diff --git a/src/server.mjs b/src/server.mjs
index 5cac260..77b174b 100644
--- a/src/server.mjs
+++ b/src/server.mjs
@@ -521,6 +521,13 @@ function isClientClosedError(error) {
   return error instanceof ClientClosedError || error?.name === 'ClientClosedError' || error?.code === 'client_closed';
 }
 
+const QUEUE_BACKPRESSURE_CODES = new Set(['RUNTIME_QUEUE_TIMEOUT', 'RUNTIME_QUEUE_FULL']);
+
+/** Queue saturation (local, or relayed by a federated node) is load, not target failure. */
+function isQueueBackpressureError(error) {
+  return QUEUE_BACKPRESSURE_CODES.has(error?.code) || QUEUE_BACKPRESSURE_CODES.has(error?.upstreamCode);
+}
+
 function clientClosedStatus(error) {
   return isClientClosedError(error) ? 499 : 0;
 }
@@ -554,8 +561,11 @@ export function shouldFailoverModelRequest(error, res = null) {
 async function upstreamStatusError(upstream) {
   const text = await readErrorDiagnostic(upstream);
   let message = text;
+  let upstreamCode = null;
   try {
-    message = JSON.parse(text)?.error?.message ?? text;
+    const parsed = JSON.parse(text)?.error;
+    message = parsed?.message ?? text;
+    upstreamCode = typeof parsed?.code === 'string' ? parsed.code : null;
   } catch {
     // Keep the raw upstream response as the diagnostic message.
   }
@@ -568,10 +578,12 @@ async function upstreamStatusError(upstream) {
     if (Number.isFinite(retryAt)) retryAfterSeconds = Math.max(1, Math.ceil((retryAt - Date.now()) / 1000));
   }
   return Object.assign(new Error(message || `upstream status ${upstream.status}`), {
-    code: 'upstream_error',
+    // Relay queue saturation by its own code so every federated hop sees backpressure.
+    code: QUEUE_BACKPRESSURE_CODES.has(upstreamCode) ? upstreamCode : 'upstream_error',
     statusCode: upstream.status,
     upstreamGenerationId: upstream.headers.get('x-generation-id'),
     upstreamHeadersReceived: true,
+    ...(upstreamCode == null ? {} : { upstreamCode }),
     ...(retryAfterSeconds == null ? {} : { retryAfterSeconds })
   });
 }
@@ -2860,7 +2872,8 @@ export function createLloomServer(
           releaseTargetProbe(resolved);
           throw error;
         }
-        if (shouldFailoverModelRequest(error, res)) noteTargetFailure(resolved, error);
+        if (isQueueBackpressureError(error)) releaseTargetProbe(resolved);
+        else if (shouldFailoverModelRequest(error, res)) noteTargetFailure(resolved, error);
         else if (!isClientClosedError(error)) noteTargetSuccess(resolved);
         else releaseTargetProbe(resolved);
         if (!hasNext || !shouldFailoverModelRequest(error, res)) throw error;
diff --git a/test/model-failover.test.mjs b/test/model-failover.test.mjs
index 4f3b06b..95f4689 100644
--- a/test/model-failover.test.mjs
+++ b/test/model-failover.test.mjs
@@ -40,6 +40,8 @@ function embedding(model, value) {
 async function createFixture({
   primaryStatus = 503,
   primaryHeaders = {},
+  primaryError = null,
+  slotError = null,
   cloudStatus = 200,
   runtimeStatus = 'running',
   preserveResident = false,
@@ -54,7 +56,7 @@ async function createFixture({
     const body =
       primaryStatus === 200
         ? completion('local-upstream', 'local')
-        : JSON.stringify({ error: { message: `primary status ${primaryStatus}` } });
+        : JSON.stringify({ error: primaryError ?? { message: `primary status ${primaryStatus}` } });
     res.writeHead(primaryStatus, { 'content-type': 'application/json', ...primaryHeaders });
     res.end(body);
   });
@@ -126,6 +128,15 @@ async function createFixture({
         contextWindow: 8192,
         maxOutputTokens: 1024
       },
+      {
+        id: 'primary-direct',
+        kind: 'chat',
+        backend: 'primary',
+        runtime: 'primary-runtime',
+        upstreamModel: 'local-upstream',
+        contextWindow: 8192,
+        maxOutputTokens: 1024
+      },
       {
         id: 'cloud-chat',
         kind: 'chat',
@@ -148,6 +159,7 @@ async function createFixture({
     },
     withSlot: async (runtimeId, fn) => {
       if (runtimeId) operations.push(`slot:${runtimeId}`);
+      if (slotError && runtimeId === 'primary-runtime') throw slotError();
       return fn();
     },
     noteRequestOutcome() {},
@@ -621,6 +633,79 @@ async function embed(url, body = {}) {
   await fixture.close();
 }
 
+// Queue saturation is backpressure, not target failure. A federated node's
+// queue-timeout 429 may fail over, but must not open the target circuit and
+// fast-fail every other caller as "temporarily unavailable".
