diff --git a/managed-chatkit/backend/app/main.py b/managed-chatkit/backend/app/main.py
index 4106d0b21..3b9a6914c 100644
--- a/managed-chatkit/backend/app/main.py
+++ b/managed-chatkit/backend/app/main.py
@@ -67,10 +67,10 @@ async def create_session(request: Request) -> JSONResponse:
 
     payload = parse_json(upstream)
     if not upstream.is_success:
-        message = None
-        if isinstance(payload, Mapping):
-            message = payload.get("error")
-        message = message or upstream.reason_phrase or "Failed to create session"
+        message = resolve_error_message(
+            payload,
+            fallback=upstream.reason_phrase or "Failed to create session",
+        )
         return respond({"error": message}, upstream.status_code, cookie_value)
 
     client_secret = None
@@ -93,6 +93,29 @@ async def create_session(request: Request) -> JSONResponse:
     )
 
 
+def resolve_error_message(payload: Mapping[str, Any], fallback: str) -> str:
+    """Return a human-readable error string from an upstream payload."""
+    raw_error = payload.get("error")
+
+    if isinstance(raw_error, str) and raw_error.strip():
+        return raw_error.strip()
+
+    if isinstance(raw_error, Mapping):
+        message = raw_error.get("message")
+        if isinstance(message, str) and message.strip():
+            return message.strip()
+
+        code = raw_error.get("code")
+        if isinstance(code, str) and code.strip():
+            return code.strip()
+
+    top_level_message = payload.get("message")
+    if isinstance(top_level_message, str) and top_level_message.strip():
+        return top_level_message.strip()
+
+    return fallback
+
+
 def respond(
     payload: Mapping[str, Any], status_code: int, cookie_value: str | None = None
 ) -> JSONResponse:
diff --git a/managed-chatkit/backend/tests/test_main.py b/managed-chatkit/backend/tests/test_main.py
new file mode 100644
index 000000000..e58f3f9df
--- /dev/null
+++ b/managed-chatkit/backend/tests/test_main.py
@@ -0,0 +1,54 @@
+from __future__ import annotations
+
+from fastapi.testclient import TestClient
+import httpx
+
+from app import main
+
+
+def test_resolve_error_message_prefers_nested_error_message() -> None:
+    payload = {"error": {"message": "Workflow id is invalid"}}
+
+    message = main.resolve_error_message(payload, fallback="Fallback")
+
+    assert message == "Workflow id is invalid"
+
+
+def test_resolve_error_message_uses_top_level_error_string() -> None:
+    payload = {"error": "Rate limit exceeded"}
+
+    message = main.resolve_error_message(payload, fallback="Fallback")
+
+    assert message == "Rate limit exceeded"
+
+
+def test_create_session_flattens_nested_upstream_error(monkeypatch) -> None:
+    class StubAsyncClient:
+        def __init__(self, *args, **kwargs) -> None:
+            pass
+
+        async def __aenter__(self) -> "StubAsyncClient":
+            return self
+
+        async def __aexit__(self, exc_type, exc, tb) -> bool:
+            return False
+
+        async def post(self, *args, **kwargs) -> httpx.Response:
+            request = httpx.Request(
+                "POST", "https://api.openai.com/v1/chatkit/sessions"
+            )
+            return httpx.Response(
+                status_code=400,
+                json={"error": {"message": "Workflow not found"}},
+                request=request,
+            )
+
+    monkeypatch.setenv("OPENAI_API_KEY", "test-key")
+    monkeypatch.setattr(main.httpx, "AsyncClient", StubAsyncClient)
+
+    client = TestClient(main.app)
+    response = client.post("/api/create-session", json={"workflow": {"id": "wf_123"}})
+
+    assert response.status_code == 400
+    assert response.json() == {"error": "Workflow not found"}
+    assert "chatkit_session_id=" in response.headers.get("set-cookie", "")