diff --git a/bin/lib/onboard.js b/bin/lib/onboard.js
index 63d34a253..484bd4167 100644
--- a/bin/lib/onboard.js
+++ b/bin/lib/onboard.js
@@ -1386,11 +1386,15 @@ async function createSandbox(gpu, model, provider, preferredInferenceApi = null)
   console.log(`  Creating sandbox '${sandboxName}' (this takes a few minutes on first run)...`);
   const chatUiUrl = process.env.CHAT_UI_URL || "http://127.0.0.1:18789";
   patchStagedDockerfile(stagedDockerfile, model, chatUiUrl, String(Date.now()), provider, preferredInferenceApi);
+  // Only pass non-sensitive env vars to the sandbox. NVIDIA_API_KEY is NOT
+  // needed inside the sandbox — inference is proxied through the OpenShell
+  // gateway which injects the stored credential server-side. The gateway
+  // also strips any Authorization headers sent by the sandbox client.
+  // See: crates/openshell-sandbox/src/proxy.rs (header stripping),
+  //      crates/openshell-router/src/backend.rs (server-side auth injection).
   const envArgs = [formatEnvAssignment("CHAT_UI_URL", chatUiUrl)];
   const sandboxEnv = { ...process.env };
-  if (process.env.NVIDIA_API_KEY) {
-    sandboxEnv.NVIDIA_API_KEY = process.env.NVIDIA_API_KEY;
-  }
+  delete sandboxEnv.NVIDIA_API_KEY;
   const discordToken = getCredential("DISCORD_BOT_TOKEN") || process.env.DISCORD_BOT_TOKEN;
   if (discordToken) {
     sandboxEnv.DISCORD_BOT_TOKEN = discordToken;
@@ -2142,6 +2146,11 @@ async function onboard(opts = {}) {
   process.env.NEMOCLAW_OPENSHELL_BIN = getOpenshellBinary();
   await startGateway(gpu);
   await setupInference(GATEWAY_NAME, model, provider, endpointUrl, credentialEnv);
+  // The key is now stored in openshell's provider config. Clear it from our
+  // process environment so new child processes don't inherit it. Note: this
+  // does NOT clear /proc/pid/environ (kernel snapshot is immutable after exec),
+  // but it prevents run()'s { ...process.env } from propagating the key.
+  delete process.env.NVIDIA_API_KEY;
   const sandboxName = await createSandbox(gpu, model, provider, preferredInferenceApi);
   if (nimContainer) {
     registry.updateSandbox(sandboxName, { nimContainer });
diff --git a/bin/nemoclaw.js b/bin/nemoclaw.js
index 2f529ddf4..9971e2e1c 100755
--- a/bin/nemoclaw.js
+++ b/bin/nemoclaw.js
@@ -96,8 +96,8 @@ async function setup() {
 }
 
 async function setupSpark() {
-  await ensureApiKey();
-  run(`sudo -E NVIDIA_API_KEY=${shellQuote(process.env.NVIDIA_API_KEY)} bash "${SCRIPTS}/setup-spark.sh"`);
+  // setup-spark.sh configures Docker cgroups — it does not use NVIDIA_API_KEY.
+  run(`sudo bash "${SCRIPTS}/setup-spark.sh"`);
 }
 
 async function deploy(instanceName) {
diff --git a/scripts/setup.sh b/scripts/setup.sh
index 6aeb68085..978c9d8ae 100755
--- a/scripts/setup.sh
+++ b/scripts/setup.sh
@@ -133,10 +133,12 @@ fi
 info "Setting up inference providers..."
 
 # nvidia-nim (build.nvidia.com)
+# Use env-name-only form so openshell reads the value from the environment
+# internally — the literal key value never appears in the process argument list.
 upsert_provider \
   "nvidia-nim" \
   "openai" \
-  "NVIDIA_API_KEY=$NVIDIA_API_KEY" \
+  "NVIDIA_API_KEY" \
   "OPENAI_BASE_URL=https://integrate.api.nvidia.com/v1"
 
 # vllm-local (if vLLM is installed or running)
@@ -193,9 +195,11 @@ rm -rf "$BUILD_CTX/nemoclaw/node_modules"
 # detect failures. The raw log is kept on failure for debugging.
 CREATE_LOG=$(mktemp /tmp/nemoclaw-create-XXXXXX.log)
 set +e
+# NVIDIA_API_KEY is NOT passed into the sandbox. Inference is proxied through
+# the OpenShell gateway which injects the stored credential server-side.
 openshell sandbox create --from "$BUILD_CTX/Dockerfile" --name "$SANDBOX_NAME" \
   --provider nvidia-nim \
-  -- env NVIDIA_API_KEY="$NVIDIA_API_KEY" >"$CREATE_LOG" 2>&1
+  >"$CREATE_LOG" 2>&1
 CREATE_RC=$?
 set -e
 rm -rf "$BUILD_CTX"
diff --git a/scripts/walkthrough.sh b/scripts/walkthrough.sh
index 1acda809b..fe176220d 100755
--- a/scripts/walkthrough.sh
+++ b/scripts/walkthrough.sh
@@ -72,9 +72,7 @@ if ! command -v tmux >/dev/null 2>&1; then
   echo ""
   echo "  Terminal 2 (Agent):"
   echo "    openshell sandbox connect nemoclaw"
-  echo '    export NVIDIA_API_KEY=<your-key>'
-  echo "    nemoclaw-start"
-  echo "    openclaw agent --agent main --local --session-id live"
+  echo "    nemoclaw-start openclaw agent --agent main --local --session-id live"
   exit 0
 fi
 
