diff --git a/litellm/proxy/management_endpoints/team_endpoints.py b/litellm/proxy/management_endpoints/team_endpoints.py
index 2c31b59b795..63db2d72fe4 100644
--- a/litellm/proxy/management_endpoints/team_endpoints.py
+++ b/litellm/proxy/management_endpoints/team_endpoints.py
@@ -1781,11 +1781,11 @@ async def _validate_and_populate_member_user_info(
     Logic:
     1. If both user_email and user_id are provided, verify they belong to the same user (use user_email as source of truth)
     2. If only user_email is provided, populate user_id from DB
-    3. If only user_id is provided, populate user_email from DB
-    4. If only user_id is provided and doesn't exist, throw error
+    3. If only user_id is provided, populate user_email from DB (if user exists)
+    4. If only user_id is provided and doesn't exist, allow it to pass with user_email as None (will be upserted later)
     5. If user_email and user_id mismatch, throw error
     
-    Returns a Member with both user_email and user_id populated.
+    Returns a Member with user_email and user_id populated (user_email may be None if only user_id provided and user doesn't exist).
     """
     if member.user_email is None and member.user_id is None:
         raise HTTPException(
@@ -1861,19 +1861,16 @@ async def _validate_and_populate_member_user_info(
         member.user_id = user_by_email.user_id
         return member
     
-    # Case 3: Only user_id provided - populate user_email from DB
+    # Case 3: Only user_id provided - populate user_email from DB if user exists
     if member.user_id is not None and member.user_email is None:
         user_by_id = await prisma_client.db.litellm_usertable.find_unique(
             where={"user_id": member.user_id}
         )
         
         if user_by_id is None:
-            raise HTTPException(
-                status_code=404,
-                detail={
-                    "error": f"User with user_id '{member.user_id}' not found in database"
-                },
-            )
+            # User doesn't exist yet - allow it to pass with user_email as None
+            # Will be upserted later with just user_id and null email
+            return member
         
         # Populate user_email
         member.user_email = user_by_id.user_email
diff --git a/tests/test_litellm/proxy/management_endpoints/test_team_endpoints.py b/tests/test_litellm/proxy/management_endpoints/test_team_endpoints.py
index a5864576906..467ee3661d1 100644
--- a/tests/test_litellm/proxy/management_endpoints/test_team_endpoints.py
+++ b/tests/test_litellm/proxy/management_endpoints/test_team_endpoints.py
@@ -5559,7 +5559,8 @@ async def test_validate_and_populate_member_user_info_only_email_provided():
 async def test_validate_and_populate_member_user_info_only_user_id_not_found():
     """
     Test _validate_and_populate_member_user_info when only user_id is provided
-    but the user doesn't exist in the database. Should raise HTTPException.
+    but the user doesn't exist in the database. Should allow it to pass with
+    user_email as None (will be upserted later).
     """
     # Create member with only user_id
     member = Member(user_email=None, user_id="nonexistent-user", role="user")
@@ -5570,17 +5571,16 @@ async def test_validate_and_populate_member_user_info_only_user_id_not_found():
     # Mock find_unique to return None (user not found)
     mock_prisma_client.db.litellm_usertable.find_unique = AsyncMock(return_value=None)
     
-    # Call the function and expect HTTPException
-    with pytest.raises(HTTPException) as exc_info:
-        await _validate_and_populate_member_user_info(
-            member=member,
-            prisma_client=mock_prisma_client,
-        )
+    # Call the function - should NOT raise an exception
+    result = await _validate_and_populate_member_user_info(
+        member=member,
+        prisma_client=mock_prisma_client,
+    )
     
-    # Verify the exception details
-    assert exc_info.value.status_code == 404
-    assert "not found" in exc_info.value.detail["error"].lower()
-    assert "nonexistent-user" in exc_info.value.detail["error"]
+    # Verify the result - should return member with user_id set and user_email as None
+    assert result.user_id == "nonexistent-user"
+    assert result.user_email is None
+    assert result.role == "user"
     
     # Verify find_unique was called with correct parameters
     mock_prisma_client.db.litellm_usertable.find_unique.assert_called_once_with(