diff --git a/FirebaseDatabase/CHANGELOG.md b/FirebaseDatabase/CHANGELOG.md
index 3aec4b057b5..180a5928fa7 100644
--- a/FirebaseDatabase/CHANGELOG.md
+++ b/FirebaseDatabase/CHANGELOG.md
@@ -1,4 +1,5 @@
 # 12.7.0
+- [fixed] Fix `Fatal Exception: FirebaseDatabasePersistenceFailure`. (#4493)
 - [fixed] Concurrency crash in FView. (#15514)
 
 # 11.9.0
diff --git a/FirebaseDatabase/Sources/Persistence/FLevelDBStorageEngine.m b/FirebaseDatabase/Sources/Persistence/FLevelDBStorageEngine.m
index 6a382db05f9..3823d07a8ff 100644
--- a/FirebaseDatabase/Sources/Persistence/FLevelDBStorageEngine.m
+++ b/FirebaseDatabase/Sources/Persistence/FLevelDBStorageEngine.m
@@ -977,17 +977,40 @@ - (id)deserializePrimitive:(NSData *)data {
 }
 
 + (void)ensureDir:(NSString *)path markAsDoNotBackup:(BOOL)markAsDoNotBackup {
+    NSFileManager *fileManager = [NSFileManager defaultManager];
     NSError *error;
-    BOOL success =
-        [[NSFileManager defaultManager] createDirectoryAtPath:path
-                                  withIntermediateDirectories:YES
-                                                   attributes:nil
-                                                        error:&error];
+
+    // Create the directory if it doesn't exist. This call is a no-op if it
+    // already exists.
+    BOOL success = [fileManager createDirectoryAtPath:path
+                          withIntermediateDirectories:YES
+                                           attributes:nil
+                                                error:&error];
     if (!success) {
         @throw [NSException
             exceptionWithName:@"FailedToCreatePersistenceDir"
                        reason:@"Failed to create persistence directory."
-                     userInfo:@{@"path" : path}];
+                     userInfo:@{
+                         @"path" : path,
+                         @"error" : error ?: [NSNull null]
+                     }];
+    }
+
+    // Now, ensure the file protection attribute is set. This will apply it
+    // whether the directory was just created or already existed. Note, this
+    // attribute has no effect on simulators.
+    NSDictionary *attributes = @{
+        NSFileProtectionKey :
+            NSFileProtectionCompleteUntilFirstUserAuthentication
+    };
+    success = [fileManager setAttributes:attributes
+                            ofItemAtPath:path
+                                   error:&error];
+    if (!success) {
+        FFWarn(@"I-RDB076036",
+               @"Failed to set file protection attribute on persistence "
+               @"directory: %@",
+               error);
     }
 
     if (markAsDoNotBackup) {
@@ -1000,9 +1023,6 @@ + (void)ensureDir:(NSString *)path markAsDoNotBackup:(BOOL)markAsDoNotBackup {
                 @"I-RDB076035",
                 @"Failed to mark firebase database folder as do not backup: %@",
                 error);
-            [NSException raise:@"Error marking as do not backup"
-                        format:@"Failed to mark folder %@ as do not backup",
-                               firebaseDirURL];
         }
     }
 }
diff --git a/FirebaseDatabase/Tests/Unit/FLevelDBStorageEngineTests.m b/FirebaseDatabase/Tests/Unit/FLevelDBStorageEngineTests.m
index dac30ab295e..823b693cf8c 100644
--- a/FirebaseDatabase/Tests/Unit/FLevelDBStorageEngineTests.m
+++ b/FirebaseDatabase/Tests/Unit/FLevelDBStorageEngineTests.m
@@ -25,8 +25,11 @@
 #import "FirebaseDatabase/Sources/Snapshot/FSnapshotUtilities.h"
 #import "FirebaseDatabase/Tests/Helpers/FTestHelpers.h"
 
-@interface FLevelDBStorageEngineTests : XCTestCase
+@interface FLevelDBStorageEngine (Tests)
++ (void)ensureDir:(NSString *)path markAsDoNotBackup:(BOOL)markAsDoNotBackup;
+@end
 
+@interface FLevelDBStorageEngineTests : XCTestCase
 @end
 
 @implementation FLevelDBStorageEngineTests
@@ -685,4 +688,49 @@ - (void)testRemoveTrackedQueryRemovesTrackedQueryKeys {
                         ([NSSet setWithArray:@[ @"b", @"c" ]]));
 }
 
+- (void)testEnsureDirSetsCorrectFileProtection {
+  NSString *testDirName =
+      [NSString stringWithFormat:@"fdb_persistence_test_%lu", (unsigned long)arc4random()];
+  NSString *testPath = [NSTemporaryDirectory() stringByAppendingPathComponent:testDirName];
+  NSFileManager *fileManager = [NSFileManager defaultManager];
+
+  // --- Test creation ---
+  [fileManager removeItemAtPath:testPath error:nil];
+  [FLevelDBStorageEngine ensureDir:testPath markAsDoNotBackup:NO];
+
+  NSError *error = nil;
+  NSDictionary<NSFileAttributeKey, id> *attributes = [fileManager attributesOfItemAtPath:testPath
+                                                                                   error:&error];
+  XCTAssertNil(error, @"Failed to get attributes of directory: %@", error);
+
+#if !TARGET_OS_SIMULATOR
+  // On a physical device, file protection should be set.
+  XCTAssertEqualObjects(attributes[NSFileProtectionKey],
+                        NSFileProtectionCompleteUntilFirstUserAuthentication);
+#else
+  XCTAssertNil(attributes[NSFileProtectionKey]);
+#endif
+
+  // --- Test update on existing directory ---
+#if !TARGET_OS_SIMULATOR
+  // This part of the test is only relevant on devices where file protection is supported.
+  [fileManager removeItemAtPath:testPath error:nil];
+  NSDictionary *initialAttributes = @{NSFileProtectionKey : NSFileProtectionNone};
+  XCTAssertTrue([fileManager createDirectoryAtPath:testPath
+                       withIntermediateDirectories:YES
+                                        attributes:initialAttributes
+                                             error:&error],
+                @"Failed to create directory for update test: %@", error);
+
+  [FLevelDBStorageEngine ensureDir:testPath markAsDoNotBackup:NO];
+
+  attributes = [fileManager attributesOfItemAtPath:testPath error:&error];
+  XCTAssertNil(error, @"Failed to get attributes after update: %@", error);
+  XCTAssertEqualObjects(attributes[NSFileProtectionKey],
+                        NSFileProtectionCompleteUntilFirstUserAuthentication);
+#endif  // !TARGET_OS_SIMULATOR
+
+  // Clean up
+  [fileManager removeItemAtPath:testPath error:nil];
+}
 @end