diff --git a/tests/v1/entrypoints/llm/test_struct_output_generate.py b/tests/v1/entrypoints/llm/test_struct_output_generate.py
index b179dc3b4747..c243d81e7f18 100644
--- a/tests/v1/entrypoints/llm/test_struct_output_generate.py
+++ b/tests/v1/entrypoints/llm/test_struct_output_generate.py
@@ -386,13 +386,21 @@ def test_structured_output_auto_mode(
         max_tokens=1000,
         guided_decoding=GuidedDecodingParams(json=unsupported_json_schema))
 
+    prompts = ("Give an example JSON object for a grade "
+               "that fits this schema: "
+               f"{unsupported_json_schema}")
     # This would fail with the default of "xgrammar", but in "auto"
     # we will handle fallback automatically.
-    outputs = llm.generate(prompts=("Give an example JSON object for a grade "
-                                    "that fits this schema: "
-                                    f"{unsupported_json_schema}"),
+    outputs = llm.generate(prompts=prompts,
                            sampling_params=sampling_params,
                            use_tqdm=True)
+    # Make sure `auto` backend handling doesn't mess up sampling_params
+    # and that we can reuse it without error.
+    outputs.extend(
+        llm.generate(prompts=prompts,
+                     sampling_params=sampling_params,
+                     use_tqdm=True))
+
     assert outputs is not None
     for output in outputs:
         assert output is not None
diff --git a/vllm/sampling_params.py b/vllm/sampling_params.py
index 68ed99664947..707a757ca83a 100644
--- a/vllm/sampling_params.py
+++ b/vllm/sampling_params.py
@@ -79,6 +79,17 @@ def backend_options(self) -> list[str]:
             return []
         return self.backend.split(":")[1].split(",")
 
+    def add_option(self, opt_name: str) -> None:
+        """Adds an option to the backend options."""
+        if not self.backend:
+            self.backend = f":{opt_name}"
+        elif ":" not in self.backend:
+            self.backend += f":{opt_name}"
+        else:
+            options = set(self.backend_options())
+            options.add(opt_name)
+            self.backend = f"{self.backend_name}:{','.join(sorted(options))}"
+
     def no_fallback(self) -> bool:
         """Returns True if the "no-fallback" option is supplied for the guided
         decoding backend"""
diff --git a/vllm/v1/engine/processor.py b/vllm/v1/engine/processor.py
index afbbddb86d51..9dce37061a82 100644
--- a/vllm/v1/engine/processor.py
+++ b/vllm/v1/engine/processor.py
@@ -154,7 +154,14 @@ def _validate_structured_output(self, params: SamplingParams) -> None:
             raise ValueError(f"Only {supported_backends} structured output is "
                              "supported in V1.")
         if params.guided_decoding.backend:
-            if params.guided_decoding.backend != engine_level_backend:
+            # Request-level backend selection is not supported in V1.
+            # The values may differ if `params` is reused and was set
+            # to a specific backend based on `auto` behavior in a previous
+            # request. We remember that it was set as a result of `auto`
+            # using the `_auto` option set on the backend in the params.
+            if (params.guided_decoding.backend != engine_level_backend
+                    and not (engine_level_backend == "auto" and "_auto"
+                             in params.guided_decoding.backend_options())):
                 raise ValueError(
                     "Request-level structured output backend selection is no "
                     "longer supported. The request specified "
@@ -182,6 +189,8 @@ def _validate_structured_output(self, params: SamplingParams) -> None:
                 # The request includes some jsonschema feature(s) that
                 # are not supported in xgrammar. Fall back to guidance.
                 params.guided_decoding.backend = "guidance"
+            # Remember that this backend was set automatically
+            params.guided_decoding.add_option("_auto")
 
         if engine_level_backend.startswith("guidance"):
             # TODO ideally we would have the LLTokenizer here as Lark syntax