diff --git a/.gitignore b/.gitignore
index eeee17fe..349c2139 100644
--- a/.gitignore
+++ b/.gitignore
@@ -9,6 +9,7 @@ client/tsconfig.app.tsbuildinfo
 client/tsconfig.node.tsbuildinfo
 cli/build
 test-output
+tool-test-output
 # symlinked by `npm run link:sdk`:
 sdk
 client/playwright-report/
diff --git a/cli/scripts/cli-tests.js b/cli/scripts/cli-tests.js
index 68ce3885..c2b8b2cb 100755
--- a/cli/scripts/cli-tests.js
+++ b/cli/scripts/cli-tests.js
@@ -37,9 +37,6 @@ console.log(`${colors.BLUE}- Environment variables (-e)${colors.NC}`);
 console.log(`${colors.BLUE}- Config file (--config)${colors.NC}`);
 console.log(`${colors.BLUE}- Server selection (--server)${colors.NC}`);
 console.log(`${colors.BLUE}- Method selection (--method)${colors.NC}`);
-console.log(
-  `${colors.BLUE}- Tool-related options (--tool-name, --tool-arg)${colors.NC}`,
-);
 console.log(`${colors.BLUE}- Resource-related options (--uri)${colors.NC}`);
 console.log(
   `${colors.BLUE}- Prompt-related options (--prompt-name, --prompt-args)${colors.NC}`,
@@ -454,64 +451,6 @@ async function runTests() {
     "tools/list",
   );
 
-  console.log(
-    `\n${colors.YELLOW}=== Running Tool-Related Tests ===${colors.NC}`,
-  );
-
-  // Test 12: CLI mode with tool call
-  await runBasicTest(
-    "tool_call",
-    TEST_CMD,
-    ...TEST_ARGS,
-    "--cli",
-    "--method",
-    "tools/call",
-    "--tool-name",
-    "echo",
-    "--tool-arg",
-    "message=Hello",
-  );
-
-  // Test 13: CLI mode with tool call but missing tool name (should fail)
-  await runErrorTest(
-    "missing_tool_name",
-    TEST_CMD,
-    ...TEST_ARGS,
-    "--cli",
-    "--method",
-    "tools/call",
-    "--tool-arg",
-    "message=Hello",
-  );
-
-  // Test 14: CLI mode with tool call but invalid tool args format (should fail)
-  await runErrorTest(
-    "invalid_tool_args",
-    TEST_CMD,
-    ...TEST_ARGS,
-    "--cli",
-    "--method",
-    "tools/call",
-    "--tool-name",
-    "echo",
-    "--tool-arg",
-    "invalid_format",
-  );
-
-  // Test 15: CLI mode with multiple tool args
-  await runBasicTest(
-    "multiple_tool_args",
-    TEST_CMD,
-    ...TEST_ARGS,
-    "--cli",
-    "--method",
-    "tools/call",
-    "--tool-name",
-    "add",
-    "--tool-arg",
-    "a=1",
-    "b=2",
-  );
 
   console.log(
     `\n${colors.YELLOW}=== Running Resource-Related Tests ===${colors.NC}`,
diff --git a/cli/scripts/cli-tool-tests.js b/cli/scripts/cli-tool-tests.js
new file mode 100644
index 00000000..41e0a787
--- /dev/null
+++ b/cli/scripts/cli-tool-tests.js
@@ -0,0 +1,611 @@
+#!/usr/bin/env node
+
+// Colors for output
+const colors = {
+  GREEN: "\x1b[32m",
+  YELLOW: "\x1b[33m",
+  RED: "\x1b[31m",
+  BLUE: "\x1b[34m",
+  ORANGE: "\x1b[33m",
+  NC: "\x1b[0m", // No Color
+};
+
+import fs from "fs";
+import path from "path";
+import { spawn } from "child_process";
+import os from "os";
+import { fileURLToPath } from "url";
+
+// Get directory paths with ESM compatibility
+const __filename = fileURLToPath(import.meta.url);
+const __dirname = path.dirname(__filename);
+
+// Track test results
+let PASSED_TESTS = 0;
+let FAILED_TESTS = 0;
+let SKIPPED_TESTS = 0;
+let TOTAL_TESTS = 0;
+
+console.log(
+  `${colors.YELLOW}=== MCP Inspector CLI Tool Tests ===${colors.NC}`,
+);
+console.log(
+  `${colors.BLUE}This script tests the MCP Inspector CLI's tool-related functionality:${colors.NC}`,
+);
+console.log(`${colors.BLUE}- Tool discovery and listing${colors.NC}`);
+console.log(`${colors.BLUE}- JSON argument parsing (strings, numbers, booleans, objects, arrays)${colors.NC}`);
