diff --git a/CHANGELOG.md b/CHANGELOG.md
index 4aba343af..83d92c0d8 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -165,6 +165,12 @@ ensuring data is stored with proper parameter values.
 
 ### Fixed
 
+- **fileConfig error handling in alembic env.py** (#7874): Wrapped the `fileConfig()`
+  call in `alembic/env.py` with a `try/except` block that catches malformed INI logging
+  configuration and emits a clear, user-actionable error message to stderr (including the
+  config file path and guidance on the `[loggers]` section) before exiting with code 1.
+  Includes Behave scenarios for the error-handling logic.
+
 - **`agents project context show` JSON/YAML output** (#6323): Fixed structured output to include spec-required envelope (`command`, `status`, `exit_code`, `data`, `timing`, `messages`) and all four data sections (`context_policy`, `limits`, `summarization`, `current_usage`). Rich output now renders four panels including the new `Current Usage` panel.
 
 ### Added
@@ -1132,4 +1138,4 @@ iteration` and data corruption under concurrent plan execution. All public
 - **TUI -- Permission Question Widget**: A new inline `PermissionQuestionWidget`
   renders permission requests directly in the conversation stream for single-key
   operations. Users can allow/reject with single-key shortcuts (`a`/`A`/`r`/`R`),
-  navigate with arrow keys, confirm with `Enter`, or press `v` to open the full
\ No newline at end of file
+  navigate with arrow keys, confirm with `Enter`, or press `v` to open the full
diff --git a/CONTRIBUTORS.md b/CONTRIBUTORS.md
index fbb10a7e0..6ddd7ce76 100644
--- a/CONTRIBUTORS.md
+++ b/CONTRIBUTORS.md
@@ -58,3 +58,4 @@ Below are some of the specific details of various contributions.
 * HAL 9000 has contributed the config-actor combined-format support fix (PR #11232 / issue #11189): added ``_detect_nested_config_actor()``, ``_flatten_config_actor()``, and handling in ``ActorConfiguration.from_blob()`` to transparently flatten the nested ``config.actor`` block from both compact-string and nested-dict forms so v3 detection, schema validation, and canonicalisation see flat data — eliminating the ``"provider is required"`` crash.
 * HAL 9000 has contributed the actor compiler `actor_ref` field fix (issue #1429): corrected `_map_node()` and `compile_actor()` in `src/cleveragents/actor/compiler.py` to read `actor_ref` from the top-level `NodeDefinition.actor_ref` field instead of `node.config.get("actor_ref")`, resolving silent failures on all SUBGRAPH nodes where `subgraph_refs` was always empty and `NodeConfig.subgraph` was always `None`.
 * HAL 9000 has contributed the removal of the unsupported executable resource type (PR #3248 / issue #3077): removed `executable` from `LSP_RESOURCE_TYPES` and `BUILTIN_TYPE_NAMES`, updated `agents resource list` CLI table columns to the spec-required `[Name, ID, Type, Phys/Virt, Children, Projects]`, deleted orphaned `examples/resource-types/executable.yaml`, and updated related BDD test coverage.
+* HAL 9000 has contributed the alembic fileConfig error handling fix (PR #8288 / issue #7874): wrapped the `fileConfig()` call in `alembic/env.py` with a `try/except` block to catch malformed INI logging configuration and emit clear, actionable error messages to stderr.
diff --git a/features/steps/tdd_fileconfig_unhandled_exception_steps.py b/features/steps/tdd_fileconfig_unhandled_exception_steps.py
new file mode 100644
index 000000000..2612e015d
--- /dev/null
+++ b/features/steps/tdd_fileconfig_unhandled_exception_steps.py
@@ -0,0 +1,164 @@
+"""Step definitions for alembic fileConfig error handling (issue #7874).
+
+Each scenario uses its own isolated temp directory, preventing cross-test
+contamination.  The malformed / valid INI files are written into those dirs
+and the ``alembic`` CLI invocation is executed from within them so that
+``fileConfig()`` reads directly from the target file under test.
+"""
+
+from __future__ import annotations
+
+import os
+import subprocess
+import tempfile
+from pathlib import Path
+from typing import Any
+
+from behave import given, then, when
+
+# Absolute path to the project's alembic migrations package so that the
+# subprocess invocations execute the real env.py (not a stub), ensuring the
+# production fileConfig() error-handling path is covered by these scenarios.
+_MIGRATIONS_DIR = str(
+    Path(__file__).resolve().parent.parent.parent
+    / "src"
+    / "cleveragents"
