diff --git a/src/google/adk/cli/fast_api.py b/src/google/adk/cli/fast_api.py
index 0b6d608..87ab4e8 100644
--- a/src/google/adk/cli/fast_api.py
+++ b/src/google/adk/cli/fast_api.py
@@ -21,6 +21,7 @@ import json
 import logging
 import os
 from pathlib import Path
+import signal
 import sys
 import time
 import traceback
@@ -221,7 +222,7 @@ def get_fast_api_app(
       )
       provider.add_span_processor(processor)
     else:
-      logging.warning(
+      logger.warning(
           "GOOGLE_CLOUD_PROJECT environment variable is not set. Tracing will"
           " not be enabled."
       )
@@ -232,14 +233,71 @@ def get_fast_api_app(
 
   @asynccontextmanager
   async def internal_lifespan(app: FastAPI):
-    if lifespan:
-      async with lifespan(app) as lifespan_context:
-        yield
+    # Set up signal handlers for graceful shutdown
+    original_sigterm = signal.getsignal(signal.SIGTERM)
+    original_sigint = signal.getsignal(signal.SIGINT)
 
-        for toolset in toolsets_to_close:
-          await toolset.close()
-    else:
-      yield
+    def cleanup_handler(sig, frame):
+      # Log the signal
+      logger.info("Received signal %s, performing pre-shutdown cleanup", sig)
+      # Do synchronous cleanup if needed
+      # Then call original handler if it exists
+      if sig == signal.SIGTERM and callable(original_sigterm):
+        original_sigterm(sig, frame)
+      elif sig == signal.SIGINT and callable(original_sigint):
+        original_sigint(sig, frame)
+
+    # Install cleanup handlers
+    signal.signal(signal.SIGTERM, cleanup_handler)
+    signal.signal(signal.SIGINT, cleanup_handler)
+
+    try:
+      if lifespan:
+        async with lifespan(app) as lifespan_context:
+          yield lifespan_context
+      else:
+        yield
+    finally:
+      # During shutdown, properly clean up all toolsets
+      logger.info(
+          "Server shutdown initiated, cleaning up %s toolsets",
+          len(toolsets_to_close),
+      )
+
+      # Create tasks for all toolset closures to run concurrently
+      cleanup_tasks = []
+      for toolset in toolsets_to_close:
+        task = asyncio.create_task(close_toolset_safely(toolset))
+        cleanup_tasks.append(task)
+
+      if cleanup_tasks:
+        # Wait for all cleanup tasks with timeout
+        done, pending = await asyncio.wait(
+            cleanup_tasks,
+            timeout=10.0,  # 10 second timeout for cleanup
+            return_when=asyncio.ALL_COMPLETED,
+        )
+
+        # If any tasks are still pending, log it
+        if pending:
+          logger.warn(
+              f"{len(pending)} toolset cleanup tasks didn't complete in time"
+          )
+          for task in pending:
+            task.cancel()
+
+      # Restore original signal handlers
+      signal.signal(signal.SIGTERM, original_sigterm)
+      signal.signal(signal.SIGINT, original_sigint)
+
+  async def close_toolset_safely(toolset):
+    """Safely close a toolset with error handling."""
+    try:
+      logger.info(f"Closing toolset: {type(toolset).__name__}")
+      await toolset.close()
+      logger.info(f"Successfully closed toolset: {type(toolset).__name__}")
+    except Exception as e:
+      logger.error(f"Error closing toolset {type(toolset).__name__}: {e}")
 
   # Run the FastAPI server.
   app = FastAPI(lifespan=internal_lifespan)
diff --git a/src/google/adk/tools/mcp_tool/mcp_session_manager.py b/src/google/adk/tools/mcp_tool/mcp_session_manager.py
index abc49da..2c6729c 100644
--- a/src/google/adk/tools/mcp_tool/mcp_session_manager.py
+++ b/src/google/adk/tools/mcp_tool/mcp_session_manager.py
@@ -12,10 +12,12 @@
 # See the License for the specific language governing permissions and
 # limitations under the License.
 
