diff --git a/v1/providers/sfcomputev2/instance.go b/v1/providers/sfcomputev2/instance.go
index f3c1076..5e34f0d 100644
--- a/v1/providers/sfcomputev2/instance.go
+++ b/v1/providers/sfcomputev2/instance.go
@@ -12,6 +12,7 @@ import (
 	"github.com/alecthomas/units"
 	"github.com/brevdev/cloud/internal/errors"
 	v1 "github.com/brevdev/cloud/v1"
+	"github.com/sfcompute/sfc-go/models/apierrors"
 	"github.com/sfcompute/sfc-go/models/components"
 	"github.com/sfcompute/sfc-go/models/operations"
 	"github.com/sfcompute/sfc-go/optionalnullable"
@@ -183,7 +184,7 @@ func (c *SFCClientV2) TerminateInstance(ctx context.Context, id v1.CloudProvider
 
 	_, err := c.client.Instances.TerminateInstance(ctx, string(id))
 	if err != nil {
-		return errors.WrapAndTrace(err)
+		return normalizeTerminateInstanceError(err)
 	}
 
 	c.logger.Debug(ctx, "sfcv2: TerminateInstance end",
@@ -193,6 +194,16 @@ func (c *SFCClientV2) TerminateInstance(ctx context.Context, id v1.CloudProvider
 	return nil
 }
 
+func normalizeTerminateInstanceError(err error) error {
+	var notFoundErr *apierrors.NotFoundError
+	if errors.As(err, &notFoundErr) {
+		// Termination is idempotent: a missing instance is already in the
+		// requested terminal state. Do not retain the provider response body.
+		return errors.WrapAndTrace(v1.ErrInstanceNotFound)
+	}
+	return errors.WrapAndTrace(err)
+}
+
 func (c *SFCClientV2) getSSHInfo(ctx context.Context, id string, status components.InstanceStatus) (*components.InstanceSSHInfo, error) {
 	if status != components.InstanceStatusRunning {
 		return nil, nil
diff --git a/v1/providers/sfcomputev2/instance_test.go b/v1/providers/sfcomputev2/instance_test.go
new file mode 100644
index 0000000..5293388
--- /dev/null
+++ b/v1/providers/sfcomputev2/instance_test.go
@@ -0,0 +1,33 @@
+package v2
+
+import (
+	"errors"
+	"fmt"
+	"testing"
+
+	v1 "github.com/brevdev/cloud/v1"
+	"github.com/sfcompute/sfc-go/models/apierrors"
+	"github.com/stretchr/testify/require"
+)
+
+func TestNormalizeTerminateInstanceErrorTreatsNotFoundAsAlreadyGone(t *testing.T) {
+	t.Parallel()
+
+	providerErr := fmt.Errorf("release instance: %w", &apierrors.NotFoundError{})
+
+	err := normalizeTerminateInstanceError(providerErr)
+
+	require.ErrorIs(t, err, v1.ErrInstanceNotFound)
+	var notFoundErr *apierrors.NotFoundError
+	require.False(t, errors.As(err, &notFoundErr))
+}
+
+func TestNormalizeTerminateInstanceErrorPreservesRetryableFailure(t *testing.T) {
+	t.Parallel()
+
+	providerErr := errors.New("provider rate limited")
+
+	err := normalizeTerminateInstanceError(providerErr)
+
+	require.ErrorIs(t, err, providerErr)
+}