diff --git a/internal/runtime/executor/xai_executor_response.go b/internal/runtime/executor/xai_executor_response.go
index a0bdbae08..7923cd597 100644
--- a/internal/runtime/executor/xai_executor_response.go
+++ b/internal/runtime/executor/xai_executor_response.go
@@ -857,13 +857,25 @@ func xaiPatchCompletedOutput(eventData []byte, outputItemsByIndex map[int64][]by
 // cli-chat-proxy ("Usage resets over a rolling 24-hour window").
 const xaiFreeUsageExhaustedCooldown = 24 * time.Hour
 
-// xaiStatusErr wraps upstream error bodies so free-tier exhaustion
-// (subscription:free-usage-exhausted) carries a 24h RetryAfter hint for
-// auth cooldown / account rotation. Generic 429s stay without an explicit
-// retry hint so conductor backoff still applies.
+// xaiStatusErr normalizes upstream xAI error bodies for conductor behavior:
+//   - credential invalidation (403 bad-credentials) is remapped to 401 so the
+//     existing OAuth refresh-once-and-retry path runs instead of payment cooldown
+//   - free-tier exhaustion (subscription:free-usage-exhausted) carries a 24h
+//     RetryAfter hint for auth cooldown / account rotation
+//
+// Generic 429s stay without an explicit retry hint so conductor backoff still applies.
 func xaiStatusErr(code int, body []byte) statusErr {
 	err := statusErr{code: code, msg: string(body)}
-	if code != http.StatusTooManyRequests || len(body) == 0 {
+	if len(body) == 0 {
+		return err
+	}
+	if code == http.StatusForbidden && isXAIBadCredentialsBody(body) {
+		// Upstream returns 403 for invalidated OAuth access tokens. Map to 401 so
+		// tryRefreshAfterUnauthorized / MarkResult unauthorized handling applies.
+		err.code = http.StatusUnauthorized
+		return err
+	}
+	if code != http.StatusTooManyRequests {
 		return err
 	}
 	codeStr := strings.ToLower(gjson.GetBytes(body, "code").String())
@@ -879,3 +891,24 @@ func xaiStatusErr(code int, body []byte) statusErr {
 	}
 	return err
 }
+
+// isXAIBadCredentialsBody reports whether an xAI error body indicates an
+// invalidated/unusable OAuth access token rather than a generic permission or
+// payment failure. HTTP and websocket payloads both use this helper, so nested
+// error.code / error.message shapes are checked as well as flat bodies.
+func isXAIBadCredentialsBody(body []byte) bool {
+	for _, path := range []string{"code", "error.code", "body.error.code"} {
+		if strings.Contains(strings.ToLower(gjson.GetBytes(body, path).String()), "bad-credentials") {
+			return true
+		}
+	}
+	for _, path := range []string{"error", "error.message", "message", "body.error", "body.error.message"} {
+		msg := strings.ToLower(gjson.GetBytes(body, path).String())
+		if strings.Contains(msg, "access token could not be validated") {
+			return true
+		}
+	}
+	raw := strings.ToLower(string(body))
+	return strings.Contains(raw, "bad-credentials") ||
+		strings.Contains(raw, "access token could not be validated")
+}
diff --git a/internal/runtime/executor/xai_status_err_test.go b/internal/runtime/executor/xai_status_err_test.go
index 3142ae50d..5ca74c9a6 100644
--- a/internal/runtime/executor/xai_status_err_test.go
+++ b/internal/runtime/executor/xai_status_err_test.go
@@ -2,6 +2,7 @@ package executor
 
