diff --git a/crates/openshell-supervisor-network/Cargo.toml b/crates/openshell-supervisor-network/Cargo.toml
index 1449276f4..979097f92 100644
--- a/crates/openshell-supervisor-network/Cargo.toml
+++ b/crates/openshell-supervisor-network/Cargo.toml
@@ -59,8 +59,10 @@ tokio-tungstenite = { workspace = true }
 futures = { workspace = true }
 tracing-subscriber = { workspace = true }
 
-[target.'cfg(unix)'.dev-dependencies]
+[target.'cfg(unix)'.dependencies]
 libc = "0.2"
 
+[target.'cfg(unix)'.dev-dependencies]
+
 [lints]
 workspace = true
diff --git a/crates/openshell-supervisor-network/src/proxy.rs b/crates/openshell-supervisor-network/src/proxy.rs
index ab2313b89..39a2e4db9 100644
--- a/crates/openshell-supervisor-network/src/proxy.rs
+++ b/crates/openshell-supervisor-network/src/proxy.rs
@@ -265,9 +265,11 @@ impl ProxyHandle {
                 }
             }
 
+            let mut consecutive_fd_errors: u32 = 0;
             loop {
                 match listener.accept().await {
                     Ok((stream, _addr)) => {
+                        consecutive_fd_errors = 0;
                         let opa = opa_engine.clone();
                         let cache = identity_cache.clone();
                         let spid = entrypoint_pid.clone();
@@ -314,14 +316,24 @@ impl ProxyHandle {
                         });
                     }
                     Err(err) => {
+                        let is_fd_exhaustion = is_fd_exhaustion_error(&err);
+                        let (severity, backoff) = if is_fd_exhaustion {
+                            consecutive_fd_errors = consecutive_fd_errors.saturating_add(1);
+                            (SeverityId::Medium, accept_backoff(consecutive_fd_errors))
+                        } else {
+                            (SeverityId::Low, std::time::Duration::from_millis(100))
+                        };
                         let event = NetworkActivityBuilder::new(openshell_ocsf::ctx::ctx())
                             .activity(ActivityId::Fail)
-                            .severity(SeverityId::Low)
+                            .severity(severity)
                             .status(StatusId::Failure)
-                            .message(format!("Proxy accept error: {err}"))
+                            .message(format!(
+                                "Proxy accept error (retrying in {}ms): {err}",
+                                backoff.as_millis(),
+                            ))
                             .build();
                         ocsf_emit!(event);
-                        break;
+                        tokio::time::sleep(backoff).await;
                     }
                 }
             }
@@ -351,6 +363,27 @@ fn emit_activity(tx: &Option<ActivitySender>, denied: bool, deny_group: &'static
     }
 }
 
+#[cfg(unix)]
+fn is_fd_exhaustion_error(err: &std::io::Error) -> bool {
+    matches!(err.raw_os_error(), Some(libc::EMFILE) | Some(libc::ENFILE))
+}
+
+#[cfg(not(unix))]
+fn is_fd_exhaustion_error(_err: &std::io::Error) -> bool {
+    false
+}
+
+const ACCEPT_BACKOFF_BASE_MS: u64 = 100;
+const ACCEPT_BACKOFF_MAX_MS: u64 = 5_000;
+
+fn accept_backoff(consecutive_errors: u32) -> std::time::Duration {
+    let exponent = consecutive_errors.saturating_sub(1).min(7);
+    let ms = ACCEPT_BACKOFF_BASE_MS
+        .saturating_mul(1u64 << exponent)
+        .min(ACCEPT_BACKOFF_MAX_MS);
+    std::time::Duration::from_millis(ms)
+}
+
 fn l7_inspection_active(l7_route: Option<&L7RouteSnapshot>) -> bool {
     l7_route.is_some_and(|route| !route.configs.is_empty())
 }
@@ -9827,4 +9860,49 @@ network_policies:
             }
         }
     }
+
+    #[test]
+    fn accept_backoff_exponential_progression() {
+        let ms = |n| accept_backoff(n).as_millis();
+        assert_eq!(ms(1), 100);
+        assert_eq!(ms(2), 200);
+        assert_eq!(ms(3), 400);
+        assert_eq!(ms(4), 800);
+        assert_eq!(ms(5), 1_600);
+        assert_eq!(ms(6), 3_200);
+        assert_eq!(ms(7), 5_000); // 6400 capped to 5000
+        assert_eq!(ms(8), 5_000); // stays at cap
+    }
+
+    #[test]
+    fn accept_backoff_zero_consecutive_errors() {
+        assert_eq!(accept_backoff(0).as_millis(), 100);
+    }
+
+    #[test]
+    fn accept_backoff_saturates_at_cap() {
+        assert_eq!(accept_backoff(100).as_millis(), 5_000);
+        assert_eq!(accept_backoff(u32::MAX).as_millis(), 5_000);
+    }
+
+    #[cfg(unix)]
+    #[test]
+    fn is_fd_exhaustion_detects_emfile() {
+        let err = std::io::Error::from_raw_os_error(libc::EMFILE);
+        assert!(is_fd_exhaustion_error(&err));
+    }
+
+    #[cfg(unix)]
+    #[test]
+    fn is_fd_exhaustion_detects_enfile() {
+        let err = std::io::Error::from_raw_os_error(libc::ENFILE);
+        assert!(is_fd_exhaustion_error(&err));
+    }
+
+    #[cfg(unix)]
+    #[test]
+    fn is_fd_exhaustion_rejects_other_errors() {
+        let err = std::io::Error::from_raw_os_error(libc::ECONNABORTED);
+        assert!(!is_fd_exhaustion_error(&err));
+    }
 }