diff --git a/mutiny-core/src/error.rs b/mutiny-core/src/error.rs
index 1f33e3bee..89f7640d5 100644
--- a/mutiny-core/src/error.rs
+++ b/mutiny-core/src/error.rs
@@ -95,6 +95,9 @@ pub enum MutinyError {
     /// A channel could not be opened.
     #[error("Failed to create channel.")]
     ChannelCreationFailed,
+    /// A channel could not be opened.
+    #[error("Failed to create channel. {0}")]
+    ChannelCreationFailedWithReason(String),
     /// A channel could not be closed.
     #[error("Failed to close channel.")]
     ChannelClosingFailed,
@@ -237,6 +240,10 @@ impl PartialEq for MutinyError {
             (Self::RoutingFailed, Self::RoutingFailed) => true,
             (Self::PeerInfoParseFailed, Self::PeerInfoParseFailed) => true,
             (Self::ChannelCreationFailed, Self::ChannelCreationFailed) => true,
+            (
+                Self::ChannelCreationFailedWithReason(x),
+                Self::ChannelCreationFailedWithReason(y),
+            ) => x == y,
             (Self::ChannelClosingFailed, Self::ChannelClosingFailed) => true,
             (Self::PersistenceFailed { source }, Self::PersistenceFailed { source: source2 }) => {
                 source == source2
diff --git a/mutiny-core/src/event.rs b/mutiny-core/src/event.rs
index 96cf57230..89200ed89 100644
--- a/mutiny-core/src/event.rs
+++ b/mutiny-core/src/event.rs
@@ -523,9 +523,20 @@ impl<S: MutinyStorage> EventHandler<S> {
                 ..
             } => {
                 // if we still have channel open params, then it was just a failed channel open
-                // we should not persist this as a closed channel and just delete the channel open params
-                if let Ok(Some(_)) = self.persister.get_channel_open_params(user_channel_id) {
-                    let _ = self.persister.delete_channel_open_params(user_channel_id);
+                // we should not persist this as a closed channel and pass back the failure reason
+                if let Ok(Some(mut params)) =
+                    self.persister.get_channel_open_params(user_channel_id)
+                {
+                    // Remove the LDK fluff from the error message
+                    let reason_str = reason.to_string().replace(
+                        "Channel closed because counterparty force-closed with message: ",
+                        "",
+                    );
+
+                    params.failure_reason = Some(reason_str);
+                    let _ = self
+                        .persister
+                        .persist_channel_open_params(user_channel_id, params);
                     return;
                 };
 
diff --git a/mutiny-core/src/ldkstorage.rs b/mutiny-core/src/ldkstorage.rs
index 3825a3772..4a3e9ea96 100644
--- a/mutiny-core/src/ldkstorage.rs
+++ b/mutiny-core/src/ldkstorage.rs
@@ -550,6 +550,8 @@ pub(crate) struct ChannelOpenParams {
     pub(crate) labels: Option<Vec<String>>,
     #[serde(skip_serializing_if = "Option::is_none")]
     pub(crate) opening_tx: Option<Transaction>,
+    #[serde(skip_serializing_if = "Option::is_none")]
+    pub(crate) failure_reason: Option<String>,
 }
 
 impl ChannelOpenParams {
@@ -560,6 +562,7 @@ impl ChannelOpenParams {
             utxos: None,
             labels: None,
             opening_tx: None,
+            failure_reason: None,
         }
     }
 
@@ -574,6 +577,7 @@ impl ChannelOpenParams {
             utxos: Some(utxos),
             labels: None,
             opening_tx: None,
+            failure_reason: None,
         }
     }
 }
diff --git a/mutiny-core/src/node.rs b/mutiny-core/src/node.rs
index e8ab0e6e2..d1bc0f664 100644
--- a/mutiny-core/src/node.rs
+++ b/mutiny-core/src/node.rs
@@ -1874,10 +1874,16 @@ impl<S: MutinyStorage> Node<S> {
                 return Err(MutinyError::NotRunning);
             }
 
-            // We will get a channel closure event if the peer rejects the channel
-            // todo return closure reason to user
-            if let Ok(Some(_closure)) = self.persister.get_channel_closure(user_channel_id) {
-                return Err(MutinyError::ChannelCreationFailed);
+            // We'll set failure reason if the peer rejects the channel
+            if let Some(failure_reason) = self
+                .persister
+                .get_channel_open_params(user_channel_id)?
+                .and_then(|p| p.failure_reason)
+            {
+                log_error!(self.logger, "Channel funding tx failed: {failure_reason}");
+                // can now safely delete the channel open params
+                let _ = self.persister.delete_channel_open_params(user_channel_id);
+                return Err(MutinyError::ChannelCreationFailedWithReason(failure_reason));
             }
 
             let channels = self.channel_manager.list_channels_with_counterparty(pubkey);
diff --git a/mutiny-wasm/src/error.rs b/mutiny-wasm/src/error.rs
index 3e7b70ff8..4297049f4 100644
--- a/mutiny-wasm/src/error.rs
+++ b/mutiny-wasm/src/error.rs
@@ -86,6 +86,9 @@ pub enum MutinyJsError {
     /// A channel could not be opened.
     #[error("Failed to create channel.")]
     ChannelCreationFailed,
+    /// A channel could not be opened.
+    #[error("Failed to create channel. {0}")]
+    ChannelCreationFailedWithReason(String),
     /// A channel could not be closed.
     #[error("Failed to close channel.")]
     ChannelClosingFailed,
@@ -203,6 +206,9 @@ impl From<MutinyError> for MutinyJsError {
             MutinyError::RoutingFailed => MutinyJsError::RoutingFailed,
             MutinyError::PeerInfoParseFailed => MutinyJsError::PeerInfoParseFailed,
             MutinyError::ChannelCreationFailed => MutinyJsError::ChannelCreationFailed,
+            MutinyError::ChannelCreationFailedWithReason(x) => {
+                MutinyJsError::ChannelCreationFailedWithReason(x)
+            }
             MutinyError::ChannelClosingFailed => MutinyJsError::ChannelClosingFailed,
             MutinyError::PersistenceFailed { source: _ } => MutinyJsError::PersistenceFailed,
             MutinyError::ReadError { source: _ } => MutinyJsError::ReadError,