diff --git a/crates/openshell-driver-vm/src/main.rs b/crates/openshell-driver-vm/src/main.rs
index 0ab4743771..aac009bc59 100644
--- a/crates/openshell-driver-vm/src/main.rs
+++ b/crates/openshell-driver-vm/src/main.rs
@@ -322,17 +322,17 @@ async fn main() -> Result<()> {
 
     let listen_mode = compute_driver_listen_mode(&args).map_err(|err| miette::miette!("{err}"))?;
 
-    // Arm procguard so that if the gateway is killed (SIGKILL or crash)
-    // we also die. Without this the driver is reparented to init and
-    // keeps its per-sandbox VM launchers alive forever. Launchers have
-    // their own procguards (armed in `run_vm`) which cascade cleanup of
-    // the libkrun worker the moment this driver exits.
-    if let Err(err) = procguard::die_with_parent() {
-        tracing::warn!(
-            error = %err,
-            "procguard arm failed; gateway crashes may orphan this driver"
-        );
-    }
+    // The managed driver must not serve after its gateway exits. Its own
+    // process group keeps terminal SIGINT away during the gateway shutdown
+    // sweep, so a failed parent-death guard must stop startup instead of
+    // leaving the driver and its VM launchers behind.
+    let expected_gateway_pid = match &listen_mode {
+        ComputeDriverListenMode::Unix {
+            expected_peer_pid, ..
+        } => *expected_peer_pid,
+        ComputeDriverListenMode::Tcp(_) => None,
+    };
+    arm_driver_parent_guard(expected_gateway_pid)?;
 
     let driver = VmDriver::new(VmDriverConfig {
         allow_driver_config: args.admission_config_json.allow_driver_config,
@@ -424,6 +424,43 @@ async fn main() -> Result<()> {
     result
 }
 
+fn arm_driver_parent_guard(expected_gateway_pid: Option<u32>) -> Result<()> {
+    if let Some(expected) = expected_gateway_pid {
+        ensure_gateway_parent(expected)?;
+    }
+
+    // Launchers arm their own procguards in `run_vm`, which cascade cleanup
+    // to libkrun workers when this driver exits.
+    match procguard::die_with_parent() {
+        Ok(()) => {}
+        Err(err) if expected_gateway_pid.is_some() => {
+            return Err(miette::miette!(
+                "failed to arm managed VM driver parent-death guard: {err}"
+            ));
+        }
+        Err(err) => {
+            tracing::warn!(error = %err, "procguard arm failed; driver may outlive its parent");
+        }
+    }
+
+    // A subreaper can adopt an orphan before procguard reads getppid(). In
+    // that case it could arm against the subreaper instead of the gateway.
+    if let Some(expected) = expected_gateway_pid {
+        ensure_gateway_parent(expected)?;
+    }
+    Ok(())
+}
+
+fn ensure_gateway_parent(expected: u32) -> Result<()> {
+    let actual = nix::unistd::getppid().as_raw();
+    if i64::from(actual) != i64::from(expected) {
+        return Err(miette::miette!(
+            "expected gateway parent PID {expected}, found {actual}"
