diff --git a/app/create/__tests__/page.test.tsx b/app/create/__tests__/page.test.tsx
index 41e9d4b..6739117 100644
--- a/app/create/__tests__/page.test.tsx
+++ b/app/create/__tests__/page.test.tsx
@@ -24,8 +24,12 @@ vi.mock('next/navigation', () => ({
 }));
 
 const mockCreateStream = vi.fn();
+// Defaults to demo/mock mode so the pre-existing zero-rate-guard tests below
+// (which predate the #218 allowance step) don't need to know about it.
+const mockIsMock = vi.fn(() => true);
 vi.mock('@/lib/factory', () => ({
   createStream: (...args: unknown[]) => mockCreateStream(...args),
+  isMock: () => mockIsMock(),
 }));
 
 const mockRefreshStreamData = vi.fn();
@@ -33,6 +37,20 @@ vi.mock('@/lib/queryClient', () => ({
   refreshStreamData: (...args: unknown[]) => mockRefreshStreamData(...args),
 }));
 
+const FACTORY_ID = 'CFACTORYAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA';
+vi.mock('@/lib/env', () => ({
+  getFactoryContractId: () => FACTORY_ID,
+}));
+
+const mockCheckAllowance = vi.fn();
+const mockApprove = vi.fn();
+vi.mock('@/lib/token-allowance-gateway', () => ({
+  getTokenAllowanceGateway: () => ({
+    checkAllowance: (...args: unknown[]) => mockCheckAllowance(...args),
+    approve: (...args: unknown[]) => mockApprove(...args),
+  }),
+}));
+
 vi.mock('lucide-react', () => ({
   ArrowRight: () => React.createElement('span', null, '→'),
   Info: () => React.createElement('span', null, 'i'),
@@ -155,3 +173,104 @@ describe('CreatePage — zero-rate guard (issue #243)', () => {
     cleanup(root, container);
   });
 });
+
+describe('CreatePage — SEP-41 allowance check before deposit (issue #218)', () => {
+  const XLM_ADDRESS = 'CDLZFC3SYJYDZT7K67VZ75HPJVIEUVNIXF47ZG2FB2RMQQVU2HHGCYSC';
+
+  beforeEach(() => {
+    vi.clearAllMocks();
+    mockIsMock.mockReturnValue(false);
+    mockCreateStream.mockResolvedValue('tx_hash_abc');
+    mockRefreshStreamData.mockResolvedValue(undefined);
+  });
+
+  async function submitDeposit(container: HTMLElement) {
+    await fillRecipient(container);
+    // 1000 XLM over the default 30-day duration -> well above the zero-rate floor.
+    await fillDeposit(container, '1000');
+    const form = container.querySelector('form') as HTMLFormElement;
+    await act(async () => {
+      form.requestSubmit();
+      await new Promise((r) => setTimeout(r, 50));
+    });
+  }
+
+  it('requests approval when the existing allowance is insufficient, then proceeds to create the stream', async () => {
+    mockCheckAllowance.mockResolvedValue({ success: true, data: 0n });
+    mockApprove.mockResolvedValue({ success: true, data: 'approve_tx_hash' });
+
+    const { container, root } = renderCreatePage();
+    await submitDeposit(container);
+
+    expect(mockCheckAllowance).toHaveBeenCalledWith(
+      expect.objectContaining({
+        token:  XLM_ADDRESS,
+        owner:  'GSENDER1234567890ABCDEF',
+        spender: FACTORY_ID,
+      }),
+    );
+    expect(mockApprove).toHaveBeenCalledTimes(1);
+    // approve() must resolve before create_stream is submitted.
+    expect(mockCreateStream).toHaveBeenCalledTimes(1);
+
+    cleanup(root, container);
+  });
+
+  it('skips approve() when the existing allowance already covers the deposit', async () => {
+    mockCheckAllowance.mockResolvedValue({ success: true, data: 10_000_000_000_000n });
+
+    const { container, root } = renderCreatePage();
+    await submitDeposit(container);
+
+    expect(mockCheckAllowance).toHaveBeenCalledTimes(1);
+    expect(mockApprove).not.toHaveBeenCalled();
+    expect(mockCreateStream).toHaveBeenCalledTimes(1);
+
+    cleanup(root, container);
+  });
+
+  it('surfaces an actionable error and never submits the deposit when approval fails', async () => {
+    mockCheckAllowance.mockResolvedValue({ success: true, data: 0n });
+    mockApprove.mockResolvedValue({
+      success: false,
+      error: {
+        message: 'Wallet rejected the approval request',
+        code: 'WALLET_REJECTED',
+        source: 'wallet',
+        retryable: false,
+      },
+    });
+
+    const { container, root } = renderCreatePage();
+    await submitDeposit(container);
+
+    expect(mockApprove).toHaveBeenCalledTimes(1);
+    expect(mockCreateStream).not.toHaveBeenCalled();
+    expect(container.textContent).toContain('Wallet rejected the approval request');
+
+    cleanup(root, container);
+  });
+
+  it('surfaces an actionable error and never approves/deposits when the allowance check itself fails', async () => {
+    // Mirrors #291 — a transient RPC/network failure must not be treated as
+    // a genuine zero allowance and silently trigger an approve() call.
+    mockCheckAllowance.mockResolvedValue({
+      success: false,
+      error: {
+        message: 'Network request timed out',
+        code: 'NETWORK_TIMEOUT',
+        source: 'network',
+        retryable: true,
+      },
+    });
+
+    const { container, root } = renderCreatePage();
+    await submitDeposit(container);
+
+    expect(mockApprove).not.toHaveBeenCalled();
+    expect(mockCreateStream).not.toHaveBeenCalled();
+    expect(container.textContent).toContain('Network request timed out');
+
+    cleanup(root, container);
+  });
+});
diff --git a/app/create/page.tsx b/app/create/page.tsx
index 6e38ff3..35a54e3 100644
--- a/app/create/page.tsx
+++ b/app/create/page.tsx
@@ -6,11 +6,13 @@ import { useForm }          from 'react-hook-form';
 import { z, ZodType } from 'zod';
 import { ArrowRight, Info } from 'lucide-react';
 import { useWallet }        from '@/contexts/WalletContext';
-import { createStream }     from '@/lib/factory';
+import { createStream, isMock } from '@/lib/factory';
 import { TOKENS_TESTNET, tokenLogoUrl } from '@/lib/tokens';
 import { CopyHashButton }   from '@/components/ui/CopyHashButton';
 import { checkRecipientExists } from '@/lib/soroban';
 import { refreshStreamData } from '@/lib/queryClient';
+import { getFactoryContractId } from '@/lib/env';
+import { getTokenAllowanceGateway } from '@/lib/token-allowance-gateway';
 import styles from './CreateStream.module.css';
 import { toStroops, wouldRateTruncateToZero } from '@/lib/format';
 
