diff --git a/zulip/README.md b/zulip/README.md
index 75845bfee..59edc5b66 100644
--- a/zulip/README.md
+++ b/zulip/README.md
@@ -94,6 +94,15 @@ keys: msg, result.  For successful calls, result will be "success" and
 msg will be the empty string.  On error, result will be "error" and
 msg will describe what went wrong.
 
+#### Rate Limiting
+
+The Zulip API client automatically handles rate limiting errors (`RATE_LIMIT_HIT`). When a rate limit error is encountered:
+
+1. If the server provides a `Retry-After` header, the client will pause for the specified number of seconds and then retry the request.
+2. If no `Retry-After` header is provided, the client will use an exponential backoff strategy to retry the request.
+
+This automatic handling ensures that your application doesn't need to implement its own rate limit handling logic.
+
 #### Examples
 
 The API bindings package comes with several nice example scripts that
diff --git a/zulip/tests/test_rate_limit_handling.py b/zulip/tests/test_rate_limit_handling.py
new file mode 100644
index 000000000..d28e5514e
--- /dev/null
+++ b/zulip/tests/test_rate_limit_handling.py
@@ -0,0 +1,92 @@
+#!/usr/bin/env python3
+
+import unittest
+import time
+import responses
+from unittest.mock import patch, MagicMock
+from zulip import Client
+
+class TestRateLimitHandling(unittest.TestCase):
+    """Test the automatic handling of RATE_LIMIT_HIT errors."""
+
+    def setUp(self):
+        # Create a test client with a mocked get_server_settings method
+        with patch.object(Client, 'get_server_settings', return_value={"zulip_version": "1.0", "zulip_feature_level": 1}):
+            self.client = Client(
+                email="test@example.com",
+                api_key="test_api_key",
+                site="https://example.com",
+            )
+            # Make sure we have a session
+            self.client.ensure_session()
+
+    @responses.activate
+    def test_rate_limit_retry_with_header(self):
+        """Test that the client retries after a rate limit error with Retry-After header."""
+        
+        # Add a mocked response for the first request that returns a rate limit error
+        responses.add(
+            responses.POST,
+            "https://example.com/api/v1/test_endpoint",
+            json={"result": "error", "code": "RATE_LIMIT_HIT", "msg": "Rate limit hit"},
+            status=429,
+            headers={"Retry-After": "1"}  # 1 second retry
+        )
+        
+        # Add a mocked response for the second request (after retry) that succeeds
+        responses.add(
+            responses.POST,
+            "https://example.com/api/v1/test_endpoint",
+            json={"result": "success", "msg": ""},
+            status=200
+        )
+        
+        # Mock time.sleep to avoid actually waiting during the test
+        with patch('time.sleep') as mock_sleep:
+            result = self.client.call_endpoint(url="test_endpoint")
+            
+            # Verify that sleep was called with the correct retry value
+            mock_sleep.assert_called_once_with(1)
+            
+            # Verify that we got the success response
+            self.assertEqual(result["result"], "success")
+            
+            # Verify that both responses were requested
+            self.assertEqual(len(responses.calls), 2)
+
+    @responses.activate
+    def test_rate_limit_retry_without_header(self):
+        """Test that the client retries after a rate limit error without Retry-After header."""
+        
+        # Add a mocked response for the first request that returns a rate limit error
+        responses.add(
+            responses.POST,
+            "https://example.com/api/v1/test_endpoint",
+            json={"result": "error", "code": "RATE_LIMIT_HIT", "msg": "Rate limit hit"},
+            status=429
+            # No Retry-After header
+        )
+        
+        # Add a mocked response for the second request (after retry) that succeeds
+        responses.add(
+            responses.POST,
+            "https://example.com/api/v1/test_endpoint",
+            json={"result": "success", "msg": ""},
+            status=200
+        )
+        
+        # Mock time.sleep to avoid actually waiting during the test
+        with patch('time.sleep') as mock_sleep:
+            result = self.client.call_endpoint(url="test_endpoint")
+            
+            # Verify that sleep was called (with any value)
+            mock_sleep.assert_called_once()
+            
+            # Verify that we got the success response
+            self.assertEqual(result["result"], "success")
+            
+            # Verify that both responses were requested
+            self.assertEqual(len(responses.calls), 2)
+
+if __name__ == "__main__":
+    unittest.main()
diff --git a/zulip/zulip/__init__.py b/zulip/zulip/__init__.py
index 8d930e7e7..12c11a8a8 100644
--- a/zulip/zulip/__init__.py
+++ b/zulip/zulip/__init__.py
@@ -687,6 +687,26 @@ def end_error_retry(succeeded: bool) -> None:
                     "status_code": res.status_code,
                 }
 
+            # Handle rate limiting automatically
+            if json_result.get("result") == "error" and json_result.get("code") == "RATE_LIMIT_HIT":
+                retry_after = None
+                # Check for Retry-After header (in seconds)
+                if "Retry-After" in res.headers:
+                    try:
+                        retry_after = int(res.headers["Retry-After"])
+                    except (ValueError, TypeError):
+                        pass
+                
+                # If we have a valid retry_after value, sleep and retry
+                if retry_after and retry_after > 0:
+                    if self.verbose:
+                        print(f"Rate limit hit. Retrying after {retry_after} seconds...")
+                    time.sleep(retry_after)
+                    continue
+                # If no valid retry_after header, use a default backoff
+                elif error_retry(" (rate limited)"):
+                    continue
+
             end_error_retry(True)
             return json_result