diff --git a/packages/client-runtime/src/rpc/client.ts b/packages/client-runtime/src/rpc/client.ts
index c364b3448d03d..743e2b5f48168 100644
--- a/packages/client-runtime/src/rpc/client.ts
+++ b/packages/client-runtime/src/rpc/client.ts
@@ -108,6 +108,11 @@ const isEnvironmentAuthorizationError = Schema.is(EnvironmentAuthorizationError)
 
 const MAX_EXPECTED_FAILURE_RETRY_DELAY_MS = 30_000;
 
+export const subscriptionRetryDelay = (base: Duration.Input, retries: number) =>
+  Duration.millis(
+    Math.min(Duration.toMillis(base) * 2 ** retries, MAX_EXPECTED_FAILURE_RETRY_DELAY_MS),
+  );
+
 export type EnvironmentRpcInput<TTag extends EnvironmentRpcTag> = Parameters<RpcMethod<TTag>>[0];
 
 export type EnvironmentRpcSuccess<TTag extends EnvironmentUnaryRpcTag> =
@@ -358,12 +363,9 @@ function subscribeDynamicMapped<TTag extends EnvironmentSubscriptionRpcTag, A>(
                         ) {
                           return handled;
                         }
-                        const retryDelay = Duration.millis(
-                          Math.min(
-                            Duration.toMillis(options.retryExpectedFailureAfter) *
-                              2 ** expectedFailureRetries,
-                            MAX_EXPECTED_FAILURE_RETRY_DELAY_MS,
-                          ),
+                        const retryDelay = subscriptionRetryDelay(
+                          options.retryExpectedFailureAfter,
+                          expectedFailureRetries,
                         );
                         expectedFailureRetries += 1;
                         return handled.pipe(
diff --git a/packages/client-runtime/src/state/threads-sync.test.ts b/packages/client-runtime/src/state/threads-sync.test.ts
index 3c1c153621e28..fe08d6094485d 100644
--- a/packages/client-runtime/src/state/threads-sync.test.ts
+++ b/packages/client-runtime/src/state/threads-sync.test.ts
@@ -13,6 +13,7 @@ import {
   type OrchestrationV2TurnItem,
 } from "@t3tools/contracts";
 import { describe, expect, it } from "@effect/vitest";
+import * as Cause from "effect/Cause";
 import * as DateTime from "effect/DateTime";
 import * as Deferred from "effect/Deferred";
 import * as Effect from "effect/Effect";
@@ -78,7 +79,7 @@ const BASE_PROJECTION: OrchestrationV2ThreadProjection = {
   thread: { ...v2Projection.thread, title: "Cached thread" },
 };
 
-type TestThreadInput = OrchestrationV2ThreadStreamItem | Error;
+type TestThreadInput = OrchestrationV2ThreadStreamItem | Error | Cause.Cause<never>;
 
 function testSession(
   client: WsRpcProtocolClient,
@@ -147,7 +148,11 @@ const makeHarness = Effect.fn("TestEnvironmentThreads.makeHarness")(function* (o
   const streamFrom = (queue: Queue.Queue<TestThreadInput>) =>
     Stream.fromQueue(queue).pipe(
       Stream.mapEffect((input) =>
-        input instanceof Error ? Effect.fail(input) : Effect.succeed(input),
+        Cause.isCause(input)
+          ? Effect.failCause(input)
+          : input instanceof Error
+            ? Effect.fail(input)
+            : Effect.succeed(input),
       ),
     );
   const client = {
@@ -1803,6 +1808,46 @@ describe("EnvironmentThreads", () => {
     }),
   );
 
