diff --git a/frontend/src/state/chat-slice.ts b/frontend/src/state/chat-slice.ts
index 47d2b651754d..da3d56427fea 100644
--- a/frontend/src/state/chat-slice.ts
+++ b/frontend/src/state/chat-slice.ts
@@ -149,9 +149,8 @@ export const chatSlice = createSlice({
       } else if (observationID === "run_ipython") {
         // For IPython, we consider it successful if there's no error message
         const ipythonObs = observation.payload as IPythonObservation;
-        causeMessage.success = !ipythonObs.message
-          .toLowerCase()
-          .includes("error");
+        // Check for error in the message field which contains error information
+        causeMessage.success = !ipythonObs.error;
       }
 
       if (observationID === "run" || observationID === "run_ipython") {
diff --git a/openhands/events/observation/commands.py b/openhands/events/observation/commands.py
index b522b5c47283..3fc1c61cdadd 100644
--- a/openhands/events/observation/commands.py
+++ b/openhands/events/observation/commands.py
@@ -40,7 +40,13 @@ class IPythonRunCellObservation(Observation):
 
     @property
     def error(self) -> bool:
-        return False  # IPython cells do not return exit codes
+        # Check for common error indicators in IPython output
+        error_indicators = [
+            'ERROR:',
+            'Error:',
+            'Exception:',
+        ]
+        return any(indicator in self.content for indicator in error_indicators)
 
     @property
     def message(self) -> str:
@@ -48,7 +54,7 @@ def message(self) -> str:
 
     @property
     def success(self) -> bool:
-        return True  # IPython cells are always considered successful
+        return not self.error
 
     def __str__(self) -> str:
         return f'**IPythonRunCellObservation**\n{self.content}'
diff --git a/tests/unit/test_observation_serialization.py b/tests/unit/test_observation_serialization.py
index 67a95449b719..3173a850d5db 100644
--- a/tests/unit/test_observation_serialization.py
+++ b/tests/unit/test_observation_serialization.py
@@ -40,6 +40,32 @@ def serialization_deserialization(
 
 
 # Additional tests for various observation subclasses can be included here
+def test_ipython_error_detection():
+    from openhands.events.observation import IPythonRunCellObservation
+
+    # Test error detection for various error patterns
+    error_cases = [
+        'ERROR: Something went wrong',
+        'Error: Invalid syntax',
+        'Exception: Division by zero',
+    ]
+    for error_content in error_cases:
+        obs = IPythonRunCellObservation(content=error_content, code='print("test")')
+        serialized = event_to_dict(obs)
+        assert (
+            serialized['success'] is False
+        ), f'Failed to detect error in: {error_content}'
+        assert obs.error is True, f'Failed to detect error in: {error_content}'
+
+    # Test success case
+    obs = IPythonRunCellObservation(
+        content='Hello World!', code='print("Hello World!")'
+    )
+    serialized = event_to_dict(obs)
+    assert serialized['success'] is True, 'Failed to detect success'
+    assert obs.error is False, 'Failed to detect success'
+
+
 def test_success_field_serialization():
     # Test success=True
     obs = CmdOutputObservation(