diff --git a/src/adapter/src/coord.rs b/src/adapter/src/coord.rs
index 0648ea52ace6b..8b1a5d1966b82 100644
--- a/src/adapter/src/coord.rs
+++ b/src/adapter/src/coord.rs
@@ -104,7 +104,7 @@ use mz_catalog::memory::objects::{
 };
 use mz_cloud_resources::{CloudResourceController, VpcEndpointConfig, VpcEndpointEvent};
 use mz_compute_client::as_of_selection;
-use mz_compute_client::controller::error::InstanceMissing;
+use mz_compute_client::controller::error::{DataflowCreationError, InstanceMissing};
 use mz_compute_types::ComputeInstanceId;
 use mz_compute_types::dataflows::DataflowDescription;
 use mz_compute_types::plan::Plan;
@@ -3682,23 +3682,41 @@ impl Coordinator {
 
     /// Call into the compute controller to install a finalized dataflow, and
     /// initialize the read policies for its exported readable objects.
+    ///
+    /// # Panics
+    ///
+    /// Panics if dataflow creation fails.
     pub(crate) async fn ship_dataflow(
         &mut self,
         dataflow: DataflowDescription<Plan>,
         instance: ComputeInstanceId,
         subscribe_target_replica: Option<ReplicaId>,
     ) {
+        self.try_ship_dataflow(dataflow, instance, subscribe_target_replica)
+            .await
+            .unwrap_or_terminate("dataflow creation cannot fail");
+    }
+
+    /// Call into the compute controller to install a finalized dataflow, and
+    /// initialize the read policies for its exported readable objects.
+    pub(crate) async fn try_ship_dataflow(
+        &mut self,
+        dataflow: DataflowDescription<Plan>,
+        instance: ComputeInstanceId,
+        subscribe_target_replica: Option<ReplicaId>,
+    ) -> Result<(), DataflowCreationError> {
         // We must only install read policies for indexes, not for sinks.
         // Sinks are write-only compute collections that don't have read policies.
         let export_ids = dataflow.exported_index_ids().collect();
 
         self.controller
             .compute
-            .create_dataflow(instance, dataflow, subscribe_target_replica)
-            .unwrap_or_terminate("dataflow creation cannot fail");
+            .create_dataflow(instance, dataflow, subscribe_target_replica)?;
 
         self.initialize_compute_read_policies(export_ids, instance, CompactionWindow::Default)
             .await;
+
+        Ok(())
     }
 
     /// Call into the compute controller to allow writes to the specified IDs
diff --git a/src/adapter/src/coord/peek.rs b/src/adapter/src/coord/peek.rs
index fa5b1291dab1e..61d254c8738f7 100644
--- a/src/adapter/src/coord/peek.rs
+++ b/src/adapter/src/coord/peek.rs
@@ -773,7 +773,9 @@ impl crate::coord::Coordinator {
                 self.controller
                     .compute
                     .create_dataflow(compute_instance, dataflow, None)
-                    .unwrap_or_terminate("cannot fail to create dataflows");
+                    .map_err(
+                        AdapterError::concurrent_dependency_drop_from_dataflow_creation_error,
+                    )?;
                 self.initialize_compute_read_policies(
                     output_ids,
                     compute_instance,
@@ -1332,8 +1334,16 @@ impl crate::coord::Coordinator {
                 .await,
         );
 
-        self.ship_dataflow(df_desc, compute_instance, target_replica)
-            .await;
+        // Try to ship the dataflow. We handle errors gracefully because dependencies might have
+        // disappeared during sequencing.
+        if let Err(e) = self
+            .try_ship_dataflow(df_desc, compute_instance, target_replica)
+            .await
+            .map_err(AdapterError::concurrent_dependency_drop_from_dataflow_creation_error)
+        {
+            let _ = tx.send(Err(e));
+            return;
+        }
 
         // Spawn background task to wait for completion
         // We must NOT await sink_rx here directly, as that would block the coordinator's main task
diff --git a/src/adapter/src/error.rs b/src/adapter/src/error.rs
index b21707e5f4748..afc4bb7e5eb41 100644
--- a/src/adapter/src/error.rs
+++ b/src/adapter/src/error.rs
@@ -675,6 +675,29 @@ impl AdapterError {
             e @ PeekError::ReadHoldInsufficient(_) => AdapterError::internal("peek error", e),
         }
     }
+
+    pub fn concurrent_dependency_drop_from_dataflow_creation_error(
+        e: compute_error::DataflowCreationError,
+    ) -> Self {
+        use compute_error::DataflowCreationError::*;
+        match e {
+            InstanceMissing(id) => AdapterError::ConcurrentDependencyDrop {
+                dependency_kind: "cluster",
+                dependency_id: id.to_string(),
+            },
+            CollectionMissing(id) => AdapterError::ConcurrentDependencyDrop {
+                dependency_kind: "collection",
+                dependency_id: id.to_string(),
+            },
+            ReplicaMissing(id) => AdapterError::ConcurrentDependencyDrop {
+                dependency_kind: "replica",
+                dependency_id: id.to_string(),
+            },
+            MissingAsOf | SinceViolation(..) | EmptyAsOfForSubscribe | EmptyAsOfForCopyTo => {
+                AdapterError::internal("dataflow creation error", e)
+            }
+        }
+    }
 }
 
 impl fmt::Display for AdapterError {