diff --git a/internal/server/server.go b/internal/server/server.go
new file mode 100644
index 0000000..cb9c834
--- /dev/null
+++ b/internal/server/server.go
@@ -0,0 +1,231 @@
+// Package server implements `keyproxy serve`: a localhost HTTP hop that
+// resolves mpk- refs to material. Consumers authenticate with a bearer
+// token bootstrapped from the file backend; material crosses the wire at
+// resolve time only, in memory, never persisted, never logged — every
+// log line that names a ref masks any value as <ref>=***.
+package server
+
+import (
+	"context"
+	"encoding/json"
+	"fmt"
+	"io"
+	"log"
+	"net/http"
+	"strings"
+	"time"
+
+	"crypto/subtle"
+
+	"git.knownelement.com/ukrrs/mopac-keyproxy/internal/backend"
+	"git.knownelement.com/ukrrs/mopac-keyproxy/internal/config"
+)
+
+// maxBodyBytes bounds resolve requests; bigger bodies are rejected
+// before parsing (413).
+const maxBodyBytes = 4 << 10
+
+// Server is the `keyproxy serve` HTTP hop.
+type Server struct {
+	cfg    *config.Config
+	reg    *backend.Registry
+	token  string // resolved at startup from the file backend; never logged
+	logger *log.Logger
+}
+
+// New resolves the bearer token through the registry (fail-fast: the
+// auth ref must resolve at startup) and returns the server. The token
+// value never reaches the log writer; a backend panic during the
+// startup resolve is converted to a generic error (a panic value may
+// embed material).
+func New(cfg *config.Config, reg *backend.Registry, out io.Writer) (*Server, error) {
+	ref := cfg.Refs[cfg.AuthTokenRef]
+	b, ok := reg.Get(ref.Backend)
+	if !ok {
+		return nil, fmt.Errorf("auth ref %s: backend %s not registered", cfg.AuthTokenRef, ref.Backend)
+	}
+	token, err := resolveAuthToken(b, ref)
+	if err != nil {
+		return nil, err
+	}
+	return &Server{
+		cfg:    cfg,
+		reg:    reg,
+		token:  token,
+		logger: log.New(out, "keyproxy: ", log.LstdFlags|log.Lmsgprefix),
+	}, nil
+}
+
+// resolveAuthToken resolves the bearer token, converting a backend
+// panic into a generic error whose text carries no material.
+func resolveAuthToken(b backend.Backend, ref backend.Ref) (token string, err error) {
+	defer func() {
+		if p := recover(); p != nil {
+			_ = p // never stringified: never logged
+			err = fmt.Errorf("auth ref %s: backend %s: resolve panicked (detail suppressed)", ref.Name, ref.Backend)
+		}
+	}()
+	token, err = b.Resolve(context.Background(), ref)
+	if err != nil {
+		return "", fmt.Errorf("auth ref %s: %w", ref.Name, err)
+	}
+	return token, nil
+}
+
+// Handler builds the HTTP routes: POST /v1/resolve (bearer auth) and
+// GET /healthz (unauthenticated liveness).
+func (s *Server) Handler() http.Handler {
+	mux := http.NewServeMux()
+	mux.HandleFunc("/healthz", func(w http.ResponseWriter, r *http.Request) {
+		w.Header().Set("Content-Type", "application/json")
+		fmt.Fprint(w, `{"status":"ok"}`)
+	})
+	mux.HandleFunc("/v1/resolve", s.resolve)
+	return mux
+}
+
+// masked returns the log-safe form of a ref: <ref>=***. Refs are
+// validated mpk- placeholders before they ever reach a log line, so the
+// name itself is safe; the =*** form asserts the value stays masked.
+func masked(ref string) string { return ref + "=***" }
+
+func (s *Server) resolve(w http.ResponseWriter, r *http.Request) {
+	// Crash-path redaction: if anything below panics, log the tracked
+	// ref/backend (masked, format-validated) and NEVER the panic value
+	// (a panic value may embed material). Stack suppressed for the same
+	// reason.
