diff --git a/CHANGELOG.md b/CHANGELOG.md
index f1e5a68..f3cd648 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -3,6 +3,12 @@ All notable changes to this project will be documented in this file. This change
 
 ## [Unreleased]
 
+### Added (v0.1.32 sync)
+- `:on-event` optional handler in `create-session` and `resume-session` configs — zero-arg function registered on the session before the `session.create`/`session.resume` RPC is issued. Guarantees that early events emitted by the CLI during session creation (e.g. `session.start`) are delivered to the handler without being dropped. Equivalent to calling `subscribe-events` immediately after creation but executes earlier in the lifecycle (upstream PR #664).
+
+### Changed (v0.1.32 sync)
+- Session registration now occurs **before** the `session.create`/`session.resume` RPC call so events emitted during the RPC (e.g. `session.start`) are routed correctly and not dropped. Session ID is generated client-side (UUID) when not provided via `:session-id`. On RPC failure, registered session state is cleaned up automatically (upstream PR #664).
+
 ## [0.1.32.0] - 2026-03-10
 ### Added (v0.1.32 sync)
 - `:agent` optional string parameter in `create-session` and `resume-session` configs — pre-selects a custom agent by name when the session starts. Must match a name in `:custom-agents`. Equivalent to calling `agent.select` after creation (upstream PR #722).
diff --git a/doc/reference/API.md b/doc/reference/API.md
index 033f30b..8dc258f 100644
--- a/doc/reference/API.md
+++ b/doc/reference/API.md
@@ -243,6 +243,7 @@ Create a client and session together, ensuring both are cleaned up on exit.
 | `:on-user-input-request` | fn | Handler for `ask_user` requests (see below) |
 | `:hooks` | map | Lifecycle hooks (see below) |
 | `:agent` | string | Name of a custom agent to activate at session start. Must match a name in `:custom-agents`. Equivalent to calling `agent.select` after creation. |
+| `:on-event` | fn | Optional event handler registered before `session.create` RPC. Called for every session event, including `session.start` which is emitted during session creation. Guarantees no early events are dropped (upstream PR #664). |
 
 #### `resume-session`
 
diff --git a/src/github/copilot_sdk/client.clj b/src/github/copilot_sdk/client.clj
index ddac748..aadb90b 100644
--- a/src/github/copilot_sdk/client.clj
+++ b/src/github/copilot_sdk/client.clj
@@ -1192,18 +1192,19 @@
       (:disable-resume? config) (assoc :disable-resume (:disable-resume? config))
       true (assoc :env-value-mode "direct"))))
 
-(defn- finalize-session
-  "Create a CopilotSession from an RPC result and config."
-  [client result config]
-  (let [session-id (:session-id result)
-        workspace-path (:workspace-path result)]
-    (session/create-session client session-id
-                            {:tools (:tools config)
-                             :on-permission-request (:on-permission-request config)
-                             :on-user-input-request (:on-user-input-request config)
-                             :hooks (:hooks config)
-                             :workspace-path workspace-path
-                             :config config})))
+(defn- register-and-create-session!
+  "Register session state before RPC and return a handler map for post-RPC finalization.
+   The session is registered in client state so events dispatched during session.create/
+   session.resume RPC (e.g. session.start) are not dropped."
+  [client session-id config]
+  (session/create-session client session-id
+                          {:tools (:tools config)
+                           :on-permission-request (:on-permission-request config)
+                           :on-user-input-request (:on-user-input-request config)
+                           :hooks (:hooks config)
+                           :on-event (:on-event config)
+                           :workspace-path nil
+                           :config config}))
 
 (defn create-session
   "Create a new conversation session.
@@ -1236,6 +1237,10 @@
    - :hooks              - Lifecycle hooks map (PR #269):
                            {:on-pre-tool-use, :on-post-tool-use, :on-user-prompt-submitted,
                             :on-session-start, :on-session-end, :on-error-occurred}
+   - :on-event           - Optional event handler registered before session.create RPC so early
+                           events (e.g. session.start) are not dropped (upstream PR #664).
+                           Equivalent to calling (subscribe-events session) + processing the channel,
+                           but guaranteed to receive events emitted during session creation.
    
