diff --git a/plugin/src/main/java/org/opensearch/ml/model/MLModelManager.java b/plugin/src/main/java/org/opensearch/ml/model/MLModelManager.java
index 297a592d91..7cfc76ecdc 100644
--- a/plugin/src/main/java/org/opensearch/ml/model/MLModelManager.java
+++ b/plugin/src/main/java/org/opensearch/ml/model/MLModelManager.java
@@ -464,7 +464,7 @@ public void registerMLRemoteModel(
                             mlRegisterModelInput.getTenantId(),
                             new MLResourceNotFoundException("Failed to get model group due to index missing")
                         );
-                        listener.onFailure(e);
+                        listener.onFailure(new OpenSearchStatusException("Model group not found", RestStatus.NOT_FOUND));
                     } else {
                         log.error("Failed to get model group", e);
                         handleException(mlRegisterModelInput.getFunctionName(), mlTask.getTaskId(), mlRegisterModelInput.getTenantId(), e);
diff --git a/plugin/src/test/java/org/opensearch/ml/model/MLModelManagerTests.java b/plugin/src/test/java/org/opensearch/ml/model/MLModelManagerTests.java
index b807363d4d..7f52fbf636 100644
--- a/plugin/src/test/java/org/opensearch/ml/model/MLModelManagerTests.java
+++ b/plugin/src/test/java/org/opensearch/ml/model/MLModelManagerTests.java
@@ -75,6 +75,7 @@
 import org.mockito.ArgumentCaptor;
 import org.mockito.Mock;
 import org.mockito.MockitoAnnotations;
+import org.opensearch.OpenSearchStatusException;
 import org.opensearch.action.get.GetRequest;
 import org.opensearch.action.get.GetResponse;
 import org.opensearch.action.index.IndexResponse;
@@ -92,9 +93,11 @@
 import org.opensearch.core.common.breaker.CircuitBreakingException;
 import org.opensearch.core.common.bytes.BytesReference;
 import org.opensearch.core.index.shard.ShardId;
+import org.opensearch.core.rest.RestStatus;
 import org.opensearch.core.xcontent.NamedXContentRegistry;
 import org.opensearch.core.xcontent.ToXContent;
 import org.opensearch.core.xcontent.XContentBuilder;
+import org.opensearch.index.IndexNotFoundException;
 import org.opensearch.index.get.GetResult;
 import org.opensearch.ml.breaker.MLCircuitBreakerService;
 import org.opensearch.ml.breaker.ThresholdCircuitBreaker;
@@ -492,6 +495,46 @@ public void testRegisterMLRemoteModel() throws PrivilegedActionException, IOExce
         verify(mlTaskManager).updateMLTask(anyString(), any(), anyMap(), anyLong(), anyBoolean());
     }
 
+    @Test
+    public void testRegisterMLRemoteModelModelGroupNotFoundException() throws PrivilegedActionException, IOException {
+        // Create listener and capture the failure
+        ArgumentCaptor<Exception> exceptionCaptor = ArgumentCaptor.forClass(Exception.class);
+        ActionListener<MLRegisterModelResponse> listener = mock(ActionListener.class);
+
+        // Setup mocks
+        doNothing().when(mlTaskManager).checkLimitAndAddRunningTask(any(), any());
+        when(mlCircuitBreakerService.checkOpenCB()).thenReturn(null);
+        when(threadPool.executor(REGISTER_THREAD_POOL)).thenReturn(taskExecutorService);
+        when(modelHelper.downloadPrebuiltModelMetaList(any(), any())).thenReturn(Collections.singletonList("demo"));
+        when(modelHelper.isModelAllowed(any(), any())).thenReturn(true);
+
+        // Create test inputs
+        MLRegisterModelInput pretrainedInput = mockRemoteModelInput(true);
+        MLTask pretrainedTask = MLTask.builder().taskId("pretrained").modelId("pretrained").functionName(FunctionName.REMOTE).build();
+
+        // Mock index handler
+        mock_MLIndicesHandler_initModelIndex(mlIndicesHandler, true);
+
+        // Mock client.get() to throw IndexNotFoundException
+        doAnswer(invocation -> {
+            ActionListener<GetResponse> getModelGroupListener = invocation.getArgument(1);
+            getModelGroupListener.onFailure(new IndexNotFoundException("Test", "test"));
+            return null;
+        }).when(client).get(any(), any());
+
+        // Execute method under test
+        modelManager.registerMLRemoteModel(sdkClient, pretrainedInput, pretrainedTask, listener);
+
+        // Verify the listener's onFailure was called with correct exception
+        verify(listener).onFailure(exceptionCaptor.capture());
+        Exception exception = exceptionCaptor.getValue();
+
+        // Verify exception type and message
+        assertTrue(exception instanceof OpenSearchStatusException);
+        assertEquals("Model group not found", exception.getMessage());
+        assertEquals(RestStatus.NOT_FOUND, ((OpenSearchStatusException) exception).status());
+    }
+
     public void testRegisterMLRemoteModel_SkipMemoryCBOpen() throws IOException {
         ActionListener<MLRegisterModelResponse> listener = mock(ActionListener.class);
         doNothing().when(mlTaskManager).checkLimitAndAddRunningTask(any(), any());