+        ));
+    }
+    Ok(())
+}
+
 async fn shutdown_signal() {
     let mut terminate = tokio::signal::unix::signal(tokio::signal::unix::SignalKind::terminate())
         .expect("install SIGTERM handler");
diff --git a/crates/openshell-driver-vm/tests/parent_death.rs b/crates/openshell-driver-vm/tests/parent_death.rs
new file mode 100644
index 0000000000..62ea6d1e81
--- /dev/null
+++ b/crates/openshell-driver-vm/tests/parent_death.rs
@@ -0,0 +1,56 @@
+// SPDX-FileCopyrightText: Copyright (c) 2025-2026 NVIDIA CORPORATION & AFFILIATES. All rights reserved.
+// SPDX-License-Identifier: Apache-2.0
+
+use std::io::Read;
+use std::process::{Command, Stdio};
+use std::time::{Duration, Instant};
+
+#[test]
+fn managed_driver_rejects_a_missing_gateway_parent() {
+    let state = tempfile::tempdir().expect("create driver state directory");
+    let socket = state.path().join("driver.sock");
+    let stale_gateway_pid = std::process::id().wrapping_add(1);
+
+    let mut child = Command::new(env!("CARGO_BIN_EXE_openshell-driver-vm"))
+        .arg("--bind-socket")
+        .arg(&socket)
+        .arg("--expected-peer-pid")
+        .arg(stale_gateway_pid.to_string())
+        .arg("--grpc-endpoint")
+        .arg("http://127.0.0.1:9")
+        .arg("--bootstrap-image")
+        .arg("example.invalid/bootstrap:latest")
+        .arg("--state-dir")
+        .arg(state.path())
+        .stdout(Stdio::null())
+        .stderr(Stdio::piped())
+        .spawn()
+        .expect("start managed driver");
+
+    let deadline = Instant::now() + Duration::from_secs(10);
+    let status = loop {
+        if let Some(status) = child.try_wait().expect("poll driver") {
+            break status;
+        }
+        if Instant::now() >= deadline {
+            child.kill().expect("stop driver after timeout");
+            child.wait().expect("reap driver after timeout");
+            panic!("driver kept running after its expected gateway parent was absent");
+        }
+        std::thread::sleep(Duration::from_millis(20));
+    };
+
+    let mut stderr = String::new();
+    child
+        .stderr
+        .take()
+        .expect("driver stderr")
+        .read_to_string(&mut stderr)
+        .expect("read driver stderr");
+    assert!(!status.success(), "driver unexpectedly succeeded: {stderr}");
+    assert!(
+        stderr.contains("expected gateway parent PID"),
+        "driver did not reject the stale gateway parent: {stderr}"
+    );
+    assert!(!socket.exists(), "driver created a socket after rejection");
+}
diff --git a/crates/openshell-gateway/src/vm.rs b/crates/openshell-gateway/src/vm.rs
index 2f9ea5cc8e..5b76a55c9c 100644
--- a/crates/openshell-gateway/src/vm.rs
+++ b/crates/openshell-gateway/src/vm.rs
@@ -539,11 +539,7 @@ pub async fn spawn(
     let guest_tls_paths = compute_driver_guest_tls_paths(vm_config)?;
     prepare_compute_driver_socket_path(vm_config, &socket_path)?;
 