+	logRef, logBackend := "-", "-"
+	defer func() {
+		if p := recover(); p != nil {
+			_ = p // never stringified: never logged
+			s.logger.Printf("panic recovered ref=%s backend=%s status=500 detail=suppressed", logRef, logBackend)
+			s.writeJSON(w, http.StatusInternalServerError, map[string]string{"error": "internal error"})
+		}
+	}()
+
+	if r.Method != http.MethodPost {
+		w.Header().Set("Allow", http.MethodPost)
+		s.writeJSON(w, http.StatusMethodNotAllowed, map[string]string{"error": "POST only"})
+		return
+	}
+
+	// Auth first, before the body is read: failures log the remote only,
+	// never the presented token.
+	if !s.authorized(r) {
+		s.logger.Printf("auth failure remote=%s status=401", r.RemoteAddr)
+		s.writeJSON(w, http.StatusUnauthorized, map[string]string{"error": "unauthorized"})
+		return
+	}
+
+	body, ok := s.readBody(w, r)
+	if !ok {
+		return
+	}
+	var req struct {
+		Ref string `json:"ref"`
+	}
+	if err := json.Unmarshal(body, &req); err != nil || strings.TrimSpace(req.Ref) == "" {
+		s.writeJSON(w, http.StatusBadRequest, map[string]string{"error": "malformed body (expected {\"ref\":\"mpk-...\"})"})
+		return
+	}
+	name := strings.TrimSpace(req.Ref)
+	if !config.ValidRef(name) {
+		// Not echoed: an unparsable "ref" field could hold pasted
+		// material. Only format-validated mpk- refs are ever echoed.
+		s.writeJSON(w, http.StatusBadRequest, map[string]string{"error": "invalid ref (expected mpk-<name>)"})
+		return
+	}
+	logRef = masked(name)
+
+	ref, ok := s.cfg.Refs[name]
+	if !ok {
+		s.logger.Printf("resolve ref=%s backend=%s status=404 reason=%s", logRef, logBackend, backend.ReasonUnknownRef)
+		s.writeJSON(w, http.StatusNotFound, map[string]string{"error": "unknown ref", "ref": name})
+		return
+	}
+	logBackend = ref.Backend
+
+	b, ok := s.reg.Get(ref.Backend)
+	if !ok {
+		s.logger.Printf("resolve ref=%s backend=%s status=500 reason=unknown_backend", logRef, logBackend)
+		s.writeJSON(w, http.StatusInternalServerError, map[string]string{"error": "backend not registered", "backend": ref.Backend})
+		return
+	}
+
+	value, err := b.Resolve(r.Context(), ref)
+	if err != nil {
+		rerr := backend.AsResolveError(err, ref, ref.Backend)
+		status := http.StatusBadGateway
+		if rerr.Reason == backend.ReasonNotImplemented {
+			status = http.StatusNotImplemented
+		}
+		// The reason is a fixed enum: it can name the ref and the
+		// backend, never material.
+		s.logger.Printf("resolve ref=%s backend=%s status=%d reason=%s", logRef, logBackend, status, rerr.Reason)
+		s.writeJSON(w, status, map[string]string{
+			"error":   "resolution failed",
+			"ref":     name,
+			"backend": ref.Backend,
+			"reason":  string(rerr.Reason),
+		})
+		return
+	}
+
+	s.logger.Printf("resolve ref=%s backend=%s status=200", logRef, logBackend)
+	s.writeJSON(w, http.StatusOK, map[string]string{"value": value})
+}
+
+// authorized checks the bearer token in constant time; the presented
+// value is never logged and never compared with early exit.
