diff --git a/src/debugpy/_vendored/pydevd/pydevd.py b/src/debugpy/_vendored/pydevd/pydevd.py
index 4abba2e1..3b2716fe 100644
--- a/src/debugpy/_vendored/pydevd/pydevd.py
+++ b/src/debugpy/_vendored/pydevd/pydevd.py
@@ -93,6 +93,7 @@
     PYDEVD_IPYTHON_COMPATIBLE_DEBUGGING,
     PYDEVD_IPYTHON_CONTEXT,
     PYDEVD_USE_SYS_MONITORING,
+    IS_PY314_OR_GREATER,
 )
 from _pydevd_bundle.pydevd_defaults import PydevdCustomization  # Note: import alias used on pydev_monkey.
 from _pydevd_bundle.pydevd_custom_frames import CustomFramesContainer, custom_frames_container_init
@@ -1292,6 +1293,16 @@ def in_project_scope(self, frame, absolute_filename=None):
             if file_type == self.PYDEV_FILE:
                 cache[cache_key] = False
 
+            elif IS_PY314_OR_GREATER and frame.f_code.co_name == "__annotate__":
+                # Special handling for __annotate__ functions (PEP 649 in Python 3.14+).
+                # These are compiler-generated functions that can raise NotImplementedError
+                # when called with unsupported format arguments by inspect.call_annotate_function.
+                # They should be treated as library code to avoid false positives in exception handling.
+                # Note: PEP 649 reserves the __annotate__ name for compiler-generated functions,
+                # so user-defined functions with this name are discouraged and will also be treated
+                # as library code to maintain consistency with the language design.
+                cache[cache_key] = False
+
             elif absolute_filename == "<string>":
                 # Special handling for '<string>'
                 if file_type == self.LIB_FILE:
diff --git a/tests/debugpy/test_exception.py b/tests/debugpy/test_exception.py
index 76412346..bf21c9dd 100644
--- a/tests/debugpy/test_exception.py
+++ b/tests/debugpy/test_exception.py
@@ -5,7 +5,7 @@
 import pytest
 import sys
 
-from _pydevd_bundle.pydevd_constants import IS_PY312_OR_GREATER
+from _pydevd_bundle.pydevd_constants import IS_PY312_OR_GREATER, IS_PY314_OR_GREATER
 from tests import debug
 from tests.debug import runners, targets
 from tests.patterns import some
@@ -390,3 +390,54 @@ def do_something2(n):
         assert min_expected_lines <= stack_line_count <= max_expected_lines
 
         session.request_continue()
+
+
+@pytest.mark.skipif(not IS_PY314_OR_GREATER, reason="Test requires Python 3.14+")
+def test_annotate_function_not_treated_as_user_exception(pyfile, target, run):
+    """
+    Test that __annotate__ functions (PEP 649) are treated as library code.
+    In Python 3.14+, compiler-generated __annotate__ functions can raise
+    NotImplementedError when called by inspect.call_annotate_function with
+    unsupported format arguments. These should not be reported as user exceptions.
+    """
+    @pyfile
+    def code_to_debug():
+        import debuggee
+        from typing import get_type_hints
+
+        debuggee.setup()
+
+        # Define a class with annotations that will trigger __annotate__ function generation
+        class AnnotatedClass:
+            value: int = 42
+            name: str = "test"
+
+        # This will trigger the __annotate__ function to be called by the runtime
+        # which may raise NotImplementedError internally (expected behavior)
+        try:
+            hints = get_type_hints(AnnotatedClass)
+            print(f"Type hints: {hints}")  # @bp
+        except Exception as e:
+            print(f"Exception: {e}")
+
+    with debug.Session() as session:
+        session.config["justMyCode"] = True
+
+        with run(session, target(code_to_debug)):
+            # Set exception breakpoints for user uncaught exceptions
+            session.request(
+                "setExceptionBreakpoints",
+                {"filters": ["userUnhandled"]}
+            )
+            session.set_breakpoints(code_to_debug, all)
+
+        # Wait for the breakpoint
+        session.wait_for_stop(
+            "breakpoint",
+            expected_frames=[some.dap.frame(code_to_debug, "bp")]
+        )
+
+        # The test passes if we reach here without stopping on a NotImplementedError
+        # from __annotate__ function
+        session.request_continue()
+