+console.log(`${colors.BLUE}- Tool schema validation${colors.NC}`);
+console.log(`${colors.BLUE}- Tool execution with various argument types${colors.NC}`);
+console.log(`${colors.BLUE}- Error handling for invalid tools and arguments${colors.NC}`);
+console.log(`\n`);
+
+// Get directory paths
+const SCRIPTS_DIR = __dirname;
+const PROJECT_ROOT = path.join(SCRIPTS_DIR, "../../");
+const BUILD_DIR = path.resolve(SCRIPTS_DIR, "../build");
+
+// Define the test server command using npx
+const TEST_CMD = "npx";
+const TEST_ARGS = ["@modelcontextprotocol/server-everything"];
+
+// Create output directory for test results
+const OUTPUT_DIR = path.join(SCRIPTS_DIR, "tool-test-output");
+if (!fs.existsSync(OUTPUT_DIR)) {
+  fs.mkdirSync(OUTPUT_DIR, { recursive: true });
+}
+
+// Create a temporary directory for test files
+const TEMP_DIR = path.join(os.tmpdir(), "mcp-inspector-tool-tests");
+fs.mkdirSync(TEMP_DIR, { recursive: true });
+
+// Track servers for cleanup
+let runningServers = [];
+
+process.on("exit", () => {
+  try {
+    fs.rmSync(TEMP_DIR, { recursive: true, force: true });
+  } catch (err) {
+    console.error(
+      `${colors.RED}Failed to remove temp directory: ${err.message}${colors.NC}`,
+    );
+  }
+
+  runningServers.forEach((server) => {
+    try {
+      process.kill(-server.pid);
+    } catch (e) {}
+  });
+});
+
+process.on("SIGINT", () => {
+  runningServers.forEach((server) => {
+    try {
+      process.kill(-server.pid);
+    } catch (e) {}
+  });
+  process.exit(1);
+});
+
+// Function to run a basic test
+async function runBasicTest(testName, ...args) {
+  const outputFile = path.join(
+    OUTPUT_DIR,
+    `${testName.replace(/\//g, "_")}.log`,
+  );
+
+  console.log(`\n${colors.YELLOW}Testing: ${testName}${colors.NC}`);
+  TOTAL_TESTS++;
+
+  // Run the command and capture output
+  console.log(
+    `${colors.BLUE}Command: node ${BUILD_DIR}/cli.js ${args.join(" ")}${colors.NC}`,
+  );
+
+  try {
+    // Create a write stream for the output file
+    const outputStream = fs.createWriteStream(outputFile);
+
+    // Spawn the process
+    return new Promise((resolve) => {
+      const child = spawn("node", [path.join(BUILD_DIR, "cli.js"), ...args], {
+        stdio: ["ignore", "pipe", "pipe"],
+      });
+
+      const timeout = setTimeout(() => {
+        console.log(`${colors.YELLOW}Test timed out: ${testName}${colors.NC}`);
+        child.kill();
+      }, 10000);
+
+      // Pipe stdout and stderr to the output file
+      child.stdout.pipe(outputStream);
+      child.stderr.pipe(outputStream);
+
+      // Also capture output for display
+      let output = "";
+      child.stdout.on("data", (data) => {
+        output += data.toString();
+      });
+      child.stderr.on("data", (data) => {
+        output += data.toString();
+      });
+
+      child.on("close", (code) => {
+        clearTimeout(timeout);
+        outputStream.end();
+
+        if (code === 0) {
+          console.log(`${colors.GREEN}✓ Test passed: ${testName}${colors.NC}`);
+          console.log(`${colors.BLUE}First few lines of output:${colors.NC}`);
+          const firstFewLines = output
+            .split("\n")
+            .slice(0, 5)
+            .map((line) => `  ${line}`)
+            .join("\n");
+          console.log(firstFewLines);
+          PASSED_TESTS++;
+          resolve(true);
+        } else {
+          console.log(`${colors.RED}✗ Test failed: ${testName}${colors.NC}`);
+          console.log(`${colors.RED}Error output:${colors.NC}`);
+          console.log(