+func (s *Server) authorized(r *http.Request) bool {
+	h := r.Header.Get("Authorization")
+	const prefix = "Bearer "
+	if len(h) <= len(prefix) || !strings.EqualFold(h[:len(prefix)], prefix) {
+		return false
+	}
+	presented := h[len(prefix):]
+	return subtle.ConstantTimeCompare([]byte(presented), []byte(s.token)) == 1
+}
+
+func (s *Server) readBody(w http.ResponseWriter, r *http.Request) ([]byte, bool) {
+	body, err := io.ReadAll(io.LimitReader(r.Body, maxBodyBytes+1))
+	if err != nil {
+		s.writeJSON(w, http.StatusBadRequest, map[string]string{"error": "unreadable body"})
+		return nil, false
+	}
+	if len(body) > maxBodyBytes {
+		s.writeJSON(w, http.StatusRequestEntityTooLarge, map[string]string{"error": "payload too large"})
+		return nil, false
+	}
+	return body, true
+}
+
+func (s *Server) writeJSON(w http.ResponseWriter, code int, v any) {
+	w.Header().Set("Content-Type", "application/json")
+	w.WriteHeader(code)
+	_ = json.NewEncoder(w).Encode(v)
+}
+
+// ListenAndServe runs the HTTP hop until ctx is cancelled, then shuts
+// down gracefully (material is memory-only; shutdown drops it).
+func (s *Server) ListenAndServe(ctx context.Context) error {
+	httpSrv := &http.Server{
+		Addr:              s.cfg.Listen,
+		Handler:           s.Handler(),
+		ReadHeaderTimeout: 5 * time.Second,
+		ReadTimeout:       10 * time.Second,
+		WriteTimeout:      10 * time.Second,
+		IdleTimeout:       60 * time.Second,
+	}
+	errCh := make(chan error, 1)
+	go func() { errCh <- httpSrv.ListenAndServe() }()
+	s.logger.Printf("listening addr=%s refs=%d backends=%s auth=%s", s.cfg.Listen, len(s.cfg.Refs), strings.Join(s.reg.Names(), ","), masked(s.cfg.AuthTokenRef))
+	select {
+	case err := <-errCh:
+		return err
+	case <-ctx.Done():
+		shutdownCtx, cancel := context.WithTimeout(context.Background(), 5*time.Second)
+		defer cancel()
+		return httpSrv.Shutdown(shutdownCtx)
+	}
+}
diff --git a/internal/server/server_test.go b/internal/server/server_test.go
new file mode 100644
index 0000000..bb83aa4
--- /dev/null
+++ b/internal/server/server_test.go
@@ -0,0 +1,467 @@
+package server
+
+import (
+	"bytes"
+	"context"
+	"fmt"
+	"net/http"
+	"net/http/httptest"
+	"os"
+	"path/filepath"
+	"strings"
+	"testing"
+
+	"git.knownelement.com/ukrrs/mopac-keyproxy/internal/backend"
+	"git.knownelement.com/ukrrs/mopac-keyproxy/internal/config"
+)
+
+const (
+	authToken   = "smoke-bearer-token-do-not-log"
+	fileSecret  = "sk-file-supersecret-material-aaa111"
+	envSecret   = "sk-env-supersecret-material-bbb222"
+	panicSecret = "sk-panic-supersecret-material-ccc333"
+)
+
+type fixture struct {
+	cfg     *config.Config
+	log     *bytes.Buffer
+	ts      *httptest.Server
+	backend *backend.Registry
+}
+
+// newFixture builds a full stack: real config file, real 0600 env files,
+// real registry, real HTTP listener on 127.0.0.1 (httptest), shared log
+// buffer for redaction sweeps.
