diff --git a/packages/core/src/store.ts b/packages/core/src/store.ts
index d1ac81520..f2a4ef96c 100644
--- a/packages/core/src/store.ts
+++ b/packages/core/src/store.ts
@@ -4017,7 +4017,7 @@ export class TaskStore extends EventEmitter<TaskStoreEvents> {
 
   async updateTask(
     id: string,
-    updates: { title?: string; description?: string; priority?: TaskPriority | null; prompt?: string; worktree?: string | null; status?: string | null; dependencies?: string[]; steps?: import("./types.js").TaskStep[]; currentStep?: number; blockedBy?: string | null; overlapBlockedBy?: string | null; assignedAgentId?: string | null; pausedByAgentId?: string | null; pausedReason?: string | null; tokenBudgetSoftAlertedAt?: string | null; tokenBudgetHardAlertedAt?: string | null; tokenBudgetOverride?: import("./types.js").TaskTokenBudgetOverride | null; dispatchStormCount?: number | null; lastDispatchAt?: string | null; assigneeUserId?: string | null; scopeOverride?: boolean | null; scopeOverrideReason?: string | null; nodeId?: string | null; effectiveNodeId?: string | null; effectiveNodeSource?: string | null; checkedOutBy?: string | null; checkedOutAt?: string | null; checkoutNodeId?: string | null; checkoutRunId?: string | null; checkoutLeaseRenewedAt?: string | null; checkoutLeaseEpoch?: number | null; paused?: boolean; baseBranch?: string | null; branch?: string | null; executionStartBranch?: string | null; baseCommitSha?: string | null; size?: "S" | "M" | "L"; reviewLevel?: number; executionMode?: import("./types.js").ExecutionMode | null; mergeRetries?: number; workflowStepRetries?: number; stuckKillCount?: number | null; postReviewFixCount?: number | null; recoveryRetryCount?: number | null; taskDoneRetryCount?: number | null; worktreeSessionRetryCount?: number | null; verificationFailureCount?: number | null; mergeConflictBounceCount?: number | null; mergeAuditBounceCount?: number | null; branchConflictRecoveryCount?: number | null; reviewerContextRetryCount?: number | null; reviewerFallbackRetryCount?: number | null; nextRecoveryAt?: string | null; enabledWorkflowSteps?: string[]; noCommitsExpected?: boolean | null; modelProvider?: string | null; modelId?: string | null; validatorModelProvider?: string | null; validatorModelId?: string | null; planningModelProvider?: string | null; planningModelId?: string | null; thinkingLevel?: string | null; error?: string | null; summary?: string | null; sessionFile?: string | null; firstExecutionAt?: string | null; cumulativeActiveMs?: number | null; executionStartedAt?: string | null; executionCompletedAt?: string | null; review?: import("./types.js").TaskReview | null; reviewState?: import("./types.js").TaskReviewState | null; workflowStepResults?: import("./types.js").WorkflowStepResult[] | null; mergeDetails?: import("./types.js").MergeDetails | null; sourceIssue?: import("./types.js").TaskSourceIssue | null; githubTracking?: import("./types.js").TaskGithubTracking | null; tokenUsage?: import("./types.js").TaskTokenUsage | null; modifiedFiles?: string[] | null; missionId?: string | null; sliceId?: string | null },
+    updates: { title?: string; description?: string; priority?: TaskPriority | null; prompt?: string; worktree?: string | null; status?: string | null; dependencies?: string[]; steps?: import("./types.js").TaskStep[]; currentStep?: number; blockedBy?: string | null; overlapBlockedBy?: string | null; assignedAgentId?: string | null; pausedByAgentId?: string | null; pausedReason?: string | null; tokenBudgetSoftAlertedAt?: string | null; worktrunkFallbackAlertedAt?: string | null; worktrunkFailure?: import("./types.js").Task["worktrunkFailure"] | null; tokenBudgetHardAlertedAt?: string | null; tokenBudgetOverride?: import("./types.js").TaskTokenBudgetOverride | null; dispatchStormCount?: number | null; lastDispatchAt?: string | null; assigneeUserId?: string | null; scopeOverride?: boolean | null; scopeOverrideReason?: string | null; nodeId?: