diff --git a/lambda-runtime/Cargo.toml b/lambda-runtime/Cargo.toml
index 7d0b570ba..442c9c61c 100644
--- a/lambda-runtime/Cargo.toml
+++ b/lambda-runtime/Cargo.toml
@@ -78,6 +78,7 @@ pin-project-lite = { workspace = true }
 tracing-appender = "0.2"
 tracing-capture = "0.1.0"
 tracing-subscriber = { version = "0.3", features = ["registry"] }
+tracing-test = "0.2"
 
 [package.metadata.docs.rs]
 all-features = true
diff --git a/lambda-runtime/src/layers/api_client.rs b/lambda-runtime/src/layers/api_client.rs
index 7113ee0a0..df9b864db 100644
--- a/lambda-runtime/src/layers/api_client.rs
+++ b/lambda-runtime/src/layers/api_client.rs
@@ -85,10 +85,230 @@ where
                             .boxed();
                         self.set(RuntimeApiClientFuture::Second(next_fut));
                     }
-                    Err(err) => break Err(err),
+                    Err(err) => {
+                        log_or_print!(
+                            tracing: tracing::error!(error = ?err, "failed to build Lambda Runtime API request"),
+                            fallback: eprintln!("failed to build Lambda Runtime API request: {err:?}")
+                        );
+                        break Err(err);
+                    }
+                },
+                RuntimeApiClientFutureProj::Second(fut) => match ready!(fut.poll(cx)) {
+                    Ok(resp) if !resp.status().is_success() => {
+                        let status = resp.status();
+
+                        // TODO
+                        // we should consume the response body of the call in order to give a more specific message.
+                        // https://github.com/aws/aws-lambda-rust-runtime/issues/1110
+
+                        log_or_print!(
+                            tracing: tracing::error!(status = %status, "Lambda Runtime API returned non-200 response"),
+                            fallback: eprintln!("Lambda Runtime API returned non-200 response: status={status}")
+                        );
+
+                        // Adding more information on top of 410 Gone, to make it more clear since we cannot access the body of the message
+                        if status == 410 {
+                            log_or_print!(
+                                tracing: tracing::error!("Lambda function timeout!"),
+                                fallback: eprintln!("Lambda function timeout!")
+                            );
+                        }
+
+                        // Return Ok to maintain existing contract - runtime continues despite API errors
+                        break Ok(());
+                    }
+                    Ok(_) => break Ok(()),
+                    Err(err) => {
+                        log_or_print!(
+                            tracing: tracing::error!(error = ?err, "Lambda Runtime API request failed"),
+                            fallback: eprintln!("Lambda Runtime API request failed: {err:?}")
+                        );
+                        break Err(err);
+                    }
                 },
-                RuntimeApiClientFutureProj::Second(fut) => break ready!(fut.poll(cx)).map(|_| ()),
             }
         })
     }
 }
+
+#[cfg(test)]
+mod tests {
+    use super::*;
+    use http::StatusCode;
+    use http_body_util::Full;
+    use hyper::body::Bytes;
+    use lambda_runtime_api_client::body::Body;
+    use std::convert::Infallible;
+    use tokio::net::TcpListener;
+    use tracing_test::traced_test;
+
+    async fn start_mock_server(status: StatusCode) -> String {
+        let listener = TcpListener::bind("127.0.0.1:0").await.unwrap();
+        let addr = listener.local_addr().unwrap();
+        let url = format!("http://{}", addr);
+
+        tokio::spawn(async move {
+            let (stream, _) = listener.accept().await.unwrap();
+            let io = hyper_util::rt::TokioIo::new(stream);
+
+            let service = hyper::service::service_fn(move |_req| async move {
+                Ok::<_, Infallible>(