+func newFixture(t *testing.T) *fixture {
+	t.Helper()
+	dir := t.TempDir()
+	write := func(name, content string, mode os.FileMode) string {
+		path := filepath.Join(dir, name)
+		if err := os.WriteFile(path, []byte(content), mode); err != nil {
+			t.Fatal(err)
+		}
+		if err := os.Chmod(path, mode); err != nil {
+			t.Fatal(err)
+		}
+		return path
+	}
+	tokenFile := write("keyproxy.env", "KEYPROXY_TOKEN="+authToken+"\n", 0o600)
+	goodFile := write("good.env", "API_KEY="+fileSecret+"\nOTHER=x\n", 0o600)
+	looseFile := write("loose.env", "API_KEY="+fileSecret+"\n", 0o644)
+	emptyFile := write("empty.env", "API_KEY=\n", 0o600)
+
+	t.Setenv("KEYPROXY_TEST_ENV_SECRET", envSecret)
+
+	cfgPath := write("keyproxy.toml", fmt.Sprintf(`
+listen = "127.0.0.1:0"
+
+[auth]
+token_ref = "mpk-keyproxy-self"
+
+[refs."mpk-keyproxy-self"]
+backend = "file"
+source = %q
+key = "KEYPROXY_TOKEN"
+
+[refs."mpk-file"]
+backend = "file"
+source = %q
+key = "API_KEY"
+
+[refs."mpk-env"]
+backend = "env"
+source = "KEYPROXY_TEST_ENV_SECRET"
+
+[refs."mpk-loose"]
+backend = "file"
+source = %q
+key = "API_KEY"
+
+[refs."mpk-empty"]
+backend = "file"
+source = %q
+key = "API_KEY"
+
+[refs."mpk-bitwarden"]
+backend = "bitwarden"
+source = "sm://p/x"
+key = "API_KEY"
+
+[refs."mpk-vault"]
+backend = "vault"
+source = "secret/data/x"
+key = "API_KEY"
+`, tokenFile, goodFile, looseFile, emptyFile), 0o600)
+
+	cfg, err := config.Load(cfgPath)
+	if err != nil {
+		t.Fatalf("fixture config: %v", err)
+	}
+	reg := backend.NewRegistry(
+		backend.NewFile(),
+		backend.NewEnv(),
+		backend.NewBitwarden(),
+		backend.NewVault(),
+	)
+	log := &bytes.Buffer{}
+	srv, err := New(cfg, reg, log)
+	if err != nil {
+		t.Fatalf("fixture server: %v", err)
+	}
+	ts := httptest.NewServer(srv.Handler())
+	t.Cleanup(ts.Close)
+	return &fixture{cfg: cfg, log: log, ts: ts, backend: reg}
+}
+
+// post drives /v1/resolve with an optional bearer token.
+func (f *fixture) post(t *testing.T, token, body string) (int, string) {
+	t.Helper()
+	req, err := http.NewRequest(http.MethodPost, f.ts.URL+"/v1/resolve", strings.NewReader(body))
+	if err != nil {
+		t.Fatal(err)
+	}
+	if token != "" {
+		req.Header.Set("Authorization", "Bearer "+token)
+	}
+	req.Header.Set("Content-Type", "application/json")
+	resp, err := http.DefaultClient.Do(req)
+	if err != nil {
+		t.Fatal(err)
+	}
+	defer resp.Body.Close()
+	buf := &bytes.Buffer{}
+	_, _ = buf.ReadFrom(resp.Body)
+	return resp.StatusCode, buf.String()
+}
+
+func TestResolveTable(t *testing.T) {
+	f := newFixture(t)
+
+	tests := []struct {
+		name       string
+		token      string
+		body       string
+		wantStatus int
+		wantBody   string // substring expected in the body
+		wantBody2  string // second substring expected in the body
+		noBody     string // substring that must NOT appear in the body
+		wantLog    string // substring expected in the log
+	}{
+		{
+			name:       "file ref resolves",
+			token:      authToken,
+			body:       `{"ref":"mpk-file"}`,
+			wantStatus: http.StatusOK,
+			wantBody:   `"value":"` + fileSecret + `"`,
+			wantLog:    "ref=mpk-file=*** backend=file status=200",
+		},
+		{
+			name:       "env ref resolves",
+			token:      authToken,
+			body:       `{"ref":"mpk-env"}`,
+			wantStatus: http.StatusOK,
+			wantBody:   `"value":"` + envSecret + `"`,
+			wantLog:    "ref=mpk-env=*** backend=env status=200",
+		},
+		{
+			name:       "no token 401",
+			body:       `{"ref":"mpk-file"}`,
+			wantStatus: http.StatusUnauthorized,