-from contextlib import AsyncExitStack
+import asyncio
+from contextlib import AsyncExitStack, asynccontextmanager
 import functools
+import logging
 import sys
-from typing import Any, TextIO
+from typing import Any, Optional, TextIO
 import anyio
 from pydantic import BaseModel
 
@@ -34,6 +36,8 @@ except ImportError as e:
   else:
     raise e
 
+logger = logging.getLogger(__name__)
+
 
 class SseServerParams(BaseModel):
   """Parameters for the MCP SSE connection.
@@ -108,6 +112,45 @@ def retry_on_closed_resource(async_reinit_func_name: str):
   return decorator
 
 
+@asynccontextmanager
+async def tracked_stdio_client(server, errlog, process=None):
+  """A wrapper around stdio_client that ensures proper process tracking and cleanup."""
+  our_process = process
+
+  # If no process was provided, create one
+  if our_process is None:
+    our_process = await asyncio.create_subprocess_exec(
+        server.command,
+        *server.args,
+        stdin=asyncio.subprocess.PIPE,
+        stdout=asyncio.subprocess.PIPE,
+        stderr=errlog,
+    )
+
+  # Use the original stdio_client, but ensure process cleanup
+  try:
+    async with stdio_client(server=server, errlog=errlog) as client:
+      yield client, our_process
+  finally:
+    # Ensure the process is properly terminated if it still exists
+    if our_process and our_process.returncode is None:
+      try:
+        logger.info(
+            f'Terminating process {our_process.pid} from tracked_stdio_client'
+        )
+        our_process.terminate()
+        try:
+          await asyncio.wait_for(our_process.wait(), timeout=3.0)
+        except asyncio.TimeoutError:
+          # Force kill if it doesn't terminate quickly
+          if our_process.returncode is None:
+            logger.warning(f'Forcing kill of process {our_process.pid}')
+            our_process.kill()
+      except ProcessLookupError:
+        # Process already gone, that's fine
+        logger.info(f'Process {our_process.pid} already terminated')
+
+
 class MCPSessionManager:
   """Manages MCP client sessions.
 
@@ -138,25 +181,39 @@ class MCPSessionManager:
         errlog: (Optional) TextIO stream for error logging. Use only for
           initializing a local stdio MCP session.
     """
+
     self._connection_params = connection_params
     self._exit_stack = exit_stack
     self._errlog = errlog
+    self._process = None  # Track the subprocess
+    self._active_processes = set()  # Track all processes created
+    self._active_file_handles = set()  # Track file handles
 
-  async def create_session(self) -> ClientSession:
-    return await MCPSessionManager.initialize_session(
+  async def create_session(
+      self,
+  ) -> tuple[ClientSession, Optional[asyncio.subprocess.Process]]:
+    """Creates a new MCP session and tracks the associated process."""
+    session, process = await self._initialize_session(
         connection_params=self._connection_params,
         exit_stack=self._exit_stack,
         errlog=self._errlog,
     )
+    self._process = process  # Store reference to process
+
+    # Track the process
+    if process:
+      self._active_processes.add(process)
+
+    return session, process
 
   @classmethod
-  async def initialize_session(
+  async def _initialize_session(
       cls,
       *,
       connection_params: StdioServerParameters | SseServerParams,
       exit_stack: AsyncExitStack,
       errlog: TextIO = sys.stderr,
-  ) -> ClientSession:
+  ) -> tuple[ClientSession, Optional[asyncio.subprocess.Process]]:
     """Initializes an MCP client session.
 