+  it.effect(
+    "resubscribes after a snapshot decode defect ends the thread subscription (#23041)",
+    () =>
+      Effect.gen(function* () {
+        const harness = yield* makeHarness({ httpSnapshot: { _tag: "unavailable" } });
+        yield* SubscriptionRef.changes(harness.subscriptionCount).pipe(
+          Stream.filter((count) => count >= 1),
+          Stream.runHead,
+        );
+        yield* Queue.offer(
+          harness.inputs,
+          Cause.die(new Error("Could not decode thread snapshot")),
+        );
+        const failed = yield* awaitThreadState(harness.observed, (value) =>
+          Option.isSome(value.error),
+        );
+        expect(failed.status).toBe("empty");
+        expect(Option.getOrThrow(failed.error)).toBe("Could not synchronize the thread.");
+
+        yield* TestClock.adjust("60 seconds");
+        expect(yield* SubscriptionRef.get(harness.subscriptionCount)).toBe(2);
+
+        yield* Queue.offer(
+          harness.inputs,
+          snapshot({
+            ...BASE_PROJECTION,
+            thread: { ...BASE_PROJECTION.thread, title: "Recovered thread" },
+          }),
+        );
+        const recovered = yield* awaitThreadState(
+          harness.observed,
+          (value) =>
+            value.status === "live" &&
+            Option.isSome(value.data) &&
+            value.data.value.thread.title === "Recovered thread",
+        );
+        expect(Option.isNone(recovered.error)).toBe(true);
+      }),
+  );
+
   it.effect("keeps replayed updates synchronizing until the completion marker arrives", () =>
     Effect.gen(function* () {
       const harness = yield* makeHarness({ cached: BASE_PROJECTION, completionMarker: true });
diff --git a/packages/client-runtime/src/state/threads.ts b/packages/client-runtime/src/state/threads.ts
index 693af5329fe1b..a53cca16134b2 100644
--- a/packages/client-runtime/src/state/threads.ts
+++ b/packages/client-runtime/src/state/threads.ts
@@ -32,7 +32,7 @@ import * as ConnectionWakeups from "../connection/wakeups.ts";
 import * as Persistence from "../platform/persistence.ts";
 import { runCachePersistence } from "./cachePersistence.ts";
 import * as ManagedRelay from "../relay/managedRelay.ts";
-import { request, subscribeDynamic } from "../rpc/client.ts";
+import { request, subscribeDynamic, subscriptionRetryDelay } from "../rpc/client.ts";
 import { parseThreadKey, threadKey } from "./entities.ts";
 import { applyOrchestrationV2ProjectionEvent } from "./orchestrationV2Projection.ts";
 import { THREAD_SNAPSHOT_IDLE_TTL_MS } from "./threadRetention.ts";
@@ -55,6 +55,8 @@ import {
   type EnvironmentThreadStatus,
 } from "./threadState.ts";
 
+const THREAD_SUBSCRIPTION_RETRY_DELAY = "250 millis";
+
 function statusWithoutLiveData(
   data: Option.Option<OrchestrationV2ThreadProjection>,
 ): EnvironmentThreadStatus {
@@ -878,7 +880,12 @@ export const makeEnvironmentThreadState = Effect.fn("EnvironmentThreadState.make
   });
 
   yield* markSynchronizing;
-  yield* Effect.forkScoped(
+  let defectRetries = 0;
+  const followThread = (): Effect.Effect<
+    void,
+    never,
+    EnvironmentSupervisor.EnvironmentSupervisor
+  > =>
     subscribeDynamic(
       ORCHESTRATION_V2_WS_METHODS.subscribeThread,
       Effect.fn("EnvironmentThreadState.makeSubscribeInput")(function* (session) {
@@ -982,11 +989,37 @@ export const makeEnvironmentThreadState = Effect.fn("EnvironmentThreadState.make
       {
         onDefect: () => setStreamError("Could not synchronize the thread."),
         onExpectedFailure: (cause) => setStreamError(formatThreadError(cause)),
-        retryExpectedFailureAfter: "250 millis",
+        retryExpectedFailureAfter: THREAD_SUBSCRIPTION_RETRY_DELAY,
         resubscribe: foregroundResubscriptions,
       },
-    ).pipe(Stream.runForEachArray(applyItems)),
-  );
+    ).pipe(
+      Stream.runForEachArray((items) =>
+        applyItems(items).pipe(
+          Effect.andThen(
+            Effect.sync(() => {
+              defectRetries = 0;
+            }),
+          ),
+        ),
+      ),
+      // A defect (an undecodable snapshot, or one applyItems cannot handle) ends the
+      // subscription for good; resubscribe the way reselecting the thread would.
+      Effect.catchCause((cause) => {
+        if (Cause.hasInterrupts(cause)) return Effect.interrupt;
+        const retryDelay = subscriptionRetryDelay(THREAD_SUBSCRIPTION_RETRY_DELAY, defectRetries);
+        defectRetries += 1;
+        return Effect.logWarning("Thread subscription failed; resubscribing.", {
+          cause: Cause.pretty(cause),
+          environmentId,
+          threadId,
+        }).pipe(
+          Effect.andThen(setStreamError("Could not synchronize the thread.")),
+          Effect.andThen(Effect.sleep(retryDelay)),
+          Effect.andThen(Effect.suspend(followThread)),
+        );
+      }),
+    );
+  yield* Effect.forkScoped(followThread());
 
   return state;
 });