+			wantBody:   "unauthorized",
+			noBody:     fileSecret,
+			wantLog:    "auth failure",
+		},
+		{
+			name:       "wrong token 401",
+			token:      "wrong-token",
+			body:       `{"ref":"mpk-file"}`,
+			wantStatus: http.StatusUnauthorized,
+			wantBody:   "unauthorized",
+			noBody:     "wrong-token", // presented token never logged/echoed
+		},
+		{
+			name:       "unknown ref 404",
+			token:      authToken,
+			body:       `{"ref":"mpk-ghost"}`,
+			wantStatus: http.StatusNotFound,
+			wantBody:   `"ref":"mpk-ghost"`,
+			wantLog:    "ref=mpk-ghost=*** backend=- status=404 reason=unknown_ref",
+		},
+		{
+			name:       "invalid ref format 400 without echo",
+			token:      authToken,
+			body:       `{"ref":"sk-live-pasted-secret-xyz"}`,
+			wantStatus: http.StatusBadRequest,
+			wantBody:   "invalid ref",
+			noBody:     "sk-live-pasted-secret-xyz",
+		},
+		{
+			name:       "malformed body 400",
+			token:      authToken,
+			body:       `not json`,
+			wantStatus: http.StatusBadRequest,
+			wantBody:   "malformed body",
+		},
+		{
+			name:       "empty ref 400",
+			token:      authToken,
+			body:       `{"ref":""}`,
+			wantStatus: http.StatusBadRequest,
+			wantBody:   "malformed body",
+		},
+		{
+			name:       "bitwarden stub 501",
+			token:      authToken,
+			body:       `{"ref":"mpk-bitwarden"}`,
+			wantStatus: http.StatusNotImplemented,
+			wantBody:   `"reason":"not_implemented"`,
+			wantBody2:  `"backend":"bitwarden"`,
+			wantLog:    "ref=mpk-bitwarden=*** backend=bitwarden status=501 reason=not_implemented",
+		},
+		{
+			name:       "vault stub 501",
+			token:      authToken,
+			body:       `{"ref":"mpk-vault"}`,
+			wantStatus: http.StatusNotImplemented,
+			wantBody:   `"reason":"not_implemented"`,
+			wantBody2:  `"backend":"vault"`,
+			wantLog:    "ref=mpk-vault=*** backend=vault status=501 reason=not_implemented",
+		},
+		{
+			name:       "empty value 502",
+			token:      authToken,
+			body:       `{"ref":"mpk-empty"}`,
+			wantStatus: http.StatusBadGateway,
+			wantBody:   `"reason":"empty_value"`,
+			wantLog:    "ref=mpk-empty=*** backend=file status=502 reason=empty_value",
+		},
+		{
+			name:       "loose file mode 502",
+			token:      authToken,
+			body:       `{"ref":"mpk-loose"}`,
+			wantStatus: http.StatusBadGateway,
+			wantBody:   `"reason":"insecure_source_mode"`,
+			wantLog:    "ref=mpk-loose=*** backend=file status=502 reason=insecure_source_mode",
+		},
+		{
+			name:       "oversized body 413",
+			token:      authToken,
+			body:       `{"ref":"` + strings.Repeat("a", 8192) + `"}`,
+			wantStatus: http.StatusRequestEntityTooLarge,
+			wantBody:   "payload too large",
+		},
+	}
+	for _, tt := range tests {
+		t.Run(tt.name, func(t *testing.T) {
+			status, body := f.post(t, tt.token, tt.body)
+			if status != tt.wantStatus {
+				t.Fatalf("status = %d (%s), want %d", status, body, tt.wantStatus)
+			}
+			if tt.wantBody != "" && !strings.Contains(body, tt.wantBody) {
+				t.Fatalf("body %q missing %q", body, tt.wantBody)
+			}
+			if tt.wantBody2 != "" && !strings.Contains(body, tt.wantBody2) {
+				t.Fatalf("body %q missing %q", body, tt.wantBody2)
+			}
+			if tt.noBody != "" && strings.Contains(body, tt.noBody) {
+				t.Fatalf("BODY LEAKS %q: %q", tt.noBody, body)
+			}
+			if tt.wantLog != "" && !strings.Contains(f.log.String(), tt.wantLog) {
+				t.Fatalf("log %q missing %q", f.log.String(), tt.wantLog)
+			}
+		})
+	}
+
+	// Method checks.
