diff --git a/test/api-timeout_test.ts b/test/api-timeout_test.ts
new file mode 100644
index 0000000..a532918
--- /dev/null
+++ b/test/api-timeout_test.ts
@@ -0,0 +1,120 @@
+import { assertEquals } from 'jsr:@std/assert@^1.0.0';
+import { ChatHandler } from '../ts/api/handlers/chat.ts';
+import { EmbeddingsHandler } from '../ts/api/handlers/embeddings.ts';
+import { UpstreamTimeoutError } from '../ts/containers/base-container.ts';
+
+class TestResponse {
+  public statusCode = 200;
+  public headers: Record<string, string> = {};
+  public body = '';
+
+  public writeHead(statusCode: number, headers: Record<string, string>): TestResponse {
+    this.statusCode = statusCode;
+    this.headers = headers;
+    return this;
+  }
+
+  public end(body = ''): TestResponse {
+    this.body = body;
+    return this;
+  }
+
+  public write(_chunk: string | Uint8Array): boolean {
+    return true;
+  }
+}
+
+Deno.test('ChatHandler maps upstream timeouts to 504 responses', async () => {
+  const handler = new ChatHandler(
+    {
+      async findContainerForModel() {
+        return {
+          async chatCompletion() {
+            throw new UpstreamTimeoutError();
+          },
+          async chatCompletionStream() {
+            throw new UpstreamTimeoutError();
+          },
+        };
+      },
+    } as never,
+    {
+      async getModel(modelName: string) {
+        return { id: modelName };
+      },
+    } as never,
+    {
+      async loadModel() {
+        return { success: false };
+      },
+    } as never,
+    {
+      shouldDeployLocallyFirst() {
+        return false;
+      },
+    } as never,
+  );
+
+  const response = new TestResponse();
+  await handler.handleChatCompletion(
+    { headers: {} } as never,
+    response as never,
+    { model: 'meta-llama/Llama-3.1-8B-Instruct', messages: [{ role: 'user', content: 'hi' }] },
+  );
+
+  assertEquals(response.statusCode, 504);
+  assertEquals(JSON.parse(response.body).error.type, 'upstream_timeout');
+});
+
+Deno.test('EmbeddingsHandler maps upstream timeouts to 504 responses', async () => {
+  const originalFetch = globalThis.fetch;
+  globalThis.fetch = async () => {
+    const error = new Error('request aborted');
+    error.name = 'AbortError';
+    throw error;
+  };
+
+  try {
+    const handler = new EmbeddingsHandler(
+      {
+        async findContainerForModel() {
+          return null;
+        },
+      } as never,
+      {
+        async getModel(modelName: string) {
+          return { id: modelName };
+        },
+      } as never,
+      {
+        async ensureModelViaControlPlane(modelName: string) {
+          return {
+            location: {
+              modelId: modelName,
+              nodeName: 'worker-a',
+              endpoint: 'http://worker-a:8080',
+              healthy: true,
+              engine: 'vllm',
+              containerId: 'remote',
+            },
+          };
+        },
+        getLocalNodeName() {
+          return 'control';
+        },
+      } as never,
+    );
+
+    const response = new TestResponse();
+    await handler.handleEmbeddings(
+      { headers: {} } as never,
+      response as never,
+      { model: 'BAAI/bge-m3', input: 'hello' },
+    );
+
+    assertEquals(response.statusCode, 504);
+    assertEquals(JSON.parse(response.body).error.type, 'upstream_timeout');
+  } finally {
+    globalThis.fetch = originalFetch;
+  }
+});
diff --git a/ts/api/handlers/chat.ts b/ts/api/handlers/chat.ts
index 4d566d9..b4c2e94 100644
--- a/ts/api/handlers/chat.ts
+++ b/ts/api/handlers/chat.ts
@@ -6,6 +6,7 @@ import * as http from 'node:http';
 import type { IApiError, IChatCompletionRequest } from '../../interfaces/api.ts';
 import { ClusterCoordinator } from '../../cluster/coordinator.ts';
 import { ContainerManager } from '../../containers/container-manager.ts';
+import { UpstreamTimeoutError } from '../../containers/base-container.ts';
 import { API_SERVER } from '../../constants.ts';
 import { logger } from '../../logger.ts';
 import { ModelRegistry } from '../../models/registry.ts';
@@ -86,6 +87,11 @@ export class ChatHandler {
 
       await this.proxyChatRequest(req, res, ensured.location.endpoint, requestBody);
     } catch (error) {
+      if (error instanceof UpstreamTimeoutError) {
+        this.sendError(res, 504, error.message, 'upstream_timeout');
+        return;
+      }
+
       const message = error instanceof Error ? error.message : String(error);
       logger.error(`Chat completion error: ${message}`);
       this.sendError(res, 500, `Chat completion failed: ${message}`, 'server_error');
@@ -166,6 +172,11 @@ export class ChatHandler {
       headers: this.buildForwardHeaders(req),
       body: JSON.stringify(body),
       signal: controller.signal,
+    }).catch((error) => {
+      if (error instanceof Error && error.name === 'AbortError') {
+        throw new UpstreamTimeoutError();
+      }
+      throw error;
     }).finally(() => clearTimeout(timeout));
 
     if (body.stream) {
diff --git a/ts/api/handlers/embeddings.ts b/ts/api/handlers/embeddings.ts
index 5c90a76..df187c9 100644
--- a/ts/api/handlers/embeddings.ts
+++ b/ts/api/handlers/embeddings.ts
@@ -11,6 +11,7 @@ import type {
 } from '../../interfaces/api.ts';
 import { ClusterCoordinator } from '../../cluster/coordinator.ts';
 import { ContainerManager } from '../../containers/container-manager.ts';
+import { UpstreamTimeoutError } from '../../containers/base-container.ts';
 import { API_SERVER } from '../../constants.ts';
 import { logger } from '../../logger.ts';
 import { ModelRegistry } from '../../models/registry.ts';
@@ -93,6 +94,11 @@ export class EmbeddingsHandler {
       });
       res.end(text);
     } catch (error) {
+      if (error instanceof UpstreamTimeoutError) {
+        this.sendError(res, 504, error.message, 'upstream_timeout');
+        return;
+      }
+
       const message = error instanceof Error ? error.message : String(error);
       logger.error(`Embeddings error: ${message}`);
       this.sendError(res, 500, `Embeddings generation failed: ${message}`, 'server_error');
@@ -224,6 +230,11 @@ export class EmbeddingsHandler {
         ...init,
         signal: controller.signal,
       });
+    } catch (error) {
+      if (error instanceof Error && error.name === 'AbortError') {
+        throw new UpstreamTimeoutError();
+      }
+      throw error;
     } finally {
       clearTimeout(timeout);
     }
diff --git a/ts/containers/base-container.ts b/ts/containers/base-container.ts
index eb676a1..fd64a20 100644
--- a/ts/containers/base-container.ts
+++ b/ts/containers/base-container.ts
@@ -24,6 +24,13 @@ export type TModelPullProgress = (progress: {
   percent?: number;
 }) => void;
 
+export class UpstreamTimeoutError extends Error {
+  constructor(message: string = 'Upstream request timed out') {
+    super(message);
+    this.name = 'UpstreamTimeoutError';
+  }
+}
+
 /**
  * Abstract base class for AI model containers
  */
@@ -181,6 +188,11 @@ export abstract class BaseContainer {
       });
 
       return response;
+    } catch (error) {
+      if (error instanceof Error && error.name === 'AbortError') {
+        throw new UpstreamTimeoutError();
+      }
+      throw error;
     } finally {
       clearTimeout(timeoutId);
     }