diff --git a/.changeset/social-ads-arrive.md b/.changeset/social-ads-arrive.md
new file mode 100644
index 00000000000..8be6221121d
--- /dev/null
+++ b/.changeset/social-ads-arrive.md
@@ -0,0 +1,5 @@
+---
+"thirdweb": patch
+---
+
+Support for x402 payment-required headers
diff --git a/packages/thirdweb/src/x402/encode.ts b/packages/thirdweb/src/x402/encode.ts
index 9a89e5e60ca..4c95fb446c2 100644
--- a/packages/thirdweb/src/x402/encode.ts
+++ b/packages/thirdweb/src/x402/encode.ts
@@ -66,7 +66,7 @@ export function safeBase64Encode(data: string): string {
  * @param data - The base64 encoded string to be decoded
  * @returns The decoded string in UTF-8 format
  */
-function safeBase64Decode(data: string): string {
+export function safeBase64Decode(data: string): string {
   if (
     typeof globalThis !== "undefined" &&
     typeof globalThis.atob === "function"
diff --git a/packages/thirdweb/src/x402/fetchWithPayment.test.ts b/packages/thirdweb/src/x402/fetchWithPayment.test.ts
new file mode 100644
index 00000000000..9207e6f264f
--- /dev/null
+++ b/packages/thirdweb/src/x402/fetchWithPayment.test.ts
@@ -0,0 +1,304 @@
+import { beforeEach, describe, expect, it, vi } from "vitest";
+import { safeBase64Decode, safeBase64Encode } from "./encode.js";
+import { wrapFetchWithPayment } from "./fetchWithPayment.js";
+
+// Mock the createPaymentHeader function
+vi.mock("./sign.js", () => ({
+  createPaymentHeader: vi.fn().mockResolvedValue("mock-payment-header"),
+}));
+
+// Mock webLocalStorage
+vi.mock("../utils/storage/webStorage.js", () => ({
+  webLocalStorage: {
+    getItem: vi.fn(),
+    setItem: vi.fn(),
+    removeItem: vi.fn(),
+  },
+}));
+
+describe("wrapFetchWithPayment", () => {
+  const mockPaymentRequirements = {
+    scheme: "exact",
+    network: "eip155:1",
+    maxAmountRequired: "1000000",
+    resource: "https://api.example.com/resource",
+    description: "Test payment",
+    mimeType: "application/json",
+    payTo: "0x1234567890123456789012345678901234567890",
+    maxTimeoutSeconds: 300,
+    asset: "0x0000000000000000000000000000000000000001",
+    extra: {
+      name: "Test Token",
+      version: "1",
+    },
+  };
+
+  const mock402ResponseData = {
+    x402Version: 1,
+    accepts: [mockPaymentRequirements],
+    error: undefined,
+  };
+
+  const mockClient = {
+    clientId: "test-client-id",
+  } as Parameters<typeof wrapFetchWithPayment>[1];
+
+  const mockAccount = {
+    address: "0x1234567890123456789012345678901234567890",
+    signTypedData: vi.fn(),
+  };
+
+  const mockWallet = {
+    getAccount: vi.fn().mockReturnValue(mockAccount),
+    getChain: vi.fn().mockReturnValue({ id: 1 }),
+    switchChain: vi.fn(),
+  } as unknown as Parameters<typeof wrapFetchWithPayment>[2];
+
+  beforeEach(() => {
+    vi.clearAllMocks();
+  });
+
+  it("should pass through non-402 responses unchanged", async () => {
+    const mockResponse = new Response(JSON.stringify({ data: "test" }), {
+      status: 200,
+    });
+    const mockFetch = vi.fn().mockResolvedValue(mockResponse);
+
+    const wrappedFetch = wrapFetchWithPayment(
+      mockFetch,
+      mockClient,
+      mockWallet,
+    );
+    const response = await wrappedFetch("https://api.example.com/resource");
+
+    expect(response.status).toBe(200);
+    expect(mockFetch).toHaveBeenCalledTimes(1);
+  });
+
+  it("should parse payment requirements from payment-required header when present", async () => {
