diff --git a/README.md b/README.md
index 1b5e8fe2ecd..a0cd4b83a62 100644
--- a/README.md
+++ b/README.md
@@ -105,6 +105,7 @@ Make Roo Code work your way with:
 - [Custom Modes](https://docs.roocode.com/advanced-usage/custom-modes) for specialized tasks
 - [Local Models](https://docs.roocode.com/advanced-usage/local-models) for offline use
 - [Auto-Approval Settings](https://docs.roocode.com/advanced-usage/auto-approving-actions) for faster workflows
+- [Proxy Configuration](docs/PROXY_CONFIGURATION.md) for working with corporate proxies and VPNs
 
 ## Resources
 
diff --git a/docs/PROXY_CONFIGURATION.md b/docs/PROXY_CONFIGURATION.md
new file mode 100644
index 00000000000..01ab3c02296
--- /dev/null
+++ b/docs/PROXY_CONFIGURATION.md
@@ -0,0 +1,100 @@
+# Proxy Configuration Guide
+
+## Issue: Connection Errors with Proxy Settings
+
+If you're experiencing "Connection error" messages when using Roo Code with a proxy (SOCKS5, HTTP proxy, or PAC file), this guide will help you resolve the issue.
+
+## Problem
+
+When VSCode is configured to use a proxy (via environment variables, settings, or command-line arguments), but the `http.electronFetch` setting is disabled (which is the default), the extension may fail to connect to API endpoints. This particularly affects:
+
+- OpenAI API connections
+- OpenAI-compatible API providers
+- Other providers that use the native `fetch` API
+
+## Symptoms
+
+- Generic "Connection error" messages when trying to use the extension
+- Models populate correctly but chat completions fail
+- Network Logger shows requests but they don't reach the server
+- The same configuration works in other extensions (like Cline)
+
+## Solution
+
+### Option 1: Enable Electron Fetch (Recommended)
+
+1. Open VSCode Settings (`Cmd/Ctrl + ,`)
+2. Search for `http.electronFetch`
+3. Check the box to enable the setting
+4. Restart VSCode
+5. Try using Roo Code again
+
+### Option 2: Use Command Line
+
+Add this to your VSCode settings.json:
+
+```json
+{
+	"http.electronFetch": true
+}
+```
+
+### Option 3: Configure VSCode Launch
+
+If you're launching VSCode with a PAC file, ensure both settings are configured:
+
+```bash
+code --proxy-pac-url=http://localhost:8000/proxy.pac
+```
+
+And enable `http.electronFetch` in settings.
+
+## Why This Happens
+
+VSCode has two different implementations for making HTTP requests:
+
+1. **Node.js fetch** (default): Doesn't fully support all proxy configurations
+2. **Electron fetch**: Better proxy support but disabled by default
+
+When `http.electronFetch` is `false` (default), extensions using the native fetch API may fail to route requests through your proxy correctly.
+
+## Supported Proxy Types
+
+With `http.electronFetch` enabled, the following proxy configurations are supported:
+
+- HTTP/HTTPS proxies (via `http.proxy` setting or environment variables)
+- SOCKS5 proxies
+- PAC (Proxy Auto-Configuration) files
+- Environment variables: `HTTP_PROXY`, `HTTPS_PROXY`, `ALL_PROXY`
+
+## Troubleshooting
+
+If you're still experiencing issues after enabling `http.electronFetch`:
+
+1. **Verify proxy settings**: Ensure your proxy configuration is correct
+2. **Check firewall rules**: Make sure VSCode is allowed through your firewall
+3. **Test connectivity**: Try accessing the API endpoint directly via curl or browser
+4. **Check API credentials**: Ensure your API keys are valid and have the necessary permissions
+5. **Review logs**: Check the Roo Code output channel for detailed error messages
+
+## Alternative Solutions
+
+If enabling `http.electronFetch` doesn't resolve your issue:
+
+1. **Temporarily disable proxy**: If the proxy isn't required for the API endpoint
+2. **Use a different provider**: Some providers may work better with your proxy setup
+3. **Configure proxy exceptions**: Add API endpoints to your proxy bypass list
+
+## Related Issues
+
+- [VSCode Issue #12588](https://github.com/microsoft/vscode/issues/12588) - Original discussion about proxy support
+- [Roo Code Issue #6991](https://github.com/RooCodeInc/Roo-Code/issues/6991) - Specific issue about connection errors with proxies
+
+## Need Help?
+
+If you're still experiencing issues, please:
+
+1. Open an issue on [GitHub](https://github.com/RooCodeInc/Roo-Code/issues)
+2. Include your proxy configuration (without sensitive information)
+3. Provide the error messages from the Roo Code output channel
+4. Mention whether `http.electronFetch` is enabled
diff --git a/src/core/task/Task.ts b/src/core/task/Task.ts
index 2103dacb274..d349de3ee4b 100644
--- a/src/core/task/Task.ts
+++ b/src/core/task/Task.ts
@@ -2221,10 +2221,19 @@ export class Task extends EventEmitter<TaskEvents> implements TaskLike {
 
 				return
 			} else {
-				const { response } = await this.ask(
-					"api_req_failed",
-					error.message ?? JSON.stringify(serializeError(error), null, 2),
-				)
+				let errorMsg = error.message || "API request failed"
+
+				// Add helpful message about proxy configuration if relevant
+				if (
+					errorMsg.includes("ECONNREFUSED") ||
+					errorMsg.includes("ETIMEDOUT") ||
+					errorMsg.includes("ENOTFOUND")
+				) {
+					errorMsg +=
+						"\n\nIf you're behind a proxy, try enabling the 'http.electronFetch' setting in VSCode:\n1. Open Settings (Cmd/Ctrl + ,)\n2. Search for 'http.electronFetch'\n3. Enable the setting\n4. Restart VSCode"
+				}
+
+				const { response } = await this.ask("api_req_failed", errorMsg)
 
 				if (response !== "yesButtonClicked") {
 					// This will never happen since if noButtonClicked, we will