+    / "infrastructure"
+    / "database"
+    / "migrations"
+)
+
+
+def _write_malformed_ini(directory: Path) -> Path:
+    """Write a deliberately malformed alembic.ini to *directory*."""
+    ini = directory / "alembic.ini"
+    ini.write_text(
+        "[alembic]\n"
+        f"script_location = {_MIGRATIONS_DIR}\n"
+        "\n"
+        # Reference a logger that does NOT exist anywhere.  fileConfig()
+        # raises ``KeyError`` at startup when the referenced key is absent
+        # from the INI file, producing an unhandled exception before any
+        # migration runs.
+        "[loggers]\n"
+        "keys = root,invalid_nonexistent_logger\n"
+        "\n",
+    )
+    return ini
+
+
+def _write_valid_ini(directory: Path) -> Path:
+    """Write a fully-valid alembic.ini to *directory*."""
+    ini = directory / "alembic.ini"
+    ini.write_text(
+        "[alembic]\n"
+        f"script_location = {_MIGRATIONS_DIR}\n"
+        "\n"
+        "[loggers]\n"
+        "keys = root\n"
+        "\n"
+        "[handlers]\n"
+        "keys = stream_handler\n"
+        "\n"
+        "[formatters]\n"
+        "keys = simple\n"
+        "\n"
+        "[logger_root]\n"
+        "level = WARN\n"
+        "handlers = stream_handler\n"
+        "\n"
+        "[handler_stream_handler]\n"
+        "class = StreamHandler\n"
+        "args = (sys.stderr,)\n"
+        "\n"
+        "[formatter_simple]\n"
+        "format = %(levelname)s:%(name)s:%(message)s\n",
+    )
+    return ini
+
+
+@given("a fresh temporary directory")
+def step_given_fresh_temp_dir(context: Any) -> None:
+    context.test_dir = Path(tempfile.mkdtemp(prefix="fileconfig_test_"))
+
+
+@when(
+    "the alembic.ini contains an invalid logger section"
+    " that references nonexistent loggers"
+)
+def step_when_invalid_log_section(context: Any) -> None:
+    """Write a malformed alembic.ini to the test directory."""
+    _write_malformed_ini(context.test_dir)
+
+
+@when("the alembic.ini contains a malformed logging configuration")
+def step_when_malformed_config(context: Any) -> None:
+    """Alias for when steps that write a malformed config."""
+    _write_malformed_ini(context.test_dir)
+
+
+@when("migrations are invoked normally")
+def step_when_invocations_normal(context: Any) -> None:
+    """Invoke ``alembic current`` to trigger env.py startup (fileConfig)."""
+    env = {
+        **os.environ,
+        "CLEVERAGENTS_DATABASE_URL": f"sqlite:///{context.test_dir}/test.db",
+    }
+    result = subprocess.run(
+        ["alembic", "current"],
+        cwd=context.test_dir,
+        capture_output=True,
+        text=True,
+        timeout=10,
+        env=env,
+    )
+    context.migration_result = result
+
+
+@when("the alembic.ini contains a valid logger configuration")
+def step_when_valid_config(context: Any) -> None:
+    """Write a fully-valid alembic.ini to the test directory."""
+    _write_valid_ini(context.test_dir)
+
+
+@then(
+    'the error output on stderr includes actionable guidance about "[loggers]" section'
+)
+def step_then_stderr_includes_guidance(context: Any) -> None:
+    """Assert that the error message contains ``[loggers]`` guidance."""
+    result = _assert_invocation(context)
+    assert result.returncode != 0, (
+        f"Expected non-zero exit code on configuration error. Got: {result.returncode}"
+    )
+    stderr = result.stderr
+    assert "[loggers]" in stderr or "loggers" in stderr.lower(), (
+        f"Error must be user-actionable and mention [loggers]. Got:\n{stderr}"
+    )
+
+
+@then('the error output on stderr includes the config file path "alembic.ini"')
+def step_then_stderr_includes_alembic_ini(context: Any) -> None:
+    """Assert that the error message contains the config file path."""
+    result = _assert_invocation(context)
+    stderr = result.stderr
+    assert "alembic.ini" in stderr, f"Error must include 'alembic.ini'. Got:\n{stderr}"
+
+
+@then("no error message appears on stderr")
+def step_then_no_stderr_error(context: Any) -> None:
+    """Assert that the alembic invocation produced no stderr output."""
+    result = _assert_invocation(context)
+    assert not result.stderr.strip(), (
+        f"Unexpected stderr when config is valid:\n{result.stderr}"
+    )
+
+
+def _assert_invocation(context: Any) -> subprocess.CompletedProcess[str]:
+    """Utility: assert that a migration invocation has been recorded."""
+    if not hasattr(context, "migration_result"):