+	resp, err := http.Get(f.ts.URL + "/v1/resolve")
+	if err != nil {
+		t.Fatal(err)
+	}
+	resp.Body.Close()
+	if resp.StatusCode != http.StatusMethodNotAllowed {
+		t.Fatalf("GET /v1/resolve = %d, want 405", resp.StatusCode)
+	}
+	resp, err = http.Get(f.ts.URL + "/healthz")
+	if err != nil {
+		t.Fatal(err)
+	}
+	resp.Body.Close()
+	if resp.StatusCode != http.StatusOK {
+		t.Fatalf("GET /healthz = %d, want 200 (unauthenticated)", resp.StatusCode)
+	}
+
+	// Whole-run redaction sweep: no material, no presented token, no
+	// panic values anywhere in the log buffer; every ref named in the
+	// log appears masked as <ref>=***.
+	logAll := f.log.String()
+	for _, secret := range []string{authToken, "wrong-token", fileSecret, envSecret, "sk-live-pasted-secret"} {
+		if strings.Contains(logAll, secret) {
+			t.Fatalf("LOG LEAKS MATERIAL %q:\n%s", secret, logAll)
+		}
+	}
+	for _, ref := range []string{"mpk-file", "mpk-env", "mpk-ghost", "mpk-empty", "mpk-loose"} {
+		if strings.Contains(logAll, ref) && !strings.Contains(logAll, ref+"=***") {
+			// ref may appear only in masked form; check per line
+			for _, line := range strings.Split(logAll, "\n") {
+				if strings.Contains(line, ref) && !strings.Contains(line, ref+"=***") {
+					t.Fatalf("LOG LINE NAMES REF UNMASKED: %s", line)
+				}
+			}
+		}
+	}
+}
+
+// TestPanicRedaction drives a backend panic whose VALUE is the material
+// and asserts the crash path stays redacted.
+func TestPanicRedaction(t *testing.T) {
+	dir := t.TempDir()
+	tokenPath := filepath.Join(dir, "keyproxy.env")
+	if err := os.WriteFile(tokenPath, []byte("KEYPROXY_TOKEN="+authToken+"\n"), 0o600); err != nil {
+		t.Fatal(err)
+	}
+	cfgPath := filepath.Join(dir, "keyproxy.toml")
+	content := fmt.Sprintf(`
+[auth]
+token_ref = "mpk-keyproxy-self"
+
+[refs."mpk-keyproxy-self"]
+backend = "file"
+source = %q
+key = "KEYPROXY_TOKEN"
+
+[refs."mpk-file"]
+backend = "file"
+source = %q
+key = "API_KEY"
+`, tokenPath, filepath.Join(dir, "absent.env"))
+	if err := os.WriteFile(cfgPath, []byte(content), 0o600); err != nil {
+		t.Fatal(err)
+	}
+	cfg, err := config.Load(cfgPath)
+	if err != nil {
+		t.Fatal(err)
+	}
+
+	// A file-backend implementation that serves the auth token normally
+	// but panics with the material as the panic value on data refs: the
+	// worst-case crash path.
+	reg := backend.NewRegistry(&panicBackend{token: authToken, material: panicSecret}, backend.NewEnv(), backend.NewBitwarden(), backend.NewVault())
+	log := &bytes.Buffer{}
+	srv, err := New(cfg, reg, log)
+	if err != nil {
+		t.Fatal(err)
+	}
+	ts := httptest.NewServer(srv.Handler())
+	defer ts.Close()
+
+	req, _ := http.NewRequest(http.MethodPost, ts.URL+"/v1/resolve", strings.NewReader(`{"ref":"mpk-file"}`))
+	req.Header.Set("Authorization", "Bearer "+authToken)
+	resp, err := http.DefaultClient.Do(req)
+	if err != nil {
+		t.Fatal(err)
+	}
+	defer resp.Body.Close()
+	buf := &bytes.Buffer{}
+	_, _ = buf.ReadFrom(resp.Body)
+	if resp.StatusCode != http.StatusInternalServerError {
+		t.Fatalf("status = %d, want 500", resp.StatusCode)
+	}
+	if strings.Contains(buf.String(), panicSecret) {
+		t.Fatalf("RESPONSE LEAKS MATERIAL: %q", buf.String())
+	}
+	got := log.String()
+	if !strings.Contains(got, "panic recovered") || !strings.Contains(got, "ref=mpk-file=***") {
+		t.Fatalf("panic log line missing or unmasked:\n%s", got)
+	}
+	if strings.Contains(got, panicSecret) {
+		t.Fatalf("LOG LEAKS MATERIAL ON CRASH PATH:\n%s", got)
+	}
+}
+
+// TestNewFailFastAuth covers startup refusing when the auth token cannot
+// be resolved (fail fast, error names the ref, never the token).