@@ -73,6 +75,11 @@ export default function CreatePage() {
   const [txHash,  setTxHash]  = useState<string | null>(null);
   const [error,   setError]   = useState<string | null>(null);
 
+  // Tracks the SEP-41 allowance pre-flight (#218) so the button label can
+  // tell the user which on-chain step they're currently waiting on — an
+  // approve() transaction is a separate wallet prompt from create_stream's.
+  const [allowanceStage, setAllowanceStage] = useState<'checking' | 'approving' | null>(null);
+
   // On-chain recipient existence check — only runs after the address passes
   // the Zod length/format guard (i.e. it's a plausible 56-char G… key).
   // Debounced to avoid hammering the RPC on every keystroke.
@@ -179,6 +186,47 @@ export default function CreatePage() {
       const startTime      = Math.floor(Date.now() / 1000) + 60; // 60s buffer
       const endTime        = startTime + data.durationSeconds;
 
+      // DripFactory::create_stream pulls the deposit from the sender via the
+      // token's SEP-41 transfer_from, which requires a pre-existing allowance
+      // from sender -> factory at least as large as the deposit. Without this
+      // check, the first-ever deposit fails with an opaque contract error
+      // (see #218). Skipped in demo/mock mode — createStream() never issues
+      // a real RPC call there either.
+      if (!isMock()) {
+        const spender = getFactoryContractId();
+        const gateway = getTokenAllowanceGateway();
+
+        setAllowanceStage('checking');
+        const allowanceCheck = await gateway.checkAllowance({
+          token:   tokenAddr,
+          owner:   publicKey,
+          spender,
+          source:  publicKey,
+        });
+        if (!allowanceCheck.success) {
+          throw new Error(
+            allowanceCheck.error?.message ?? 'Could not verify token allowance. Please try again.',
+          );
+        }
+
+        if ((allowanceCheck.data ?? 0n) < depositStroops) {
+          setAllowanceStage('approving');
+          const approveResult = await gateway.approve({
+            token:  tokenAddr,
+            spender,
+            amount: depositStroops,
+            source: publicKey,
+            signTx,
+          });
+          if (!approveResult.success) {
+            throw new Error(
+              approveResult.error?.message ?? 'Token approval failed. Please try again.',
+            );
+          }
+        }
+        setAllowanceStage(null);
+      }
+
       const hash = await withTimeout(
         createStream({
           sender:     publicKey,
@@ -204,6 +252,7 @@ export default function CreatePage() {
       setError(e instanceof Error ? e.message : 'Transaction failed');
     } finally {
       setPending(false);
+      setAllowanceStage(null);
     }
   }
 
@@ -380,7 +429,11 @@ export default function CreatePage() {
           className="btn-primary w-full"
         >
           {pending
-            ? 'Signing transaction…'
+            ? allowanceStage === 'checking'
+              ? 'Checking token allowance…'
+              : allowanceStage === 'approving'
+                ? 'Requesting approval…'
+                : 'Signing transaction…'
             : recipientStatus === 'checking'
               ? 'Verifying recipient…'
               : 'Create stream'}
diff --git a/lib/factory.ts b/lib/factory.ts
index 7bf810e..84706eb 100644
--- a/lib/factory.ts
+++ b/lib/factory.ts
@@ -26,7 +26,13 @@ function isDemoMode(): boolean {
   return process.env['NEXT_PUBLIC_DEMO_MODE'] === 'true';
 }
 
-function isMock(): boolean {
+/**
+ * Exported so callers that need to gate non-factory on-chain steps (e.g. the
+ * SEP-41 allowance check/approve step ahead of create_stream — see #218) can
+ * skip them under the exact same condition createStream() itself uses to
+ * skip the real RPC call.
+ */
+export function isMock(): boolean {
   if (isDemoMode()) return true;
 
   // #279 — require NEXT_PUBLIC_DEMO_MODE=true explicitly rather than