diff --git a/Lib/test/test_decimal.py b/Lib/test/test_decimal.py
index d049646d6e8b55a..c4b24617af7c433 100644
--- a/Lib/test/test_decimal.py
+++ b/Lib/test/test_decimal.py
@@ -3763,6 +3763,20 @@ def test_to_integral_value(self):
         self.assertRaises(TypeError, c.to_integral_value, '10')
         self.assertRaises(TypeError, c.to_integral_value, 10, 'x')
 
+    def test_crashing_signal_dict_traps(self):
+        # gh-161389
+        Context = self.decimal.Context
+        SignalDict = type(Context().traps)
+        with self.assertRaisesRegex((KeyError, ValueError), "signal dict"):
+            Context(traps=SignalDict())
+
+    def test_crashing_signal_dict_flags(self):
+        # gh-161389
+        Context = self.decimal.Context
+        SignalDict = type(Context().flags)
+        with self.assertRaisesRegex((KeyError, ValueError), "signal dict"):
+            Context(flags=SignalDict())
+
 @requires_cdecimal
 class CContextAPItests(ContextAPItests, unittest.TestCase):
     decimal = C
diff --git a/Misc/NEWS.d/next/Library/2026-11-05-11-56-50.gh-issue-161389.EIl2E6.rst b/Misc/NEWS.d/next/Library/2026-11-05-11-56-50.gh-issue-161389.EIl2E6.rst
new file mode 100644
index 000000000000000..62fd6fe712f6dfc
--- /dev/null
+++ b/Misc/NEWS.d/next/Library/2026-11-05-11-56-50.gh-issue-161389.EIl2E6.rst
@@ -0,0 +1,2 @@
+Fixes a crash in :class:`decimal.Context` when passing invalid signaling
+dicts as *flags* and *traps*.
diff --git a/Modules/_decimal/_decimal.c b/Modules/_decimal/_decimal.c
index 4849b447e277bfc..098522b130ec874 100644
--- a/Modules/_decimal/_decimal.c
+++ b/Modules/_decimal/_decimal.c
@@ -1162,6 +1162,9 @@ context_settraps_dict(PyObject *self, PyObject *value)
 
     decimal_state *state = get_module_state_from_ctx(self);
     if (PyDecSignalDict_Check(state, value)) {
+        if (SdFlagAddr(value) == NULL) {
+            return value_error_int(INVALID_SIGNALDICT_ERROR_MSG);
+        }
         flags = SdFlags(value);
     }
     else {
@@ -1228,6 +1231,9 @@ context_setstatus_dict(PyObject *self, PyObject *value)
 
     decimal_state *state = get_module_state_from_ctx(self);
     if (PyDecSignalDict_Check(state, value)) {
+        if (SdFlagAddr(value) == NULL) {
+            return value_error_int(INVALID_SIGNALDICT_ERROR_MSG);
+        }
         flags = SdFlags(value);
     }
     else {