@@ -87,8 +85,10 @@ tmux kill-session -t "$SESSION" 2>/dev/null || true
 tmux new-session -d -s "$SESSION" -x 200 -y 50 "openshell term"
 
 # Split right pane for the agent
+# NVIDIA_API_KEY is not needed inside the sandbox — inference is proxied
+# through the OpenShell gateway which injects credentials server-side.
 tmux split-window -h -t "$SESSION" \
-  "openshell sandbox connect nemoclaw -- bash -c 'export NVIDIA_API_KEY=$NVIDIA_API_KEY && nemoclaw-start openclaw agent --agent main --local --session-id live'"
+  "openshell sandbox connect nemoclaw -- bash -c 'nemoclaw-start openclaw agent --agent main --local --session-id live'"
 
 # Even split
 tmux select-layout -t "$SESSION" even-horizontal
diff --git a/test/runner.test.js b/test/runner.test.js
index 13f4013de..676a49085 100644
--- a/test/runner.test.js
+++ b/test/runner.test.js
@@ -224,4 +224,72 @@ describe("regression guards", () => {
     expect(src.includes("validateName(SANDBOX")).toBeTruthy();
     expect(src.includes("execSync")).toBeFalsy();
   });
+
+  describe("credential exposure guards (#429)", () => {
+    it("onboard createSandbox does not pass NVIDIA_API_KEY to sandbox env", () => {
+      const fs = require("fs");
+      const src = fs.readFileSync(path.join(__dirname, "..", "bin", "lib", "onboard.js"), "utf-8");
+      // Find the envArgs block in createSandbox — it should not contain NVIDIA_API_KEY
+      const envArgsMatch = src.match(/const envArgs = \[[\s\S]*?\];/);
+      expect(envArgsMatch).toBeTruthy();
+      expect(envArgsMatch[0].includes("NVIDIA_API_KEY")).toBe(false);
+    });
+
+    it("onboard clears NVIDIA_API_KEY from process.env after setupInference", () => {
+      const fs = require("fs");
+      const src = fs.readFileSync(path.join(__dirname, "..", "bin", "lib", "onboard.js"), "utf-8");
+      expect(src.includes("delete process.env.NVIDIA_API_KEY")).toBeTruthy();
+    });
+
+    it("setup.sh uses env-name-only form for nvidia-nim credential", () => {
+      const fs = require("fs");
+      const src = fs.readFileSync(path.join(__dirname, "..", "scripts", "setup.sh"), "utf-8");
+      // Should use "NVIDIA_API_KEY" (name only), not "NVIDIA_API_KEY=$NVIDIA_API_KEY" (value)
+      const lines = src.split("\n");
+      for (const line of lines) {
+        if (line.includes("upsert_provider") || line.includes("--credential")) continue;
+        if (line.trim().startsWith("#")) continue;
+        // Check credential argument lines passed to upsert_provider
+        if (line.includes('"NVIDIA_API_KEY=')) {
+          // Allow "NVIDIA_API_KEY" alone but not "NVIDIA_API_KEY=$..."
+          expect(line.includes("NVIDIA_API_KEY=$")).toBe(false);
+        }
+      }
+    });
+
+    it("setup.sh does not pass NVIDIA_API_KEY in sandbox create env args", () => {
+      const fs = require("fs");
+      const src = fs.readFileSync(path.join(__dirname, "..", "scripts", "setup.sh"), "utf-8");
+      // Find sandbox create command — should not have env NVIDIA_API_KEY
+      const createLines = src.split("\n").filter((l) => l.includes("sandbox create"));
+      for (const line of createLines) {
+        expect(line.includes("NVIDIA_API_KEY")).toBe(false);
+      }
+    });
+
+    it("setupSpark does not pass NVIDIA_API_KEY to sudo", () => {
+      const fs = require("fs");
+      const src = fs.readFileSync(path.join(__dirname, "..", "bin", "nemoclaw.js"), "utf-8");
+      // Find the run() call inside setupSpark — it should not contain the key
+      const sparkLines = src.split("\n").filter(
+        (l) => l.includes("setup-spark") && l.includes("run(")
+      );
+      for (const line of sparkLines) {
+        expect(line.includes("NVIDIA_API_KEY")).toBe(false);
+      }
+    });
+
+    it("walkthrough.sh does not embed NVIDIA_API_KEY in tmux or sandbox commands", () => {
+      const fs = require("fs");
+      const src = fs.readFileSync(path.join(__dirname, "..", "scripts", "walkthrough.sh"), "utf-8");
+      // Check only executable lines (tmux spawn, openshell connect) — not comments/docs
+      const cmdLines = src.split("\n").filter(
+        (l) => !l.trim().startsWith("#") && !l.trim().startsWith("echo") &&
+               (l.includes("tmux") || l.includes("openshell sandbox connect"))
+      );
+      for (const line of cmdLines) {
+        expect(line.includes("NVIDIA_API_KEY")).toBe(false);
+      }
+    });
+  });
 });