diff --git a/apps/web/src/app/dashboard/agents/[id]/page.tsx b/apps/web/src/app/dashboard/agents/[id]/page.tsx
index 9d49904..3efb612 100644
--- a/apps/web/src/app/dashboard/agents/[id]/page.tsx
+++ b/apps/web/src/app/dashboard/agents/[id]/page.tsx
@@ -1029,14 +1029,26 @@ export default function AgentDetailPage(): React.ReactElement {
         <div className="bg-surface border border-border rounded-lg p-6">
           <EnvVarsEditor
             value={envVars}
-            onChange={(newEnvVars) => {
+            onChange={async (newEnvVars) => {
               setEnvVars(newEnvVars);
-              // Auto-save env vars
-              fetch(`/api/agents/${agentId}`, {
-                method: 'PATCH',
-                headers: { 'Content-Type': 'application/json' },
-                body: JSON.stringify({ envVars: newEnvVars }),
-              });
+              // Auto-save env vars with error handling
+              try {
+                const response = await fetch(`/api/agents/${agentId}`, {
+                  method: 'PATCH',
+                  headers: { 'Content-Type': 'application/json' },
+                  body: JSON.stringify({ envVars: newEnvVars }),
+                });
+                const result = await response.json();
+                if (!result.success) {
+                  console.error('Failed to save env vars:', result.error);
+                  alert(
+                    'Failed to save environment variables: ' + (result.error || 'Unknown error')
+                  );
+                }
+              } catch (err) {
+                console.error('Failed to save env vars:', err);
+                alert('Failed to save environment variables. Please try again.');
+              }
             }}
             title="Environment Variables"
             description="Passed to tools at runtime. Agent vars override collection vars. Changes are saved automatically."
diff --git a/packages/tools/official/sprites-exec/package.json b/packages/tools/official/sprites-exec/package.json
index 2628486..ccc204c 100644
--- a/packages/tools/official/sprites-exec/package.json
+++ b/packages/tools/official/sprites-exec/package.json
@@ -1,6 +1,6 @@
 {
   "name": "@tpmjs/tools-sprites-exec",
-  "version": "0.1.3",
+  "version": "0.1.4",
   "description": "Execute a command inside a sprite and return the output with exit code",
   "type": "module",
   "keywords": [
diff --git a/packages/tools/official/sprites-exec/src/index.ts b/packages/tools/official/sprites-exec/src/index.ts
index 08208d9..2550790 100644
--- a/packages/tools/official/sprites-exec/src/index.ts
+++ b/packages/tools/official/sprites-exec/src/index.ts
@@ -254,9 +254,30 @@ export const spritesExecTool = tool({
       );
     }
 
-    // Parse binary response
+    // Parse response - handle both binary and JSON error responses
     const arrayBuffer = await response.arrayBuffer();
     const buffer = new Uint8Array(arrayBuffer);
+
+    // Check if response is JSON error (starts with '{') instead of binary (starts with 0x00-0x03)
+    // Sprites API returns HTTP 200 with JSON body for some errors like auth failures
+    if (buffer.length > 0 && buffer[0] === 0x7b) {
+      // 0x7B = '{'
+      const decoder = new TextDecoder();
+      const jsonText = decoder.decode(buffer);
+      try {
+        const errorResponse = JSON.parse(jsonText) as { error?: string };
+        if (errorResponse.error) {
+          throw new Error(`Failed to execute command in sprite "${name}": ${errorResponse.error}`);
+        }
+      } catch (parseError) {
+        // If JSON parsing fails, throw generic error with raw text
+        if (parseError instanceof SyntaxError) {
+          throw new Error(`Failed to execute command in sprite "${name}": ${jsonText}`);
+        }
+        throw parseError;
+      }
+    }
+
     const { stdout, stderr, exitCode } = parseBinaryResponse(buffer);
 
     return {