diff --git a/src/wallet/scriptpubkeyman.cpp b/src/wallet/scriptpubkeyman.cpp
index 37cf86672cdeb..0ab2dc1d82499 100644
--- a/src/wallet/scriptpubkeyman.cpp
+++ b/src/wallet/scriptpubkeyman.cpp
@@ -427,11 +427,11 @@ void LegacyScriptPubKeyMan::GenerateNewHDChain(const SecureString& secureMnemoni
     }
 }
 
-bool LegacyScriptPubKeyMan::LoadHDChain(const CHDChain& chain)
+bool LegacyScriptPubKeyMan::LoadHDChain(const CHDChain& chain, bool skip_encryption_check)
 {
     LOCK(cs_KeyStore);
 
-    if (m_storage.HasEncryptionKeys() != chain.IsCrypted()) return false;
+    if (!skip_encryption_check && m_storage.HasEncryptionKeys() != chain.IsCrypted()) return false;
 
     m_hd_chain = chain;
     return true;
diff --git a/src/wallet/scriptpubkeyman.h b/src/wallet/scriptpubkeyman.h
index 7f4ee75c413bc..ba3c6efbf7bb1 100644
--- a/src/wallet/scriptpubkeyman.h
+++ b/src/wallet/scriptpubkeyman.h
@@ -404,7 +404,7 @@ class LegacyScriptPubKeyMan : public ScriptPubKeyMan, public FillableSigningProv
     /* Set the HD chain model (chain child index counters) and writes it to the database */
     bool AddHDChain(WalletBatch &batch, const CHDChain& chain);
     //! Load a HD chain model (used by LoadWallet)
-    bool LoadHDChain(const CHDChain& chain);
+    bool LoadHDChain(const CHDChain& chain, bool skip_encryption_check = false);
     /**
      * Set the HD chain model (chain child index counters) using temporary wallet db object
      * which causes db flush every time these methods are used
diff --git a/src/wallet/walletdb.cpp b/src/wallet/walletdb.cpp
index e2e4452d64daa..df835e2547269 100644
--- a/src/wallet/walletdb.cpp
+++ b/src/wallet/walletdb.cpp
@@ -572,9 +572,10 @@ ReadKeyValue(CWallet* pwallet, CDataStream& ssKey, CDataStream& ssValue,
             CHDChain chain;
             ssValue >> chain;
             assert ((strType == DBKeys::CRYPTED_HDCHAIN) == chain.IsCrypted());
-            if (!pwallet->GetOrCreateLegacyScriptPubKeyMan()->LoadHDChain(chain))
-            {
-                strErr = "Error reading wallet database: SetHDChain failed";
+            // Skip encryption check during loading as MASTER_KEY records may not be loaded yet.
+            // Consistency will be validated after all records are loaded.
+            if (!pwallet->GetOrCreateLegacyScriptPubKeyMan()->LoadHDChain(chain, /*skip_encryption_check=*/true)) {
+                strErr = "Error reading wallet database: LoadHDChain failed";
                 return false;
             }
         } else if (strType == DBKeys::HDPUBKEY) {
@@ -875,6 +876,23 @@ DBErrors WalletBatch::LoadWallet(CWallet* pwallet)
     }
     m_batch->CloseCursor();
 
+    // Validate HD chain encryption consistency now that all data is loaded
+    if (auto spk_man = pwallet->GetLegacyScriptPubKeyMan()) {
+        CHDChain hdChain;
+        if (spk_man->GetHDChain(hdChain)) {
+            // If HD chain exists, validate encryption consistency
+            bool fHasMasterKeys = pwallet->HasEncryptionKeys();
+            bool fChainCrypted = hdChain.IsCrypted();
+
+            if (fHasMasterKeys != fChainCrypted) {
+                pwallet->WalletLogPrintf("Error: HD chain encryption state (%s) inconsistent with wallet encryption state (%s)\n",
+                    fChainCrypted ? "encrypted" : "not encrypted",
+                    fHasMasterKeys ? "encrypted" : "not encrypted");
+                return DBErrors::CORRUPT;
+            }
+        }
+    }
+
     // Set the active ScriptPubKeyMans
     for (auto spk_man : wss.m_active_external_spks) {
         pwallet->LoadActiveScriptPubKeyMan(spk_man.second, /*internal=*/false);