diff --git a/crates/chat_ui/src/lib.rs b/crates/chat_ui/src/lib.rs
index 0ad30ce3..221b1e8c 100644
--- a/crates/chat_ui/src/lib.rs
+++ b/crates/chat_ui/src/lib.rs
@@ -714,17 +714,34 @@ impl ChatPanel {
                 return Ok(());
             };
 
-            this.update(cx, |this, cx| {
-                this.set_uploading(true, cx);
+            this.update_in(cx, |this, window, cx| {
+                this.upload_file(server, path, encrypted, window, cx);
             })?;
 
-            // Upload the file, encrypted when it is the whole message
+            Ok(())
+        }));
+    }
+
+    /// Upload a file, encrypted when the attachment is the whole message
+    fn upload_file(
+        &mut self,
+        server: Url,
+        path: PathBuf,
+        encrypted: bool,
+        window: &mut Window,
+        cx: &mut Context<Self>,
+    ) {
+        self.set_uploading(true, cx);
+
+        self.tasks.push(cx.spawn_in(window, async move |this, cx| {
             let result = if encrypted {
-                upload_encrypted(server, path.clone(), cx)
+                upload_encrypted(server.clone(), path.clone(), cx)
                     .await
-                    .map(|file| Uploaded::File(file, path))
+                    .map(|file| Uploaded::File(file, path.clone()))
             } else {
-                upload(server, path, cx).await.map(Uploaded::Url)
+                upload(server.clone(), path.clone(), cx)
+                    .await
+                    .map(Uploaded::Url)
             };
 
             this.update_in(cx, |this, window, cx| {
@@ -733,6 +750,9 @@ impl ChatPanel {
                 match result {
                     Ok(Uploaded::Url(url)) => this.add_attachment(url, cx),
                     Ok(Uploaded::File(file, path)) => this.add_pending_file(file, path, cx),
+                    Err(e) if encrypted => {
+                        this.report_encrypted_upload_error(server, path, e, window, cx)
+                    }
                     Err(e) => {
                         window.push_notification(
                             Notification::error(e.to_string()).autohide(false),
@@ -746,6 +766,38 @@ impl ChatPanel {
         }));
     }
 
+    /// Report a failed encrypted upload, offering to retry it without encryption
+    fn report_encrypted_upload_error(
+        &mut self,
+        server: Url,
+        path: PathBuf,
+        error: Error,
+        window: &mut Window,
+        cx: &mut Context<Self>,
+    ) {
+        let view = cx.entity().downgrade();
+
+        window.push_notification(
+            Notification::error(error.to_string())
+                .title("Encrypted upload failed")
+                .action(move |_this, _window, _cx| {
+                    let view = view.clone();
+                    let server = server.clone();
+                    let path = path.clone();
+
+                    Button::new("retry-without-encryption")
+                        .label("Upload without encryption")
+                        .on_click(move |_ev, window, cx| {
+                            view.update(cx, |this, cx| {
+                                this.upload_file(server.clone(), path.clone(), false, window, cx);
+                            })
+                            .ok();
+                        })
+                }),
+            cx,
+        );
+    }
+
     fn set_uploading(&mut self, uploading: bool, cx: &mut Context<Self>) {
         self.uploading = uploading;
         cx.notify();