diff --git a/litellm/integrations/langfuse/langfuse.py b/litellm/integrations/langfuse/langfuse.py
index 96d711337fb..87988102ff5 100644
--- a/litellm/integrations/langfuse/langfuse.py
+++ b/litellm/integrations/langfuse/langfuse.py
@@ -327,7 +327,14 @@ class LangFuseLogger:
                     verbose_logger.warning("Overwriting Langfuse `%s` from request header", trace_param_key)
                 else:
                     verbose_logger.debug("Found Langfuse `%s` in request header", trace_param_key)
-                metadata[trace_param_key] = proxy_headers.get(metadata_param_key)
+                header_value = proxy_headers.get(metadata_param_key)
+                if trace_param_key == "tags" and isinstance(header_value, str):
+                    # Langfuse tags are a list. Parse the comma-separated header string
+                    # here, so the shared litellm_params metadata never holds a raw
+                    # string: the router's tag handling reuses that dict across retry
+                    # attempts and crashes on a string during retry/fallback (#38927).
+                    header_value = [tag.strip() for tag in header_value.split(",") if tag.strip()]
+                metadata[trace_param_key] = header_value
 
         return metadata
 
diff --git a/tests/test_litellm/integrations/test_langfuse.py b/tests/test_litellm/integrations/test_langfuse.py
index 37860ae8445..96eb3ec4b84 100644
--- a/tests/test_litellm/integrations/test_langfuse.py
+++ b/tests/test_litellm/integrations/test_langfuse.py
@@ -1799,3 +1799,63 @@ def test_langfuse_deployment_environment_fallback_never_raises(monkeypatch, env_
         langfuse_host="https://test.langfuse.com",
     )
     assert logger.langfuse_environment == expected
+
+
+def test_tags_header_is_parsed_into_a_list():
+    """A ``langfuse_tags`` header arrives as one comma-separated string."""
+    metadata: dict = {}
+    litellm_params = {
+        "metadata": metadata,
+        "proxy_server_request": {"headers": {"langfuse_tags": "org:acme, agent:support"}},
+    }
+
+    returned = LangFuseLogger.add_metadata_from_header(litellm_params, metadata)
+
+    assert returned["tags"] == ["org:acme", "agent:support"]
+
+
+def test_tags_header_never_leaves_a_string_in_shared_metadata():
+    """``add_metadata_from_header`` mutates the caller's metadata dict in place, and the
+    router reuses that dict across retry attempts: a raw header string in ``tags``
+    crashes ``Router._update_kwargs_with_deployment`` with ``'str' object has no
+    attribute 'append'`` on any retry/fallback deployment that has
+    ``litellm_credential_name`` (https://github.com/BerriAI/litellm/issues/38927)."""
+    metadata: dict = {}
+    litellm_params = {
+        "metadata": metadata,
+        "proxy_server_request": {"headers": {"langfuse_tags": "org:acme,agent:support"}},
+    }
+
+    returned = LangFuseLogger.add_metadata_from_header(litellm_params, metadata)
+
+    assert returned is metadata
+    assert metadata["tags"] == ["org:acme", "agent:support"]
+    # What the router's "CREDENTIAL NAME AS TAG" branch does on the next attempt:
+    metadata["tags"].append("Credential: my-credential")
+    assert "Credential: my-credential" in metadata["tags"]
+
+
+def test_tags_already_in_metadata_pass_through_unchanged():
+    """Body-supplied tags are already a list; only header ingestion needs parsing."""
+    metadata: dict = {"tags": ["pre:set"]}
+    litellm_params = {
+        "metadata": metadata,
+        "proxy_server_request": {"headers": {}},
+    }
+
+    returned = LangFuseLogger.add_metadata_from_header(litellm_params, metadata)
+
+    assert returned["tags"] == ["pre:set"]
+
+
+def test_other_langfuse_headers_stay_raw_strings():
+    """Only ``tags`` needs list parsing; other steering headers keep their raw value."""
+    metadata: dict = {}
+    litellm_params = {
+        "metadata": metadata,
+        "proxy_server_request": {"headers": {"langfuse_existing_trace_id": "trace-123"}},
+    }
+
+    LangFuseLogger.add_metadata_from_header(litellm_params, metadata)
+
+    assert metadata["existing_trace_id"] == "trace-123"