+for (const code of ['RUNTIME_QUEUE_TIMEOUT', 'RUNTIME_QUEUE_FULL']) {
+  const fixture = await createFixture({
+    primaryStatus: 429,
+    primaryHeaders: { 'retry-after': '30' },
+    primaryError: { message: 'runtime primary request queue wait timed out', type: 'runtime_queue_error', code }
+  });
+  try {
+    assert.equal((await chat(fixture.url)).status, 200);
+    assert.equal((await chat(fixture.url)).status, 200);
+    assert.deepEqual(fixture.hits, { primary: 2, cloud: 2, ensures: 2 });
+    const routing = await fetch(`${fixture.url}/gateway/routing`).then((response) => response.json());
+    assert.equal(
+      routing.targetBackoffs.find((entry) => entry.model === 'stable-chat'),
+      undefined
+    );
+  } finally {
+    await fixture.close();
+  }
+}
+
+// A relaying gateway keeps the queue code, so backpressure survives any number
+// of federated hops instead of degrading to a generic upstream error.
+{
+  const fixture = await createFixture({
+    primaryStatus: 429,
+    primaryHeaders: { 'retry-after': '3' },
+    primaryError: { message: 'runtime primary request queue wait timed out', code: 'RUNTIME_QUEUE_TIMEOUT' }
+  });
+  try {
+    const response = await chat(fixture.url, { model: 'primary-direct' });
+    assert.equal(response.status, 429);
+    assert.equal(response.headers.get('retry-after'), '3');
+    assert.equal((await response.json()).error.code, 'RUNTIME_QUEUE_TIMEOUT');
+    const routing = await fetch(`${fixture.url}/gateway/routing`).then((value) => value.json());
+    assert.equal(
+      routing.targetBackoffs.find((entry) => entry.model === 'primary-direct'),
+      undefined
+    );
+  } finally {
+    await fixture.close();
+  }
+}
+
+// The same holds for this gateway's own runtime queue.
+{
+  const fixture = await createFixture({
+    primaryStatus: 200,
+    slotError: () =>
+      Object.assign(new Error('runtime primary-runtime request queue is full; retry after 2 seconds'), {
+        name: 'RuntimeQueueError',
+        code: 'RUNTIME_QUEUE_FULL',
+        type: 'runtime_queue_error',
+        statusCode: 429,
+        retryAfterSeconds: 2
+      })
+  });
+  try {
+    assert.equal((await chat(fixture.url)).status, 200);
+    assert.equal((await chat(fixture.url)).status, 200);
+    assert.deepEqual(fixture.hits, { primary: 0, cloud: 2, ensures: 2 });
+    const routing = await fetch(`${fixture.url}/gateway/routing`).then((response) => response.json());
+    assert.equal(
+      routing.targetBackoffs.find((entry) => entry.model === 'stable-chat'),
+      undefined
+    );
+  } finally {
+    await fixture.close();
+  }
+}
+
 // A worker/control-plane LLooM remains healthy and administrable but refuses
 // direct inference, making an accidental client connection fail visibly.
 {