    Returns a CopilotSession."
   [client config]
@@ -1243,11 +1248,22 @@
   (validate-session-config! config)
   (ensure-connected! client)
   (let [{:keys [connection-io]} @(:state client)
-        params (build-create-session-params config)
-        result (proto/send-request! connection-io "session.create" params)
-        session (finalize-session client result config)]
-    (log/info "Session created: " (:session-id result))
-    session))
+        ;; Generate UUID client-side so session can be registered before RPC (upstream PR #664)
+        session-id (or (:session-id config) (str (java.util.UUID/randomUUID)))
+        ;; Register session state BEFORE the RPC so events dispatched during session.create
+        ;; (e.g. session.start) are not dropped
+        _ (register-and-create-session! client session-id config)
+        params (assoc (build-create-session-params config) :session-id session-id)]
+    (try
+      (let [result (proto/send-request! connection-io "session.create" params)
+            workspace-path (:workspace-path result)
+            session (session/update-workspace-path! client session-id workspace-path)]
+        (log/info "Session created: " session-id)
+        session)
+      (catch Exception e
+        ;; Clean up session state if RPC failed
+        (session/cleanup-failed-session! client session-id)
+        (throw e)))))
 
 (defn resume-session
   "Resume an existing session by ID.
@@ -1271,6 +1287,7 @@
    - :reasoning-effort   - Reasoning effort level: \"low\", \"medium\", \"high\", or \"xhigh\"
    - :on-user-input-request - Handler for ask_user requests
    - :hooks              - Lifecycle hooks map
+   - :on-event           - Optional event handler registered before session.resume RPC (upstream PR #664)
    
    Returns a CopilotSession."
   [client session-id config]
@@ -1288,10 +1305,16 @@
                     {:config config})))
   (ensure-connected! client)
   (let [{:keys [connection-io]} @(:state client)
-        params (build-resume-session-params session-id config)
-        result (proto/send-request! connection-io "session.resume" params)
-        session (finalize-session client result config)]
-    session))
+        ;; Register session state BEFORE the RPC (upstream PR #664)
+        _ (register-and-create-session! client session-id config)
+        params (build-resume-session-params session-id config)]
+    (try
+      (let [result (proto/send-request! connection-io "session.resume" params)
+            workspace-path (:workspace-path result)]
+        (session/update-workspace-path! client session-id workspace-path))
+      (catch Exception e
+        (session/cleanup-failed-session! client session-id)
+        (throw e)))))
 
 (defn <create-session
   "Async version of create-session. Returns a channel that delivers a CopilotSession.
@@ -1316,17 +1339,22 @@
   (validate-session-config! config)
   (ensure-connected! client)
   (let [{:keys [connection-io]} @(:state client)
-        params (build-create-session-params config)
+        session-id (or (:session-id config) (str (java.util.UUID/randomUUID)))
+        ;; Register session state BEFORE the RPC (upstream PR #664)
+        _ (register-and-create-session! client session-id config)
+        params (assoc (build-create-session-params config) :session-id session-id)
         rpc-ch (proto/send-request connection-io "session.create" params)]
     (go
       (when-let [response (<! rpc-ch)]
         (if-let [err (:error response)]
-          (do (log/error "<create-session RPC error: " err)
+          (do (session/cleanup-failed-session! client session-id)
+              (log/error "<create-session RPC error: " err)
               (ex-info (str "Failed to create session: " (:message err))
                        {:error err}))
           (let [result (:result response)
-                session (finalize-session client result config)]
-            (log/info "Session created (async): " (:session-id result))
+                workspace-path (:workspace-path result)
+                session (session/update-workspace-path! client session-id workspace-path)]
+            (log/info "Session created (async): " session-id)
             session))))))
 
 (defn <resume-session
@@ -1363,17 +1391,20 @@
                     {:config config})))
   (ensure-connected! client)
   (let [{:keys [connection-io]} @(:state client)
+        ;; Register session state BEFORE the RPC (upstream PR #664)
+        _ (register-and-create-session! client session-id config)
         params (build-resume-session-params session-id config)
         rpc-ch (proto/send-request connection-io "session.resume" params)]
     (go
       (when-let [response (<! rpc-ch)]
         (if-let [err (:error response)]
-          (do (log/error "<resume-session RPC error: " err)
+          (do (session/cleanup-failed-session! client session-id)
+              (log/error "<resume-session RPC error: " err)
               (ex-info (str "Failed to resume session: " (:message err))
                        {:error err :session-id session-id}))
           (let [result (:result response)
-                session (finalize-session client result config)]
-            session))))))
+                workspace-path (:workspace-path result)]
+            (session/update-workspace-path! client session-id workspace-path)))))))
 
 (defn list-sessions
   "List all available sessions.
diff --git a/src/github/copilot_sdk/session.clj b/src/github/copilot_sdk/session.clj
index 20c57dd..45464b0 100644
--- a/src/github/copilot_sdk/session.clj
+++ b/src/github/copilot_sdk/session.clj
@@ -47,8 +47,10 @@
 
