diff --git a/tests/experimental/test_distillation_trainer.py b/tests/experimental/test_distillation_trainer.py
new file mode 100644
index 00000000000..a2f1d6f8182
--- /dev/null
+++ b/tests/experimental/test_distillation_trainer.py
@@ -0,0 +1,183 @@
+# Copyright 2020-2026 The HuggingFace Team. All rights reserved.
+#
+# Licensed under the Apache License, Version 2.0 (the "License");
+# you may not use this file except in compliance with the License.
+# You may obtain a copy of the License at
+#
+#     http://www.apache.org/licenses/LICENSE-2.0
+#
+# Unless required by applicable law or agreed to in writing, software
+# distributed under the License is distributed on an "AS IS" BASIS,
+# WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+# See the License for the specific language governing permissions and
+# limitations under the License.
+
+import math
+from unittest.mock import MagicMock
+
+import pytest
+import torch
+import torch.nn.functional as F
+from datasets import Dataset
+from transformers import AutoModelForCausalLM, AutoTokenizer
+
+from trl.experimental.distillation import DistillationConfig, DistillationTrainer
+from trl.experimental.distillation.distillation_trainer import _add_tail_bucket, _jsd_divergence
+
+from ..testing_utils import TrlTestCase
+
+
+def _ragged_server_response():
+    # Two samples with completion lengths 1 and 3 respectively; matches the wire format
+    # of VLLMClient.get_sequence_logprobs (per-sample shape (comp_len, top_k=1)).
+    return {
+        "logprobs": [[[-2.3]], [[-1.1], [-0.4], [-3.0]]],
+        "logprob_token_ids": [[[90]], [[90], [9217], [100]]],
+        "actual_logprobs": [[[-2.3]], [[-1.1], [-0.4], [-3.0]]],
+    }
+
+
+class TestGetTeacherTokenLogprobsFromServer(TrlTestCase):
+    def test_variable_lengths_use_neg_inf_sentinel_at_padding(self):
+        mock_self = MagicMock()
+        mock_self.teacher_client.get_sequence_logprobs = MagicMock(return_value=_ragged_server_response())
+        mock_self.loss_top_k = 1
+        mock_self.temperature = 1.0
+
+        inputs = {
+            "input_ids": torch.tensor([[10, 11, 90, 0, 0], [10, 11, 90, 9217, 100]]),
+            "attention_mask": torch.tensor([[1, 1, 1, 0, 0], [1, 1, 1, 1, 1]]),
+            "labels": torch.tensor([[-100, -100, 90, -100, -100], [-100, -100, 90, 9217, 100]]),
+        }
+
+        out = DistillationTrainer._get_teacher_token_logprobs_from_server(mock_self, inputs, aligned_prompt_length=2)
+
+        assert out["actual_logprobs"].shape == (2, 3)
+        assert out["topk_logprobs"].shape == (2, 3, 1)
+
+        # Real completion positions preserved.
+        assert out["actual_logprobs"][0, 0].item() == pytest.approx(-2.3, rel=1e-5)
+        assert out["actual_logprobs"][1, 0].item() == pytest.approx(-1.1, rel=1e-5)
+        assert out["actual_logprobs"][1, 2].item() == pytest.approx(-3.0, rel=1e-5)
+
+        # Sample 0 is 1 token long; positions 1 and 2 are padded with the -inf sentinel.
+        assert out["actual_logprobs"][0, 1].item() == float("-inf")
+        assert out["actual_logprobs"][0, 2].item() == float("-inf")
+        assert out["topk_logprobs"][0, 1, 0].item() == float("-inf")
+
+        # Sample 1 is full-length and fully finite.
+        assert torch.isfinite(out["actual_logprobs"][1, :]).all()
+
+
+class TestServerReverseKLPaddingMask(TrlTestCase):
+    def test_mask_keeps_forward_and_backward_finite(self):
+        # Simulates the getter's output: sample 0 has completion length 1 (positions 1-2
+        # padded with -inf), sample 1 is full-length.
+        teacher_topk = torch.tensor(
+            [[[-2.3], [float("-inf")], [float("-inf")]], [[-1.1], [-0.4], [-3.0]]],
+            dtype=torch.float32,
+        )
+        labels = torch.tensor([[90, -100, -100], [90, 9217, 100]])
+
+        # Strategy B: neutralise -inf at labels == -100 before the divergence math.
+        pad_mask = (labels == -100).unsqueeze(-1)
+        zero = torch.zeros((), dtype=teacher_topk.dtype)
+        teacher_topk = torch.where(pad_mask, zero, teacher_topk)
+
+        valid_mask = torch.ones_like(teacher_topk, dtype=torch.bool)
+        teacher_with_tail, support_mask = _add_tail_bucket(teacher_topk, valid_mask)
+        assert torch.isfinite(teacher_with_tail).all()
+
+        raw_student = torch.randn(2, 3, 2, requires_grad=True)
+        student_log_probs = F.log_softmax(raw_student, dim=-1)
+        loss = _jsd_divergence(student_log_probs, teacher_with_tail, beta=1.0, support_mask=support_mask)
+        assert torch.isfinite(loss).all()
+
+        loss.sum().backward()
+        assert torch.isfinite(raw_student.grad).all()
+
+
+def _canned_teacher_logprobs(**kwargs):
+    # Fabricate ragged per-sample logprobs matching the requested sequence shapes.