+    const encodedPaymentInfo = safeBase64Encode(
+      JSON.stringify(mock402ResponseData),
+    );
+
+    const mock402Response = new Response(null, {
+      status: 402,
+      headers: {
+        "payment-required": encodedPaymentInfo,
+      },
+    });
+
+    const mockSuccessResponse = new Response(
+      JSON.stringify({ success: true }),
+      {
+        status: 200,
+      },
+    );
+
+    const mockFetch = vi
+      .fn()
+      .mockResolvedValueOnce(mock402Response)
+      .mockResolvedValueOnce(mockSuccessResponse);
+
+    const wrappedFetch = wrapFetchWithPayment(
+      mockFetch,
+      mockClient,
+      mockWallet,
+    );
+    const response = await wrappedFetch("https://api.example.com/resource");
+
+    expect(response.status).toBe(200);
+    expect(mockFetch).toHaveBeenCalledTimes(2);
+
+    // Verify the second call includes the X-PAYMENT header
+    const secondCallInit = mockFetch.mock.calls[1]?.[1] as RequestInit;
+    expect(secondCallInit.headers).toHaveProperty("X-PAYMENT");
+  });
+
+  it("should parse payment requirements from JSON body when payment-required header is absent", async () => {
+    const mock402Response = new Response(JSON.stringify(mock402ResponseData), {
+      status: 402,
+    });
+
+    const mockSuccessResponse = new Response(
+      JSON.stringify({ success: true }),
+      {
+        status: 200,
+      },
+    );
+
+    const mockFetch = vi
+      .fn()
+      .mockResolvedValueOnce(mock402Response)
+      .mockResolvedValueOnce(mockSuccessResponse);
+
+    const wrappedFetch = wrapFetchWithPayment(
+      mockFetch,
+      mockClient,
+      mockWallet,
+    );
+    const response = await wrappedFetch("https://api.example.com/resource");
+
+    expect(response.status).toBe(200);
+    expect(mockFetch).toHaveBeenCalledTimes(2);
+
+    // Verify the second call includes the X-PAYMENT header
+    const secondCallInit = mockFetch.mock.calls[1]?.[1] as RequestInit;
+    expect(secondCallInit.headers).toHaveProperty("X-PAYMENT");
+  });
+
+  it("should prefer payment-required header over JSON body when both are present", async () => {
+    const headerPaymentRequirements = {
+      ...mockPaymentRequirements,
+      maxAmountRequired: "500000", // Different amount to verify header is used
+    };
+    const headerResponseData = {
+      x402Version: 1,
+      accepts: [headerPaymentRequirements],
+    };
+
+    const bodyResponseData = {
+      x402Version: 1,
+      accepts: [{ ...mockPaymentRequirements, maxAmountRequired: "2000000" }],
+    };
+
+    const encodedPaymentInfo = safeBase64Encode(
+      JSON.stringify(headerResponseData),
+    );
+
+    // Create response with both header and body
+    const mock402Response = new Response(JSON.stringify(bodyResponseData), {
+      status: 402,
+      headers: {
+        "payment-required": encodedPaymentInfo,
+      },
+    });
+
+    const mockSuccessResponse = new Response(
+      JSON.stringify({ success: true }),
+      {
+        status: 200,
+      },
+    );
+
+    const mockFetch = vi
+      .fn()
+      .mockResolvedValueOnce(mock402Response)
+      .mockResolvedValueOnce(mockSuccessResponse);
+
+    // Use maxValue to verify which payment requirements are used
+    // If header is used (500000), it should pass
+    // If body is used (2000000), it would exceed maxValue
+    const wrappedFetch = wrapFetchWithPayment(
+      mockFetch,
