diff --git a/litellm/litellm_core_utils/prompt_templates/factory.py b/litellm/litellm_core_utils/prompt_templates/factory.py
index 76b3f47db18..29d81965b5f 100644
--- a/litellm/litellm_core_utils/prompt_templates/factory.py
+++ b/litellm/litellm_core_utils/prompt_templates/factory.py
@@ -5371,6 +5371,8 @@ def _parse_tool_call_arguments(raw: Any, tool_name: str | None, context: str) ->
         return raw
     if not isinstance(raw, str):
         return {}
+    if raw == "redacted-by-litellm":
+        return {}
     from litellm.litellm_core_utils.prompt_templates.common_utils import (
         parse_tool_call_arguments,
     )
diff --git a/tests/test_litellm/litellm_core_utils/prompt_templates/test_litellm_core_utils_prompt_templates_factory.py b/tests/test_litellm/litellm_core_utils/prompt_templates/test_litellm_core_utils_prompt_templates_factory.py
index 8edc6a91cbf..f5a5463d918 100644
--- a/tests/test_litellm/litellm_core_utils/prompt_templates/test_litellm_core_utils_prompt_templates_factory.py
+++ b/tests/test_litellm/litellm_core_utils/prompt_templates/test_litellm_core_utils_prompt_templates_factory.py
@@ -1,5 +1,6 @@
 import base64
 import json
+import logging
 import os
 from unittest.mock import MagicMock, patch
 
@@ -3200,6 +3201,66 @@ def test_get_tool_calls_from_response_include_all_choices_reads_every_choice():
     assert names == ["tool_alpha", "tool_beta"]
 
 
+def test_get_tool_calls_from_response_silences_redacted_arguments(caplog):
+    from litellm.litellm_core_utils.prompt_templates.factory import (
+        get_tool_calls_from_response,
+    )
+
+    response = {
+        "choices": [
+            {
+                "message": {
+                    "tool_calls": [
+                        {
+                            "id": "call_1",
+                            "function": {
+                                "name": "Read",
+                                "arguments": "redacted-by-litellm",
+                            },
+                        }
+                    ]
+                }
+            }
+        ]
+    }
+
+    with caplog.at_level(logging.WARNING, logger="LiteLLM"):
+        tool_calls = get_tool_calls_from_response(response)
+
+    assert tool_calls == [{"id": "call_1", "name": "Read", "arguments": {}}]
+    assert "Failed to parse tool call arguments" not in caplog.text
+
+
+def test_get_tool_calls_from_response_warns_for_malformed_arguments(caplog):
+    from litellm.litellm_core_utils.prompt_templates.factory import (
+        get_tool_calls_from_response,
+    )
+
+    response = {
+        "choices": [
+            {
+                "message": {
+                    "tool_calls": [
+                        {
+                            "id": "call_1",
+                            "function": {
+                                "name": "Read",
+                                "arguments": "not-json",
+                            },
+                        }
+                    ]
+                }
+            }
+        ]
+    }
+
+    with caplog.at_level(logging.WARNING, logger="LiteLLM"):
+        tool_calls = get_tool_calls_from_response(response)
+
+    assert tool_calls == [{"id": "call_1", "name": "Read", "arguments": {}}]
+    assert "Failed to parse tool call arguments" in caplog.text
+
+
 def test_group_tool_exchanges_pairs_assistant_with_its_tool_rows():
     from litellm.litellm_core_utils.prompt_templates.factory import group_tool_exchanges