+    sequences = kwargs["sequences"]
+    prompt_lengths = kwargs["prompt_lengths"]
+    top_k = kwargs.get("top_logprobs", 1)
+    logprobs, token_ids, actual = [], [], []
+    for seq, plen in zip(sequences, prompt_lengths, strict=True):
+        comp_len = len(seq) - plen
+        logprobs.append([[-1.0 - 0.05 * i] * top_k for i in range(comp_len)])
+        token_ids.append([[int(seq[plen + i])] * top_k for i in range(comp_len)])
+        actual.append([[-1.0 - 0.05 * i] for i in range(comp_len)])
+    return {"logprobs": logprobs, "logprob_token_ids": token_ids, "actual_logprobs": actual}
+
+
+def _variable_length_dataset():
+    return Dataset.from_list(
+        [
+            {"messages": [{"role": "user", "content": "What's 2+2?"}, {"role": "assistant", "content": "4."}]},
+            {
+                "messages": [
+                    {"role": "user", "content": "Name three primary colors."},
+                    {
+                        "role": "assistant",
+                        "content": "Red, green, and blue are the three primary colors commonly used in additive color mixing.",
+                    },
+                ]
+            },
+        ]
+    )
+
+
+class TestDistillationTrainerServerPath(TrlTestCase):
+    @classmethod
+    def setup_class(cls):
+        model_id = "trl-internal-testing/tiny-Qwen2ForCausalLM-2.5"
+        cls.device = "cuda" if torch.cuda.is_available() else "cpu"
+        cls.tokenizer = AutoTokenizer.from_pretrained(model_id)
+        cls.tokenizer.pad_token = cls.tokenizer.eos_token
+        cls.model_id = model_id
+
+    def _run_one_step(self, bs, ga, monkeypatch):
+        from trl.generation import vllm_client as vllm_client_module
+
+        fake_client = MagicMock()
+        fake_client.get_sequence_logprobs.side_effect = _canned_teacher_logprobs
+        monkeypatch.setattr(vllm_client_module, "VLLMClient", lambda *a, **kw: fake_client)
+
+        config = DistillationConfig(
+            output_dir=self.tmp_dir,
+            per_device_train_batch_size=bs,
+            gradient_accumulation_steps=ga,
+            learning_rate=1e-4,
+            max_length=64,
+            max_prompt_length=32,
+            max_completion_length=32,
+            use_teacher_server=True,
+            teacher_model_server_url="http://fake-teacher.invalid:8000",
+            loss_top_k=1,
+            beta=1.0,
+            lmbda=0.0,
+            loss_add_tail=True,
+            save_strategy="no",
+            report_to="none",
+            logging_steps=1,
+        )
+        model = AutoModelForCausalLM.from_pretrained(self.model_id, dtype=torch.float32).to(self.device)
+        trainer = DistillationTrainer(
+            model=model,
+            args=config,
+            train_dataset=_variable_length_dataset(),
+            processing_class=self.tokenizer,
+        )
+        trainer.teacher_client = fake_client
+        trainer.train()
+        return [rec for rec in trainer.state.log_history if "grad_norm" in rec]
+
+    @pytest.mark.slow
+    @pytest.mark.parametrize(("bs", "ga"), [(1, 2), (2, 1)])
+    def test_reverse_kl_finite_grad_with_ragged_batch(self, bs, ga, monkeypatch):
+        records = self._run_one_step(bs=bs, ga=ga, monkeypatch=monkeypatch)
+        assert records, "Expected at least one grad_norm log entry during training"
+        for record in records:
+            assert math.isfinite(record["grad_norm"]), f"grad_norm={record['grad_norm']} leaked -inf into backward"
+            assert math.isfinite(record["loss"])
diff --git a/trl/experimental/distillation/distillation_trainer.py b/trl/experimental/distillation/distillation_trainer.py
index 77dbcc6c08e..af13f25f745 100644
--- a/trl/experimental/distillation/distillation_trainer.py
+++ b/trl/experimental/distillation/distillation_trainer.py
@@ -1284,7 +1284,11 @@ def _get_teacher_token_logprobs_from_server(
 
         # Size the output tensors to tightly fit the teacher logprobs. Using the full padded
         # sequence length would include padding positions with -inf teacher logprobs, producing
-        # inf in the forward pass and NaN gradients in the backward pass (0 * inf = NaN).
+        # +inf in the forward pass and NaN gradients in the backward pass (0 * inf = NaN).
+        # Shorter samples in variable-length batches still need the -inf sentinel at the tail;
+        # downstream loss consumers (_compute_server_sparse_top_1_divergence_loss,
+        # _compute_server_forward_kl_loss) neutralise those positions before the divergence
+        # math runs.
         completion_length = max(
             (offset + len(lps) for offset, lps in zip(completion_offsets, result["logprobs"], strict=True)),
             default=0,
@@ -1354,6 +1358,13 @@ def _compute_server_sparse_top_1_divergence_loss(
                     f"{missing_count}/{total_required}."
                 )
 
+        # Replace -inf teacher logprobs at intra-batch padding (labels == -100) with 0 so
+        # reverse-KL's student_probs·(log_s - log_t) does not leak +inf into the backward pass.
+        pad_mask_2d = ~required
+        pad_mask_3d = pad_mask_2d.unsqueeze(-1)
+        topk_teacher_lps = torch.where(pad_mask_3d, 0.0, topk_teacher_lps)
+        actual_teacher_lps = torch.where(pad_mask_2d, 0.0, actual_teacher_lps)
+
         # Server path only supports "sampled" mode — config validation enforces this, but we guard
         # explicitly so future relaxations of the config check don't silently change behaviour.
         reverse_token_ids = self._get_reverse_kl_top_1_tokens(student_log_probs, completion_tokens)