string | null; effectiveNodeId?: string | null; effectiveNodeSource?: string | null; checkedOutBy?: string | null; checkedOutAt?: string | null; checkoutNodeId?: string | null; checkoutRunId?: string | null; checkoutLeaseRenewedAt?: string | null; checkoutLeaseEpoch?: number | null; paused?: boolean; baseBranch?: string | null; branch?: string | null; executionStartBranch?: string | null; baseCommitSha?: string | null; size?: "S" | "M" | "L"; reviewLevel?: number; executionMode?: import("./types.js").ExecutionMode | null; mergeRetries?: number; workflowStepRetries?: number; stuckKillCount?: number | null; postReviewFixCount?: number | null; recoveryRetryCount?: number | null; taskDoneRetryCount?: number | null; worktreeSessionRetryCount?: number | null; verificationFailureCount?: number | null; mergeConflictBounceCount?: number | null; mergeAuditBounceCount?: number | null; branchConflictRecoveryCount?: number | null; reviewerContextRetryCount?: number | null; reviewerFallbackRetryCount?: number | null; nextRecoveryAt?: string | null; enabledWorkflowSteps?: string[]; noCommitsExpected?: boolean | null; modelProvider?: string | null; modelId?: string | null; validatorModelProvider?: string | null; validatorModelId?: string | null; planningModelProvider?: string | null; planningModelId?: string | null; thinkingLevel?: string | null; error?: string | null; summary?: string | null; sessionFile?: string | null; firstExecutionAt?: string | null; cumulativeActiveMs?: number | null; executionStartedAt?: string | null; executionCompletedAt?: string | null; review?: import("./types.js").TaskReview | null; reviewState?: import("./types.js").TaskReviewState | null; workflowStepResults?: import("./types.js").WorkflowStepResult[] | null; mergeDetails?: import("./types.js").MergeDetails | null; sourceIssue?: import("./types.js").TaskSourceIssue | null; githubTracking?: import("./types.js").TaskGithubTracking | null; tokenUsage?: import("./types.js").TaskTokenUsage | null; modifiedFiles?: string[] | null; missionId?: string | null; sliceId?: string | null },
     runContext?: RunMutationContext,
   ): Promise<Task> {
     return this.withTaskLock(id, async () => {
@@ -4160,6 +4160,16 @@ export class TaskStore extends EventEmitter<TaskStoreEvents> {
       } else if (updates.tokenBudgetSoftAlertedAt !== undefined) {
         task.tokenBudgetSoftAlertedAt = updates.tokenBudgetSoftAlertedAt;
       }
+      if (updates.worktrunkFallbackAlertedAt === null) {
+        task.worktrunkFallbackAlertedAt = undefined;
+      } else if (updates.worktrunkFallbackAlertedAt !== undefined) {
+        task.worktrunkFallbackAlertedAt = updates.worktrunkFallbackAlertedAt;
+      }
+      if (updates.worktrunkFailure === null) {
+        task.worktrunkFailure = undefined;
+      } else if (updates.worktrunkFailure !== undefined) {
+        task.worktrunkFailure = updates.worktrunkFailure;
+      }
       if (updates.tokenBudgetHardAlertedAt === null) {
         task.tokenBudgetHardAlertedAt = undefined;
       } else if (updates.tokenBudgetHardAlertedAt !== undefined) {
diff --git a/packages/engine/src/__tests__/worktrunk-failure-handler.test.ts b/packages/engine/src/__tests__/worktrunk-failure-handler.test.ts
new file mode 100644
index 000000000..3a3e382b9
--- /dev/null
+++ b/packages/engine/src/__tests__/worktrunk-failure-handler.test.ts
@@ -0,0 +1,166 @@
+import { describe, expect, it, vi } from "vitest";
+import type { Task } from "@fusion/core";
+import {
+  handleWorktrunkOperationFailure,
+  type WorktrunkOperationFailure,
+  type WorktreeOperationResult,
+} from "../worktrunk-failure-handler.js";
+import {
+  WorktrunkBinaryUnavailableError,
+  WorktrunkInstallDeniedError,
+  WorktrunkInstallFailedError,
+} from "../worktrunk-installer.js";
+
+function makeTask(overrides: Partial<Task> = {}): Task {
+  return {
+    id: "FN-4625",
+    description: "task",
+    column: "in-progress",
+    dependencies: [],