+      mockClient,
+      mockWallet,
+      {
+        maxValue: BigInt(1000000),
+      },
+    );
+
+    const response = await wrappedFetch("https://api.example.com/resource");
+
+    // Should succeed because header value (500000) is under maxValue (1000000)
+    expect(response.status).toBe(200);
+  });
+
+  it("should parse payment requirements from payment-required header", async () => {
+    const encodedPaymentInfo = safeBase64Encode(
+      JSON.stringify(mock402ResponseData),
+    );
+
+    const mock402Response = new Response(null, {
+      status: 402,
+      headers: {
+        "payment-required": encodedPaymentInfo,
+      },
+    });
+
+    const mockSuccessResponse = new Response(
+      JSON.stringify({ success: true }),
+      {
+        status: 200,
+      },
+    );
+
+    const mockFetch = vi
+      .fn()
+      .mockResolvedValueOnce(mock402Response)
+      .mockResolvedValueOnce(mockSuccessResponse);
+
+    const wrappedFetch = wrapFetchWithPayment(
+      mockFetch,
+      mockClient,
+      mockWallet,
+    );
+    const response = await wrappedFetch("https://api.example.com/resource");
+
+    expect(response.status).toBe(200);
+    expect(mockFetch).toHaveBeenCalledTimes(2);
+
+    // Verify the second call includes the X-PAYMENT header
+    const secondCallInit = mockFetch.mock.calls[1]?.[1] as RequestInit;
+    expect(secondCallInit.headers).toHaveProperty("X-PAYMENT");
+  });
+
+  it("should correctly decode a raw base64 encoded payment-required header", async () => {
+    // This is an actual base64 encoded payment requirements header
+    // Original JSON: {"x402Version":1,"accepts":[{"scheme":"exact","network":"eip155:8453","maxAmountRequired":"100000","resource":"https://example.com/api","description":"API access","mimeType":"application/json","payTo":"0xd8dA6BF26964aF9D7eEd9e03E53415D37aA96045","maxTimeoutSeconds":300,"asset":"0x833589fCD6eDb6E08f4c7C32D4f71b54bdA02913","extra":{"name":"USD Coin","version":"2"}}]}
+    const rawBase64Header =
+      "eyJ4NDAyVmVyc2lvbiI6MSwiYWNjZXB0cyI6W3sic2NoZW1lIjoiZXhhY3QiLCJuZXR3b3JrIjoiZWlwMTU1Ojg0NTMiLCJtYXhBbW91bnRSZXF1aXJlZCI6IjEwMDAwMCIsInJlc291cmNlIjoiaHR0cHM6Ly9leGFtcGxlLmNvbS9hcGkiLCJkZXNjcmlwdGlvbiI6IkFQSSBhY2Nlc3MiLCJtaW1lVHlwZSI6ImFwcGxpY2F0aW9uL2pzb24iLCJwYXlUbyI6IjB4ZDhkQTZCRjI2OTY0YUY5RDdlRWQ5ZTAzRTUzNDE1RDM3YUE5NjA0NSIsIm1heFRpbWVvdXRTZWNvbmRzIjozMDAsImFzc2V0IjoiMHg4MzM1ODlmQ0Q2ZURiNkUwOGY0YzdDMzJENGY3MWI1NGJkQTAyOTEzIiwiZXh0cmEiOnsibmFtZSI6IlVTRCBDb2luIiwidmVyc2lvbiI6IjIifX1dfQ==";
+
+    // Verify the base64 decodes to valid JSON
+    const decoded = safeBase64Decode(rawBase64Header);
+    const parsed = JSON.parse(decoded);
+
+    expect(parsed.x402Version).toBe(1);
+    expect(parsed.accepts).toHaveLength(1);
+    expect(parsed.accepts[0].network).toBe("eip155:8453");
+    expect(parsed.accepts[0].maxAmountRequired).toBe("100000");
+    expect(parsed.accepts[0].payTo).toBe(
+      "0xd8dA6BF26964aF9D7eEd9e03E53415D37aA96045",
+    );
+
+    // Now test the full flow with this raw header
+    const mock402Response = new Response(null, {
+      status: 402,
+      headers: {
+        "payment-required": rawBase64Header,
+      },
+    });
+
+    const mockSuccessResponse = new Response(
+      JSON.stringify({ success: true }),
+      {
+        status: 200,
+      },
+    );
+
+    const mockFetch = vi
+      .fn()
+      .mockResolvedValueOnce(mock402Response)
