diff --git a/litellm/litellm_core_utils/litellm_logging.py b/litellm/litellm_core_utils/litellm_logging.py
index a6391a2ae27..833e2be225b 100644
--- a/litellm/litellm_core_utils/litellm_logging.py
+++ b/litellm/litellm_core_utils/litellm_logging.py
@@ -2265,13 +2265,9 @@ class Logging(LiteLLMLoggingBaseClass):
         self,
         event_type: Literal["async_success", "sync_success", "async_failure", "sync_failure"],
     ) -> None:
-        if self.stream is not None and self.stream is True:
-            """
-            Ignore check on stream, as there can be multiple chunks
-            """
+        if self.stream is True and event_type in ("async_success", "sync_success"):
             return
         self.model_call_details[f"has_logged_{event_type}"] = True
-        return
 
     def should_run_callback(self, callback: litellm.CALLBACK_TYPES, litellm_params: dict, event_hook: str) -> bool:
         if litellm.global_disable_no_log_param:
diff --git a/tests/e2e/coverage_registry/logging.yaml b/tests/e2e/coverage_registry/logging.yaml
index 7c83e4d3aea..4db55a5eb9b 100644
--- a/tests/e2e/coverage_registry/logging.yaml
+++ b/tests/e2e/coverage_registry/logging.yaml
@@ -5,6 +5,7 @@
 - {id: logging.datadog.success.exports_metric, module: logging, tier: P0, event: success, assertions: [exports_metric], exercised_on: [chat_completions, messages, responses, embeddings], source: "integrations/datadog/datadog.py", rationale: "Powers dashboards/alerts; cardinality regressions common"}
 - {id: logging.datadog.stream.exports_metric, module: logging, tier: P0, event: stream, assertions: [exports_metric], exercised_on: [chat_completions, messages, responses], source: "integrations/datadog/datadog.py", rationale: "Streaming aggregates usage after the last chunk; delivery and cost must survive that path"}
 - {id: logging.datadog.failure.exports_metric, module: logging, tier: P0, event: failure, assertions: [exports_metric], exercised_on: [chat_completions], source: "integrations/datadog/datadog.py", rationale: "Failure metrics for alerting/SLO"}
+- {id: logging.datadog.stream_failure.exports_metric, module: logging, tier: P0, event: failure, assertions: [exports_metric], exercised_on: [chat_completions], source: "litellm_core_utils/litellm_logging.py", rationale: "Streamed failures re-enter the failure handler once per retry on the same logging object; dedup must hold on the stream path too (#42988)"}
 - {id: logging.prometheus.success.exports_metric, module: logging, tier: P0, event: success, assertions: [exports_metric], exercised_on: [chat_completions, messages, embeddings], source: "integrations/prometheus.py", rationale: "Standard OSS metrics; per-key cardinality (existing e2e)"}
 - {id: logging.prometheus.success.records_queue_time, module: logging, tier: P1, event: success, assertions: [records_queue_time], exercised_on: [chat_completions], source: "integrations/prometheus.py / LIT-2034", fail_before_fix: proven, rationale: "Queue time feeds saturation alerting; the family stayed registered while no observation was ever recorded, so presence alone is not the contract"}
 - {id: logging.otel.success.exports_metric, module: logging, tier: P0, event: success, assertions: [exports_metric], exercised_on: [chat_completions, messages, responses, embeddings], source: "integrations/otel/logger.py", rationale: "OTEL spans on every call path"}
diff --git a/tests/e2e/logging/test_datadog_log_e2e.py b/tests/e2e/logging/test_datadog_log_e2e.py
index a4821ed058b..7790b8b3243 100644
--- a/tests/e2e/logging/test_datadog_log_e2e.py
+++ b/tests/e2e/logging/test_datadog_log_e2e.py
@@ -398,3 +398,50 @@ class TestDataDogFailureDelivery:
         assert payload.error_str is not None and "AnthropicException" in payload.error_str, (
             f"the event must carry the provider error, got error_str={payload.error_str!r}"
         )
+
+    @pytest.mark.covers("logging.datadog.stream_failure.exports_metric", exercised_on=["chat_completions"])
+    def test_failed_chat_completions_stream_emits_one_error_event(
+        self, client: LoggingClient, dd_logs: DdLogsReader, resources: ResourceManager
+    ) -> None:
+        """A STREAMED /chat/completions call that fails at the provider after
+        its configured retries must still reach the DataDog logs intake as
+        exactly one error-grade event: the retry loop invokes the failure
+        handler once per attempt on the same logging object, so a dedup that
+        only works for non-streaming calls multiplies every retried stream
+        failure by its attempt count (issue #42988)."""
+        _assert_datadog_configured(client)
+
+        model_name = f"dd-err-stream-{unique_marker()}"
+        model_id = client.create_model(
+            model_name,
+            LiteLLMParamsBody(model="anthropic/claude-haiku-4-5", api_key=INVALID_UPSTREAM_API_KEY, num_retries=2),
+        )
+        resources.defer(lambda: client.delete_model(model_id))
+        key = client.key_with_alias(f"dd-err-stream-key-{unique_marker()}", models=[model_name])
+        resources.defer(lambda: client.delete_key(key))
+
+        deadline = time.monotonic() + client.proxy.poll_timeout
+        while True:
+            outcome = client.chat_raw(key, model_name, "trigger an upstream auth failure", stream=True, max_tokens=16)
+            assert not outcome.ok, "the call must fail; the deployment's upstream key is invalid"
+            assert outcome.status_code != -1, (
+                "network failure between the test and the proxy while provoking the provider "
+                "failure; retrying now could double-log the failure payload and falsely trip "
+                f"the exactly-one assertion - fix the rig connectivity first: {outcome.body[:200]}"
+            )
+            if "AnthropicException" in outcome.body or time.monotonic() >= deadline:
+                break
+            time.sleep(client.proxy.poll_interval)
+        assert "AnthropicException" in outcome.body, (
+            "never saw the upstream provider failure before the deadline; the key may still be "
+            f"propagating - last outcome {outcome.status_code}: {outcome.body[:200]}"
+        )
+        assert outcome.status_code == 401, (
+            f"an upstream auth failure must map to 401, got {outcome.status_code}: {outcome.body[:200]}"
+        )
+
+        events = dd_logs.poll_events_for_query(f"@model_group:{model_name}")
+        payload = _assert_exactly_one_failure_event(events, model_group=model_name)
+        assert payload.error_str is not None and "AnthropicException" in payload.error_str, (
+            f"the event must carry the provider error, got error_str={payload.error_str!r}"
+        )
diff --git a/tests/e2e/models.py b/tests/e2e/models.py
index c96f4b0bef1..84dc126acb4 100644
--- a/tests/e2e/models.py
+++ b/tests/e2e/models.py
@@ -1248,6 +1248,7 @@ class LiteLLMParamsBody(BaseModel):
     tpm: int | None = None
     weight: int | None = None
     order: int | None = None
+    num_retries: int | None = None
 