 import (
 	"net/http"
+	"strings"
 	"testing"
 	"time"
 )
@@ -31,7 +32,58 @@ func TestXAIStatusErr_Generic429HasNoRetryAfter(t *testing.T) {
 func TestXAIStatusErr_Non429Unchanged(t *testing.T) {
 	body := []byte(`{"error":"nope"}`)
 	err := xaiStatusErr(http.StatusBadRequest, body)
+	if err.StatusCode() != http.StatusBadRequest {
+		t.Fatalf("status = %d, want 400", err.StatusCode())
+	}
 	if err.RetryAfter() != nil {
 		t.Fatalf("expected nil RetryAfter for 400, got %v", *err.RetryAfter())
 	}
 }
+
+func TestXAIStatusErr_BadCredentials403RemapsToUnauthorized(t *testing.T) {
+	body := []byte(`{"code":"unauthenticated:bad-credentials","error":"The OAuth2 access token could not be validated."}`)
+	err := xaiStatusErr(http.StatusForbidden, body)
+	if err.StatusCode() != http.StatusUnauthorized {
+		t.Fatalf("status = %d, want 401", err.StatusCode())
+	}
+	if !strings.Contains(err.Error(), "bad-credentials") {
+		t.Fatalf("error body should be preserved, got %q", err.Error())
+	}
+	if err.RetryAfter() != nil {
+		t.Fatalf("expected nil RetryAfter for bad-credentials, got %v", *err.RetryAfter())
+	}
+}
+
+func TestXAIStatusErr_BadCredentialsByMessageOnly(t *testing.T) {
+	body := []byte(`{"error":"The OAuth2 access token could not be validated."}`)
+	err := xaiStatusErr(http.StatusForbidden, body)
+	if err.StatusCode() != http.StatusUnauthorized {
+		t.Fatalf("status = %d, want 401", err.StatusCode())
+	}
+}
+
+func TestXAIStatusErr_BadCredentialsNestedErrorCode(t *testing.T) {
+	body := []byte(`{"type":"error","status":403,"error":{"code":"unauthenticated:bad-credentials","message":"The OAuth2 access token could not be validated."}}`)
+	err := xaiStatusErr(http.StatusForbidden, body)
+	if err.StatusCode() != http.StatusUnauthorized {
+		t.Fatalf("status = %d, want 401", err.StatusCode())
+	}
+}
+
+func TestXAIStatusErr_Generic403Unchanged(t *testing.T) {
+	body := []byte(`{"code":"permission_denied","error":"model access is not allowed for this account"}`)
+	err := xaiStatusErr(http.StatusForbidden, body)
+	if err.StatusCode() != http.StatusForbidden {
+		t.Fatalf("status = %d, want 403", err.StatusCode())
+	}
+	if err.RetryAfter() != nil {
+		t.Fatalf("expected nil RetryAfter for generic 403, got %v", *err.RetryAfter())
+	}
+}
+
+func TestXAIStatusErr_EmptyBodyForbiddenUnchanged(t *testing.T) {
+	err := xaiStatusErr(http.StatusForbidden, nil)
+	if err.StatusCode() != http.StatusForbidden {
+		t.Fatalf("status = %d, want 403", err.StatusCode())
+	}
+}
diff --git a/internal/runtime/executor/xai_websockets_executor.go b/internal/runtime/executor/xai_websockets_executor.go
index a28cb9c62..841bfe0e1 100644
--- a/internal/runtime/executor/xai_websockets_executor.go
+++ b/internal/runtime/executor/xai_websockets_executor.go
@@ -982,6 +982,9 @@ func parseXAIWebsocketError(payload []byte) (error, bool) {
 	if wsErr, ok := parseCodexWebsocketError(payload); ok {
 		if statusError, okStatus := wsErr.(statusErrWithHeaders); okStatus {
 			xaiError := xaiStatusErr(statusError.code, payload)
+			// Apply normalized status (e.g. 403 bad-credentials -> 401) and any
+			// provider-specific retry hint while preserving websocket headers.
+			statusError.code = xaiError.code
 			if xaiError.retryAfter != nil {
 				statusError.retryAfter = xaiError.retryAfter
 			}
diff --git a/internal/runtime/executor/xai_websockets_executor_test.go b/internal/runtime/executor/xai_websockets_executor_test.go
index 065e73f5a..c05ba0a39 100644
--- a/internal/runtime/executor/xai_websockets_executor_test.go
+++ b/internal/runtime/executor/xai_websockets_executor_test.go
@@ -1600,6 +1600,43 @@ func TestParseXAIWebsocketErrorFreeUsageExhaustedSetsRetryAfter(t *testing.T) {
 	}
 }
 
+func TestParseXAIWebsocketErrorBadCredentialsRemapsToUnauthorized(t *testing.T) {
+	payload := []byte(`{"type":"error","status":403,"headers":{"x-request-id":"req-bad-credentials"},"error":{"code":"unauthenticated:bad-credentials","message":"The OAuth2 access token could not be validated."}}`)
+	err, ok := parseXAIWebsocketError(payload)
+	if !ok {
+		t.Fatal("expected xAI websocket error")
+	}
+
+	status, okStatus := err.(interface{ StatusCode() int })
+	if !okStatus || status.StatusCode() != http.StatusUnauthorized {
+		t.Fatalf("status = %#v, want 401", err)
+	}
+	headerSource, okHeaders := err.(interface{ Headers() http.Header })
+	if !okHeaders {
+		t.Fatalf("expected websocket error to preserve headers, got %#v", err)
+	}
+	if got := headerSource.Headers().Get("x-request-id"); got != "req-bad-credentials" {
+		t.Fatalf("x-request-id = %q, want req-bad-credentials", got)
+	}
+	parsed := gjson.Parse(err.Error())
+	if got := parsed.Get("error.code").String(); got != "unauthenticated:bad-credentials" {
+		t.Fatalf("error code = %q, want unauthenticated:bad-credentials; payload=%s", got, err)
+	}
+}
+
+func TestParseXAIWebsocketBareErrorBadCredentialsRemapsToUnauthorized(t *testing.T) {
+	payload := []byte(`{"status":403,"error":{"code":"unauthenticated:bad-credentials","message":"The OAuth2 access token could not be validated."}}`)
+	err, ok := parseXAIWebsocketError(payload)
+	if !ok {
+		t.Fatal("expected bare xAI websocket error")
+	}
+
+	status, okStatus := err.(interface{ StatusCode() int })
+	if !okStatus || status.StatusCode() != http.StatusUnauthorized {
+		t.Fatalf("status = %#v, want 401", err)
+	}
+}
+
 func TestParseXAIWebsocketBareErrorFreeUsageExhaustedSetsRetryAfter(t *testing.T) {
 	payload := []byte(`{"status":429,"error":{"code":"subscription:free-usage-exhausted","message":"You've used all the included free usage for now."}}`)
 	err, ok := parseXAIWebsocketError(payload)