diff --git a/frontend/src/components/settings/DaydreamAccountSection.tsx b/frontend/src/components/settings/DaydreamAccountSection.tsx
index 01df7ffb1..5bd8c130d 100644
--- a/frontend/src/components/settings/DaydreamAccountSection.tsx
+++ b/frontend/src/components/settings/DaydreamAccountSection.tsx
@@ -56,8 +56,11 @@ export function DaydreamAccountSection({
     setShowCloudMode(shouldShowCloudMode());
 
     // If signed in but no display name cached, refresh the profile
+    // Only attempt if we have valid stored auth (not just env var fallback)
     if (authed && !cachedName) {
-      refreshUserProfile();
+      refreshUserProfile().catch(() => {
+        // If refresh fails (e.g. 401), auth state will be cleared automatically
+      });
     }
 
     const handleAuthChange = () => {
diff --git a/frontend/src/lib/auth.ts b/frontend/src/lib/auth.ts
index e7e837353..66e11a089 100644
--- a/frontend/src/lib/auth.ts
+++ b/frontend/src/lib/auth.ts
@@ -104,6 +104,12 @@ async function fetchUserProfile(apiKey: string): Promise<UserProfile> {
   const response = await fetch(`${DAYDREAM_API_BASE}/users/profile`, {
     headers: { Authorization: `Bearer ${apiKey}` },
   });
+  if (response.status === 401) {
+    // Clear invalid auth data to prevent repeated 401 polling
+    localStorage.removeItem(AUTH_STORAGE_KEY);
+    window.dispatchEvent(new CustomEvent("daydream-auth-change"));
+    throw new Error("Authentication expired or invalid");
+  }
   if (!response.ok) {
     throw new Error(`Failed to fetch profile: ${response.status}`);
   }
@@ -182,10 +188,11 @@ export async function saveDaydreamAuth(
 
 /**
  * Refresh user profile in localStorage (for existing auth)
+ * Only makes API call if user has valid stored auth credentials.
  */
 export async function refreshUserProfile(): Promise<void> {
   const authData = getAuthData();
-  if (!authData) return;
+  if (!authData?.apiKey) return;
 
   try {
     const profile = await fetchUserProfile(authData.apiKey);