+        msg = (
+            "No migration result recorded. Did all required *When* steps execute? "
+            "The test flow must be: Given … → When … → When … → Then …"
+        )
+        raise AssertionError(msg)
+    return context.migration_result
diff --git a/features/tdd_fileconfig_unhandled_exception.feature b/features/tdd_fileconfig_unhandled_exception.feature
new file mode 100644
index 000000000..ef1dba2a9
--- /dev/null
+++ b/features/tdd_fileconfig_unhandled_exception.feature
@@ -0,0 +1,42 @@
+@tdd_issue @tdd_issue_7874
+Feature: Alembic fileConfig error handling (issue #7874)
+
+    As an operator running Alembic migrations, I want to receive a clear,
+    actionable error message when alembic.ini contains malformed logging
+    configuration, so that I can diagnose and fix the issue without being
+    confronted by an unhandled traceback.
+
+    Background:
+        Given a fresh temporary directory
+
+    Scenario Outline: fileConfig failure exits with non-zero exit code
+        When the alembic.ini contains an invalid logger section that references nonexistent loggers
+        And migrations are invoked normally
+        Then the error output on stderr includes actionable guidance about "[loggers]" section
+
+        Examples: malformed configurations
+            | description                        |
+            | references undefined logger key    |
+
+    Scenario Outline: fileConfig failure message includes the config file path
+        When the alembic.ini contains a malformed logging configuration
+        And migrations are invoked normally
+        Then the error output on stderr includes the config file path "alembic.ini"
+
+        Examples: malformed configurations
+            | description                        |
+            | references undefined logger key    |
+
+    Scenario Outline: fileConfig failure message is user-actionable
+        When the alembic.ini contains a malformed logging configuration
+        And migrations are invoked normally
+        Then the error output on stderr includes actionable guidance about "[loggers]" section
+
+        Examples: malformed configurations
+            | description                        |
+            | references undefined logger key    |
+
+    Scenario: fileConfig succeeds silently when INI file is valid
+        When the alembic.ini contains a valid logger configuration
+        And migrations are invoked normally
+        Then no error message appears on stderr
diff --git a/src/cleveragents/infrastructure/database/migrations/env.py b/src/cleveragents/infrastructure/database/migrations/env.py
index 44cb4bee3..7d0a68e92 100644
--- a/src/cleveragents/infrastructure/database/migrations/env.py
+++ b/src/cleveragents/infrastructure/database/migrations/env.py
@@ -1,5 +1,6 @@
 import logging
 import os
+import sys
 from logging.config import fileConfig
 from pathlib import Path
 
@@ -27,7 +28,23 @@ if config is not None:
     # application loggers that were created before this point, which causes
     # test failures when log capture handlers are attached to those loggers.
     if config.config_file_name is not None:
-        fileConfig(config.config_file_name, disable_existing_loggers=False)
+        try:
+            fileConfig(config.config_file_name, disable_existing_loggers=False)
+        except Exception as exc:
+            # fileConfig() can raise configparser.Error, KeyError, ValueError, or
+            # other exceptions when the INI file is malformed or contains an invalid
+            # logging configuration section.  Per the project's "fail fast" philosophy
+            # (CONTRIBUTING.md), we add context (file path, nature of error) and
+            # re-raise so the operator receives a clear, actionable diagnostic rather
+            # than a raw traceback with no indication of which file caused the failure.
+            config_path = config.config_file_name
+            print(
+                f"ERROR: Failed to configure logging from '{config_path}': {exc}\n"
+                f"Check that '{config_path}' contains a valid [loggers] section "
+                f"and that all referenced handlers and formatters are defined.",
+                file=sys.stderr,
+            )
+            raise SystemExit(1) from exc
 
     # Override the database URL from environment or use default
     # This allows flexible configuration based on deployment