To handle bad messages in Kafka's Streams API, you can implement a strategy that involves creating a separate error topic. When a message fails processing, you can produce it to this error topic for later analysis. Additionally, consider using a try-catch block in your processing logic to capture exceptions and handle them gracefully. This way, you can log the errors and ensure that your main processing flow remains uninterrupted. Finally, make sure to monitor the error topic to address the issues with bad messages in a timely manner.