diff --git a/src/issues/stateManager.ts b/src/issues/stateManager.ts
index 14316c0818..d9d2b74ed1 100644
--- a/src/issues/stateManager.ts
+++ b/src/issues/stateManager.ts
@@ -345,20 +345,24 @@ export class StateManager {
 		singleRepoState.maxIssueNumber = await folderManager.getMaxIssue();
 		singleRepoState.lastHead = folderManager.repository.state.HEAD?.commit;
 		singleRepoState.lastBranch = folderManager.repository.state.HEAD?.name;
+		this._onDidChangeIssueData.fire();
 	}
 
-	private setIssues(folderManager: FolderRepositoryManager, query: string): Promise<IssueItem[] | undefined> {
-		return new Promise(async resolve => {
+	private async setIssues(folderManager: FolderRepositoryManager, query: string): Promise<IssueItem[] | undefined> {
+		try {
 			const issues = await folderManager.getIssues(query, { fetchNextPage: false, fetchOnePagePerRepo: true });
+			return issues?.items.map(item => {
+				const issueItem: IssueItem = item as IssueItem;
+				issueItem.uri = folderManager.repository.rootUri;
+				return issueItem;
+			});
+		} catch {
+			// Errors from fetching issues are expected (e.g. network failures).
+			// Return undefined so the tree shows an empty state for this query.
+			return undefined;
+		} finally {
 			this._onDidChangeIssueData.fire();
-			resolve(
-				issues?.items.map(item => {
-					const issueItem: IssueItem = item as IssueItem;
-					issueItem.uri = folderManager.repository.rootUri;
-					return issueItem;
-				}),
-			);
-		});
+		}
 	}
 
 	private async setCurrentIssueFromBranch(singleRepoState: SingleRepoState, branchName: string, silent: boolean = false) {
diff --git a/src/test/issues/stateManager.test.ts b/src/test/issues/stateManager.test.ts
index 4f2549ac0f..64ad1ed274 100644
--- a/src/test/issues/stateManager.test.ts
+++ b/src/test/issues/stateManager.test.ts
@@ -169,4 +169,140 @@ describe('StateManager branch behavior with useBranchForIssues setting', functio
 			vscode.workspace.getConfiguration = originalGetConfiguration;
 		}
 	});
+
+	it('should fire onDidChangeIssueData even when getIssues throws', async function () {
+		const mockUri = vscode.Uri.parse('file:///test');
+		const mockFolderManager = {
+			repository: { rootUri: mockUri, state: { HEAD: { commit: 'abc123' }, remotes: [] } },
+			getIssues: async () => {
+				throw new Error('Network error');
+			},
+			getMaxIssue: async () => 0,
+		};
+
+		const originalGetConfiguration = vscode.workspace.getConfiguration;
+		vscode.workspace.getConfiguration = (section?: string) => {
+			if (section === ISSUES_SETTINGS_NAMESPACE) {
+				return {
+					get: (key: string, defaultValue?: any) => {
+						if (key === 'queries') {
+							return [{ label: 'Test', query: 'is:open assignee:@me repo:owner/repo', groupBy: [] }];
+						}
+						return defaultValue;
+					},
+				} as any;
+			}
+			return originalGetConfiguration(section);
+		};
+
+		try {
+			const sm = new StateManager(undefined as any, {
+				folderManagers: [mockFolderManager],
+				credentialStore: { isAnyAuthenticated: () => true, getCurrentUser: async () => ({ login: 'testuser' }) },
+			} as any, mockContext);
+
+			let changeEventCount = 0;
+			sm.onDidChangeIssueData(() => changeEventCount++);
+
+			await (sm as any).setIssueData(mockFolderManager);
+
+			// The event should have fired even though getIssues threw
+			assert.ok(changeEventCount > 0, 'onDidChangeIssueData should fire even when getIssues fails');
+
+			// The promise in the collection should resolve to undefined issues (not reject)
+			const collection = sm.getIssueCollection(mockUri);
