diff --git a/CHANGELOG.md b/CHANGELOG.md
index 9dc2bb6f..89f1992f 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -8,6 +8,10 @@ The format is based on [Keep a Changelog](https://keepachangelog.com/en/1.0.0/),
 
 ## Unreleased
 
+***Fixed:***
+
+- Ensure telemetry is submitted when its storage directory does not exist
+
 ## 0.38.0 - 2026-08-04
 
 ***Changed:***
diff --git a/src/dda/telemetry/daemon/handler.py b/src/dda/telemetry/daemon/handler.py
index bcf131b4..c4e6d218 100644
--- a/src/dda/telemetry/daemon/handler.py
+++ b/src/dda/telemetry/daemon/handler.py
@@ -9,9 +9,13 @@
 from dda.telemetry.constants import DaemonEnvVars
 from dda.utils.fs import Path
 
+LOG_FILE = Path(os.environ[DaemonEnvVars.LOG_FILE])
 ERROR_FILE = Path(os.environ[DaemonEnvVars.ERROR_FILE])
 ERROR_OCCURRED = False
 
+LOG_FILE.parent.ensure_dir()
+ERROR_FILE.parent.ensure_dir()
+
 
 def set_error() -> None:
     global ERROR_OCCURRED  # noqa: PLW0603
@@ -33,7 +37,7 @@ def filter(self, record: logging.LogRecord) -> bool:  # noqa: PLR6301
 
 
 logging.basicConfig(
-    filename=os.environ[DaemonEnvVars.LOG_FILE],
+    filename=LOG_FILE,
     level=os.environ.get(DaemonEnvVars.LOG_LEVEL, "INFO"),
     format="%(asctime)s | %(levelname)s | %(message)s",
 )
diff --git a/tests/telemetry/test_manager.py b/tests/telemetry/test_manager.py
new file mode 100644
index 00000000..ca47d72b
--- /dev/null
+++ b/tests/telemetry/test_manager.py
@@ -0,0 +1,40 @@
+# SPDX-FileCopyrightText: 2026-present Datadog, Inc. <dev@datadoghq.com>
+#
+# SPDX-License-Identifier: MIT
+from __future__ import annotations
+
+import os
+import subprocess
+import sys
+
+from dda.telemetry.constants import DaemonEnvVars
+from dda.telemetry.manager import TelemetryManager
+
+
+def test_watch_delegates_storage_creation_to_daemon(mocker, temp_dir):
+    app = mocker.Mock()
+    cache_dir = temp_dir / "cache"
+    app.config.storage.cache = cache_dir
+    write_dir = temp_dir / "write"
+    mocker.patch("tempfile.mkdtemp", return_value=str(write_dir))
+
+    manager = TelemetryManager(app)
+    manager.watch()
+
+    storage_dir = cache_dir / "telemetry"
+    assert not storage_dir.exists()
+    env_vars = app.subprocess.spawn_daemon.call_args.kwargs["env"]
+    assert env_vars[DaemonEnvVars.WRITE_DIR] == str(write_dir)
+    assert env_vars[DaemonEnvVars.LOG_FILE] == str(storage_dir / "daemon.log")
+    assert env_vars[DaemonEnvVars.ERROR_FILE] == str(storage_dir / "daemon.error")
+
+
+def test_daemon_creates_storage_directory(temp_dir):
+    storage_dir = temp_dir / "cache" / "telemetry"
+    env_vars = os.environ.copy()
+    env_vars[DaemonEnvVars.LOG_FILE] = str(storage_dir / "daemon.log")
+    env_vars[DaemonEnvVars.ERROR_FILE] = str(storage_dir / "daemon.error")
+
+    subprocess.run([sys.executable, "-c", "import dda.telemetry.daemon.handler"], env=env_vars, check=True)
+
+    assert storage_dir.is_dir()