diff --git a/src/lightspeed_stack.py b/src/lightspeed_stack.py
index 858799c36..0c58c0bc3 100644
--- a/src/lightspeed_stack.py
+++ b/src/lightspeed_stack.py
@@ -15,6 +15,7 @@
 from runners.quota_scheduler import start_quota_scheduler
 from runners.uvicorn import start_uvicorn
 from utils import schema_dumper
+from utils.proxy_env import sanitize_no_proxy_env
 
 # Resolve log level and handler from centralized logging utilities
 log_level = resolve_log_level()
@@ -114,6 +115,7 @@ def main() -> None:
                     (exits with status 1).
     """
     logger.info("Lightspeed Core Stack startup")
+    sanitize_no_proxy_env()
     parser = create_argument_parser()
     args = parser.parse_args()
 
diff --git a/src/utils/proxy_env.py b/src/utils/proxy_env.py
new file mode 100644
index 000000000..66a2f869e
--- /dev/null
+++ b/src/utils/proxy_env.py
@@ -0,0 +1,75 @@
+"""Helpers for normalizing proxy-related environment variables."""
+
+from __future__ import annotations
+
+import logging
+import os
+import re
+
+logger = logging.getLogger(__name__)
+
+_NO_PROXY_ENV_VARS = ("NO_PROXY", "no_proxy")
+
+# IPv6 CIDR entries (for example fd00:1234:5678::/64) crash httpx until
+# https://github.com/encode/httpx/pull/3741 ships in a release.
+_IPV6_CIDR_PATTERN = re.compile(r"::.*/")
+
+
+def is_unsupported_no_proxy_entry(entry: str) -> bool:
+    """Return True when a NO_PROXY entry cannot be parsed by httpx."""
+    stripped = entry.strip()
+    if not stripped:
+        return True
+    return _IPV6_CIDR_PATTERN.search(stripped) is not None
+
+
+def sanitize_no_proxy_value(value: str) -> tuple[str, list[str]]:
+    """Remove unsupported NO_PROXY entries from a comma-separated value."""
+    kept: list[str] = []
+    removed: list[str] = []
+
+    for entry in value.split(","):
+        stripped = entry.strip()
+        if not stripped:
+            continue
+        if is_unsupported_no_proxy_entry(stripped):
+            removed.append(stripped)
+        else:
+            kept.append(stripped)
+
+    return ",".join(kept), removed
+
+
+def sanitize_no_proxy_env() -> list[str]:
+    """Sanitize NO_PROXY/no_proxy before httpx reads proxy settings.
+
+    OpenShift cluster proxies commonly inject IPv6 CIDR bypass entries.
+    httpx currently mis-parses those values and raises InvalidURL during
+    client initialization (encode/httpx#3221).
+
+    Returns:
+        Entries removed from the environment.
+    """
+    removed: list[str] = []
+
+    for var in _NO_PROXY_ENV_VARS:
+        value = os.environ.get(var)
+        if value is None:
+            continue
+
+        sanitized, removed_entries = sanitize_no_proxy_value(value)
+        removed.extend(removed_entries)
+
+        if sanitized:
+            os.environ[var] = sanitized
+        else:
+            os.environ.pop(var, None)
+
+    if removed:
+        logger.warning(
+            "Removed unsupported IPv6 CIDR entries from NO_PROXY/no_proxy "
+            "to avoid httpx startup failures: %s",
+            ", ".join(removed),
+        )
+
+    return removed
diff --git a/tests/unit/utils/test_proxy_env.py b/tests/unit/utils/test_proxy_env.py
new file mode 100644
index 000000000..e4358f1b9
--- /dev/null
+++ b/tests/unit/utils/test_proxy_env.py
@@ -0,0 +1,94 @@
+"""Unit tests for proxy environment helpers."""
+
+import os
+
+import httpx
+import pytest
+
+from utils.proxy_env import (
+    is_unsupported_no_proxy_entry,
+    sanitize_no_proxy_env,
+    sanitize_no_proxy_value,
+)
+
+
+class TestIsUnsupportedNoProxyEntry:
+    """Tests for is_unsupported_no_proxy_entry."""
+
+    @pytest.mark.parametrize(
+        "entry",
+        [
+            "fd00:1234:5678::/64",
+            "fd01::/48",
+            "fd02::/112",
+        ],
+    )
+    def test_ipv6_cidr_entries_are_unsupported(self, entry: str) -> None:
+        """IPv6 CIDR entries should be treated as unsupported."""
+        assert is_unsupported_no_proxy_entry(entry) is True
+
+    @pytest.mark.parametrize(
+        "entry",
+        [
+            "localhost",
+            "127.0.0.0/8",
+            "10.0.0.0/8",
+            ".cluster.local",
+            ".svc",
+        ],
+    )
+    def test_common_entries_remain_supported(self, entry: str) -> None:
+        """Common OpenShift NO_PROXY entries should be preserved."""
+        assert is_unsupported_no_proxy_entry(entry) is False
+
+
+class TestSanitizeNoProxyValue:
+    """Tests for sanitize_no_proxy_value."""
+
+    def test_removes_only_ipv6_cidr_entries(self) -> None:
+        """Sanitization should keep supported entries and drop IPv6 CIDRs."""
+        original = (
+            "localhost,127.0.0.0/8,fd00:1234:5678::/64,fd01::/48,"
+            "fd02::/112,.cluster.local,.svc"
+        )
+
+        sanitized, removed = sanitize_no_proxy_value(original)
+
+        assert sanitized == "localhost,127.0.0.0/8,.cluster.local,.svc"
+        assert removed == [
+            "fd00:1234:5678::/64",
+            "fd01::/48",
+            "fd02::/112",
+        ]
+
+
+class TestSanitizeNoProxyEnv:
+    """Tests for sanitize_no_proxy_env."""
+
+    def test_updates_both_proxy_env_vars(self, monkeypatch: pytest.MonkeyPatch) -> None:
+        """Both NO_PROXY and no_proxy should be sanitized."""
+        monkeypatch.setenv(
+            "NO_PROXY",
+            "localhost,fd00:1234:5678::/64,.cluster.local",
+        )
+        monkeypatch.setenv("no_proxy", "localhost,fd01::/48")
+
+        removed = sanitize_no_proxy_env()
+
+        assert removed == ["fd00:1234:5678::/64", "fd01::/48"]
+        assert os.environ["NO_PROXY"] == "localhost,.cluster.local"
+        assert os.environ["no_proxy"] == "localhost"
+
+    def test_httpx_client_initializes_after_sanitize(
+        self, monkeypatch: pytest.MonkeyPatch
+    ) -> None:
+        """httpx should not crash once unsupported entries are removed."""
+        monkeypatch.setenv(
+            "NO_PROXY",
+            "localhost,fd00:1234:5678::/64,fd01::/48,fd02::/112",
+        )
+
+        sanitize_no_proxy_env()
+
+        with httpx.Client() as client:
+            assert client is not None