diff --git a/.jules/sentinel.md b/.jules/sentinel.md
new file mode 100644
index 000000000..d31daf6fd
--- /dev/null
+++ b/.jules/sentinel.md
@@ -0,0 +1,4 @@
+## 2025-05-14 - Loose Loopback Validation
+**Vulnerability:** `isLoopbackBindHost` incorrectly identified any hostname starting with "127." (e.g., `127.example.com`) as a loopback address. This could bypass the automatic API token generation for non-loopback binds (`ensureApiTokenForBindHost`), potentially exposing the API without authentication if a user binds to such a hostname that resolves to a public IP.
+**Learning:** String prefix matching is insufficient for validating loopback addresses when hostnames are involved. Public DNS records can point to public IPs while having names that mimic private IP ranges.
+**Prevention:** Always validate resolved IP addresses or use strict IP matching logic (like `net.isIP`) when enforcing network security policies based on address ranges. Do not rely on hostname patterns for security decisions.
diff --git a/src/api/server.api-token-bind.test.ts b/src/api/server.api-token-bind.test.ts
index b5e217da3..5996464b9 100644
--- a/src/api/server.api-token-bind.test.ts
+++ b/src/api/server.api-token-bind.test.ts
@@ -45,4 +45,14 @@ describe("ensureApiTokenForBindHost", () => {
       false,
     );
   });
+
+  it("generates a token for non-loopback binds starting with 127.", () => {
+    delete process.env.MILADY_API_TOKEN;
+    const warnSpy = vi.spyOn(logger, "warn").mockImplementation(() => {});
+
+    ensureApiTokenForBindHost("127.example.com");
+
+    const generated = process.env.MILADY_API_TOKEN ?? "";
+    expect(generated).toMatch(/^[a-f0-9]{64}$/);
+  });
 });
diff --git a/src/api/server.ts b/src/api/server.ts
index 63819fc20..6a9312883 100644
--- a/src/api/server.ts
+++ b/src/api/server.ts
@@ -4317,7 +4317,7 @@ function isLoopbackBindHost(host: string): boolean {
   ) {
     return true;
   }
-  if (normalized.startsWith("127.")) return true;
+  if (net.isIP(normalized) === 4 && normalized.startsWith("127.")) return true;
   return false;
 }