diff --git a/dynamic/internal/shim/run/loader.go b/dynamic/internal/shim/run/loader.go
index 34363f9cc..b12a2d7f1 100644
--- a/dynamic/internal/shim/run/loader.go
+++ b/dynamic/internal/shim/run/loader.go
@@ -40,6 +40,9 @@ import (
 	tfaddr "github.com/opentofu/registry-address"
 	"github.com/pulumi/pulumi/sdk/v3/go/common/util/contract"
 	"github.com/pulumi/pulumi/sdk/v3/go/common/workspace"
+	"google.golang.org/grpc"
+	"google.golang.org/grpc/codes"
+	"google.golang.org/grpc/status"
 
 	"github.com/pulumi/pulumi-terraform-bridge/v3/pkg/tfbridge"
 )
@@ -192,6 +195,25 @@ func getProviderServer(
 	return runProvider(ctx, p)
 }
 
+func includePanic(
+	ctx context.Context, method string,
+	req, reply any,
+	cc *grpc.ClientConn, invoker grpc.UnaryInvoker,
+	opts ...grpc.CallOption,
+) error {
+	err := invoker(ctx, method, req, reply, cc, opts...)
+	if status.Code(err) != codes.Unavailable {
+		return nil
+	}
+
+	panics := logging.PluginPanics()
+	if len(panics) == 0 {
+		return err
+	}
+
+	return fmt.Errorf("%w:\n%s", err, strings.Join(panics, "\n"))
+}
+
 // runProvider produces a provider factory that runs up the executable
 // file in the given cache package and uses go-plugin to implement
 // providers.Interface against it.
@@ -213,6 +235,9 @@ func runProvider(ctx context.Context, meta *providercache.CachedProvider) (Provi
 		VersionedPlugins: tfplugin.VersionedPlugins,
 		SyncStdout:       logging.PluginOutputMonitor(fmt.Sprintf("%s:stdout", meta.Provider)),
 		SyncStderr:       logging.PluginOutputMonitor(fmt.Sprintf("%s:stderr", meta.Provider)),
+		GRPCDialOptions: []grpc.DialOption{
+			grpc.WithUnaryInterceptor(includePanic),
+		},
 	}
 
 	client := plugin.NewClient(config)
diff --git a/dynamic/provider_test.go b/dynamic/provider_test.go
index 3fb0f7767..100cd5081 100644
--- a/dynamic/provider_test.go
+++ b/dynamic/provider_test.go
@@ -46,6 +46,21 @@ func TestMain(m *testing.M) {
 	os.Exit(exitVal)
 }
 
+func TestStacktraceDisplayed(t *testing.T) {
+	t.Parallel()
+	skipWindows(t)
+
+	ctx := context.Background()
+	grpc := pfProviderTestServer(ctx, t)
+
+	_, err := grpc.Create(ctx, &pulumirpc.CreateRequest{
+		Urn: string(resource.NewURN(
+			"test", "test", "", "pfprovider:index/panic:Panic", "panic",
+		)),
+	})
+	assert.ErrorContains(t, err, "PANIC MESSAGE HERE")
+}
+
 func TestPrimitiveTypes(t *testing.T) {
 	t.Parallel()
 	skipWindows(t)
@@ -371,6 +386,7 @@ var pfProviderPath = func() func(t *testing.T) string {
 	}
 }()
 
+// grpcTestServer returns an unparameterized in-memory gRPC server.
 func grpcTestServer(ctx context.Context, t *testing.T) pulumirpc.ResourceProviderServer {
 	defaultInfo, metadata, close := initialSetup()
 	t.Cleanup(func() { assert.NoError(t, close()) })
@@ -379,6 +395,20 @@ func grpcTestServer(ctx context.Context, t *testing.T) pulumirpc.ResourceProvide
 	return s
 }
 
