diff --git a/package.json b/package.json
index 30c41c80..46d23c16 100644
--- a/package.json
+++ b/package.json
@@ -1,7 +1,7 @@
 {
   "name": "root",
   "private": true,
-  "version": "4.0.2",
+  "version": "4.0.3",
   "engines": {
     "node": ">=18.0.0"
   },
diff --git a/packages/executor/src/services/EntryPointService/utils/packedUserOpUtils.ts b/packages/executor/src/services/EntryPointService/utils/packedUserOpUtils.ts
index 0eef8034..e9076d3d 100644
--- a/packages/executor/src/services/EntryPointService/utils/packedUserOpUtils.ts
+++ b/packages/executor/src/services/EntryPointService/utils/packedUserOpUtils.ts
@@ -1,4 +1,7 @@
-import { AddressZero } from "@skandha/params/lib/index.js";
+import {
+  AddressZero,
+  INITCODE_EIP7702_MARKER,
+} from "@skandha/params/lib/index.js";
 import {
   UserOperation,
   PackedUserOperation,
@@ -176,7 +179,13 @@ export function packUserOp(op: UserOperation): PackedUserOperation {
       op.paymasterData
     );
   }
-  const factory = pad(op.factory ?? "0x", { dir: "right", size: 20 });
+  // The EIP-7702 marker must stay 2 bytes: paymasters (e.g. Pimlico's singleton)
+  // sign over keccak256(initCode), so padding it to 20 bytes invalidates their
+  // signature and the op reverts with AA34 at bundle time.
+  const factory =
+    op.factory?.toLowerCase() === INITCODE_EIP7702_MARKER
+      ? INITCODE_EIP7702_MARKER
+      : pad(op.factory ?? "0x", { dir: "right", size: 20 });
   return {
     sender: op.sender,
     nonce: BigInt(op.nonce),
diff --git a/packages/executor/test/unit/services/packedUserOpUtils.test.ts b/packages/executor/test/unit/services/packedUserOpUtils.test.ts
new file mode 100644
index 00000000..29a41adf
--- /dev/null
+++ b/packages/executor/test/unit/services/packedUserOpUtils.test.ts
@@ -0,0 +1,64 @@
+import { describe, it, expect } from "vitest";
+import { INITCODE_EIP7702_MARKER } from "@skandha/params/lib";
+import { packUserOp } from "../../../src/services/EntryPointService/utils/packedUserOpUtils";
+import { UserOperation } from "@skandha/types/lib/contracts/UserOperation";
+
+const baseOp: UserOperation = {
+  sender: "0x54E3d8E0F9800440581D6d82C7A85F1167090d98",
+  nonce: "0x01",
+  callData: "0x",
+  callGasLimit: "0x3e93f",
+  verificationGasLimit: "0x1aaf8",
+  preVerificationGas: "0x10a2b",
+  maxFeePerGas: "0xd59f80",
+  maxPriorityFeePerGas: "0x1e8480",
+  signature: "0x",
+};
+
+describe("packUserOp initCode packing", () => {
+  it("keeps the EIP-7702 marker 0x7702 unpadded so paymaster signatures over keccak256(initCode) stay valid", () => {
+    // Pimlico's singleton paymaster commits to keccak256(userOp.initCode) of the
+    // canonical 2-byte marker. Padding it to 20 bytes changes the digest and the
+    // op reverts with FailedOp("AA34 signature error") at bundle time.
+    const packed = packUserOp({
+      ...baseOp,
+      factory: INITCODE_EIP7702_MARKER,
+      factoryData: "0x",
+    });
+    expect(packed.initCode).toEqual(INITCODE_EIP7702_MARKER);
+  });
+
+  it("keeps the EIP-7702 marker unpadded regardless of prefix casing", () => {
+    const packed = packUserOp({
+      ...baseOp,
+      factory: "0X7702" as `0x${string}`,
+      factoryData: "0x",
+    });
+    expect(packed.initCode.toLowerCase()).toEqual(INITCODE_EIP7702_MARKER);
+  });
+
+  it("appends factoryData after the EIP-7702 marker", () => {
+    const packed = packUserOp({
+      ...baseOp,
+      factory: INITCODE_EIP7702_MARKER,
+      factoryData: "0xdeadbeef",
+    });
+    expect(packed.initCode).toEqual("0x7702deadbeef");
+  });
+
+  it("still packs a real 20-byte factory address followed by factoryData", () => {
+    const packed = packUserOp({
+      ...baseOp,
+      factory: "0x5803c076563C85799989d42Fc00292A8aE52fa9E",
+      factoryData: "0xcafe",
+    });
+    expect(packed.initCode.toLowerCase()).toEqual(
+      "0x5803c076563c85799989d42fc00292a8ae52fa9ecafe"
+    );
+  });
+
+  it("packs an empty initCode when there is no factory", () => {
+    const packed = packUserOp({ ...baseOp });
+    expect(packed.initCode).toEqual("0x");
+  });
+});