 
 ModelMode = Literal["batch", "realtime", "image_generation"]
diff --git a/tests/test_litellm/litellm_core_utils/test_litellm_logging.py b/tests/test_litellm/litellm_core_utils/test_litellm_logging.py
index 23c01841b1b..c8a3f715837 100644
--- a/tests/test_litellm/litellm_core_utils/test_litellm_logging.py
+++ b/tests/test_litellm/litellm_core_utils/test_litellm_logging.py
@@ -6,6 +6,7 @@ import logging
 import os
 import sys
 import time
+import traceback
 from collections.abc import Callable, Iterator, Mapping
 from types import MappingProxyType
 from typing import Final, Literal
@@ -1616,6 +1617,57 @@ def test_logging_prevent_double_logging(logging_obj):
     assert logging_obj.should_run_logging(event_type="async_failure") == True
 
 
+def test_has_run_logging_stream_marks_failure_events(logging_obj):
+    """
+    On streaming requests the stream early-return must only skip the success
+    dedup markers (multiple chunks each log success); failure events must still
+    be marked so a retried stream failure is logged once.
+    """
+    logging_obj.stream = True
+    logging_obj.has_run_logging(event_type="async_failure")
+    logging_obj.has_run_logging(event_type="sync_failure")
+    assert logging_obj.should_run_logging(event_type="async_failure") == False
+    assert logging_obj.should_run_logging(event_type="sync_failure") == False
+    assert logging_obj.should_run_logging(event_type="async_success") == True
+    assert logging_obj.should_run_logging(event_type="sync_success") == True
+
+
+@pytest.mark.asyncio
+async def test_async_failure_handler_stream_runs_failure_callbacks_once():
+    """
+    A streamed call that retries re-enters async_failure_handler once per
+    attempt on the same logging object; only the first may run the failure
+    callbacks (issue #42988).
+    """
+
+    class CountingLogger(CustomLogger):
+        def __init__(self):
+            self.count = 0
+
+        async def async_log_failure_event(self, kwargs, response_obj, start_time, end_time):
+            self.count += 1
+
+    spy = CountingLogger()
+    logging_obj = LitellmLogging(
+        model="anthropic/claude-haiku-4-5",
+        messages=[{"role": "user", "content": "hi"}],
+        stream=True,
+        call_type="acompletion",
+        start_time=time.time(),
+        litellm_call_id="stream-failure-dedup",
+        function_id="stream-failure-dedup",
+        dynamic_async_failure_callbacks=[spy],
+        kwargs={"litellm_params": {"metadata": {}}},
+    )
+    try:
+        raise ValueError("upstream auth failure")
+    except ValueError as e:
+        exception, tb = e, traceback.format_exc()
+    for _ in range(3):
+        await logging_obj.async_failure_handler(exception, tb)
+    assert spy.count == 1
+
+
 @pytest.mark.asyncio
 async def test_datadog_logger_not_shadowed_by_llm_obs(monkeypatch):
     """Ensure DataDog logger instantiates even when LLM Obs logger already cached."""