+    steps: [],
+    currentStep: 0,
+    createdAt: new Date().toISOString(),
+    updatedAt: new Date().toISOString(),
+    ...overrides,
+  } as Task;
+}
+
+function makeFailure(cause: Error, stderr = "boom", exitCode: number | null = 1): WorktrunkOperationFailure {
+  return { op: "create", cause, stderr, exitCode };
+}
+
+describe("handleWorktrunkOperationFailure", () => {
+  it("fail mode pauses, persists details, audits, and rethrows", async () => {
+    const pauseTask = vi.fn().mockResolvedValue(undefined);
+    const updateTask = vi.fn().mockResolvedValue(undefined);
+    const git = vi.fn().mockResolvedValue(undefined);
+    const notify = vi.fn();
+    const cause = new Error("create failed");
+
+    await expect(handleWorktrunkOperationFailure({
+      failure: makeFailure(cause),
+      task: makeTask(),
+      settings: { enabled: true, onFailure: "fail" },
+      store: { pauseTask, updateTask } as any,
+      runContext: { runId: "run-1", agentId: "agent-1" },
+      runAudit: { git },
+      notify,
+    })).rejects.toThrow("create failed");
+
+    expect(pauseTask).toHaveBeenCalledWith("FN-4625", true, expect.any(Object));
+    expect(updateTask).toHaveBeenCalledWith(
+      "FN-4625",
+      expect.objectContaining({
+        pausedReason: "worktrunk_operation_failed",
+        worktrunkFailure: expect.objectContaining({ op: "create", stderr: "boom", exitCode: 1 }),
+      }),
+      expect.any(Object),
+    );
+    expect(git).toHaveBeenCalledWith(expect.objectContaining({ type: "worktree:worktrunk-failure" }));
+    expect(notify).not.toHaveBeenCalled();
+  });
+
+  it("fallback-native calls nativeFallback, notifies once, audits, and returns result", async () => {
+    const pauseTask = vi.fn();
+    const updateTask = vi.fn().mockResolvedValue(undefined);
+    const git = vi.fn().mockResolvedValue(undefined);
+    const notify = vi.fn().mockResolvedValue(undefined);
+    const result: WorktreeOperationResult = { path: "/tmp/wt", branch: "fusion/fn-4625" };
+    const nativeFallback = vi.fn().mockResolvedValue(result);
+
+    const disposition = await handleWorktrunkOperationFailure({
+      failure: makeFailure(new Error("create failed")),
+      task: makeTask(),
+      settings: { enabled: true, onFailure: "fallback-native" },
+      store: { pauseTask, updateTask } as any,
+      runAudit: { git },
+      notify,
+      nativeFallback,
+    });
+
+    expect(disposition).toEqual({ kind: "fallback-native", result, alerted: true });
+    expect(updateTask).toHaveBeenCalledWith("FN-4625", expect.objectContaining({ worktrunkFallbackAlertedAt: expect.any(String) }), undefined);
+    expect(notify).toHaveBeenCalledTimes(1);
+    expect(git).toHaveBeenCalledWith(expect.objectContaining({ type: "worktree:worktrunk-fallback-native" }));
+    expect(pauseTask).not.toHaveBeenCalled();
+  });
+
+  it("fallback-native does not re-alert when already alerted", async () => {
+    const updateTask = vi.fn().mockResolvedValue(undefined);
+    const notify = vi.fn();
+    const nativeFallback = vi.fn().mockResolvedValue(undefined);
+
+    const disposition = await handleWorktrunkOperationFailure({
+      failure: makeFailure(new Error("create failed")),
+      task: makeTask({ worktrunkFallbackAlertedAt: "2026-05-15T00:00:00.000Z" }),
+      settings: { enabled: true, onFailure: "fallback-native" },
+      store: { pauseTask: vi.fn(), updateTask } as any,
+      notify,
+      nativeFallback,
+    });
+
+    expect(disposition).toEqual({ kind: "fallback-native", result: undefined, alerted: false });
+    expect(notify).not.toHaveBeenCalled();
+    expect(updateTask).not.toHaveBeenCalledWith("FN-4625", expect.objectContaining({ worktrunkFallbackAlertedAt: expect.any(String) }), undefined);
+  });
+
+  it("fallback-native without nativeFallback degrades to fail-hard", async () => {
+    const pauseTask = vi.fn().mockResolvedValue(undefined);
+    const updateTask = vi.fn().mockResolvedValue(undefined);