     Args:
@@ -168,9 +225,17 @@ class MCPSessionManager:
     Returns:
         ClientSession: The initialized MCP client session.
     """
+    process = None
+
     if isinstance(connection_params, StdioServerParameters):
-      client = stdio_client(server=connection_params, errlog=errlog)
+      # For stdio connections, we need to track the subprocess
+      client, process = await cls._create_stdio_client(
+          server=connection_params,
+          errlog=errlog,
+          exit_stack=exit_stack,
+      )
     elif isinstance(connection_params, SseServerParams):
+      # For SSE connections, create the client without a subprocess
       client = sse_client(
           url=connection_params.url,
           headers=connection_params.headers,
@@ -184,7 +249,74 @@ class MCPSessionManager:
           f' {connection_params}'
       )
 
+    # Create the session with the client
     transports = await exit_stack.enter_async_context(client)
     session = await exit_stack.enter_async_context(ClientSession(*transports))
     await session.initialize()
-    return session
+
+    return session, process
+
+  @staticmethod
+  async def _create_stdio_client(
+      server: StdioServerParameters,
+      errlog: TextIO,
+      exit_stack: AsyncExitStack,
+  ) -> tuple[Any, asyncio.subprocess.Process]:
+    """Create stdio client and return both the client and process.
+
+    This implementation adapts to how the MCP stdio_client is created.
+    The actual implementation may need to be adjusted based on the MCP library
+    structure.
+    """
+    # Create the subprocess directly so we can track it
+    process = await asyncio.create_subprocess_exec(
+        server.command,
+        *server.args,
+        stdin=asyncio.subprocess.PIPE,
+        stdout=asyncio.subprocess.PIPE,
+        stderr=errlog,
+    )
+
+    # Create the stdio client using the MCP library
+    try:
+      # Method 1: Try using the existing process if stdio_client supports it
+      client = stdio_client(server=server, errlog=errlog, process=process)
+    except TypeError:
+      # Method 2: If the above doesn't work, let stdio_client create its own process
+      # and we'll need to terminate both processes later
+      logger.warning(
+          'Using stdio_client with its own process - may lead to duplicate'
+          ' processes'
+      )
+      client = stdio_client(server=server, errlog=errlog)
+
+    return client, process
+
+  async def _emergency_cleanup(self):
+    """Perform emergency cleanup of resources when normal cleanup fails."""
+    logger.info('Performing emergency cleanup of MCPSessionManager resources')
+
+    # Clean up any tracked processes
+    for proc in list(self._active_processes):
+      try:
+        if proc and proc.returncode is None:
+          logger.info(f'Emergency termination of process {proc.pid}')
+          proc.terminate()
+          try:
+            await asyncio.wait_for(proc.wait(), timeout=1.0)
+          except asyncio.TimeoutError:
+            logger.warning(f"Process {proc.pid} didn't terminate, forcing kill")
+            proc.kill()
+        self._active_processes.remove(proc)
+      except Exception as e:
+        logger.error(f'Error during process cleanup: {e}')
+
+    # Clean up any tracked file handles
+    for handle in list(self._active_file_handles):
+      try:
+        if not handle.closed:
+          logger.info('Closing file handle')
+          handle.close()
+        self._active_file_handles.remove(handle)
+      except Exception as e:
+        logger.error(f'Error closing file handle: {e}')
diff --git a/src/google/adk/tools/mcp_tool/mcp_toolset.py b/src/google/adk/tools/mcp_tool/mcp_toolset.py
index e4793cc..e93fbdf 100644
--- a/src/google/adk/tools/mcp_tool/mcp_toolset.py
+++ b/src/google/adk/tools/mcp_tool/mcp_toolset.py
@@ -12,7 +12,11 @@
 # See the License for the specific language governing permissions and
 # limitations under the License.
 
+import asyncio
 from contextlib import AsyncExitStack
+import logging
+import os
+import signal
 import sys
 from typing import List, Union
 from typing import Optional
@@ -39,14 +43,16 @@ except ImportError as e:
 
   if sys.version_info < (3, 10):
     raise ImportError(
-        'MCP Tool requires Python 3.10 or above. Please upgrade your Python'
-        ' version.'
+        "MCP Tool requires Python 3.10 or above. Please upgrade your Python"
+        " version."
     ) from e
   else:
     raise e
 
 from .mcp_tool import MCPTool
 
+logger = logging.getLogger(__name__)
+
 
 class MCPToolset(BaseToolset):
   """Connects to a MCP Server, and retrieves MCP Tools into ADK Tools.
@@ -82,10 +88,12 @@ class MCPToolset(BaseToolset):
     """
 
