The RadGrid OnDataBindingFailed event does not fire when WCF/WebService returns an IIS 500 Errror page. It DOES, however, fire when IIS returns a proper 500 error JSON response. In my case, the former was happening because my ASP.NET WCF services were incorrectly configured and thus throwing a standard IIS 500 error page. RadGrid should recognize the IIS 500 page as failure and spawned a OnDataBindingFailed event. NOTE: For example, RadScheduler *does* correctly interpret the IIS 500 page as a failure (RE: OnClientRequestFailed).