diff --git a/AGENTS.md b/AGENTS.md
index 6eaae54d..c03c458a 100644
--- a/AGENTS.md
+++ b/AGENTS.md
@@ -40,7 +40,7 @@ When making larger scale changes, check with the developer before committing to
 
 The SDK has three categories of threads:
 
-**FFI callback thread** — The Rust FFI layer calls `LivekitFfiCallback` from a Rust-managed thread (typically a Tokio runtime thread). This single entry point deserializes the `FfiEvent` and calls `FfiClient::pushEvent`, which:
+**FFI callback thread** — The Rust FFI layer calls `ffiEventCallback` from a Rust-managed thread (typically a Tokio runtime thread). This single entry point deserializes the `FfiEvent` and calls `FfiClient::pushEvent`, which:
 1. Completes any pending async `std::promise` matched by `async_id`.
 2. Invokes all registered `FfiClient` listeners (including `Room::onEvent`).
 
diff --git a/src/ffi_client.cpp b/src/ffi_client.cpp
index 1ae3ddf4..0966816f 100644
--- a/src/ffi_client.cpp
+++ b/src/ffi_client.cpp
@@ -17,6 +17,7 @@
 #include "ffi_client.h"
 
 #include <cassert>
+#include <csignal>
 
 #include "data_track.pb.h"
 #include "e2ee.pb.h"
@@ -167,7 +168,7 @@ bool FfiClient::initialize(bool capture_logs) {
     return false;
   }
   initialized_.store(true, std::memory_order_release);
-  livekit_ffi_initialize(&LivekitFfiCallback, capture_logs, LIVEKIT_BUILD_FLAVOR, LIVEKIT_BUILD_VERSION);
+  livekit_ffi_initialize(&ffiEventCallback, capture_logs, LIVEKIT_BUILD_FLAVOR, LIVEKIT_BUILD_VERSION);
   return true;
 }
 
@@ -250,11 +251,19 @@ void FfiClient::pushEvent(const proto::FfiEvent& event) const {
   }
 }
 
-void LivekitFfiCallback(const uint8_t* buf, size_t len) {
+extern "C" LIVEKIT_INTERNAL_API void ffiEventCallback(const uint8_t* buf, size_t len) {
   proto::FfiEvent event;
   event.ParseFromArray(buf,
                        static_cast<int>(len)); // TODO: this fixes for now, what if len exceeds int?
 
+  // We are in a unrecoverable state, terminate the process
+  if (event.has_panic()) {
+    LK_LOG_CRITICAL("FFI Panic: {}", event.panic().message());
+    livekit::detail::getLogger()->flush(); // Flush the logger to ensure all messages are written
+    std::raise(SIGTERM);
+    return;
+  }
+
   FfiClient::instance().pushEvent(event);
 }
 
diff --git a/src/ffi_client.h b/src/ffi_client.h
index 5136e49e..5ea0a89a 100644
--- a/src/ffi_client.h
+++ b/src/ffi_client.h
@@ -20,7 +20,6 @@
 #include <cstdint>
 #include <functional>
 #include <future>
-#include <iostream>
 #include <memory>
 #include <mutex>
 #include <optional>
@@ -59,7 +58,7 @@ extern "C" void livekit_ffi_initialize(FfiCallbackFn cb, bool capture_logs, cons
 
 extern "C" void livekit_ffi_dispose();
 
-extern "C" void LivekitFfiCallback(const uint8_t* buf, size_t len);
+extern "C" LIVEKIT_INTERNAL_API void ffiEventCallback(const uint8_t* buf, size_t len);
 
 // The FfiClient is used to communicate with the FFI interface of the Rust SDK
 // We use the generated protocol messages to facilitate the communication.
@@ -195,7 +194,7 @@ class LIVEKIT_INTERNAL_API FfiClient {
   std::atomic<AsyncId> next_async_id_{1};
 
   void pushEvent(const proto::FfiEvent& event) const;
-  friend void LivekitFfiCallback(const uint8_t* buf, size_t len);
+  friend void ffiEventCallback(const uint8_t* buf, size_t len);
   std::atomic<bool> initialized_{false};
 };
 } // namespace livekit
diff --git a/src/tests/unit/test_ffi_client.cpp b/src/tests/unit/test_ffi_client.cpp
index d240654b..f6982ebb 100644
--- a/src/tests/unit/test_ffi_client.cpp
+++ b/src/tests/unit/test_ffi_client.cpp
@@ -17,7 +17,9 @@
 #include <gtest/gtest.h>
 #include <livekit/livekit.h>
 
+#include <csignal>
 #include <stdexcept>
+#include <string>
 #include <unordered_set>
 
 #include "ffi.pb.h"
@@ -25,6 +27,19 @@
 
 namespace livekit::test {
 
+namespace {
+
+volatile bool g_sigterm_received = false;
+
+// Has to be registered globally per csignal API
+void handleSignal(int signal) {
+  if (signal == SIGTERM) {
+    g_sigterm_received = true;
+  }
+}
+
+} // namespace
+
 class FfiClientTest : public ::testing::Test {
 protected:
   void SetUp() override {
@@ -140,6 +155,36 @@ TEST_F(FfiClientTest, ListenerRegistrationSurvivesShutdownReinitCycle) {
   EXPECT_NO_THROW(FfiClient::instance().removeListener(id));
 }
 
+TEST_F(FfiClientTest, PanicEvent) {
+  // Wire up a signal handler to ensure the panic event raises SIGTERM
+  // (and that users can handle it)
+  g_sigterm_received = false;
+  auto previous_handler = std::signal(SIGTERM, handleSignal);
+  ASSERT_NE(previous_handler, SIG_ERR);
+
+  // Wire up a listener to ensure the panic event doesn't make it through
+  // (matches Python SDK)
+  bool listener_called = false;
+  const auto id =
+      FfiClient::instance().addListener([&listener_called](const proto::FfiEvent&) { listener_called = true; });
+
+  proto::FfiEvent event;
+  event.mutable_panic()->set_message("rust panic");
+  std::string bytes;
+  ASSERT_TRUE(event.SerializeToString(&bytes));
+
+  testing::internal::CaptureStderr();
+  ffiEventCallback(reinterpret_cast<const std::uint8_t*>(bytes.data()), bytes.size());
+  const std::string stderr_output = testing::internal::GetCapturedStderr();
+
+  ASSERT_NE(std::signal(SIGTERM, previous_handler), SIG_ERR);
+  FfiClient::instance().removeListener(id);
+
+  EXPECT_TRUE(g_sigterm_received);
+  EXPECT_FALSE(listener_called);
+  EXPECT_NE(stderr_output.find("FFI Panic: rust panic"), std::string::npos);
+}
+
 // ---------------------------------------------------------------------------
 // These tests ensure FfiClient methods throw in various error conditions
 // ---------------------------------------------------------------------------