+    const cause = new Error("create failed");
+
+    await expect(handleWorktrunkOperationFailure({
+      failure: makeFailure(cause),
+      task: makeTask(),
+      settings: { enabled: true, onFailure: "fallback-native" },
+      store: { pauseTask, updateTask } as any,
+      notify: vi.fn(),
+    })).rejects.toThrow("create failed");
+
+    expect(pauseTask).toHaveBeenCalledTimes(1);
+    expect(updateTask).toHaveBeenCalledWith("FN-4625", expect.objectContaining({ pausedReason: "worktrunk_operation_failed" }), undefined);
+  });
+
+  it("native fallback errors are rethrown", async () => {
+    const fallbackError = new Error("native failed");
+    await expect(handleWorktrunkOperationFailure({
+      failure: makeFailure(new Error("create failed")),
+      task: makeTask(),
+      settings: { enabled: true, onFailure: "fallback-native" },
+      store: { pauseTask: vi.fn(), updateTask: vi.fn().mockResolvedValue(undefined) } as any,
+      notify: vi.fn(),
+      nativeFallback: vi.fn().mockRejectedValue(fallbackError),
+    })).rejects.toThrow("native failed");
+  });
+
+  it("truncates stderr preview to 4KB in run-audit metadata", async () => {
+    const git = vi.fn().mockResolvedValue(undefined);
+    const longStderr = "x".repeat(5000);
+    await expect(handleWorktrunkOperationFailure({
+      failure: makeFailure(new Error("create failed"), longStderr),
+      task: makeTask(),
+      settings: { enabled: true, onFailure: "fail" },
+      store: { pauseTask: vi.fn().mockResolvedValue(undefined), updateTask: vi.fn().mockResolvedValue(undefined) } as any,
+      runAudit: { git },
+      notify: vi.fn(),
+    })).rejects.toThrow();
+
+    const call = git.mock.calls.find((entry) => entry[0]?.type === "worktree:worktrunk-failure");
+    expect(call?.[0]?.metadata?.stderrPreview.length).toBe(4097);
+    expect(call?.[0]?.metadata?.stderrPreview.endsWith("…")).toBe(true);
+  });
+
+  it.each([
+    new WorktrunkBinaryUnavailableError("missing"),
+    new WorktrunkInstallFailedError("install failed", { stage: "release" }),
+    new WorktrunkInstallDeniedError("denied"),
+  ])("handles installer error class %s in fail-hard mode", async (cause) => {
+    await expect(handleWorktrunkOperationFailure({
+      failure: makeFailure(cause, cause.message),
+      task: makeTask(),
+      settings: { enabled: true, onFailure: "fail" },
+      store: { pauseTask: vi.fn().mockResolvedValue(undefined), updateTask: vi.fn().mockResolvedValue(undefined) } as any,
+      notify: vi.fn(),
+    })).rejects.toBe(cause);
+  });
+});
diff --git a/packages/engine/src/index.ts b/packages/engine/src/index.ts
index ff2b90c0f..314a04858 100644
--- a/packages/engine/src/index.ts
+++ b/packages/engine/src/index.ts
@@ -128,6 +128,15 @@ export {
   WORKTRUNK_DOWNLOAD_MAX_BYTES,
   WORKTRUNK_CARGO_TIMEOUT_MS,
 } from "./worktrunk-installer.js";
+export {
+  handleWorktrunkOperationFailure,
+  truncateWorktrunkStderr,
+  type WorktreeOperationResult,
+  type WorktrunkDisposition,
+  type WorktrunkFailureNotification,
+  type WorktrunkOpName,
+  type WorktrunkOperationFailure,
+} from "./worktrunk-failure-handler.js";
 export { isUsageLimitError, UsageLimitPauser } from "./usage-limit-detector.js";
 export { withRateLimitRetry } from "./rate-limit-retry.js";
 export { ResearchOrchestrator, type ResearchOrchestratorOptions, type ResearchOrchestratorStatus, type ResearchOrchestratorStartOptions } from "./research-orchestrator.js";
diff --git a/packages/engine/src/run-audit.ts b/packages/engine/src/run-audit.ts
index d662716cf..943bbf6cc 100644
--- a/packages/engine/src/run-audit.ts
+++ b/packages/engine/src/run-audit.ts
@@ -71,6 +71,8 @@ export type GitMutationType =
   | "worktree:worktrunk-sync"
   | "worktree:worktrunk-prune"
   | "worktree:worktrunk-fallback"
+  | "worktree:worktrunk-failure"
+  | "worktree:worktrunk-fallback-native"
   | "branch:create"
   | "branch:delete"
   | "branch:checkout"