+      .mockResolvedValueOnce(mockSuccessResponse);
+
+    // Use a wallet on Base (chain 8453) to match the payment requirements
+    const baseWallet = {
+      getAccount: vi.fn().mockReturnValue(mockAccount),
+      getChain: vi.fn().mockReturnValue({ id: 8453 }),
+      switchChain: vi.fn(),
+    } as unknown as Parameters<typeof wrapFetchWithPayment>[2];
+
+    const wrappedFetch = wrapFetchWithPayment(
+      mockFetch,
+      mockClient,
+      baseWallet,
+    );
+    const response = await wrappedFetch("https://example.com/api");
+
+    expect(response.status).toBe(200);
+    expect(mockFetch).toHaveBeenCalledTimes(2);
+
+    // Verify the retry request was made with X-PAYMENT header
+    const secondCallInit = mockFetch.mock.calls[1]?.[1] as RequestInit;
+    expect(secondCallInit.headers).toHaveProperty("X-PAYMENT");
+  });
+});
diff --git a/packages/thirdweb/src/x402/fetchWithPayment.ts b/packages/thirdweb/src/x402/fetchWithPayment.ts
index 589637c3bad..9100a12a61b 100644
--- a/packages/thirdweb/src/x402/fetchWithPayment.ts
+++ b/packages/thirdweb/src/x402/fetchWithPayment.ts
@@ -4,6 +4,7 @@ import { getAddress } from "../utils/address.js";
 import type { AsyncStorage } from "../utils/storage/AsyncStorage.js";
 import { webLocalStorage } from "../utils/storage/webStorage.js";
 import type { Wallet } from "../wallets/interfaces/wallet.js";
+import { safeBase64Decode } from "./encode.js";
 import { clearPermitSignatureFromCache } from "./permitSignatureStorage.js";
 import {
   extractEvmChainId,
@@ -75,14 +76,50 @@ export function wrapFetchWithPayment(
       return response;
     }
 
-    const { x402Version, accepts, error } = (await response.json()) as {
-      x402Version: number;
-      accepts: unknown[];
-      error?: string;
-    };
-    const parsedPaymentRequirements = accepts.map((x) =>
-      RequestedPaymentRequirementsSchema.parse(x),
-    );
+    let x402Version: number;
+    let parsedPaymentRequirements: RequestedPaymentRequirements[];
+    let error: string | undefined;
+
+    // Check payment-required header first before falling back to JSON body
+    const paymentRequiredHeader = response.headers.get("payment-required");
+    if (paymentRequiredHeader) {
+      const decoded = safeBase64Decode(paymentRequiredHeader);
+      const parsed = JSON.parse(decoded) as {
+        x402Version: number;
+        accepts: unknown[];
+        error?: string;
+      };
+
+      if (!Array.isArray(parsed.accepts)) {
+        throw new Error(
+          `402 response has no usable x402 payment requirements. ${parsed.error ?? ""}`,
+        );
+      }
+
+      x402Version = parsed.x402Version;
+      parsedPaymentRequirements = parsed.accepts.map((x) =>
+        RequestedPaymentRequirementsSchema.parse(x),
+      );
+      error = parsed.error;
+    } else {
+      const body = (await response.json()) as {
+        x402Version: number;
+        accepts: unknown[];
+        error?: string;
+      };
+
+      if (!Array.isArray(body.accepts)) {
+        throw new Error(
+          `402 response has no usable x402 payment requirements. ${body.error ?? ""}`,
+        );
+      }
+
+      x402Version = body.x402Version;
+      parsedPaymentRequirements = body.accepts.map((x) =>
+        RequestedPaymentRequirementsSchema.parse(x),
+      );
+      error = body.error;
+    }
 
     const account = wallet.getAccount();
     let chain = wallet.getChain();