diff --git a/openhands/runtime/utils/log_streamer.py b/openhands/runtime/utils/log_streamer.py
index 24a28b93f36c..1bb4582c8ea7 100644
--- a/openhands/runtime/utils/log_streamer.py
+++ b/openhands/runtime/utils/log_streamer.py
@@ -17,16 +17,25 @@ def __init__(
         logFn: Callable,
     ):
         self.log = logFn
-        self.log_generator = container.logs(stream=True, follow=True)
+        self.stdout_thread = None
+        self.log_generator = None
         self._stop_event = threading.Event()
 
-        # Start the stdout streaming thread
-        self.stdout_thread = threading.Thread(target=self._stream_logs)
-        self.stdout_thread.daemon = True
-        self.stdout_thread.start()
+        try:
+            self.log_generator = container.logs(stream=True, follow=True)
+            # Start the stdout streaming thread
+            self.stdout_thread = threading.Thread(target=self._stream_logs)
+            self.stdout_thread.daemon = True
+            self.stdout_thread.start()
+        except Exception as e:
+            self.log('error', f'Failed to initialize log streaming: {e}')
 
     def _stream_logs(self):
         """Stream logs from the Docker container to stdout."""
+        if not self.log_generator:
+            self.log('error', 'Log generator not initialized')
+            return
+
         try:
             for log_line in self.log_generator:
                 if self._stop_event.is_set():
diff --git a/tests/unit/test_log_streamer.py b/tests/unit/test_log_streamer.py
new file mode 100644
index 000000000000..185f49bb14ab
--- /dev/null
+++ b/tests/unit/test_log_streamer.py
@@ -0,0 +1,53 @@
+import unittest
+from unittest.mock import Mock, patch
+
+from openhands.runtime.utils.log_streamer import LogStreamer
+
+
+class TestLogStreamer(unittest.TestCase):
+    def setUp(self):
+        self.mock_container = Mock()
+        self.mock_log_fn = Mock()
+
+    def test_init_failure_handling(self):
+        """Test that LogStreamer handles initialization failures gracefully."""
+        self.mock_container.logs.side_effect = Exception("Test error")
+
+        streamer = LogStreamer(self.mock_container, self.mock_log_fn)
+        self.assertIsNone(streamer.stdout_thread)
+        self.assertIsNone(streamer.log_generator)
+        self.mock_log_fn.assert_called_with('error', 'Failed to initialize log streaming: Test error')
+
+    def test_stream_logs_without_generator(self):
+        """Test that _stream_logs handles missing log generator gracefully."""
+        streamer = LogStreamer(self.mock_container, self.mock_log_fn)
+        streamer.log_generator = None
+        streamer._stream_logs()
+        self.mock_log_fn.assert_called_with('error', 'Log generator not initialized')
+
+    def test_cleanup_without_thread(self):
+        """Test that cleanup works even if stdout_thread is not initialized."""
+        streamer = LogStreamer(self.mock_container, self.mock_log_fn)
+        streamer.stdout_thread = None
+        streamer.close()  # Should not raise any exceptions
+
+    def test_normal_operation(self):
+        """Test normal operation of LogStreamer."""
+        mock_logs = [b'test log 1\n', b'test log 2\n']
+        self.mock_container.logs.return_value = mock_logs
+
+        streamer = LogStreamer(self.mock_container, self.mock_log_fn)
+        self.assertIsNotNone(streamer.stdout_thread)
+        self.assertIsNotNone(streamer.log_generator)
+
+        # Let the thread process the logs
+        streamer.close()
+
+        # Verify logs were processed
+        expected_calls = [
+            ('debug', '[inside container] test log 1'),
+            ('debug', '[inside container] test log 2')
+        ]
+        actual_calls = [(args[0], args[1]) for args, _ in self.mock_log_fn.call_args_list]
+        for expected in expected_calls:
+            self.assertIn(expected, actual_calls)