+            output
+              .split("\n")
+              .map((line) => `  ${line}`)
+              .join("\n"),
+          );
+          FAILED_TESTS++;
+
+          // Stop after any error is encountered
+          console.log(
+            `${colors.YELLOW}Stopping tests due to error. Please validate and fix before continuing.${colors.NC}`,
+          );
+          process.exit(1);
+        }
+      });
+    });
+  } catch (error) {
+    console.error(
+      `${colors.RED}Error running test: ${error.message}${colors.NC}`,
+    );
+    FAILED_TESTS++;
+    process.exit(1);
+  }
+}
+
+// Function to run an error test (expected to fail)
+async function runErrorTest(testName, ...args) {
+  const outputFile = path.join(
+    OUTPUT_DIR,
+    `${testName.replace(/\//g, "_")}.log`,
+  );
+
+  console.log(`\n${colors.YELLOW}Testing error case: ${testName}${colors.NC}`);
+  TOTAL_TESTS++;
+
+  // Run the command and capture output
+  console.log(
+    `${colors.BLUE}Command: node ${BUILD_DIR}/cli.js ${args.join(" ")}${colors.NC}`,
+  );
+
+  try {
+    // Create a write stream for the output file
+    const outputStream = fs.createWriteStream(outputFile);
+
+    // Spawn the process
+    return new Promise((resolve) => {
+      const child = spawn("node", [path.join(BUILD_DIR, "cli.js"), ...args], {
+        stdio: ["ignore", "pipe", "pipe"],
+      });
+
+      const timeout = setTimeout(() => {
+        console.log(
+          `${colors.YELLOW}Error test timed out: ${testName}${colors.NC}`,
+        );
+        child.kill();
+      }, 10000);
+
+      // Pipe stdout and stderr to the output file
+      child.stdout.pipe(outputStream);
+      child.stderr.pipe(outputStream);
+
+      // Also capture output for display
+      let output = "";
+      child.stdout.on("data", (data) => {
+        output += data.toString();
+      });
+      child.stderr.on("data", (data) => {
+        output += data.toString();
+      });
+
+      child.on("close", (code) => {
+        clearTimeout(timeout);
+        outputStream.end();
+
+        // For error tests, we expect a non-zero exit code
+        if (code !== 0) {
+          console.log(
+            `${colors.GREEN}✓ Error test passed: ${testName}${colors.NC}`,
+          );
+          console.log(`${colors.BLUE}Error output (expected):${colors.NC}`);
+          const firstFewLines = output
+            .split("\n")
+            .slice(0, 5)
+            .map((line) => `  ${line}`)
+            .join("\n");
+          console.log(firstFewLines);
+          PASSED_TESTS++;
+          resolve(true);
+        } else {
+          console.log(
+            `${colors.RED}✗ Error test failed: ${testName} (expected error but got success)${colors.NC}`,
+          );
+          console.log(`${colors.RED}Output:${colors.NC}`);
+          console.log(
+            output
+              .split("\n")
+              .map((line) => `  ${line}`)
+              .join("\n"),
+          );
+          FAILED_TESTS++;
+
+          // Stop after any error is encountered
+          console.log(
+            `${colors.YELLOW}Stopping tests due to error. Please validate and fix before continuing.${colors.NC}`,
+          );
+          process.exit(1);
+        }
+      });
+    });
+  } catch (error) {
+    console.error(
+      `${colors.RED}Error running test: ${error.message}${colors.NC}`,
+    );
+    FAILED_TESTS++;
+    process.exit(1);
+  }
+}
+
+// Run all tests
+async function runTests() {
+  console.log(
+    `\n${colors.YELLOW}=== Running Tool Discovery Tests ===${colors.NC}`,