 (defn create-session
   "Create a new session. Internal use - called by client.
-   Initializes session state in client's atom and returns a CopilotSession handle."
-  [client session-id {:keys [tools on-permission-request on-user-input-request hooks workspace-path config]}]
+   Initializes session state in client's atom and returns a CopilotSession handle.
+   If :on-event is provided, starts a background go-loop that calls the handler
+   for each event dispatched to this session (registered before session.create RPC)."
+  [client session-id {:keys [tools on-permission-request on-user-input-request hooks workspace-path config on-event]}]
   (log/debug "Creating session: " session-id)
   (let [event-chan (chan (async/sliding-buffer 4096))
         event-mult (mult event-chan)
@@ -70,10 +72,40 @@
                            {:event-chan event-chan
                             :event-mult event-mult
                             :send-lock send-lock}))))
+    ;; If on-event handler provided, start a go-loop to call it for each event.
+    ;; Registered before session.create RPC so early events (e.g. session.start) are not dropped.
+    (when on-event
+      (let [tap-ch (chan (async/sliding-buffer 1024))]
+        (tap event-mult tap-ch)
+        (go-loop []
+          (when-let [event (<! tap-ch)]
+            (try
+              (on-event event)
+              (catch Exception e
+                (log/warn "on-event handler error for session " session-id ": " (ex-message e))))
+            (recur)))))
     (log/debug "Session created: " session-id)
     ;; Return lightweight handle
     (->CopilotSession session-id workspace-path client)))
 
+(defn update-workspace-path!
+  "Update the workspace-path in session state after a successful session.create/session.resume RPC.
+   Returns a new CopilotSession record with the updated workspace-path."
+  [client session-id workspace-path]
+  (update-session! client session-id assoc :workspace-path workspace-path)
+  (->CopilotSession session-id workspace-path client))
+
+(defn cleanup-failed-session!
+  "Clean up session state after a failed session.create/session.resume RPC.
+   Closes the event channel (which stops any on-event go-loop) and removes session state."
+  [client session-id]
+  (when-let [{:keys [event-chan]} (session-io client session-id)]
+    (close! event-chan))
+  (swap! (:state client)
+         (fn [s] (-> s
+                     (update :sessions dissoc session-id)
+                     (update :session-io dissoc session-id)))))
+
 (defn dispatch-event!
   "Dispatch an event to all subscribers via the mult. Called by client notification router.
    Events are dropped (with warning) if the session event buffer is full."
diff --git a/src/github/copilot_sdk/specs.clj b/src/github/copilot_sdk/specs.clj
index edf81dc..c9bf114 100644
--- a/src/github/copilot_sdk/specs.clj
+++ b/src/github/copilot_sdk/specs.clj
@@ -207,6 +207,9 @@
 
 (s/def ::client-name ::non-blank-string)
 
+;; Early event handler registered before session.create/session.resume RPC (upstream PR #664)
+(s/def ::on-event fn?)
+
 (def session-config-keys
   #{:session-id :client-name :model :tools :system-message
     :available-tools :excluded-tools :provider
@@ -214,7 +217,7 @@
     :custom-agents :config-dir :skill-directories
     :disabled-skills :large-output :infinite-sessions
     :reasoning-effort :on-user-input-request :hooks
-    :working-directory :agent})
+    :working-directory :agent :on-event})
 
 (s/def ::session-config
   (closed-keys
@@ -225,7 +228,7 @@
                     ::custom-agents ::config-dir ::skill-directories
                     ::disabled-skills ::large-output ::infinite-sessions
                     ::reasoning-effort ::on-user-input-request ::hooks
-                    ::working-directory ::agent])
+                    ::working-directory ::agent ::on-event])
    session-config-keys))
 
 (def ^:private resume-session-config-keys
@@ -233,7 +236,7 @@
     :provider :streaming? :on-permission-request
     :mcp-servers :custom-agents :config-dir :skill-directories
     :disabled-skills :infinite-sessions :reasoning-effort
-    :on-user-input-request :hooks :working-directory :disable-resume? :agent})
+    :on-user-input-request :hooks :working-directory :disable-resume? :agent :on-event})
 
 (s/def ::resume-session-config
   (closed-keys
@@ -242,7 +245,7 @@
                     ::provider ::streaming?
                     ::mcp-servers ::custom-agents ::config-dir ::skill-directories
                     ::disabled-skills ::infinite-sessions ::reasoning-effort
-                    ::on-user-input-request ::hooks ::working-directory ::disable-resume? ::agent])
+                    ::on-user-input-request ::hooks ::working-directory ::disable-resume? ::agent ::on-event])
    resume-session-config-keys))
 
 ;; -----------------------------------------------------------------------------