diff --git a/kotlin-sdk-client/src/commonMain/kotlin/io/modelcontextprotocol/kotlin/sdk/client/SseClientTransport.kt b/kotlin-sdk-client/src/commonMain/kotlin/io/modelcontextprotocol/kotlin/sdk/client/SseClientTransport.kt
index a48db60..0295eb9 100644
--- a/kotlin-sdk-client/src/commonMain/kotlin/io/modelcontextprotocol/kotlin/sdk/client/SseClientTransport.kt
+++ b/kotlin-sdk-client/src/commonMain/kotlin/io/modelcontextprotocol/kotlin/sdk/client/SseClientTransport.kt
@@ -136,6 +136,7 @@ public class SseClientTransport(
             throw e
         } finally {
             closeResources()
+            invokeOnCloseCallback()
         }
     }
 
diff --git a/kotlin-sdk-client/src/commonTest/kotlin/io/modelcontextprotocol/kotlin/sdk/client/sse/MockSseClientEngine.kt b/kotlin-sdk-client/src/commonTest/kotlin/io/modelcontextprotocol/kotlin/sdk/client/sse/MockSseClientEngine.kt
index 3627b6c..14af546 100644
--- a/kotlin-sdk-client/src/commonTest/kotlin/io/modelcontextprotocol/kotlin/sdk/client/sse/MockSseClientEngine.kt
+++ b/kotlin-sdk-client/src/commonTest/kotlin/io/modelcontextprotocol/kotlin/sdk/client/sse/MockSseClientEngine.kt
@@ -53,6 +53,14 @@ internal open class MockSseClientEngine(
         job.cancel()
     }
 
+    /**
+     * Closes the SSE byte channel without disposing the engine, simulating a server-side
+     * disconnect of the SSE stream.
+     */
+    fun disconnectSseStream() {
+        channel.close()
+    }
+
     private fun responseContext(): CoroutineContext = dispatcher + Job()
 
     private suspend fun respondWithSseEndpointEvent(data: HttpRequestData): HttpResponseData {
diff --git a/kotlin-sdk-client/src/commonTest/kotlin/io/modelcontextprotocol/kotlin/sdk/client/sse/SseClientTransportTest.kt b/kotlin-sdk-client/src/commonTest/kotlin/io/modelcontextprotocol/kotlin/sdk/client/sse/SseClientTransportTest.kt
index 6cc7f6e..319ba2a 100644
--- a/kotlin-sdk-client/src/commonTest/kotlin/io/modelcontextprotocol/kotlin/sdk/client/sse/SseClientTransportTest.kt
+++ b/kotlin-sdk-client/src/commonTest/kotlin/io/modelcontextprotocol/kotlin/sdk/client/sse/SseClientTransportTest.kt
@@ -1,5 +1,6 @@
 package io.modelcontextprotocol.kotlin.sdk.client.sse
 
+import io.kotest.assertions.nondeterministic.eventually
 import io.kotest.matchers.collections.shouldHaveSize
 import io.kotest.matchers.shouldBe
 import io.ktor.client.HttpClient
@@ -9,6 +10,7 @@ import io.modelcontextprotocol.kotlin.sdk.client.SseClientTransport
 import io.modelcontextprotocol.kotlin.sdk.types.JSONRPCNotification
 import kotlinx.coroutines.test.runTest
 import kotlin.test.Test
+import kotlin.time.Duration.Companion.seconds
 
 class SseClientTransportTest {
 
@@ -90,6 +92,31 @@ class SseClientTransportTest {
         engine.close()
     }
 
+    @Test
+    fun `onClose callback fires when the SSE stream is disconnected by the server`() = runTest {
+        // Given
+        val sseUrl = "http://example.com/api/mcp/sse"
+
+        // And
+        val engine = CapturingSseClientEngine(endpoint = "/messages?sessionId=abc")
+        val transport = sseTransport(sseUrl, engine)
+        var onCloseFired = false
+        transport.onClose { onCloseFired = true }
+
+        // When
+        transport.start()
+        engine.disconnectSseStream()
+
+        // Then
+        eventually(2.seconds) {
+            onCloseFired shouldBe true
+        }
+
+        // Cleanup
+        transport.close()
+        engine.close()
+    }
+
     private fun sseTransport(sseUrl: String, engine: CapturingSseClientEngine) =
         SseClientTransport(HttpClient(engine) { install(SSE) }, sseUrl)