diff --git a/litellm/litellm_core_utils/streaming_handler.py b/litellm/litellm_core_utils/streaming_handler.py
index 6927ba998f9..83c6677eb3c 100644
--- a/litellm/litellm_core_utils/streaming_handler.py
+++ b/litellm/litellm_core_utils/streaming_handler.py
@@ -2402,9 +2402,12 @@ class CustomStreamWrapper:
         (https://github.com/BerriAI/litellm/issues/13786).
 
         Re-raise the failure the stream died of, without logging it a second time.
+        The traceback is dropped first: raising one retained exception object over
+        and over would otherwise chain a frame per read onto it, holding every
+        consumer frame alive and growing the traceback without bound.
         """
         if self._terminal_failure is not None:
-            raise self._terminal_failure
+            raise self._terminal_failure.with_traceback(None)
 
     def _raise_terminal_failure(self, exc: Exception) -> "NoReturn":
         self._terminal_failure = exc
diff --git a/tests/test_litellm/litellm_core_utils/test_streaming_handler.py b/tests/test_litellm/litellm_core_utils/test_streaming_handler.py
index 7ba8b762f26..611edf8a4e1 100644
--- a/tests/test_litellm/litellm_core_utils/test_streaming_handler.py
+++ b/tests/test_litellm/litellm_core_utils/test_streaming_handler.py
@@ -2270,6 +2270,43 @@ def test_sync_stream_stays_failed_after_raising_and_logs_failure_once():
     assert len(failures) == 1
 
 
+def test_failed_stream_traceback_does_not_grow_per_read():
+    """A consumer that keeps reading past the failure gets the same size traceback every time."""
+
+    def looping_stream():
+        while True:
+            yield _make_chunk("the model is stuck on this")
+
+    logging_obj = MagicMock()
+    logging_obj.completion_start_time = None
+    logging_obj.failure_handler = lambda exception, traceback_exception: None
+
+    wrapper = CustomStreamWrapper(
+        completion_stream=looping_stream(),
+        model="test-model",
+        logging_obj=logging_obj,
+        custom_llm_provider="openai",
+    )
+
+    def _traceback_length(error: BaseException) -> int:
+        length = 0
+        tb = error.__traceback__
+        while tb is not None:
+            length += 1
+            tb = tb.tb_next
+        return length
+
+    lengths = []
+    for _ in range(litellm.REPEATED_STREAMING_CHUNK_LIMIT + 20):
+        try:
+            next(wrapper)
+        except Exception as e:
+            lengths.append(_traceback_length(e))
+
+    assert len(lengths) == 20
+    assert len(set(lengths[1:])) == 1
+
+
 def test_usage_chunk_after_finish_reason_updates_hidden_params(logging_obj):
     """
     Test that provider-reported usage from a post-finish_reason chunk