+  );
+
+  // Test 1: List available tools
+  await runBasicTest(
+    "tool_discovery_list",
+    TEST_CMD,
+    ...TEST_ARGS,
+    "--cli",
+    "--method",
+    "tools/list",
+  );
+
+  console.log(
+    `\n${colors.YELLOW}=== Running JSON Argument Parsing Tests ===${colors.NC}`,
+  );
+
+  // Test 2: String arguments (backward compatibility)
+  await runBasicTest(
+    "json_args_string",
+    TEST_CMD,
+    ...TEST_ARGS,
+    "--cli",
+    "--method",
+    "tools/call",
+    "--tool-name",
+    "echo",
+    "--tool-arg",
+    "message=hello world",
+  );
+
+  // Test 3: Number arguments
+  await runBasicTest(
+    "json_args_number_integer",
+    TEST_CMD,
+    ...TEST_ARGS,
+    "--cli",
+    "--method",
+    "tools/call",
+    "--tool-name",
+    "add",
+    "--tool-arg",
+    "a=42",
+    "b=58",
+  );
+
+  // Test 4: Number arguments with decimals (using add tool with decimal numbers)
+  await runBasicTest(
+    "json_args_number_decimal",
+    TEST_CMD,
+    ...TEST_ARGS,
+    "--cli",
+    "--method",
+    "tools/call",
+    "--tool-name",
+    "add",
+    "--tool-arg",
+    "a=19.99",
+    "b=20.01",
+  );
+
+  // Test 5: Boolean arguments - true
+  await runBasicTest(
+    "json_args_boolean_true",
+    TEST_CMD,
+    ...TEST_ARGS,
+    "--cli",
+    "--method",
+    "tools/call",
+    "--tool-name",
+    "annotatedMessage",
+    "--tool-arg",
+    "messageType=success",
+    "includeImage=true",
+  );
+
+  // Test 6: Boolean arguments - false
+  await runBasicTest(
+    "json_args_boolean_false",
+    TEST_CMD,
+    ...TEST_ARGS,
+    "--cli",
+    "--method",
+    "tools/call",
+    "--tool-name",
+    "annotatedMessage",
+    "--tool-arg",
+    "messageType=error",
+    "includeImage=false",
+  );
+
+  // Test 7: Null arguments (using echo with string "null")
+  await runBasicTest(
+    "json_args_null",
+    TEST_CMD,
+    ...TEST_ARGS,
+    "--cli",
+    "--method",
+    "tools/call",
+    "--tool-name",
+    "echo",
+    "--tool-arg",
+    'message="null"',
+  );
+
+
+  // Test 14: Multiple arguments with mixed types (using add tool)
+  await runBasicTest(
+    "json_args_multiple_mixed",
+    TEST_CMD,
+    ...TEST_ARGS,
+    "--cli",
+    "--method",
+    "tools/call",
+    "--tool-name",
+    "add",
+    "--tool-arg",
+    "a=42.5",
+    "b=57.5",
+  );
+
+  console.log(
+    `\n${colors.YELLOW}=== Running JSON Parsing Edge Cases ===${colors.NC}`,
+  );
+
+  // Test 15: Invalid JSON should fall back to string
+  await runBasicTest(
+    "json_args_invalid_fallback",
+    TEST_CMD,
+    ...TEST_ARGS,
+    "--cli",
+    "--method",
+    "tools/call",
+    "--tool-name",
+    "echo",
+    "--tool-arg",
+    "message={invalid json}",
+  );
+
+  // Test 16: Empty string value
+  await runBasicTest(
+    "json_args_empty_value",
+    TEST_CMD,
+    ...TEST_ARGS,
+    "--cli",
+    "--method",
+    "tools/call",
+    "--tool-name",
+    "echo",
+    "--tool-arg",
+    'message=""',
+  );
+
+  // Test 17: Special characters in strings
+  await runBasicTest(
+    "json_args_special_chars",
+    TEST_CMD,
+    ...TEST_ARGS,
+    "--cli",
+    "--method",
+    "tools/call",
+    "--tool-name",
+    "echo",
+    "--tool-arg",
+    'message="C:\\\\Users\\\\test"',
+  );
+
+  // Test 18: Unicode characters
+  await runBasicTest(
+    "json_args_unicode",
+    TEST_CMD,
+    ...TEST_ARGS,
+    "--cli",
+    "--method",
+    "tools/call",
+    "--tool-name",
+    "echo",
+    "--tool-arg",
+    'message="🚀🎉✨"',
+  );
+
+  // Test 19: Arguments with equals signs in values
+  await runBasicTest(