+			const queryResult = await collection.get('Test');
+			assert.strictEqual(queryResult?.issues, undefined, 'Issues should be undefined when getIssues fails');
+		} finally {
+			vscode.workspace.getConfiguration = originalGetConfiguration;
+		}
+	});
+
+	it('should fire onDidChangeIssueData after setIssueData completes', async function () {
+		const mockUri = vscode.Uri.parse('file:///test');
+		const mockFolderManager = {
+			repository: { rootUri: mockUri, state: { HEAD: { commit: 'abc123' }, remotes: [] } },
+			getIssues: async () => {
+				return { items: [], hasMorePages: false, hasUnsearchedRepositories: false, totalCount: 0 };
+			},
+			getMaxIssue: async () => 0,
+		};
+
+		const originalGetConfiguration = vscode.workspace.getConfiguration;
+		vscode.workspace.getConfiguration = (section?: string) => {
+			if (section === ISSUES_SETTINGS_NAMESPACE) {
+				return {
+					get: (key: string, defaultValue?: any) => {
+						if (key === 'queries') {
+							return [{ label: 'Test', query: 'is:open assignee:@me repo:owner/repo', groupBy: [] }];
+						}
+						return defaultValue;
+					},
+				} as any;
+			}
+			return originalGetConfiguration(section);
+		};
+
+		try {
+			const sm = new StateManager(undefined as any, {
+				folderManagers: [mockFolderManager],
+				credentialStore: { isAnyAuthenticated: () => true, getCurrentUser: async () => ({ login: 'testuser' }) },
+			} as any, mockContext);
+
+			let changeEventCount = 0;
+			sm.onDidChangeIssueData(() => changeEventCount++);
+
+			await (sm as any).setIssueData(mockFolderManager);
+
+			// The event should fire at least twice: once from setIssues (per-query) and once from setIssueData (final)
+			assert.strictEqual(changeEventCount, 2, `onDidChangeIssueData should fire exactly twice for a single query, but fired ${changeEventCount} times`);
+		} finally {
+			vscode.workspace.getConfiguration = originalGetConfiguration;
+		}
+	});
+
+	it('should not reject promises in issueCollection when getIssues throws', async function () {
+		const mockUri = vscode.Uri.parse('file:///test');
+		const mockFolderManager = {
+			repository: { rootUri: mockUri, state: { HEAD: { commit: 'abc123' }, remotes: [] } },
+			getIssues: async () => {
+				throw new Error('API error');
+			},
+			getMaxIssue: async () => 0,
+		};
+
+		const originalGetConfiguration = vscode.workspace.getConfiguration;
+		vscode.workspace.getConfiguration = (section?: string) => {
+			if (section === ISSUES_SETTINGS_NAMESPACE) {
+				return {
+					get: (key: string, defaultValue?: any) => {
+						if (key === 'queries') {
+							return [{ label: 'Test', query: 'is:open repo:owner/repo', groupBy: [] }];
+						}
+						return defaultValue;
+					},
+				} as any;
+			}
+			return originalGetConfiguration(section);
+		};
+
+		try {
+			const sm = new StateManager(undefined as any, {
+				folderManagers: [mockFolderManager],
+				credentialStore: { isAnyAuthenticated: () => true, getCurrentUser: async () => ({ login: 'testuser' }) },
+			} as any, mockContext);
+
+			await (sm as any).setIssueData(mockFolderManager);
+
+			// Verify that the promises in issueCollection resolve (not reject)
+			const collection = sm.getIssueCollection(mockUri);
+			for (const [, promise] of collection) {
+				const result = await promise;
+				assert.ok(result !== undefined, 'Promise should resolve, not reject');
+				assert.strictEqual(result.issues, undefined, 'Issues should be undefined on error');
+			}
+		} finally {
+			vscode.workspace.getConfiguration = originalGetConfiguration;
+		}
+	});
 });
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