diff --git a/src/pipecat/services/llm_service.py b/src/pipecat/services/llm_service.py
index 036818370..f8a0baae0 100644
--- a/src/pipecat/services/llm_service.py
+++ b/src/pipecat/services/llm_service.py
@@ -725,7 +725,11 @@ class LLMService(UserTurnCompletionLLMServiceMixin, AIService):
                 logger.warning(
                     f"{self} is calling '{function_call.function_name}', but it's not registered."
                 )
-                continue
+                item = FunctionCallRegistryItem(
+                    function_name=function_call.function_name,
+                    handler=self._missing_function_call_handler,
+                    cancel_on_interruption=True,
+                )
 
             runner_items.append(
                 FunctionCallRunnerItem(
@@ -782,12 +786,7 @@ class LLMService(UserTurnCompletionLLMServiceMixin, AIService):
             await self._sequential_runner_queue.put(runner_item)
 
     async def _run_function_call(self, runner_item: FunctionCallRunnerItem):
-        if runner_item.function_name in self._functions.keys():
-            item = self._functions[runner_item.function_name]
-        elif None in self._functions.keys():
-            item = self._functions[None]
-        else:
-            return
+        item = runner_item.registry_item
 
         logger.debug(
             f"{self} Calling function [{runner_item.function_name}:{runner_item.tool_call_id}] with arguments {runner_item.arguments}"
@@ -894,6 +893,12 @@ class LLMService(UserTurnCompletionLLMServiceMixin, AIService):
             if timeout_task and not timeout_task.done():
                 await self.cancel_task(timeout_task)
 
+    async def _missing_function_call_handler(self, params: FunctionCallParams):
+        """Return a terminal tool result when the LLM calls an unknown function."""
+        await params.result_callback(
+            f"Error: function '{params.function_name}' is not registered."
+        )
+
     def _has_async_tools(self) -> bool:
         """Return True if at least one non-builtin async tool is registered."""
         return any(
diff --git a/tests/test_llm_service.py b/tests/test_llm_service.py
new file mode 100644
index 000000000..0bde008b5
--- /dev/null
+++ b/tests/test_llm_service.py
@@ -0,0 +1,116 @@
+#
+# Copyright (c) 2024-2026, Daily
+#
+# SPDX-License-Identifier: BSD 2-Clause License
+#
+
+import unittest
+from unittest.mock import AsyncMock
+
+from pipecat.frames.frames import (
+    FunctionCallFromLLM,
+    FunctionCallInProgressFrame,
+    FunctionCallResultFrame,
+    FunctionCallsStartedFrame,
+)
+from pipecat.processors.aggregators.llm_context import LLMContext
+from pipecat.services.llm_service import LLMService
+from pipecat.services.settings import LLMSettings
+from pipecat.turns.user_mute.function_call_user_mute_strategy import FunctionCallUserMuteStrategy
+
+
+class MockLLMService(LLMService):
+    """Minimal LLM service for testing function call execution."""
+
+    def __init__(self, **kwargs):
+        settings = LLMSettings(
+            model="test-model",
+            system_instruction=None,
+            temperature=None,
+            max_tokens=None,
+            top_p=None,
+            top_k=None,
+            frequency_penalty=None,
+            presence_penalty=None,
+            seed=None,
+            filter_incomplete_user_turns=None,
+            user_turn_completion_config=None,
+        )
+        super().__init__(settings=settings, **kwargs)
+
+
+class TestLLMService(unittest.IsolatedAsyncioTestCase):
+    async def _run_function_calls_inline(self, service: MockLLMService):
+        async def run_inline(runner_items):
+            for runner_item in runner_items:
+                await service._run_function_call(runner_item)
+
+        service._run_parallel_function_calls = run_inline
+        service._run_sequential_function_calls = run_inline
+
+    async def test_missing_function_call_emits_terminal_result(self):
+        service = MockLLMService()
+        service._call_event_handler = AsyncMock()
+        await self._run_function_calls_inline(service)
+
+        recorded_frames = []
+
+        async def mock_broadcast_frame(frame_cls, **kwargs):
+            recorded_frames.append(frame_cls(**kwargs))
+
+        service.broadcast_frame = mock_broadcast_frame
+
+        await service.run_function_calls(
+            [
+                FunctionCallFromLLM(
+                    function_name="missing_tool",
+                    tool_call_id="call_1",
+                    arguments={"query": "weather"},
+                    context=LLMContext(),
+                )
+            ]
+        )
+
+        self.assertEqual(
+            [type(frame) for frame in recorded_frames],
+            [
+                FunctionCallsStartedFrame,
+                FunctionCallInProgressFrame,
+                FunctionCallResultFrame,
+            ],
+        )
+        self.assertEqual(recorded_frames[1].function_name, "missing_tool")
+        self.assertEqual(
+            recorded_frames[2].result,
+            "Error: function 'missing_tool' is not registered.",
+        )
+
+    async def test_missing_function_call_allows_user_mute_cleanup(self):
+        service = MockLLMService()
+        service._call_event_handler = AsyncMock()
+        await self._run_function_calls_inline(service)
+
+        recorded_frames = []
+
+        async def mock_broadcast_frame(frame_cls, **kwargs):
+            recorded_frames.append(frame_cls(**kwargs))
+
+        service.broadcast_frame = mock_broadcast_frame
+
+        await service.run_function_calls(
+            [
+                FunctionCallFromLLM(
+                    function_name="missing_tool",
+                    tool_call_id="call_1",
+                    arguments={},
+                    context=LLMContext(),
+                )
+            ]
+        )
+
+        strategy = FunctionCallUserMuteStrategy()
+        muted = False
+        for frame in recorded_frames:
+            muted = await strategy.process_frame(frame)
+
+        self.assertFalse(muted)