diff --git a/litellm/proxy/guardrails/guardrail_hooks/alice_wonderfence/alice_wonderfence.py b/litellm/proxy/guardrails/guardrail_hooks/alice_wonderfence/alice_wonderfence.py
index 38dcb91c077..8d6e328d449 100644
--- a/litellm/proxy/guardrails/guardrail_hooks/alice_wonderfence/alice_wonderfence.py
+++ b/litellm/proxy/guardrails/guardrail_hooks/alice_wonderfence/alice_wonderfence.py
@@ -62,6 +62,22 @@ if TYPE_CHECKING:
 logger = verbose_proxy_logger.getChild("alice_wonderfence")
 
 
+def _is_wonderfence_client_error(exc: Exception) -> bool:
+    """True for a persistent WonderFence client/config error.
+
+    The V2 SDK raises ``Exception("<status>:<body>")`` on an HTTP error, so an
+    invalid or revoked api_key / app_id surfaces as a 4xx. Such failures are
+    persistent, not a transient outage, so they must never fail open: doing so
+    would silently disable scanning for every affected request until the
+    credential is fixed. 429 and 5xx stay in the fail-open path, matching the
+    SDK's own retry classification (``utils.py``: 4xx except 429 is not retried).
+    """
+    head = str(exc).split(":", 1)[0].strip()
+    if not head.isdigit():
+        return False
+    return 400 <= int(head) < 500 and int(head) != 429
+
+
 class WonderFenceGuardrail(CustomGuardrail):
     """Alice WonderFence guardrail handler using the V2 SDK client.
 
@@ -282,7 +298,7 @@ class WonderFenceGuardrail(CustomGuardrail):
                 },
             ) from e
         except Exception as e:
-            if self.fail_open:
+            if self.fail_open and not _is_wonderfence_client_error(e):
                 # Log only — do not add to the applied-guardrails header. The
                 # header lists configured guardrail_names verbatim; consumers
                 # rely on its membership to decide whether scanning ran. A
@@ -298,9 +314,12 @@ class WonderFenceGuardrail(CustomGuardrail):
                     exc_info=e,
                 )
                 return inputs
+            # Either fail-open is off, or this is a persistent client/config
+            # error (4xx) that must never fail open — see
+            # _is_wonderfence_client_error.
             logger.error(
-                "Alice WonderFence unreachable; fail-open disabled, blocking "
-                "request. guardrail_name=%s input_type=%s error=%s",
+                "Alice WonderFence request failed and was not allowed through "
+                "(fail-open off or persistent client error). guardrail_name=%s input_type=%s error=%s",
                 self.guardrail_name,
                 input_type,
                 str(e),
diff --git a/tests/test_litellm/proxy/guardrails/guardrail_hooks/alice_wonderfence/test_apply_guardrail_failmodes.py b/tests/test_litellm/proxy/guardrails/guardrail_hooks/alice_wonderfence/test_apply_guardrail_failmodes.py
index 8238e55f6c1..7863b029626 100644
--- a/tests/test_litellm/proxy/guardrails/guardrail_hooks/alice_wonderfence/test_apply_guardrail_failmodes.py
+++ b/tests/test_litellm/proxy/guardrails/guardrail_hooks/alice_wonderfence/test_apply_guardrail_failmodes.py
@@ -97,6 +97,43 @@ async def test_apply_guardrail_fail_closed_returns_500(guardrail_and_client, mak
     assert "Error in Alice WonderFence Guardrail" in exc.value.detail["error"]
 
 
+@pytest.mark.asyncio
+async def test_client_error_4xx_not_fail_open(make_guardrail, make_request_data):
+    """A persistent client/config error (the SDK raises Exception("<4xx>:...")
+    for an invalid/revoked api_key or app_id) must NOT fail open, even with
+    fail_open=True: it would silently disable scanning for every affected
+    request. It surfaces as HTTP 500 and the original inputs are not returned."""
+    guardrail, client = make_guardrail(fail_open=True)
+    guardrail._client_cache["default-api-key"] = client
+    client.evaluate_prompt.side_effect = Exception('401:{"detail":"invalid api key"}')
+
+    with pytest.raises(HTTPException) as exc:
+        await guardrail.apply_guardrail(
+            inputs={"texts": ["original"]},
+            request_data=make_request_data(),
+            input_type="request",
+        )
+    assert exc.value.status_code == 500
+    client.evaluate_prompt.assert_awaited()
+
+
+@pytest.mark.asyncio
+async def test_transient_5xx_and_429_still_fail_open(make_guardrail, make_request_data):
+    """5xx and 429 are transient (matching the SDK's retry classification), so
+    fail_open still lets the request through unscanned."""
+    for status in ("503", "429"):
+        guardrail, client = make_guardrail(fail_open=True)
+        guardrail._client_cache["default-api-key"] = client
+        client.evaluate_prompt.side_effect = Exception(f"{status}:upstream unavailable")
+
+        out = await guardrail.apply_guardrail(
+            inputs={"texts": ["original"]},
+            request_data=make_request_data(),
+            input_type="request",
+        )
+        assert out["texts"] == ["original"], f"status {status} should fail open"
+
+
 @pytest.mark.asyncio
 async def test_malformed_override_does_not_fail_open(make_guardrail, make_request_data):
     """A non-string request-metadata app_id override must not slip through under