diff --git a/setup/jetstream/nats.go b/setup/jetstream/nats.go
index 748c191b..328cf915 100644
--- a/setup/jetstream/nats.go
+++ b/setup/jetstream/nats.go
@@ -1,11 +1,13 @@
 package jetstream
 
 import (
+	"fmt"
 	"reflect"
 	"strings"
 	"sync"
 	"time"
 
+	"github.com/getsentry/sentry-go"
 	"github.com/matrix-org/dendrite/setup/config"
 	"github.com/matrix-org/dendrite/setup/process"
 	"github.com/sirupsen/logrus"
@@ -20,7 +22,7 @@ var natsServerMutex sync.Mutex
 func Prepare(process *process.ProcessContext, cfg *config.JetStream) (natsclient.JetStreamContext, *natsclient.Conn) {
 	// check if we need an in-process NATS Server
 	if len(cfg.Addresses) != 0 {
-		return setupNATS(cfg, nil)
+		return setupNATS(process, cfg, nil)
 	}
 	natsServerMutex.Lock()
 	if natsServer == nil {
@@ -56,10 +58,10 @@ func Prepare(process *process.ProcessContext, cfg *config.JetStream) (natsclient
 	if err != nil {
 		logrus.Fatalln("Failed to create NATS client")
 	}
-	return setupNATS(cfg, nc)
+	return setupNATS(process, cfg, nc)
 }
 
-func setupNATS(cfg *config.JetStream, nc *natsclient.Conn) (natsclient.JetStreamContext, *natsclient.Conn) {
+func setupNATS(process *process.ProcessContext, cfg *config.JetStream, nc *natsclient.Conn) (natsclient.JetStreamContext, *natsclient.Conn) {
 	if nc == nil {
 		var err error
 		nc, err = natsclient.Connect(strings.Join(cfg.Addresses, ","))
@@ -117,7 +119,40 @@ func setupNATS(cfg *config.JetStream, nc *natsclient.Conn) (natsclient.JetStream
 			namespaced.Name = name
 			namespaced.Subjects = subjects
 			if _, err = s.AddStream(&namespaced); err != nil {
-				logrus.WithError(err).WithField("stream", name).WithField("subjects", subjects).Fatal("Unable to add stream")
+				logger := logrus.WithError(err).WithFields(logrus.Fields{
+					"stream":   namespaced.Name,
+					"subjects": namespaced.Subjects,
+				})
+
+				// If the stream was supposed to be in-memory to begin with
+				// then an error here is fatal so we'll give up.
+				if namespaced.Storage == natsclient.MemoryStorage {
+					logger.WithError(err).Fatal("Unable to add in-memory stream")
+				}
+
+				// The stream was supposed to be on disk. Let's try starting
+				// Dendrite with the stream in-memory instead. That'll mean that
+				// we can't recover anything that was queued on the disk but we
+				// will still be able to start and run hopefully in the meantime.
+				logger.WithError(err).Error("Unable to add stream")
+				sentry.CaptureException(fmt.Errorf("Unable to add stream %q: %w", namespaced.Name, err))
+
+				namespaced.Storage = natsclient.MemoryStorage
+				if _, err = s.AddStream(&namespaced); err != nil {
+					// We tried to add the stream in-memory instead but something
+					// went wrong. That's an unrecoverable situation so we will
+					// give up at this point.
+					logger.WithError(err).Fatal("Unable to add in-memory stream")
+				}
+
+				if stream.Storage != namespaced.Storage {
+					// We've managed to add the stream in memory.  What's on the
+					// disk will be left alone, but our ability to recover from a
+					// future crash will be limited. Yell about it.
+					sentry.CaptureException(fmt.Errorf("Stream %q is running in-memory; this may be due to data corruption in the JetStream storage directory, investigate as soon as possible", namespaced.Name))
+					logrus.Warn("Stream is running in-memory; this may be due to data corruption in the JetStream storage directory, investigate as soon as possible")
+					process.Degraded()
+				}
 			}
 		}
 	}
diff --git a/setup/process/process.go b/setup/process/process.go
index d55751d7..01eb26e2 100644
--- a/setup/process/process.go
+++ b/setup/process/process.go
@@ -2,13 +2,19 @@ package process
 
 import (
 	"context"
+	"fmt"
 	"sync"
+
+	"github.com/getsentry/sentry-go"
+	"github.com/sirupsen/logrus"
+	"go.uber.org/atomic"
 )
 
 type ProcessContext struct {
 	wg       *sync.WaitGroup    // used to wait for components to shutdown
 	ctx      context.Context    // cancelled when Stop is called
 	shutdown context.CancelFunc // shut down Dendrite
+	degraded atomic.Bool
 }
 
 func NewProcessContext() *ProcessContext {
@@ -43,3 +49,14 @@ func (b *ProcessContext) WaitForShutdown() <-chan struct{} {
 func (b *ProcessContext) WaitForComponentsToFinish() {
 	b.wg.Wait()
 }
+
+func (b *ProcessContext) Degraded() {
+	if b.degraded.CAS(false, true) {
+		logrus.Warn("Dendrite is running in a degraded state")
+		sentry.CaptureException(fmt.Errorf("Process is running in a degraded state"))
+	}
+}
+
+func (b *ProcessContext) IsDegraded() bool {
+	return b.degraded.Load()
+}