diff --git a/changelog/3796.fixed.md b/changelog/3796.fixed.md
new file mode 100644
index 000000000..8acc3f3b9
--- /dev/null
+++ b/changelog/3796.fixed.md
@@ -0,0 +1 @@
+- Fixed `IdleFrameProcessor` where `asyncio.Event` was unconditionally cleared in a `finally` block instead of only on the success path.
diff --git a/src/pipecat/processors/idle_frame_processor.py b/src/pipecat/processors/idle_frame_processor.py
index 001b60440..3a7f1b860 100644
--- a/src/pipecat/processors/idle_frame_processor.py
+++ b/src/pipecat/processors/idle_frame_processor.py
@@ -85,7 +85,6 @@ class IdleFrameProcessor(FrameProcessor):
         while True:
             try:
                 await asyncio.wait_for(self._idle_event.wait(), timeout=self._timeout)
+                self._idle_event.clear()
             except asyncio.TimeoutError:
                 await self._callback(self)
-            finally:
-                self._idle_event.clear()
diff --git a/tests/test_idle_frame_processor.py b/tests/test_idle_frame_processor.py
new file mode 100644
index 000000000..22bfb7595
--- /dev/null
+++ b/tests/test_idle_frame_processor.py
@@ -0,0 +1,104 @@
+#
+# Copyright (c) 2024-2026, Daily
+#
+# SPDX-License-Identifier: BSD 2-Clause License
+#
+
+import asyncio
+import unittest
+
+from pipecat.frames.frames import (
+    TextFrame,
+    TranscriptionFrame,
+)
+from pipecat.processors.idle_frame_processor import IdleFrameProcessor
+from pipecat.tests.utils import SleepFrame, run_test
+
+
+class TestIdleFrameProcessor(unittest.IsolatedAsyncioTestCase):
+    async def test_basic_idle_detection(self):
+        """Test that idle callback is triggered after timeout."""
+        callback_called = asyncio.Event()
+
+        async def idle_callback(processor):
+            callback_called.set()
+
+        processor = IdleFrameProcessor(callback=idle_callback, timeout=0.1)
+
+        await run_test(
+            processor,
+            frames_to_send=[SleepFrame(sleep=0.2)],
+            expected_down_frames=[],
+        )
+
+        assert callback_called.is_set(), "Idle callback was not called"
+
+    async def test_activity_resets_timer(self):
+        """Test that receiving frames resets the idle timer."""
+        callback_called = asyncio.Event()
+
+        async def idle_callback(processor):
+            callback_called.set()
+
+        processor = IdleFrameProcessor(callback=idle_callback, timeout=0.2)
+
+        await run_test(
+            processor,
+            frames_to_send=[
+                SleepFrame(sleep=0.1),
+                TextFrame(text="hello"),
+                SleepFrame(sleep=0.1),
+                TextFrame(text="world"),
+                SleepFrame(sleep=0.1),
+            ],
+            expected_down_frames=[TextFrame, TextFrame],
+        )
+
+        assert not callback_called.is_set()
+
+    async def test_signal_preserved_during_callback(self):
+        """Regression: event set during callback must not be cleared."""
+
+        class _Sentinel(Exception):
+            pass
+
+        async def callback(proc):
+            proc._idle_event.set()
+            raise _Sentinel()
+
+        processor = IdleFrameProcessor(callback=callback, timeout=0.01)
+        processor._idle_event = asyncio.Event()
+
+        with self.assertRaises(_Sentinel):
+            await processor._idle_task_handler()
+
+        self.assertTrue(processor._idle_event.is_set())
+
+    async def test_specific_frame_types(self):
+        """Test that only monitored frame types reset the idle timer."""
+        callback_called = asyncio.Event()
+
+        async def idle_callback(processor):
+            callback_called.set()
+
+        processor = IdleFrameProcessor(
+            callback=idle_callback,
+            timeout=0.15,
+            types=[TranscriptionFrame],
+        )
+
+        await run_test(
+            processor,
+            frames_to_send=[
+                SleepFrame(sleep=0.1),
+                TextFrame(text="this should not reset"),
+                SleepFrame(sleep=0.2),
+            ],
+            expected_down_frames=[TextFrame],
+        )
+
+        assert callback_called.is_set()
+
+
+if __name__ == "__main__":
+    unittest.main()