diff --git a/packages/uploadthing/src/_internal/handler.ts b/packages/uploadthing/src/_internal/handler.ts
index 6361de5382..cc591dcada 100644
--- a/packages/uploadthing/src/_internal/handler.ts
+++ b/packages/uploadthing/src/_internal/handler.ts
@@ -8,6 +8,7 @@ import {
   HttpServerRequest,
   HttpServerResponse,
 } from "@effect/platform";
+import type { ResponseError } from "@effect/platform/HttpClientError";
 import * as Config from "effect/Config";
 import * as Context from "effect/Context";
 import * as Effect from "effect/Effect";
@@ -601,6 +602,42 @@ const handleUploadAction = (opts: {
       Effect.flatMap(httpClient.execute),
     );
 
+    const handleDevStreamError = Effect.fn("handleDevStreamError")(function* (
+      err: ResponseError,
+      chunk: string,
+    ) {
+      const schema = Schema.parseJson(
+        Schema.Struct({ file: UploadedFileData }),
+      );
+      const parsedChunk = yield* Schema.decodeUnknown(schema)(chunk);
+      const key = parsedChunk.file.key;
+
+      yield* Effect.logError(
+        "Failed to forward callback request from dev stream",
+      ).pipe(Effect.annotateLogs({ fileKey: key, error: err.message }));
+
+      const httpResponse = yield* HttpClientRequest.post(
+        "/callback-result",
+      ).pipe(
+        HttpClientRequest.prependUrl(ingestUrl),
+        HttpClientRequest.setHeaders({
+          "x-uploadthing-api-key": Redacted.value(apiKey),
+          "x-uploadthing-version": pkgJson.version,
+          "x-uploadthing-be-adapter": beAdapter,
+          "x-uploadthing-fe-package": fePackage,
+        }),
+        HttpClientRequest.bodyJson({
+          fileKey: key,
+          error: `Failed to forward callback request from dev stream: ${err.message}`,
+        }),
+        Effect.flatMap(httpClient.execute),
+      );
+
+      yield* logHttpClientResponse("Reported callback error to UploadThing")(
+        httpResponse,
+      );
+    });
+
     // Send metadata to UT server (non blocking as a daemon)
     // In dev, keep the stream open and simulate the callback requests as
     // files complete uploading
@@ -624,14 +661,14 @@ const handleUploadAction = (opts: {
                 HttpBody.text(chunk.payload, "application/json"),
               ),
               httpClient.execute,
-              Effect.tapBoth({
-                onSuccess: logHttpClientResponse(
+              Effect.tap(
+                logHttpClientResponse(
                   "Successfully forwarded callback request from dev stream",
                 ),
-                onFailure: logHttpClientError(
-                  "Failed to forward callback request from dev stream",
-                ),
-              }),
+              ),
+              Effect.catchTag("ResponseError", (err) =>
+                handleDevStreamError(err, chunk.payload),
+              ),
               Effect.annotateLogs(chunk),
               Effect.asVoid,
               Effect.ignoreLogged,
diff --git a/packages/uploadthing/src/_internal/upload-browser.ts b/packages/uploadthing/src/_internal/upload-browser.ts
index 395b161f59..82d22b1a74 100644
--- a/packages/uploadthing/src/_internal/upload-browser.ts
+++ b/packages/uploadthing/src/_internal/upload-browser.ts
@@ -1,5 +1,6 @@
 import { unsafeCoerce } from "effect/Function";
 import * as Micro from "effect/Micro";
+import { hasProperty, isRecord } from "effect/Predicate";
 
 import type { FetchContext, FetchError } from "@uploadthing/shared";
 import { fetchEff, UploadThingError } from "@uploadthing/shared";
@@ -37,13 +38,27 @@ const uploadWithProgress = (
       previousLoaded = loaded;
     });
     xhr.addEventListener("load", () => {
-      resume(
-        xhr.status >= 200 && xhr.status < 300
-          ? Micro.succeed(xhr.response)
-          : Micro.die(
-              `XHR failed ${xhr.status} ${xhr.statusText} - ${JSON.stringify(xhr.response)}`,
-            ),
-      );
+      if (xhr.status >= 200 && xhr.status < 300 && isRecord(xhr.response)) {
+        if (hasProperty(xhr.response, "error")) {
+          resume(
+            new UploadThingError({
+              code: "UPLOAD_FAILED",
+              message: String(xhr.response.error),
+              data: xhr.response as never,
+            }),
+          );
+        } else {
+          resume(Micro.succeed(xhr.response));
+        }
+      } else {
+        resume(
+          new UploadThingError({
+            code: "UPLOAD_FAILED",
+            message: `XHR failed ${xhr.status} ${xhr.statusText}`,
+            data: xhr.response as never,
+          }),
+        );
+      }
     });
 
     // Is there a case when the client would throw and
diff --git a/playground/middleware.ts b/playground/middleware.ts
new file mode 100644
index 0000000000..d777adaa93
--- /dev/null
+++ b/playground/middleware.ts
@@ -0,0 +1,22 @@
+import {
+  MiddlewareConfig,
+  NextResponse,
+  type NextMiddleware,
+} from "next/server";
+
+import { getSession } from "./lib/data";
+
+export default (async (req) => {
+  if (req.nextUrl.pathname !== "/") {
+    const sesh = await getSession();
+    if (!sesh) {
+      return NextResponse.json({ error: "Forbidden" }, { status: 403 });
+    }
+  }
+
+  return NextResponse.next();
+}) satisfies NextMiddleware;
+
+export const config = {
+  matcher: ["/((?!.*\\..*|_next).*)", "/", "/(api|trpc)(.*)"],
+} satisfies MiddlewareConfig;