+// pfProviderTestServer returns an in-memory gRPC server already parameterized by the
+// pfprovider test Terraform provider.
+func pfProviderTestServer(ctx context.Context, t *testing.T) pulumirpc.ResourceProviderServer {
+	grpc := grpcTestServer(ctx, t)
+	t.Run("parameterize", assertGRPCCall(grpc.Parameterize, &pulumirpc.ParameterizeRequest{
+		Parameters: &pulumirpc.ParameterizeRequest_Args{
+			Args: &pulumirpc.ParameterizeRequest_ParametersArgs{
+				Args: []string{pfProviderPath(t)},
+			},
+		},
+	}, noParallel))
+	return grpc
+}
+
 func skipWindows(t *testing.T) {
 	t.Helper()
 	if runtime.GOOS != "windows" {
diff --git a/dynamic/test/pfprovider/panic_resource.go b/dynamic/test/pfprovider/panic_resource.go
new file mode 100644
index 000000000..e2b401368
--- /dev/null
+++ b/dynamic/test/pfprovider/panic_resource.go
@@ -0,0 +1,79 @@
+package main
+
+import (
+	"context"
+
+	"github.com/hashicorp/terraform-plugin-framework/resource"
+	"github.com/hashicorp/terraform-plugin-framework/resource/schema"
+	"github.com/hashicorp/terraform-plugin-framework/resource/schema/planmodifier"
+	"github.com/hashicorp/terraform-plugin-framework/resource/schema/stringplanmodifier"
+)
+
+// Ensure provider defined types fully satisfy framework interfaces.
+var _ resource.Resource = &panicResource{}
+var _ resource.ResourceWithImportState = &panicResource{}
+
+func NewPanicResource() resource.Resource { return &panicResource{} }
+
+// panicResource defines the resource implementation.
+type panicResource struct{}
+
+func (r *panicResource) Metadata(
+	ctx context.Context, req resource.MetadataRequest, resp *resource.MetadataResponse,
+) {
+	resp.TypeName = req.ProviderTypeName + "_panic"
+}
+
+func (r *panicResource) Schema(
+	ctx context.Context, req resource.SchemaRequest, resp *resource.SchemaResponse,
+) {
+	resp.Schema = schema.Schema{
+		// This description is used by the documentation generator and the language server.
+		MarkdownDescription: "Example resource",
+
+		Attributes: map[string]schema.Attribute{
+			"id": schema.StringAttribute{
+				Computed:            true,
+				MarkdownDescription: "Example identifier",
+				PlanModifiers: []planmodifier.String{
+					stringplanmodifier.UseStateForUnknown(),
+				},
+			},
+		},
+	}
+}
+
+func (r *panicResource) Configure(
+	ctx context.Context, req resource.ConfigureRequest, resp *resource.ConfigureResponse,
+) {
+}
+
+func (r *panicResource) Create(
+	ctx context.Context, req resource.CreateRequest, resp *resource.CreateResponse,
+) {
+	panic("PANIC MESSAGE HERE")
+}
+
+func (r *panicResource) Read(
+	ctx context.Context, req resource.ReadRequest, resp *resource.ReadResponse,
+) {
+	panic("PANIC MESSAGE HERE")
+}
+
+func (r *panicResource) Update(
+	ctx context.Context, req resource.UpdateRequest, resp *resource.UpdateResponse,
+) {
+	panic("PANIC MESSAGE HERE")
+}
+
+func (r *panicResource) Delete(
+	ctx context.Context, req resource.DeleteRequest, resp *resource.DeleteResponse,
+) {
+	panic("PANIC MESSAGE HERE")
+}
+
+func (r *panicResource) ImportState(
+	ctx context.Context, req resource.ImportStateRequest, resp *resource.ImportStateResponse,
+) {
+	panic("PANIC MESSAGE HERE")
+}
diff --git a/dynamic/test/pfprovider/provider.go b/dynamic/test/pfprovider/provider.go
index 4b7feaaa2..c05423dc2 100644
--- a/dynamic/test/pfprovider/provider.go
+++ b/dynamic/test/pfprovider/provider.go
@@ -90,6 +90,7 @@ func (p *PFProvider) Configure(
 func (p *PFProvider) Resources(ctx context.Context) []func() resource.Resource {
 	return []func() resource.Resource{
 		NewExampleResource,
+		NewPanicResource,
 	}
 }
 
diff --git a/dynamic/testdata/TestStacktraceDisplayed/parameterize.golden b/dynamic/testdata/TestStacktraceDisplayed/parameterize.golden
new file mode 100644
index 000000000..e5bae4b9b
--- /dev/null
+++ b/dynamic/testdata/TestStacktraceDisplayed/parameterize.golden
@@ -0,0 +1,4 @@
+{
+  "name": "pfprovider",
+  "version": "0.0.0"
+}
\ No newline at end of file