diff --git a/CHANGELOG.md b/CHANGELOG.md
index 825ca3f..4d37db7 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -1,6 +1,12 @@
 # Release Notes
 
-## Latest
+## 1.1.1 - 2026-05-14
+
+### Bug fixes
+
+* 🐛 **Consumer group loss after `FLUSHALL`**: `FLUSHALL` at runtime deletes all stream consumer groups. The Coordinator recreates streams via `XADD`, but `xreadgroup` kept throwing `NOGROUP` on every iteration. Catch `NOGROUP` in `_try_read_stream` and call `setup_consumer_groups()` to recover; the Reconciler republishes any tasks queued before the group was restored.
+
+* 🐛 **False "Task failed" after flush**: When a task finishes while the consumer group is gone, `xack` throws `NOGROUP`. The generic handler in `_execute_and_ack` was catching this, logging "Task failed", and applying backoff on a task that actually succeeded. Catch `NOGROUP` in `_ack_message` and log a warning instead — the message is already gone from the PEL.
 
 ## 1.1.0 - 2026-04-15
 
diff --git a/pyproject.toml b/pyproject.toml
index 7dc035f..758ecce 100644
--- a/pyproject.toml
+++ b/pyproject.toml
@@ -1,6 +1,6 @@
 [project]
 name = "fastapi-task-manager"
-version = "1.1.0"
+version = "1.1.1"
 description = "A task manager for FastAPI. Robust Scheduling, Distributed Safety"
 readme = "README.md"
 authors = [
diff --git a/src/fastapi_task_manager/stream_consumer.py b/src/fastapi_task_manager/stream_consumer.py
index c05c72d..2f0d6b2 100644
--- a/src/fastapi_task_manager/stream_consumer.py
+++ b/src/fastapi_task_manager/stream_consumer.py
@@ -288,13 +288,27 @@ async def _try_read_stream(
         Returns:
             Tuple of (message_id, data) if a message was read, None otherwise.
         """
-        messages = await self._redis.xreadgroup(
-            groupname=group_name,
-            consumername=self._worker.redis_safe_id,
-            streams={stream_key: ">"},
-            count=1,  # Read one message at a time
-            block=block_ms,
-        )
+        try:
+            messages = await self._redis.xreadgroup(
+                groupname=group_name,
+                consumername=self._worker.redis_safe_id,
+                streams={stream_key: ">"},
+                count=1,  # Read one message at a time
+                block=block_ms,
+            )
+        except ResponseError as e:
+            if "NOGROUP" in str(e):
+                # Consumer group was deleted (e.g. Redis FLUSHALL). Recreate it so
+                # the consume loop can resume; the Reconciler will republish any
+                # tasks that were published to the stream before the group existed.
+                logger.warning(
+                    "Consumer group '%s' not found on stream '%s' (Redis flush?), recreating groups",
+                    group_name,
+                    stream_key,
+                )
+                await self.setup_consumer_groups()
+                return None
+            raise
 
         if not messages:
             return None
@@ -546,14 +560,28 @@ async def _ack_message(self, message_id: str, is_high_priority: bool) -> None:
         stream_keys = self._keys.get_stream_keys()
         stream_key = stream_keys.task_stream_high if is_high_priority else stream_keys.task_stream_low
 
-        await self._redis.xack(
-            stream_key,
-            stream_keys.consumer_group,
-            message_id,
-        )
+        try:
+            await self._redis.xack(
+                stream_key,
+                stream_keys.consumer_group,
+                message_id,
+            )
 
-        # Remove the message from the stream to keep memory usage low
-        await self._redis.xdel(stream_key, message_id)
+            # Remove the message from the stream to keep memory usage low
+            await self._redis.xdel(stream_key, message_id)
+        except ResponseError as e:
+            if "NOGROUP" in str(e):
+                # Consumer group no longer exists (e.g. Redis FLUSHALL); the
+                # message is already gone from the PEL so there is nothing to
+                # acknowledge. Swallow the error to avoid masking a successful
+                # task execution as a failure.
+                logger.warning(
+                    "Could not ACK message %s: consumer group '%s' not found (Redis flush?)",
+                    message_id,
+                    stream_keys.consumer_group,
+                )
+            else:
+                raise
 
     def _find_task(self, group_name: str, task_name: str) -> Task | None:
         """Find a task by group and task name.
diff --git a/uv.lock b/uv.lock
index 7fc504d..183b7a4 100644
--- a/uv.lock
+++ b/uv.lock
@@ -379,7 +379,7 @@ wheels = [
 
 [[package]]
 name = "fastapi-task-manager"
-version = "1.1.0"
+version = "1.1.1"
 source = { editable = "." }
 dependencies = [
     { name = "cronsim" },