diff --git a/internal/guard/guard_test.go b/internal/guard/guard_test.go
index 93b85d9f..47a8426a 100644
--- a/internal/guard/guard_test.go
+++ b/internal/guard/guard_test.go
@@ -2,6 +2,7 @@ package guard
 
 import (
 	"context"
+	"errors"
 	"sync"
 	"testing"
 
@@ -17,6 +18,20 @@ type mockGuard struct {
 	id string
 }
 
+// mockClosableGuard is a guard that tracks whether Close was called
+type mockClosableGuard struct {
+	mockGuard
+	closed     bool
+	closeCount int
+	closeErr   error
+}
+
+func (m *mockClosableGuard) Close(ctx context.Context) error {
+	m.closed = true
+	m.closeCount++
+	return m.closeErr
+}
+
 func (m *mockGuard) Name() string { return "mock-" + m.id }
 func (m *mockGuard) LabelAgent(ctx context.Context, policy interface{}, backend BackendCaller, caps *difc.Capabilities) (*LabelAgentResult, error) {
 	return &LabelAgentResult{DIFCMode: difc.ModeStrict}, nil
@@ -450,6 +465,70 @@ func TestGuardRegistry_HasNonNoopGuard(t *testing.T) {
 	})
 }
 
+func TestGuardRegistry_Close(t *testing.T) {
+	t.Run("close calls Close on guards that implement it", func(t *testing.T) {
+		registry := NewRegistry()
+		g := &mockClosableGuard{mockGuard: mockGuard{id: "wasm"}}
+		registry.Register("server1", g)
+
+		registry.Close(context.Background())
+
+		assert.True(t, g.closed, "expected guard Close to be called")
+	})
+
+	t.Run("close skips guards that do not implement Close", func(t *testing.T) {
+		registry := NewRegistry()
+		registry.Register("server1", NewNoopGuard())
+
+		// Should not panic
+		registry.Close(context.Background())
+	})
+
+	t.Run("close on empty registry is safe", func(t *testing.T) {
+		registry := NewRegistry()
+		// Should not panic
+		registry.Close(context.Background())
+	})
+
+	t.Run("close calls Close on all closable guards", func(t *testing.T) {
+		registry := NewRegistry()
+		g1 := &mockClosableGuard{mockGuard: mockGuard{id: "wasm1"}}
+		g2 := &mockClosableGuard{mockGuard: mockGuard{id: "wasm2"}}
+		registry.Register("server1", g1)
+		registry.Register("server2", g2)
+
+		registry.Close(context.Background())
+
+		assert.True(t, g1.closed, "expected guard 1 Close to be called")
+		assert.True(t, g2.closed, "expected guard 2 Close to be called")
+	})
+
+	t.Run("close continues when one guard returns an error", func(t *testing.T) {
+		registry := NewRegistry()
+		g1 := &mockClosableGuard{mockGuard: mockGuard{id: "failing"}, closeErr: errors.New("close failed")}
+		g2 := &mockClosableGuard{mockGuard: mockGuard{id: "ok"}}
+		registry.Register("server1", g1)
+		registry.Register("server2", g2)
+
+		// Should not panic even when one guard returns an error
+		registry.Close(context.Background())
+
+		assert.True(t, g1.closed, "expected failing guard Close to be called")
+		assert.True(t, g2.closed, "expected ok guard Close to be called")
+	})
+
+	t.Run("double close is safe", func(t *testing.T) {
+		registry := NewRegistry()
+		g := &mockClosableGuard{mockGuard: mockGuard{id: "wasm"}}
+		registry.Register("server1", g)
+
+		registry.Close(context.Background())
+		registry.Close(context.Background())
+
+		assert.Equal(t, 2, g.closeCount, "Close should be called twice without panic")
+	})
+}
+
 func TestCreateGuard(t *testing.T) {
 	tests := []struct {
 		name        string
diff --git a/internal/guard/registry.go b/internal/guard/registry.go
index 08143455..44bfceb4 100644
--- a/internal/guard/registry.go
+++ b/internal/guard/registry.go
@@ -1,6 +1,7 @@
 package guard
 
 import (
+	"context"
 	"fmt"
 	"sync"
 
@@ -30,7 +31,7 @@ func (r *Registry) Register(serverID string, guard Guard) {
 	defer r.mu.Unlock()
 
 	r.guards[serverID] = guard
-	log.Printf("[Guard] Registered guard '%s' for server '%s'", guard.Name(), serverID)
+	logger.LogInfo("guard", "Registered guard '%s' for server '%s'", guard.Name(), serverID)
 }
 
 // Get retrieves the guard for a server, or returns a noop guard if not found
@@ -46,7 +47,6 @@ func (r *Registry) Get(serverID string) Guard {
 
 	// Return noop guard as default
 	debugLog.Printf("No guard registered for serverID=%s, returning noop guard", serverID)
-	log.Printf("[Guard] No guard registered for server '%s', using noop guard", serverID)
 	return NewNoopGuard()
 }
 
@@ -76,7 +76,7 @@ func (r *Registry) Remove(serverID string) {
 	r.mu.Lock()
 	defer r.mu.Unlock()
 	delete(r.guards, serverID)
-	log.Printf("[Guard] Removed guard for server '%s'", serverID)
+	logger.LogInfo("guard", "Removed guard for server '%s'", serverID)
 }
 
 // List returns all registered server IDs
@@ -103,6 +103,33 @@ func (r *Registry) GetGuardInfo() map[string]string {
 	return info
 }
 