-    let mut command = Command::new(&driver_bin);
-    command.kill_on_drop(true);
-    command.stdin(Stdio::null());
-    command.stdout(Stdio::inherit());
-    command.stderr(Stdio::inherit());
+    let mut command = compute_driver_command(&driver_bin);
     command.arg("--bind-socket").arg(&socket_path);
     command.arg("--admission-config-json").arg(
         serde_json::to_string(&openshell_core::resource_admission::DriverAdmissionConfig {
@@ -592,6 +588,7 @@ pub async fn spawn(
             driver_bin.display()
         ))
     })?;
+    forward_compute_driver_output(&mut child);
     let channel = wait_for_compute_driver(&socket_path, &mut child).await?;
     let process = Arc::new(ManagedDriverProcess::new(child, socket_path));
     Ok(AcquiredRemoteDriverEndpoint::managed(
@@ -599,6 +596,47 @@ pub async fn spawn(
     ))
 }
 
+/// Base command for the VM compute-driver subprocess.
+///
+/// The driver gets its own process group. Ctrl+C on a foreground gateway
+/// sends SIGINT to the terminal's foreground process group; if the driver
+/// shared the gateway's group it would exit on that signal before the
+/// gateway's shutdown sweep could stop its sandboxes. In its own group the
+/// driver keeps serving until the gateway stops it through
+/// `ManagedDriverProcess::shutdown` after the sweep. A gateway that dies
+/// without that shutdown still takes the driver with it: the driver arms a
+/// parent-death signal at startup, which does not depend on the group. Pipe
+/// stdout and stderr so the gateway can write the driver's logs to its own
+/// terminal; the driver's background group must not write there when TOSTOP
+/// is enabled.
+#[cfg(unix)]
+fn compute_driver_command(driver_bin: &Path) -> Command {
+    let mut command = Command::new(driver_bin);
+    command.kill_on_drop(true);
+    command.process_group(0);
+    command.stdin(Stdio::null());
+    command.stdout(Stdio::piped());
+    command.stderr(Stdio::piped());
+    command
+}
+
+#[cfg(unix)]
+fn forward_compute_driver_output(child: &mut tokio::process::Child) {
+    let mut child_stdout = child.stdout.take().expect("vm driver stdout is piped");
+    tokio::spawn(async move {
+        if let Err(error) = tokio::io::copy(&mut child_stdout, &mut tokio::io::stdout()).await {
+            tracing::warn!(%error, "failed to forward vm compute driver stdout");
+        }
+    });
+
+    let mut child_stderr = child.stderr.take().expect("vm driver stderr is piped");
+    tokio::spawn(async move {
+        if let Err(error) = tokio::io::copy(&mut child_stderr, &mut tokio::io::stderr()).await {
+            tracing::warn!(%error, "failed to forward vm compute driver stderr");
+        }
+    });
+}
+
 fn validate_vm_sandbox_identity(config: &VmComputeConfig) -> Result<()> {
     let range = openshell_policy::MIN_SANDBOX_UID..=openshell_policy::MAX_SANDBOX_UID;
     for (field, value) in [
@@ -797,10 +835,10 @@ async fn connect_compute_driver(socket_path: &Path) -> Result<Channel> {
 mod tests {
     use super::{
         VmComputeConfig, append_otlp_args, append_vm_identity_args, append_vm_network_trust_args,
-        append_vm_proxy_and_spiffe_args, append_vm_rootfs_tar_args, compute_driver_guest_tls_paths,
-        compute_driver_socket_path, current_euid, prepare_compute_driver_socket_path,
-        prepare_vm_state_dir, resolve_compute_driver_bin, resolve_driver_search_dirs,
-        validate_vm_sandbox_identity,
+        append_vm_proxy_and_spiffe_args, append_vm_rootfs_tar_args, compute_driver_command,
+        compute_driver_guest_tls_paths, compute_driver_socket_path, current_euid,
+        prepare_compute_driver_socket_path, prepare_vm_state_dir, resolve_compute_driver_bin,
+        resolve_driver_search_dirs, validate_vm_sandbox_identity,
     };
     use openshell_core::{NetworkSupervisorTrustBundle, UpstreamProxyConfig};
     use openshell_server::config_file::{OcsfOtlpConfig, OtlpConfig, OtlpTracesConfig};
@@ -845,6 +883,51 @@ mod tests {
         .expect("an explicit bootstrap image is valid");
     }
 
+    #[tokio::test]
+    async fn vm_driver_command_runs_driver_in_its_own_process_group() {
+        use rustix::process::{Pid, getpgid};
+
+        let mut child = compute_driver_command(std::path::Path::new("sleep"))
+            .arg("30")
+            .spawn()
+            .expect("spawn stand-in driver");
+        let pid = Pid::from_raw(i32::try_from(child.id().expect("child pid")).unwrap())
+            .expect("child pid is non-zero");
+        let child_group = getpgid(Some(pid)).expect("read child process group");
+        let gateway_group = getpgid(None).expect("read own process group");
+        child.kill().await.expect("stop stand-in driver");
+
+        assert_eq!(
+            child_group, pid,
+            "the driver must lead its own process group"
+        );
+        assert_ne!(
+            child_group, gateway_group,
+            "terminal SIGINT to the gateway's group must not reach the driver"
+        );
+    }
+
+    #[tokio::test]
+    async fn vm_driver_command_pipes_both_output_streams() {
+        let child = compute_driver_command(std::path::Path::new("sh"))
+            .arg("-c")
+            .arg("printf 'driver stdout'; printf 'driver stderr' >&2")
+            .spawn()
+            .expect("run stand-in driver");
+
+        assert!(child.stdout.is_some(), "driver stdout must be piped");
+        assert!(child.stderr.is_some(), "driver stderr must be piped");
+
+        let output = child
+            .wait_with_output()
+            .await
+            .expect("collect driver output");
+
+        assert!(output.status.success());
+        assert_eq!(output.stdout, b"driver stdout");
+        assert_eq!(output.stderr, b"driver stderr");
+    }
+
     #[test]
     fn vm_driver_command_includes_gateway_otlp_configuration() {
         let mut command = tokio::process::Command::new("openshell-driver-vm");