diff --git a/src/nanoarrow/common/inline_buffer.h b/src/nanoarrow/common/inline_buffer.h
index 929fe8159..bd74afb48 100644
--- a/src/nanoarrow/common/inline_buffer.h
+++ b/src/nanoarrow/common/inline_buffer.h
@@ -117,14 +117,16 @@ static inline uint16_t ArrowFloatToHalfFloat(float value) {
 
   if (exp == 0) {
     res = 0;
+    fc = 0;
   } else if (exp == 0xff) {
     res = 0x1f;
   } else if (res > 0x1e) {
     res = 0x1f;
     fc = 0;
   } else if (res < 0x01) {
+    // Restore the implicit leading bit and shift for a subnormal exponent.
+    fc = res < -9 ? 0 : (uint16_t)((fc | 0x400) >> (1 - res));
     res = 0;
-    fc = 0;
   }
 
   return (uint16_t)((sn << 15) | (uint16_t)(res << 10) | fc);
@@ -140,6 +142,15 @@ static inline float ArrowHalfFloatToFloat(uint16_t value) {
 
   if (exp == 0) {
     res = 0;
+    if (fc != 0) {
+      // Normalize the subnormal significand before rebiasing its exponent.
+      res = 127 - 14;
+      while ((fc & 0x400) == 0) {
+        fc <<= 1;
+        res--;
+      }
+      fc &= 0x3ff;
+    }
   } else if (exp == 0x1f) {
     res = 0xff;
   }
diff --git a/src/nanoarrow/common/utils_test.cc b/src/nanoarrow/common/utils_test.cc
index d4e43ad57..0d52d0f95 100644
--- a/src/nanoarrow/common/utils_test.cc
+++ b/src/nanoarrow/common/utils_test.cc
@@ -15,6 +15,7 @@
 // specific language governing permissions and limitations
 // under the License.
 
+#include <cmath>
 #include <cstring>
 #include <string>
 
@@ -759,6 +760,28 @@ TEST(HalfFloatTest, FloatAndHalfFloatRoundTrip) {
   }
 }
 
+TEST(HalfFloatTest, FloatAndHalfFloatSubnormals) {
+  // Include signed zeros and the smallest normals at the subnormal boundaries.
+  for (uint16_t bits = 0; bits <= 0x400; bits++) {
+    SCOPED_TRACE(bits);
+    float expected = std::ldexp(static_cast<float>(bits), -24);
+    EXPECT_EQ(ArrowHalfFloatToFloat(bits), expected);
+    EXPECT_EQ(ArrowHalfFloatToFloat(bits | 0x8000), -expected);
+    EXPECT_EQ(ArrowFloatToHalfFloat(expected), bits);
+    EXPECT_EQ(ArrowFloatToHalfFloat(-expected), bits | 0x8000);
+  }
+
+  EXPECT_FALSE(std::signbit(ArrowHalfFloatToFloat(0x0000)));
+  EXPECT_TRUE(std::signbit(ArrowHalfFloatToFloat(0x8000)));
+
+  float underflow[] = {std::ldexp(1.0f, -25), std::ldexp(1.0f, -126),
+                       std::ldexp(1.5f, -127)};
+  for (float value : underflow) {
+    EXPECT_EQ(ArrowFloatToHalfFloat(value), 0x0000);
+    EXPECT_EQ(ArrowFloatToHalfFloat(-value), 0x8000);
+  }
+}
+
 TEST(UtilsTest, ArrowResolveChunk64Test) {
   int64_t offsets[] = {0, 2, 3, 6};
   int64_t n_offsets = 4;