diff --git a/src/test/rpc/GatewayBalances_test.cpp b/src/test/rpc/GatewayBalances_test.cpp
index a13e5bc20c..e1cafb2f9c 100644
--- a/src/test/rpc/GatewayBalances_test.cpp
+++ b/src/test/rpc/GatewayBalances_test.cpp
@@ -247,6 +247,46 @@ public:
         expect(jv[jss::result][jss::obligations]["USD"] == maxUSD.getText());
     }
 
+    void
+    testGWBWithMPT()
+    {
+        testcase("Gateway Balances with MPT Escrow");
+        using namespace std::chrono_literals;
+        using namespace jtx;
+
+        // Ensure MPT is enabled
+        FeatureBitset features = testable_amendments() | featureMPTokensV1;
+        Env env(*this, features);
+
+        Account const alice{"alice"};
+        Account const bob{"bob"};
+
+        env.fund(XRP(10000), alice, bob);
+        env.close();
+
+        // Create MPT issuance (Alice) with Escrow capability
+        MPTTester mpt(env, alice, {.holders = {bob}, .fund = false});
+        mpt.create({.flags = tfMPTCanEscrow});
+
+        // Authorize Bob and fund him
+        mpt.authorize({.account = bob, .holderCount = 1});
+        mpt.pay(alice, bob, 1000);
+
+        // Bob creates an escrow of MPT to Alice.
+        auto const MPT = mpt["MPT"];
+        env(escrow::create(bob, alice, MPT(100)),
+            escrow::finish_time(env.now() + 10s));
+        env.close();
+
+        // Query gateway_balances for Bob.
+        auto wsc = makeWSClient(env.app().config());
+        Json::Value qry;
+        qry[jss::account] = bob.human();
+
+        auto jv = wsc->invoke("gateway_balances", qry);
+        expect(jv[jss::status] == "success");
+    }
+
     void
     run() override
     {
@@ -257,7 +297,7 @@ public:
             testGWB(feature);
             testGWBApiVersions(feature);
         }
-
+        testGWBWithMPT();
         testGWBOverflow();
     }
 };
diff --git a/src/xrpld/rpc/handlers/GatewayBalances.cpp b/src/xrpld/rpc/handlers/GatewayBalances.cpp
index a4542f682f..6c6867b248 100644
--- a/src/xrpld/rpc/handlers/GatewayBalances.cpp
+++ b/src/xrpld/rpc/handlers/GatewayBalances.cpp
@@ -151,6 +151,10 @@ doGatewayBalances(RPC::JsonContext& context)
                 if (sle->getType() == ltESCROW)
                 {
                     auto const& escrow = sle->getFieldAmount(sfAmount);
+                    // Gateway Balance should not include MPTs
+                    if (escrow.holds<MPTIssue>())
+                        return;
+
                     auto& bal = locked[escrow.getCurrency()];
                     if (bal == beast::zero)
                     {