diff --git a/packages/provider-cursor/src/server/CursorSdkCatalog.ts b/packages/provider-cursor/src/server/CursorSdkCatalog.ts
index fae053fe535c9..5ac3b2925039e 100644
--- a/packages/provider-cursor/src/server/CursorSdkCatalog.ts
+++ b/packages/provider-cursor/src/server/CursorSdkCatalog.ts
@@ -10,7 +10,7 @@ import * as Schema from "effect/Schema";
 import { AuthenticationError, Cursor, CursorSdkError } from "./sdk.ts";
 
 export interface CursorSdkCatalogSnapshot {
-  readonly user: SDKUser;
+  readonly user: SDKUser | undefined;
   readonly models: ReadonlyArray<SDKModel>;
 }
 
@@ -30,6 +30,10 @@ export class CursorSdkCatalogError extends Schema.TaggedError<CursorSdkCatalogEr
   get planRequired(): boolean {
     return this.cause instanceof CursorSdkError && this.cause.code === "plan_required";
   }
+
+  get accountBlocked(): boolean {
+    return this.cause instanceof CursorSdkError && this.cause.status === 403 && !this.planRequired;
+  }
 }
 
 export class CursorSdkCatalog extends Context.Service<
@@ -82,7 +86,13 @@ export const makeCursorSdkCatalog = Effect.fn("CursorSdkCatalog.make")(function*
     read: (apiKey) =>
       Effect.all(
         {
-          user: probes.readUser(apiKey),
+          // Enterprise teams can block account labels while model discovery still works.
+          user: Effect.catchIf(
+            probes.readUser(apiKey),
+            (error: CursorSdkCatalogError): boolean => error.accountBlocked,
+            () => Effect.undefined,
+            (error: CursorSdkCatalogError) => Effect.fail(error),
+          ),
           models: Cache.get(modelCache, apiKey),
         },
         { concurrency: "unbounded" },
diff --git a/packages/provider-cursor/src/server/status.test.ts b/packages/provider-cursor/src/server/status.test.ts
index 6d211d592b500..36fa4f8b2d5af 100644
--- a/packages/provider-cursor/src/server/status.test.ts
+++ b/packages/provider-cursor/src/server/status.test.ts
@@ -261,6 +261,94 @@ describe("checkCursorProviderStatus", () => {
       }),
   );
 
+  it.effect.each([
+    {
+      name: "keeps models when /v1/me is blocked",
+      meFailure: new CursorSdkError("[feature_unavailable] Not available for this team.", {
+        code: "feature_unavailable",
+        status: 403,
+      }),
+      expected: {
+        status: "ready",
+        auth: { status: "authenticated", type: "api-key", label: "Cursor API key" },
+        models: [{ slug: "claude-opus-4-8", isCustom: false }],
+      },
+    },
+    {
+      name: "keeps models when /v1/me returns a 403 without a code",
+      meFailure: new CursorSdkError("[unknown] Forbidden", { code: "unknown", status: 403 }),
+      expected: {
+        status: "ready",
+        auth: { status: "authenticated", type: "api-key", label: "Cursor API key" },
+        models: [{ slug: "claude-opus-4-8", isCustom: false }],
+      },
+    },
+    {
+      name: "keeps the paid-plan message when /v1/me returns plan_required",
+      meFailure: new CursorSdkError("[plan_required] Not available for free users.", {
+        code: "plan_required",
+        status: 403,
+      }),
+      expected: {
+        status: "error",
+        auth: { status: "unknown" },
+        message:
+          "Cursor needs a paid plan to run in T3 Code. Upgrade the account that owns CURSOR_API_KEY or use a key from a paid account.",
+      },
+    },
+    {
+      name: "fails when /v1/me has a server error",
+      meFailure: new CursorSdkError("[unknown] Service unavailable", {
+        code: "unknown",
+        status: 503,
+      }),
+      expected: {
+        status: "error",
+        auth: { status: "unknown" },
+        message: "Cursor SDK catalog request failed. Check server logs for details.",
+      },
+    },
+    {
+      name: "rejects a 401 even when its code is feature_unavailable",
+      meFailure: new CursorSdkError("Unauthorized", {
+        code: "feature_unavailable",
+        status: 401,
+      }),
+      expected: {
+        status: "error",
+        auth: { status: "unauthenticated" },
+        message: "Cursor SDK authentication failed. Check CURSOR_API_KEY.",
+      },
+    },
+    {
+      name: "fails a key that /v1/me rejects",
+      meFailure: new CursorSdkError("Unauthorized", { status: 401 }),
+      expected: {
+        status: "error",
+        auth: { status: "unauthenticated" },
+        message: "Cursor SDK authentication failed. Check CURSOR_API_KEY.",
+      },
+    },
+  ])("$name", ({ meFailure, expected }) =>
+    Effect.gen(function* () {
+      const catalog = yield* CursorSdkCatalog.makeCursorSdkCatalog({
+        readUser: () =>
+          Effect.fail(
+            new CursorSdkCatalog.CursorSdkCatalogError({
+              authenticationFailure: meFailure.status === 401,
+              cause: meFailure,
+            }),
+          ),
+        readModels: () => Effect.succeed([sdkParameterizedModel]),
+      });
+      const provider = yield* checkCursorProviderStatus(baseCursorSettings, {
+        CURSOR_API_KEY: "enterprise-key",
+      }).pipe(Effect.provideService(CursorSdkCatalog.CursorSdkCatalog, catalog));
+
+      expect(provider).toMatchObject(expected);
+    }),
+  );
+
   it.effect("requires a Cursor API key without probing any external Cursor binary", () =>
     Effect.gen(function* () {
       const provider = yield* checkCursorProviderStatus(baseCursorSettings).pipe(
diff --git a/packages/provider-cursor/src/server/status.ts b/packages/provider-cursor/src/server/status.ts
index 9722ddbcfd23a..ffeca7a1da0b7 100644
--- a/packages/provider-cursor/src/server/status.ts
+++ b/packages/provider-cursor/src/server/status.ts
@@ -182,9 +182,9 @@ export function buildCursorDiscoveredModelsFromSdk(
   });
 }
 
-function cursorSdkAuth(user: SDKUser, type: "api-key" | "browser"): ServerProviderAuth {
-  const email = user.userEmail?.trim();
-  const apiKeyName = user.apiKeyName.trim();
+function cursorSdkAuth(user: SDKUser | undefined, type: "api-key" | "browser"): ServerProviderAuth {
+  const email = user?.userEmail?.trim();
+  const apiKeyName = user?.apiKeyName.trim();
   return {
     status: "authenticated",
     type,