diff --git a/packages/typescript/test/sync/shutdown.test.ts b/packages/typescript/test/sync/shutdown.test.ts
new file mode 100644
index 0000000000000..030e959af88fa
--- /dev/null
+++ b/packages/typescript/test/sync/shutdown.test.ts
@@ -0,0 +1,36 @@
+import assert from "node:assert";
+import { spawn } from "node:child_process";
+import { test } from "node:test";
+
+test("close shuts down the API process cleanly", async () => {
+    const script = `
+        import { API } from "@typescript/typescript/unstable/sync";
+        const api = new API({ cwd: process.cwd() });
+        api.updateSnapshot().dispose();
+        api.close();
+    `;
+
+    const results = await Promise.all(Array.from({ length: 20 }, () => runNode(script)));
+    for (const result of results) {
+        assert.equal(result.status, 0);
+        assert.equal(result.stderr, "");
+    }
+});
+
+function runNode(script: string): Promise<{ status: number | null; stderr: string; }> {
+    return new Promise((resolve, reject) => {
+        const child = spawn(process.execPath, [
+            "--conditions",
+            "@typescript/source",
+            "--experimental-strip-types",
+            "--input-type=module",
+            "--eval",
+            script,
+        ]);
+        let stderr = "";
+        child.stderr.setEncoding("utf8");
+        child.stderr.on("data", chunk => stderr += chunk);
+        child.on("error", reject);
+        child.on("close", status => resolve({ status, stderr }));
+    });
+}
diff --git a/tsc/internal/api/server.go b/tsc/internal/api/server.go
index 817ddebffa2e7..cb3c4a0672f34 100644
--- a/tsc/internal/api/server.go
+++ b/tsc/internal/api/server.go
@@ -120,5 +120,12 @@ func (s *StdioServer) Run(ctx context.Context) error {
 		callbackFS.SetConnection(ctx, conn)
 	}
 
-	return conn.Run(ctx)
+	return serverRunError(ctx, conn.Run(ctx))
+}
+
+func serverRunError(ctx context.Context, err error) error {
+	if ctx.Err() != nil {
+		return nil
+	}
+	return err
 }
diff --git a/tsc/internal/api/server_test.go b/tsc/internal/api/server_test.go
new file mode 100644
index 0000000000000..00607cdde5c90
--- /dev/null
+++ b/tsc/internal/api/server_test.go
@@ -0,0 +1,38 @@
+package api
+
+import (
+	"context"
+	"errors"
+	"testing"
+
+	"gotest.tools/v3/assert"
+)
+
+func TestServerRunError(t *testing.T) {
+	t.Parallel()
+
+	t.Run("EOF", func(t *testing.T) {
+		t.Parallel()
+		assert.NilError(t, serverRunError(context.Background(), nil))
+	})
+
+	t.Run("context cancellation", func(t *testing.T) {
+		t.Parallel()
+		ctx, cancel := context.WithCancel(context.Background())
+		cancel()
+		assert.NilError(t, serverRunError(ctx, context.Canceled))
+	})
+
+	t.Run("unrelated cancellation", func(t *testing.T) {
+		t.Parallel()
+		err := context.Canceled
+		assert.ErrorIs(t, serverRunError(context.Background(), err), err)
+	})
+
+	t.Run("context cancellation supersedes server error", func(t *testing.T) {
+		t.Parallel()
+		ctx, cancel := context.WithCancel(context.Background())
+		cancel()
+		assert.NilError(t, serverRunError(ctx, errors.New("server failed")))
+	})
+}