+	if testing.Short() {
+		t.Skip("Skipping tokenizer integration test in short mode")
+	}
+
+	mockIndexer := &FailingMockIndexer{}
+
+	prompts := []string{"hello world", "this is a test", "unicode test: 世界"}
+
+	// Setup mock expectations for each prompt
+	for _, prompt := range prompts {
+		mockIndexer.On("FindLongestContainedTokens", prompt).Return([]uint32{}, defaultMinPrefixOverlapRatio-.1)
+	}
+
+	// Setup a misconfigured tokenization pool
+	config := &Config{
+		WorkersCount: 1,
+		LocalTokenizerConfig: &LocalTokenizerConfig{
+			ModelTokenizerMap: map[string]string{
+				testModelName: t.TempDir(),
+			},
+		},
+		MinPrefixOverlapRatio: defaultMinPrefixOverlapRatio,
+	}
+
+	pool, err := NewTokenizationPool(config, mockIndexer)
+	require.NoError(t, err)
+
+	// Create context for the pool
+	ctx, cancel := context.WithTimeout(context.Background(), 5*time.Second)
+	defer cancel()
+
+	// Run pool
+	done := make(chan struct{})
+	go func() {
+		defer close(done)
+		pool.Run(ctx)
+	}()
+
+	// We expect all tokenizers to terminate reporting an error
+	for _, prompt := range prompts {
+		_, err := pool.Tokenize(nil, prompt, testModelName)
+		require.Error(t, err)
+	}
+
+	time.Sleep(2 * time.Second)
+	cancel()
+	<-done
+
+	mockIndexer.AssertExpectations(t)
+}
+
 func generateRandomSentence(wordLength, maxWords int, rng *rand.Rand) string {
 	numWords := rng.Intn(maxWords) + 1
 	words := make([]string, numWords)
@@ -269,7 +332,7 @@ func BenchmarkSyncTokenizationStress(b *testing.B) {
 	for i := 0; b.Loop(); i++ {
 		prompt := generateRandomSentence(benchmarkWordLength, benchmarkMaxWords, rng)
 		model := benchmarkModels[i%len(benchmarkModels)]
-		pool.Tokenize(nil, prompt, model)
+		_, _ = pool.Tokenize(nil, prompt, model) //nolint:errcheck
 	}
 
 	b.StopTimer()
diff --git a/pkg/tokenization/tokenizer.go b/pkg/tokenization/tokenizer.go
index 603b32421..97f4540c2 100644
--- a/pkg/tokenization/tokenizer.go
+++ b/pkg/tokenization/tokenizer.go
@@ -400,7 +400,7 @@ func (t *CachedTokenizer) RenderChatTemplate(
 func (t *CachedTokenizer) Encode(input, modelName string) ([]uint32, []tokenizers.Offset, error) {
 	tokenizer, err := t.get(modelName)
 	if err != nil {
-		return nil, nil, fmt.Errorf("failed to get tokenizer for model %q: %w", modelName, err)
+		return nil, nil, FatalInitError{err: fmt.Errorf("failed to get tokenizer for model %q: %w", modelName, err)}
 	}
 
 	encodeOptions := []tokenizers.EncodeOption{