diff --git a/.changeset/forward-fetch-headers-options.md b/.changeset/forward-fetch-headers-options.md
new file mode 100644
index 000000000..b907a704f
--- /dev/null
+++ b/.changeset/forward-fetch-headers-options.md
@@ -0,0 +1,5 @@
+---
+"@browserbasehq/stagehand": patch
+---
+
+fix: forward fetch and headers options to AI SDK providers to enable proxy authentication, request logging, and custom retry logic
diff --git a/packages/core/examples/test-custom-fetch.ts b/packages/core/examples/test-custom-fetch.ts
new file mode 100644
index 000000000..9ea6c9c50
--- /dev/null
+++ b/packages/core/examples/test-custom-fetch.ts
@@ -0,0 +1,82 @@
+import { Stagehand } from "../lib/v3";
+
+/**
+ * Test script to verify custom fetch and headers are forwarded to AI SDK providers
+ *
+ * This demonstrates the fix for the bug where custom fetch functions and headers
+ * were being silently ignored when using AI SDK providers (e.g., "openai/gpt-4o-mini").
+ *
+ * Expected behavior:
+ * - Custom fetch function should be called for all LLM API requests
+ * - Custom headers should be included in the requests
+ * - This enables use cases like: proxy authentication, request logging, retry logic
+ */
+
+async function main() {
+  // Track if custom fetch was called
+  let fetchCallCount = 0;
+  const customHeaders: string[] = [];
+
+  // Create custom fetch function
+  const customFetch: typeof fetch = async (url, options) => {
+    fetchCallCount++;
+    console.log(`✅ Custom fetch called (${fetchCallCount} times)`);
+    console.log(`   URL: ${url}`);
+
+    // Log custom headers if present
+    if (options?.headers) {
+      const headers = new Headers(options.headers);
+      headers.forEach((value, key) => {
+        if (key.toLowerCase().startsWith('x-custom')) {
+          customHeaders.push(`${key}: ${value}`);
+          console.log(`   Custom header: ${key}: ${value}`);
+        }
+      });
+    }
+
+    return fetch(url, options);
+  };
+
+  // Initialize Stagehand with custom fetch and headers
+  console.log("Initializing Stagehand with custom fetch and headers...\n");
+
+  const stagehand = new Stagehand({
+    model: {
+      modelName: "openai/gpt-4o-mini",
+      apiKey: process.env.OPENAI_API_KEY,
+      fetch: customFetch,
+      headers: {
+        "X-Custom-Header": "test-value",
+        "X-Custom-Proxy-Auth": "proxy-token-123"
+      }
+    } as any,
+    env: "LOCAL"
+  });
+
+  await stagehand.init();
+
+  try {
+    console.log("Making a simple LLM call via act()...\n");
+
+    // Navigate to a simple page
+    await stagehand.context.pages()[0].goto("https://example.com");
+
+    // Make an act() call that will use the LLM
+    await stagehand.act("find the heading on the page");
+
+    console.log("\n=== Test Results ===");
+    if (fetchCallCount > 0) {
+      console.log(`✅ SUCCESS: Custom fetch was called ${fetchCallCount} times`);
+      console.log(`✅ Custom headers detected: ${customHeaders.length > 0 ? customHeaders.join(", ") : "None (may be overridden by SDK)"}`);
+    } else {
+      console.log("❌ FAILURE: Custom fetch was NOT called");
+      console.log("   This indicates the bug still exists.");
+    }
+  } catch (error) {
+    console.error("\n❌ Error during test:", error);
+  } finally {
+    await stagehand.close();
+  }
+}
+
+main().catch(console.error);
diff --git a/packages/core/lib/v3/llm/LLMProvider.ts b/packages/core/lib/v3/llm/LLMProvider.ts
index 7c16f2118..fae3afa44 100644
--- a/packages/core/lib/v3/llm/LLMProvider.ts
+++ b/packages/core/lib/v3/llm/LLMProvider.ts
@@ -16,6 +16,11 @@ import { GoogleClient } from "./GoogleClient";
 import { GroqClient } from "./GroqClient";
 import { LLMClient } from "./LLMClient";
 import { OpenAIClient } from "./OpenAIClient";
+
+interface ExtendedClientOptions {
+  headers?: Record<string, string>;
+  fetch?: typeof globalThis.fetch;
+}
 import { openai, createOpenAI } from "@ai-sdk/openai";
 import { anthropic, createAnthropic } from "@ai-sdk/anthropic";
 import { google, createGoogleGenerativeAI } from "@ai-sdk/google";
@@ -98,33 +103,43 @@ export function getAISDKLanguageModel(
   subModelName: string,
   apiKey?: string,
   baseURL?: string,
+  headers?: Record<string, string>,
+  fetch?: typeof globalThis.fetch,
 ) {
+  const creator = AISDKProvidersWithAPIKey[subProvider];
+  if (!creator) {
+    throw new UnsupportedAISDKModelProviderError(
+      subProvider,
+      Object.keys(AISDKProvidersWithAPIKey),
+    );
+  }
+
+  // Build provider config - all fields are optional
+  // When apiKey is not provided, creator functions automatically use environment variables
+  const providerConfig: {
+    apiKey?: string;
+    baseURL?: string;
+    headers?: Record<string, string>;
+    fetch?: typeof globalThis.fetch;
+  } = {};
+
   if (apiKey) {
-    const creator = AISDKProvidersWithAPIKey[subProvider];
-    if (!creator) {
-      throw new UnsupportedAISDKModelProviderError(
-        subProvider,
-        Object.keys(AISDKProvidersWithAPIKey),
-      );
-    }
-    // Create the provider instance with the API key and baseURL if provided
-    const providerConfig: { apiKey: string; baseURL?: string } = { apiKey };
-    if (baseURL) {
-      providerConfig.baseURL = baseURL;
-    }
-    const provider = creator(providerConfig);
-    // Get the specific model from the provider
-    return provider(subModelName);
-  } else {
-    const provider = AISDKProviders[subProvider];
-    if (!provider) {
-      throw new UnsupportedAISDKModelProviderError(
-        subProvider,
-        Object.keys(AISDKProviders),
-      );
-    }
-    return provider(subModelName);
+    providerConfig.apiKey = apiKey;
   }
+  if (baseURL) {
+    providerConfig.baseURL = baseURL;
+  }
+  if (headers) {
+    providerConfig.headers = headers;
+  }
+  if (fetch) {
+    providerConfig.fetch = fetch;
+  }
+
+  // Type assertion needed: AI SDK types require apiKey, but runtime accepts optional apiKey
+  // At runtime, when apiKey is not provided, creators automatically use environment variables
+  const provider = creator(providerConfig as { apiKey: string });
+  return provider(subModelName);
 }
 
 export class LLMProvider {
@@ -148,6 +163,8 @@ export class LLMProvider {
         subModelName,
         clientOptions?.apiKey,
         clientOptions?.baseURL,
+        (clientOptions as ExtendedClientOptions)?.headers,
+        (clientOptions as ExtendedClientOptions)?.fetch,
       );
 
       return new AISdkClient({