+func TestNewFailFastAuth(t *testing.T) {
+	dir := t.TempDir()
+	cfgPath := filepath.Join(dir, "keyproxy.toml")
+	content := fmt.Sprintf(`
+[auth]
+token_ref = "mpk-keyproxy-self"
+
+[refs."mpk-keyproxy-self"]
+backend = "file"
+source = %q
+key = "KEYPROXY_TOKEN"
+`, filepath.Join(dir, "absent.env"))
+	if err := os.WriteFile(cfgPath, []byte(content), 0o600); err != nil {
+		t.Fatal(err)
+	}
+	cfg, err := config.Load(cfgPath)
+	if err != nil {
+		t.Fatal(err)
+	}
+	reg := backend.NewRegistry(backend.NewFile(), backend.NewEnv(), backend.NewBitwarden(), backend.NewVault())
+	_, err = New(cfg, reg, &bytes.Buffer{})
+	if err == nil {
+		t.Fatal("New must fail when the auth token cannot be resolved")
+	}
+	if !strings.Contains(err.Error(), "mpk-keyproxy-self") || !strings.Contains(err.Error(), "unreadable_source") {
+		t.Fatalf("error %q must name the auth ref and reason", err)
+	}
+}
+
+// panicBackend implements Backend (registered under the file name):
+// with all set it panics on every resolve; otherwise it serves the auth
+// token normally and panics with material in the panic value on every
+// other ref.
+type panicBackend struct {
+	token    string
+	material string
+	all      bool
+}
+
+func (p *panicBackend) Name() string { return "file" }
+
+func (p *panicBackend) Resolve(ctx context.Context, ref backend.Ref) (string, error) {
+	if !p.all && ref.Key == "KEYPROXY_TOKEN" {
+		return p.token, nil
+	}
+	panic(p.material)
+}
+
+// TestNewPanicSuppressed: a backend that panics even on the auth-token
+// resolve makes startup fail fast with a generic, material-free error.
+func TestNewPanicSuppressed(t *testing.T) {
+	dir := t.TempDir()
+	cfgPath := filepath.Join(dir, "keyproxy.toml")
+	content := fmt.Sprintf(`
+[auth]
+token_ref = "mpk-keyproxy-self"
+
+[refs."mpk-keyproxy-self"]
+backend = "file"
+source = %q
+key = "KEYPROXY_TOKEN"
+`, filepath.Join(dir, "absent.env"))
+	if err := os.WriteFile(cfgPath, []byte(content), 0o600); err != nil {
+		t.Fatal(err)
+	}
+	cfg, err := config.Load(cfgPath)
+	if err != nil {
+		t.Fatal(err)
+	}
+	reg := backend.NewRegistry(
+		&panicBackend{token: "never-served", material: panicSecret, all: true},
+		backend.NewEnv(), backend.NewBitwarden(), backend.NewVault(),
+	)
+	logBuf := &bytes.Buffer{}
+	_, err = New(cfg, reg, logBuf)
+	if err == nil {
+		t.Fatal("New must fail when the auth-token resolve panics")
+	}
+	if strings.Contains(err.Error(), panicSecret) {
+		t.Fatalf("STARTUP ERROR LEAKS MATERIAL: %q", err)
+	}
+	if !strings.Contains(err.Error(), "panicked (detail suppressed)") {
+		t.Fatalf("error %q must say the panic detail is suppressed", err)
+	}
+}