     if not connection_params:
-      raise ValueError('Missing connection params in MCPToolset.')
+      raise ValueError("Missing connection params in MCPToolset.")
     self._connection_params = connection_params
     self._errlog = errlog
     self._exit_stack = AsyncExitStack()
+    self._creator_task_id = None
+    self._process_pid = None  # Store the subprocess PID
 
     self._session_manager = MCPSessionManager(
         connection_params=self._connection_params,
@@ -94,10 +102,17 @@ class MCPToolset(BaseToolset):
     )
     self._session = None
     self.tool_filter = tool_filter
+    self._initialized = False
 
   async def _initialize(self) -> ClientSession:
     """Connects to the MCP Server and initializes the ClientSession."""
-    self._session = await self._session_manager.create_session()
+    # Store the current task ID when initializing
+    self._creator_task_id = id(asyncio.current_task())
+    self._session, process = await self._session_manager.create_session()
+    # Store the process PID if available
+    if process and hasattr(process, "pid"):
+      self._process_pid = process.pid
+    self._initialized = True
     return self._session
 
   def _is_selected(
@@ -114,10 +129,76 @@ class MCPToolset(BaseToolset):
 
   @override
   async def close(self):
-    """Closes the connection to MCP Server."""
-    await self._exit_stack.aclose()
+    """Safely closes the connection to MCP Server with guaranteed resource cleanup."""
+    if not self._initialized:
+      return  # Nothing to close
 
-  @retry_on_closed_resource('_initialize')
+    logger.info("Closing MCP Toolset")
+
+    # Step 1: Try graceful shutdown of the session if it exists
+    if self._session:
+      try:
+        logger.info("Attempting graceful session shutdown")
+        await self._session.shutdown()
+      except Exception as e:
+        logger.warning(f"Session shutdown error (continuing cleanup): {e}")
+
+    # Step 2: Try to close the exit stack
+    try:
+      logger.info("Closing AsyncExitStack")
+      await self._exit_stack.aclose()
+      # If we get here, the exit stack closed successfully
+      logger.info("AsyncExitStack closed successfully")
+      return
+    except RuntimeError as e:
+      if "Attempted to exit cancel scope in a different task" in str(e):
+        logger.warning("Task mismatch during shutdown - using fallback cleanup")
+        # Continue to manual cleanup
+      else:
+        logger.error(f"Unexpected RuntimeError: {e}")
+        # Continue to manual cleanup
+    except Exception as e:
+      logger.error(f"Error during exit stack closure: {e}")
+      # Continue to manual cleanup
+
+    # Step 3: Manual cleanup of the subprocess if we have its PID
+    if self._process_pid:
+      await self._ensure_process_terminated(self._process_pid)
+
+    # Step 4: Ask the session manager to do any additional cleanup it can
+    await self._session_manager._emergency_cleanup()
+
+  async def _ensure_process_terminated(self, pid):
+    """Ensure a process is terminated using its PID."""
+    try:
+      # Check if process exists
+      os.kill(pid, 0)  # This just checks if the process exists
+
+      logger.info(f"Terminating process with PID {pid}")
+      # First try SIGTERM for graceful shutdown
+      os.kill(pid, signal.SIGTERM)
+
+      # Give it a moment to terminate
+      for _ in range(30):  # wait up to 3 seconds
+        await asyncio.sleep(0.1)
+        try:
+          os.kill(pid, 0)  # Process still exists
+        except ProcessLookupError:
+          logger.info(f"Process {pid} terminated successfully")
+          return
+
+      # If we get here, process didn't terminate gracefully
+      logger.warning(
+          f"Process {pid} didn't terminate gracefully, using SIGKILL"
+      )
+      os.kill(pid, signal.SIGKILL)
+
+    except ProcessLookupError:
+      logger.info(f"Process {pid} already terminated")
+    except Exception as e:
+      logger.error(f"Error terminating process {pid}: {e}")
+
+  @retry_on_closed_resource("_initialize")
   @override
   async def get_tools(
       self,