diff --git a/core/chaincode/handler.go b/core/chaincode/handler.go
index 094d76d3f44..2307434a9e0 100644
--- a/core/chaincode/handler.go
+++ b/core/chaincode/handler.go
@@ -227,12 +227,41 @@ type handleFunc func(*pb.ChaincodeMessage, *TransactionContext) (*pb.ChaincodeMe
 // returned by the delegate are sent to the chat stream. Any errors returned by the
 // delegate are packaged as chaincode error messages.
 func (h *Handler) HandleTransaction(msg *pb.ChaincodeMessage, delegate handleFunc) {
+	startTime := time.Now()
+	meterLabels := []string{
+		"type", msg.Type.String(),
+		"channel", msg.ChannelId,
+		"chaincode", h.chaincodeID,
+	}
+
+	// Recover from panics that can occur when the transaction context is cleaned up
+	// (e.g., iterators closed) due to execution timeout while this goroutine is still
+	// actively using those resources. This prevents peer crashes from nil pointer
+	// dereferences in the underlying LevelDB iterator.
+	// See https://github.com/hyperledger/fabric/issues/5048
+	defer func() {
+		if r := recover(); r != nil {
+			chaincodeLogger.Errorf("[%s] Recovered from panic handling %s: %v", shorttxid(msg.Txid), msg.Type, r)
+			resp := &pb.ChaincodeMessage{
+				Type:      pb.ChaincodeMessage_ERROR,
+				Payload:   []byte(fmt.Sprintf("%s failed: transaction ID: %s: panic during execution", msg.Type, msg.Txid)),
+				Txid:      msg.Txid,
+				ChannelId: msg.ChannelId,
+			}
+			h.ActiveTransactions.Remove(msg.ChannelId, msg.Txid)
+			h.serialSendAsync(resp)
+
+			meterLabels = append(meterLabels, "success", "false")
+			h.Metrics.ShimRequestDuration.With(meterLabels...).Observe(time.Since(startTime).Seconds())
+			h.Metrics.ShimRequestsCompleted.With(meterLabels...).Add(1)
+		}
+	}()
+
 	chaincodeLogger.Debugf("[%s] handling %s from chaincode", shorttxid(msg.Txid), msg.Type.String())
 	if !h.registerTxid(msg) {
 		return
 	}
 
-	startTime := time.Now()
 	var txContext *TransactionContext
 	var err error
 	if msg.Type == pb.ChaincodeMessage_INVOKE_CHAINCODE {
@@ -241,11 +270,6 @@ func (h *Handler) HandleTransaction(msg *pb.ChaincodeMessage, delegate handleFun
 		txContext, err = h.isValidTxSim(msg.ChannelId, msg.Txid, "no ledger context")
 	}
 
-	meterLabels := []string{
-		"type", msg.Type.String(),
-		"channel", msg.ChannelId,
-		"chaincode", h.chaincodeID,
-	}
 	h.Metrics.ShimRequestsReceived.With(meterLabels...).Add(1)
 
 	var resp *pb.ChaincodeMessage
diff --git a/core/chaincode/handler_test.go b/core/chaincode/handler_test.go
index 62e5fc56575..7e929e81d38 100644
--- a/core/chaincode/handler_test.go
+++ b/core/chaincode/handler_test.go
@@ -490,6 +490,43 @@ var _ = Describe("Handler", func() {
 				}))
 			})
 		})
+
+		// Regression test for https://github.com/hyperledger/fabric/issues/5048
+		// When a transaction times out during a range query, the timeout path closes
+		// the LevelDB iterator while the handler goroutine is still using it, causing
+		// a nil pointer dereference panic. The recover() in HandleTransaction prevents
+		// this from crashing the peer.
+		Context("when the delegate panics", func() {
+			It("recovers and sends an error response", func() {
+				panickingDelegate := func(msg *pb.ChaincodeMessage, txContext *chaincode.TransactionContext) (*pb.ChaincodeMessage, error) {
+					panic("simulated nil pointer dereference from closed iterator")
+				}
+
+				Expect(func() {
+					handler.HandleTransaction(incomingMessage, panickingDelegate)
+				}).NotTo(Panic())
+
+				Eventually(fakeChatStream.SendCallCount).Should(Equal(1))
+				msg := fakeChatStream.SendArgsForCall(0)
+				Expect(msg.Type).To(Equal(pb.ChaincodeMessage_ERROR))
+				Expect(msg.Txid).To(Equal("tx-id"))
+				Expect(msg.ChannelId).To(Equal("channel-id"))
+				Expect(string(msg.Payload)).To(ContainSubstring("panic during execution"))
+			})
+
+			It("deregisters the transaction ID", func() {
+				panickingDelegate := func(msg *pb.ChaincodeMessage, txContext *chaincode.TransactionContext) (*pb.ChaincodeMessage, error) {
+					panic("simulated panic")
+				}
+
+				handler.HandleTransaction(incomingMessage, panickingDelegate)
+
+				Expect(fakeTransactionRegistry.RemoveCallCount()).To(Equal(1))
+				channelID, transactionID := fakeTransactionRegistry.RemoveArgsForCall(0)
+				Expect(channelID).To(Equal("channel-id"))
+				Expect(transactionID).To(Equal("tx-id"))
+			})
+		})
 	})
 
 	Describe("HandlePutState", func() {