+// Close closes all registered guards that implement Close(context.Context) error.
+// It should be called during server shutdown to release WASM runtime resources.
+func (r *Registry) Close(ctx context.Context) {
+	type closableGuard struct {
+		id string
+		c  interface{ Close(context.Context) error }
+	}
+
+	r.mu.RLock()
+	closers := make([]closableGuard, 0, len(r.guards))
+	for id, g := range r.guards {
+		if c, ok := g.(interface{ Close(context.Context) error }); ok {
+			closers = append(closers, closableGuard{id: id, c: c})
+		}
+	}
+	r.mu.RUnlock()
+
+	for _, guard := range closers {
+		if err := guard.c.Close(ctx); err != nil {
+			logger.LogWarn("guard", "Failed to close guard for server %s: %v", guard.id, err)
+		}
+	}
+	if len(closers) > 0 {
+		logger.LogInfo("guard", "Closed %d guard(s)", len(closers))
+	}
+}
+
 // GuardFactory is a function that creates a guard instance
 type GuardFactory func() (Guard, error)
 
@@ -116,7 +143,7 @@ func RegisterGuardType(name string, factory GuardFactory) {
 	registeredGuardsMu.Lock()
 	defer registeredGuardsMu.Unlock()
 	registeredGuards[name] = factory
-	log.Printf("[Guard] Registered guard type: %s", name)
+	logger.LogInfo("guard", "Registered guard type: %s", name)
 }
 
 // CreateGuard creates a guard instance by name using registered factories
diff --git a/internal/guard/wasm.go b/internal/guard/wasm.go
index ea144fa9..2a300d59 100644
--- a/internal/guard/wasm.go
+++ b/internal/guard/wasm.go
@@ -15,6 +15,7 @@ import (
 	"github.com/tetratelabs/wazero"
 	"github.com/tetratelabs/wazero/api"
 	"github.com/tetratelabs/wazero/imports/wasi_snapshot_preview1"
+	"github.com/tetratelabs/wazero/sys"
 )
 
 var logWasm = logger.New("guard:wasm")
@@ -830,10 +831,22 @@ func parsePathLabeledResponse(responseJSON []byte, originalData interface{}) (di
 	return pld.ToCollectionLabeledData(), nil
 }
 
-// isWasmTrap reports whether err is a WASM execution trap such as the
-// "wasm error: unreachable" produced when a Rust-compiled guard panics.
+// isWasmTrap reports whether err represents a WASM execution trap that should
+// permanently poison the guard. Normal process exits (exit code 0, e.g. TinyGo
+// init) are NOT considered traps. A non-zero exit code is treated as a trap.
+// As a fallback for wazero execution faults (e.g. Rust panic → unreachable),
+// the function also matches on wazero's "wasm error:" message prefix.
 func isWasmTrap(err error) bool {
-	return err != nil && strings.Contains(err.Error(), "wasm error:")
+	if err == nil {
+		return false
+	}
+	// A normal WASI process exit (exit code 0) is not a trap — don't poison the guard.
+	var exitErr *sys.ExitError
+	if errors.As(err, &exitErr) {
+		return exitErr.ExitCode() != 0
+	}
+	// Fallback for wazero execution traps (e.g. Rust panic → unreachable).
+	return strings.Contains(err.Error(), "wasm error:")
 }
 
 // callWasmFunction calls an exported function in the WASM module.
diff --git a/internal/guard/wasm_test.go b/internal/guard/wasm_test.go
index 66314b2d..776501fe 100644
--- a/internal/guard/wasm_test.go
+++ b/internal/guard/wasm_test.go
@@ -16,6 +16,7 @@ import (
 
 	"github.com/github/gh-aw-mcpg/internal/difc"
 	"github.com/tetratelabs/wazero"
+	"github.com/tetratelabs/wazero/sys"
 )
 
 func TestMain(m *testing.M) {
@@ -1152,6 +1153,26 @@ func TestIsWasmTrap(t *testing.T) {
 		err := errors.New("wasm error: out of bounds memory access")
 		assert.True(t, isWasmTrap(err))
 	})
+
+	t.Run("sys.ExitError with exit code 0 is not a trap", func(t *testing.T) {
+		err := sys.NewExitError(0)
+		assert.False(t, isWasmTrap(err))
+	})
+
+	t.Run("sys.ExitError with non-zero exit code is a trap", func(t *testing.T) {
+		err := sys.NewExitError(1)
+		assert.True(t, isWasmTrap(err))
+	})
+
+	t.Run("wrapped sys.ExitError with exit code 0 is not a trap", func(t *testing.T) {
+		err := fmt.Errorf("wrapper: %w", sys.NewExitError(0))
+		assert.False(t, isWasmTrap(err))
+	})
+
+	t.Run("wrapped sys.ExitError with non-zero exit code is a trap", func(t *testing.T) {
+		err := fmt.Errorf("wrapper: %w", sys.NewExitError(2))
+		assert.True(t, isWasmTrap(err))
+	})
 }
 
 func TestWasmGuardFailedState(t *testing.T) {
diff --git a/internal/server/unified.go b/internal/server/unified.go
index 7c0f5ce8..ce433ecb 100644
--- a/internal/server/unified.go
+++ b/internal/server/unified.go
@@ -718,7 +718,7 @@ func (us *UnifiedServer) GetToolHandler(backendID string, toolName string) func(
 
 // Close cleans up resources
 func (us *UnifiedServer) Close() error {
-	us.launcher.Close()
+	us.InitiateShutdown()
 	return nil
 }
 
@@ -753,6 +753,11 @@ func (us *UnifiedServer) InitiateShutdown() int {
 		logger.LogInfo("shutdown", "Terminating %d backend servers", serversTerminated)
 		us.launcher.Close()
 
+		// Release WASM runtime resources held by guards
+		if us.guardRegistry != nil {
+			us.guardRegistry.Close(context.Background())
+		}
+
 		logger.LogInfo("shutdown", "Backend servers terminated successfully")
 	})
 	return serversTerminated