+                    http::Response::builder()
+                        .status(status)
+                        .body(Full::new(Bytes::from("test response")))
+                        .unwrap(),
+                )
+            });
+
+            let _ = hyper_util::server::conn::auto::Builder::new(hyper_util::rt::TokioExecutor::new())
+                .serve_connection(io, service)
+                .await;
+        });
+
+        // Give the server a moment to start
+        tokio::time::sleep(tokio::time::Duration::from_millis(10)).await;
+        url
+    }
+
+    #[tokio::test]
+    #[traced_test]
+    async fn test_successful_response() {
+        let url = start_mock_server(StatusCode::OK).await;
+        let client = Arc::new(
+            lambda_runtime_api_client::Client::builder()
+                .with_endpoint(url.parse().unwrap())
+                .build()
+                .unwrap(),
+        );
+
+        let request_fut =
+            async { Ok::<_, BoxError>(http::Request::builder().uri("/test").body(Body::empty()).unwrap()) };
+
+        let future = RuntimeApiClientFuture::First(request_fut, client);
+        let result = future.await;
+
+        assert!(result.is_ok());
+        // No error logs should be present
+        assert!(!logs_contain("Lambda Runtime API returned non-200 response"));
+    }
+
+    #[tokio::test]
+    #[traced_test]
+    async fn test_410_timeout_error() {
+        let url = start_mock_server(StatusCode::GONE).await;
+        let client = Arc::new(
+            lambda_runtime_api_client::Client::builder()
+                .with_endpoint(url.parse().unwrap())
+                .build()
+                .unwrap(),
+        );
+
+        let request_fut =
+            async { Ok::<_, BoxError>(http::Request::builder().uri("/test").body(Body::empty()).unwrap()) };
+
+        let future = RuntimeApiClientFuture::First(request_fut, client);
+        let result = future.await;
+
+        // Returns Ok to maintain contract, but logs the error
+        assert!(result.is_ok());
+
+        // Verify the error was logged
+        assert!(logs_contain("Lambda Runtime API returned non-200 response"));
+        assert!(logs_contain("Lambda function timeout!"));
+    }
+
+    #[tokio::test]
+    #[traced_test]
+    async fn test_500_error() {
+        let url = start_mock_server(StatusCode::INTERNAL_SERVER_ERROR).await;
+        let client = Arc::new(
+            lambda_runtime_api_client::Client::builder()
+                .with_endpoint(url.parse().unwrap())
+                .build()
+                .unwrap(),
+        );
+
+        let request_fut =
+            async { Ok::<_, BoxError>(http::Request::builder().uri("/test").body(Body::empty()).unwrap()) };
+
+        let future = RuntimeApiClientFuture::First(request_fut, client);
+        let result = future.await;
+
+        // Returns Ok to maintain contract, but logs the error
+        assert!(result.is_ok());
+
+        // Verify the error was logged with status code
+        assert!(logs_contain("Lambda Runtime API returned non-200 response"));
+    }
+
+    #[tokio::test]
+    #[traced_test]
+    async fn test_404_error() {
+        let url = start_mock_server(StatusCode::NOT_FOUND).await;
+        let client = Arc::new(
+            lambda_runtime_api_client::Client::builder()
+                .with_endpoint(url.parse().unwrap())
+                .build()
+                .unwrap(),
+        );
+
+        let request_fut =
+            async { Ok::<_, BoxError>(http::Request::builder().uri("/test").body(Body::empty()).unwrap()) };
+
+        let future = RuntimeApiClientFuture::First(request_fut, client);
+        let result = future.await;
+
+        // Returns Ok to maintain contract, but logs the error
+        assert!(result.is_ok());
+
+        // Verify the error was logged
+        assert!(logs_contain("Lambda Runtime API returned non-200 response"));
+    }
+
+    #[tokio::test]
+    #[traced_test]
+    async fn test_request_build_error() {