+    "json_args_equals_in_value",
+    TEST_CMD,
+    ...TEST_ARGS,
+    "--cli",
+    "--method",
+    "tools/call",
+    "--tool-name",
+    "echo",
+    "--tool-arg",
+    "message=2+2=4",
+  );
+
+  // Test 20: Base64-like strings
+  await runBasicTest(
+    "json_args_base64_like",
+    TEST_CMD,
+    ...TEST_ARGS,
+    "--cli",
+    "--method",
+    "tools/call",
+    "--tool-name",
+    "echo",
+    "--tool-arg",
+    "message=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJzdWIiOiIxMjM0NTY3ODkwIn0=",
+  );
+
+  console.log(
+    `\n${colors.YELLOW}=== Running Tool Error Handling Tests ===${colors.NC}`,
+  );
+
+  // Test 21: Non-existent tool
+  await runErrorTest(
+    "tool_error_nonexistent",
+    TEST_CMD,
+    ...TEST_ARGS,
+    "--cli",
+    "--method",
+    "tools/call",
+    "--tool-name",
+    "nonexistent_tool",
+    "--tool-arg",
+    "message=test",
+  );
+
+  // Test 22: Missing tool name
+  await runErrorTest(
+    "tool_error_missing_name",
+    TEST_CMD,
+    ...TEST_ARGS,
+    "--cli",
+    "--method",
+    "tools/call",
+    "--tool-arg",
+    "message=test",
+  );
+
+  // Test 23: Invalid tool argument format
+  await runErrorTest(
+    "tool_error_invalid_arg_format",
+    TEST_CMD,
+    ...TEST_ARGS,
+    "--cli",
+    "--method",
+    "tools/call",
+    "--tool-name",
+    "echo",
+    "--tool-arg",
+    "invalid_format_no_equals",
+  );
+
+  console.log(
+    `\n${colors.YELLOW}=== Running Prompt JSON Argument Tests ===${colors.NC}`,
+  );
+
+  // Test 24: Prompt with JSON arguments
+  await runBasicTest(
+    "prompt_json_args_mixed",
+    TEST_CMD,
+    ...TEST_ARGS,
+    "--cli",
+    "--method",
+    "prompts/get",
+    "--prompt-name",
+    "complex_prompt",
+    "--prompt-args",
+    "temperature=0.7",
+    'style="concise"',
+    'options={"format":"json","max_tokens":100}',
+  );
+
+  // Test 25: Prompt with simple arguments
+  await runBasicTest(
+    "prompt_json_args_simple",
+    TEST_CMD,
+    ...TEST_ARGS,
+    "--cli",
+    "--method",
+    "prompts/get",
+    "--prompt-name",
+    "simple_prompt",
+    "--prompt-args",
+    "name=test",
+    "count=5",
+  );
+
+  console.log(
+    `\n${colors.YELLOW}=== Running Backward Compatibility Tests ===${colors.NC}`,
+  );
+
+  // Test 26: Ensure existing string-only usage still works
+  await runBasicTest(
+    "backward_compatibility_strings",
+    TEST_CMD,
+    ...TEST_ARGS,
+    "--cli",
+    "--method",
+    "tools/call",
+    "--tool-name",
+    "echo",
+    "--tool-arg",
+    "message=hello",
+  );
+
+  // Test 27: Multiple string arguments (existing pattern) - using add tool
+  await runBasicTest(
+    "backward_compatibility_multiple_strings",
+    TEST_CMD,
+    ...TEST_ARGS,
+    "--cli",
+    "--method",
+    "tools/call",
+    "--tool-name",
+    "add",
+    "--tool-arg",
+    "a=10",
+    "b=20",
+  );
+
+  // Print test summary
+  console.log(`\n${colors.YELLOW}=== Test Summary ===${colors.NC}`);
+  console.log(`${colors.GREEN}Passed: ${PASSED_TESTS}${colors.NC}`);
+  console.log(`${colors.RED}Failed: ${FAILED_TESTS}${colors.NC}`);
+  console.log(`${colors.ORANGE}Skipped: ${SKIPPED_TESTS}${colors.NC}`);
+  console.log(`Total: ${TOTAL_TESTS}`);
+  console.log(
+    `${colors.BLUE}Detailed logs saved to: ${OUTPUT_DIR}${colors.NC}`,
+  );
+
+  console.log(`\n${colors.GREEN}All tool tests completed!${colors.NC}`);
+}
+
+// Run all tests
+runTests().catch((error) => {
+  console.error(
+    `${colors.RED}Tests failed with error: ${error.message}${colors.NC}`,
+  );
+  process.exit(1);
+});