diff --git a/openhands/llm/llm.py b/openhands/llm/llm.py
index aafd633819..36459072cb 100644
--- a/openhands/llm/llm.py
+++ b/openhands/llm/llm.py
@@ -18,6 +18,7 @@ from litellm import ModelInfo, PromptTokensDetails
 from litellm import completion as litellm_completion
 from litellm import completion_cost as litellm_completion_cost
 from litellm.exceptions import (
+    APIConnectionError,
     RateLimitError,
     ServiceUnavailableError,
 )
@@ -40,6 +41,7 @@ __all__ = ['LLM']
 
 # tuple of exceptions to retry on
 LLM_RETRY_EXCEPTIONS: tuple[type[Exception], ...] = (
+    APIConnectionError,
     RateLimitError,
     ServiceUnavailableError,
     litellm.Timeout,
diff --git a/tests/unit/test_api_connection_error_retry.py b/tests/unit/test_api_connection_error_retry.py
new file mode 100644
index 0000000000..3dc3ee73b8
--- /dev/null
+++ b/tests/unit/test_api_connection_error_retry.py
@@ -0,0 +1,88 @@
+from unittest.mock import patch
+
+import pytest
+from litellm.exceptions import APIConnectionError
+
+from openhands.core.config import LLMConfig
+from openhands.llm.llm import LLM
+
+
+@pytest.fixture
+def default_config():
+    return LLMConfig(
+        model='gpt-4o',
+        api_key='test_key',
+        num_retries=2,
+        retry_min_wait=1,
+        retry_max_wait=2,
+    )
+
+
+@patch('openhands.llm.llm.litellm_completion')
+def test_completion_retries_api_connection_error(
+    mock_litellm_completion, default_config
+):
+    """Test that APIConnectionError is properly retried."""
+    # Mock the litellm_completion to first raise an APIConnectionError, then return a successful response
+    mock_litellm_completion.side_effect = [
+        APIConnectionError(
+            message='API connection error',
+            llm_provider='test_provider',
+            model='test_model',
+        ),
+        {'choices': [{'message': {'content': 'Retry successful'}}]},
+    ]
+
+    # Create an LLM instance and call completion
+    llm = LLM(config=default_config)
+    response = llm.completion(
+        messages=[{'role': 'user', 'content': 'Hello!'}],
+        stream=False,
+    )
+
+    # Verify that the retry was successful
+    assert response['choices'][0]['message']['content'] == 'Retry successful'
+    assert mock_litellm_completion.call_count == 2  # Initial call + 1 retry
+
+
+@patch('openhands.llm.llm.litellm_completion')
+def test_completion_max_retries_api_connection_error(
+    mock_litellm_completion, default_config
+):
+    """Test that APIConnectionError respects max retries."""
+    # Mock the litellm_completion to raise APIConnectionError multiple times
+    mock_litellm_completion.side_effect = [
+        APIConnectionError(
+            message='API connection error 1',
+            llm_provider='test_provider',
+            model='test_model',
+        ),
+        APIConnectionError(
+            message='API connection error 2',
+            llm_provider='test_provider',
+            model='test_model',
+        ),
+        APIConnectionError(
+            message='API connection error 3',
+            llm_provider='test_provider',
+            model='test_model',
+        ),
+    ]
+
+    # Create an LLM instance and call completion
+    llm = LLM(config=default_config)
+
+    # The completion should raise an APIConnectionError after exhausting all retries
+    with pytest.raises(APIConnectionError) as excinfo:
+        llm.completion(
+            messages=[{'role': 'user', 'content': 'Hello!'}],
+            stream=False,
+        )
+
+    # Verify that the correct number of retries were attempted
+    # The actual behavior is that it tries the initial call + num_retries (not +1)
+    assert mock_litellm_completion.call_count == default_config.num_retries
+
+    # The exception doesn't contain retry information in the current implementation
+    # Just verify that we got an APIConnectionError
+    assert 'API connection error' in str(excinfo.value)