+        let client = Arc::new(
+            lambda_runtime_api_client::Client::builder()
+                .with_endpoint("http://localhost:9001".parse().unwrap())
+                .build()
+                .unwrap(),
+        );
+
+        let request_fut = async { Err::<http::Request<Body>, BoxError>("Request build error".into()) };
+
+        let future = RuntimeApiClientFuture::First(request_fut, client);
+        let result = future.await;
+
+        assert!(result.is_err());
+        let err = result.unwrap_err();
+        assert!(err.to_string().contains("Request build error"));
+
+        // Verify the error was logged
+        assert!(logs_contain("failed to build Lambda Runtime API request"));
+    }
+
+    #[tokio::test]
+    #[traced_test]
+    async fn test_network_error() {
+        // Use an invalid endpoint that will fail to connect
+        let client = Arc::new(
+            lambda_runtime_api_client::Client::builder()
+                .with_endpoint("http://127.0.0.1:1".parse().unwrap()) // Port 1 should be unreachable
+                .build()
+                .unwrap(),
+        );
+
+        let request_fut =
+            async { Ok::<_, BoxError>(http::Request::builder().uri("/test").body(Body::empty()).unwrap()) };
+
+        let future = RuntimeApiClientFuture::First(request_fut, client);
+        let result = future.await;
+
+        // Network errors should propagate as Err
+        assert!(result.is_err());
+
+        // Verify the error was logged
+        assert!(logs_contain("Lambda Runtime API request failed"));
+    }
+}
diff --git a/lambda-runtime/src/lib.rs b/lambda-runtime/src/lib.rs
index 148050877..8755a130e 100644
--- a/lambda-runtime/src/lib.rs
+++ b/lambda-runtime/src/lib.rs
@@ -19,6 +19,9 @@ use tokio_stream::Stream;
 use tower::util::ServiceFn;
 pub use tower::{self, service_fn, Service};
 
+#[macro_use]
+mod macros;
+
 /// Diagnostic utilities to convert Rust types into Lambda Error types.
 pub mod diagnostic;
 pub use diagnostic::Diagnostic;
diff --git a/lambda-runtime/src/macros.rs b/lambda-runtime/src/macros.rs
new file mode 100644
index 000000000..8c531470d
--- /dev/null
+++ b/lambda-runtime/src/macros.rs
@@ -0,0 +1,10 @@
+// Logs using tracing `error!` if a dispatcher is set, otherwise falls back to `eprintln!`.
+macro_rules! log_or_print {
+    (tracing: $tracing_expr:expr, fallback: $fallback_expr:expr) => {
+        if tracing::dispatcher::has_been_set() {
+            $tracing_expr;
+        } else {
+            $fallback_expr;
+        }
+    };
+}
diff --git a/lambda-runtime/src/runtime.rs b/lambda-runtime/src/runtime.rs
index 191b55ae3..755377ae6 100644
--- a/lambda-runtime/src/runtime.rs
+++ b/lambda-runtime/src/runtime.rs
@@ -363,13 +363,12 @@ where
     /// unset.
     pub async fn run(self) -> Result<(), BoxError> {
         if let Some(raw) = concurrency_env_value() {
-            if tracing::dispatcher::has_been_set() {
-                tracing::warn!(
+            log_or_print!(
+                tracing: tracing::warn!(
                     "AWS_LAMBDA_MAX_CONCURRENCY is set to '{raw}', but the concurrency-tokio feature is not enabled; running sequentially",
-                );
-            } else {
-                eprintln!("AWS_LAMBDA_MAX_CONCURRENCY is set to '{raw}', but the concurrency-tokio feature is not enabled; running sequentially");
-            }
+                ),
+                fallback: eprintln!("AWS_LAMBDA_MAX_CONCURRENCY is set to '{raw}', but the concurrency-tokio feature is not enabled; running sequentially")
+            );
         }
         let incoming = incoming(&self.client);
         Self::run_with_incoming(self.service, self.config, incoming).await
@@ -938,6 +937,8 @@ mod endpoint_tests {
 
     #[tokio::test]
     #[cfg(feature = "concurrency-tokio")]
+    #[traced_test]
+    #[cfg(feature = "tokio-concurrent-runtime")]
     async fn test_concurrent_structured_logging_isolation() -> Result<(), Error> {
         use std::collections::HashSet;
         use tracing::info;