diff --git a/docs/features/nixl_connector_usage.md b/docs/features/nixl_connector_usage.md
index 8aa23b24a..af38087e4 100644
--- a/docs/features/nixl_connector_usage.md
+++ b/docs/features/nixl_connector_usage.md
@@ -50,7 +50,7 @@ VLLM_NIXL_SIDE_CHANNEL_PORT=5600 \
 vllm serve Qwen/Qwen3-0.6B \
   --port 8100 \
   --enforce-eager \
-  --kv-transfer-config '{"kv_connector":"NixlConnector","kv_role":"kv_both"}'
+  --kv-transfer-config '{"kv_connector":"NixlConnector","kv_role":"kv_both","kv_load_failure_policy":"fail"}'
 ```
 
 ### Consumer (Decoder) Configuration
@@ -65,7 +65,7 @@ VLLM_NIXL_SIDE_CHANNEL_PORT=5601 \
 vllm serve Qwen/Qwen3-0.6B \
   --port 8200 \
   --enforce-eager \
-  --kv-transfer-config '{"kv_connector":"NixlConnector","kv_role":"kv_both"}'
+  --kv-transfer-config '{"kv_connector":"NixlConnector","kv_role":"kv_both","kv_load_failure_policy":"fail"}'
 ```
 
 ### Proxy Server
@@ -110,7 +110,7 @@ VLLM_NIXL_SIDE_CHANNEL_PORT=5600 \
 UCX_NET_DEVICES=all \
 vllm serve Qwen/Qwen3-0.6B --port 8000 \
   --tensor-parallel-size 8 \
-  --kv-transfer-config '{"kv_connector":"NixlConnector","kv_role":"kv_producer"}'
+  --kv-transfer-config '{"kv_connector":"NixlConnector","kv_role":"kv_producer","kv_load_failure_policy":"fail"}'
 
 # Prefiller 2 on Machine B (example IP: ${IP2})
 VLLM_NIXL_SIDE_CHANNEL_HOST=${IP2} \
@@ -118,7 +118,7 @@ VLLM_NIXL_SIDE_CHANNEL_PORT=5600 \
 UCX_NET_DEVICES=all \
 vllm serve Qwen/Qwen3-0.6B --port 8000 \
   --tensor-parallel-size 8 \
-  --kv-transfer-config '{"kv_connector":"NixlConnector","kv_role":"kv_producer"}'
+  --kv-transfer-config '{"kv_connector":"NixlConnector","kv_role":"kv_producer","kv_load_failure_policy":"fail"}'
 ```
 
 ### Multiple Decoder Instances on Different Machines
@@ -130,7 +130,7 @@ VLLM_NIXL_SIDE_CHANNEL_PORT=5600 \
 UCX_NET_DEVICES=all \
 vllm serve Qwen/Qwen3-0.6B --port 8000 \
   --tensor-parallel-size 8 \
-  --kv-transfer-config '{"kv_connector":"NixlConnector","kv_role":"kv_consumer"}'
+  --kv-transfer-config '{"kv_connector":"NixlConnector","kv_role":"kv_consumer","kv_load_failure_policy":"fail"}'
 
 # Decoder 2 on Machine D (example IP: ${IP4})
 VLLM_NIXL_SIDE_CHANNEL_HOST=${IP4} \
@@ -138,7 +138,7 @@ VLLM_NIXL_SIDE_CHANNEL_PORT=5600 \
 UCX_NET_DEVICES=all \
 vllm serve Qwen/Qwen3-0.6B --port 8000 \
   --tensor-parallel-size 8 \
-  --kv-transfer-config '{"kv_connector":"NixlConnector","kv_role":"kv_consumer"}'
+  --kv-transfer-config '{"kv_connector":"NixlConnector","kv_role":"kv_consumer","kv_load_failure_policy":"fail"}'
 ```
 
 ### Proxy for Multiple Instances
@@ -164,6 +164,16 @@ For multi-host DP deployment, only need to provide the host/port of the head ins
     NixlConnector currently does not distinguish `kv_role`; the actual prefiller/decoder roles are determined by the upper-level proxy (e.g., `toy_proxy_server.py` using `--prefiller-hosts` and `--decoder-hosts`).
     Therefore, `kv_role` in `--kv-transfer-config` is effectively a placeholder and does not affect NixlConnector's behavior.
 
+### KV Load Failure Policy
+
+The `kv_load_failure_policy` setting controls how the system handles failures when the decoder instance loads KV cache blocks from the prefiller instance:
+
+- **fail** (recommended): Immediately fail the request with an error when KV load fails. This prevents performance degradation by avoiding recomputation of prefill work on the decode instance.
+- **recompute** (default): Recompute failed blocks locally on the decode instance. This may cause performance _jitter_ on decode instances as the scheduled prefill will delay and interfere with other decodes. Furthermore, decode instances are typically configured with low-latency optimizations.
+
+!!! warning
+    Using `kv_load_failure_policy="recompute"` can lead to performance degradation in production deployments. When KV loads fail, the decode instance will execute prefill work with decode-optimized configurations, which is inefficient and defeats the purpose of disaggregated prefilling. This also increases tail latency for other ongoing decode requests.
+
 ## Experimental Feature
 
 ### Heterogeneous KV Layout support