diff --git a/openhands-sdk/openhands/sdk/llm/utils/litellm_provider.py b/openhands-sdk/openhands/sdk/llm/utils/litellm_provider.py
index 16f4199a51..338246a6c1 100644
--- a/openhands-sdk/openhands/sdk/llm/utils/litellm_provider.py
+++ b/openhands-sdk/openhands/sdk/llm/utils/litellm_provider.py
@@ -33,25 +33,48 @@ class LLMProvider:
 
     @classmethod
     def from_model(cls, *, model: str, api_base: str | None) -> LLMProvider:
-        """Parse a model string using LiteLLM's provider inference logic."""
-        try:
-            get_llm_provider = cast(Any, litellm).get_llm_provider
-            parsed_model, provider_name, _dynamic_key, _resolved_api_base = (
-                get_llm_provider(
-                    model=model,
-                    custom_llm_provider=None,
-                    api_base=api_base,
-                    api_key=None,
+        """Parse a model string using LiteLLM's provider inference logic.
+
+        LiteLLM infers the provider from the model string's first ``/``
+        segment. When ``api_base`` points at a custom endpoint (a
+        self-hosted server such as LM Studio, or a third-party router) and
+        that segment isn't a LiteLLM-recognized provider name, inference
+        raises instead of falling back to the custom base — so a model id
+        like ``auto/coding`` configured against a personal OpenAI-compatible
+        router fails with "LLM Provider NOT provided" deep inside the actual
+        completion call, not here. Retry once with
+        ``custom_llm_provider="openai"`` in that case: a caller-supplied
+        ``api_base`` already implies an OpenAI-compatible endpoint, and
+        LiteLLM only strips a *recognized* provider prefix, so an
+        unrecognized one like ``auto/`` reaches the endpoint unchanged.
+        """
+        get_llm_provider = cast(Any, litellm).get_llm_provider
+        custom_llm_providers: tuple[str | None, ...] = (
+            (None,) if api_base is None else (None, "openai")
+        )
+
+        parsed_model, provider_name = model, None
+        for custom_llm_provider in custom_llm_providers:
+            try:
+                parsed_model, provider_name, _dynamic_key, _resolved_api_base = (
+                    get_llm_provider(
+                        model=model,
+                        custom_llm_provider=custom_llm_provider,
+                        api_base=api_base,
+                        api_key=None,
+                    )
+                )
+            except Exception as exc:
+                logger.debug(
+                    "Failed to parse LiteLLM provider for model=%s "
+                    "(custom_llm_provider=%s): %s",
+                    model,
+                    custom_llm_provider,
+                    exc,
                 )
-            )
-        except Exception as exc:
-            logger.debug(
-                "Failed to parse LiteLLM provider for model=%s: %s",
-                model,
-                exc,
-            )
-            parsed_model = model
-            provider_name = None
+                parsed_model, provider_name = model, None
+            if provider_name is not None:
+                break
 
         return cls(
             model=parsed_model,
diff --git a/tests/sdk/llm/test_litellm_provider.py b/tests/sdk/llm/test_litellm_provider.py
index 6ddffe0a62..1d9fdb3dd5 100644
--- a/tests/sdk/llm/test_litellm_provider.py
+++ b/tests/sdk/llm/test_litellm_provider.py
@@ -49,6 +49,38 @@ def test_llm_provider_handles_unknown_model_without_provider():
     assert provider.as_litellm_call_kwargs() == {"model": "unknown-model"}
 
 
+def test_llm_provider_resolves_unrecognized_model_against_custom_api_base():
+    # A custom router/self-hosted endpoint (e.g. LM Studio, a personal
+    # OpenAI-compatible gateway) whose model id's first "/" segment isn't a
+    # LiteLLM-recognized provider (e.g. "auto/coding") must still resolve to
+    # the "openai" custom_llm_provider, and the model id must survive intact
+    # since "auto/" is not a prefix LiteLLM strips. See regression: without
+    # this fallback, this raises "LLM Provider NOT provided" deep inside the
+    # actual completion call instead of resolving here.
+    provider = LLMProvider.from_model(
+        model="auto/coding",
+        api_base="https://omniroute.example.com/v1",
+    )
+
+    assert provider.name == "openai"
+    assert provider.model == "auto/coding"
+    assert provider.as_litellm_call_kwargs() == {
+        "model": "auto/coding",
+        "custom_llm_provider": "openai",
+    }
+
+
+def test_llm_provider_does_not_force_openai_without_api_base():
+    # Without a custom api_base there is no OpenAI-compatible endpoint to
+    # infer, so an unrecognized model id must stay unresolved exactly as
+    # before this fix (matches test_llm_provider_handles_unknown_model_
+    # without_provider).
+    provider = LLMProvider.from_model(model="auto/coding", api_base=None)
+
+    assert provider.name is None
+    assert provider.model == "auto/coding"
+
+
 def test_llm_provider_keeps_requested_api_base_verbatim():
     # LiteLLM's own resolution appends "/v1" to a custom mistral base; the
     # helper must not leak that mutated value back into the forwarded kwargs.