diff --git a/src/mcp/server/mcpserver/utilities/func_metadata.py b/src/mcp/server/mcpserver/utilities/func_metadata.py
index a4b7f4873e..9c3cb0bcdb 100644
--- a/src/mcp/server/mcpserver/utilities/func_metadata.py
+++ b/src/mcp/server/mcpserver/utilities/func_metadata.py
@@ -73,6 +73,30 @@ def emit_warning(self, kind: JsonSchemaWarningKind, detail: str) -> None:
         raise ValueError(f"JSON schema warning: {kind} - {detail}")
 
 
+_DEFS_REF_PREFIX = "#/$defs/"
+
+
+def _with_object_root(schema: dict[str, Any]) -> dict[str, Any]:
+    """Give a generated schema whose root is a bare `$ref` an object root.
+
+    Pydantic emits `{"$defs": ..., "$ref": "#/$defs/Model"}` for self-referential
+    return types, but the published tool schema requires `type: "object"` at the
+    root. Wrapping the reference (instead of inlining it) terminates on recursive
+    models; refs to non-object defs are left alone.
+    """
+    ref = schema.get("$ref")
+    if not isinstance(ref, str) or "type" in schema or not ref.startswith(_DEFS_REF_PREFIX):
+        return schema
+    defs: dict[str, Any] = schema["$defs"] if "$defs" in schema else {}
+    try:
+        is_object_root = defs[ref[len(_DEFS_REF_PREFIX) :]]["type"] == "object"
+    except (KeyError, TypeError):
+        return schema
+    if not is_object_root:
+        return schema
+    return {"type": "object", "allOf": [{"$ref": ref}], **{k: v for k, v in schema.items() if k != "$ref"}}
+
+
 class ArgModelBase(BaseModel):
     """A model representing the arguments to a function."""
 
@@ -107,7 +131,9 @@ class FuncMetadata(BaseModel):
     def model_post_init(self, context: Any, /) -> None:
         if self.output_model is not None and self.output_schema is None:
             # StrictJsonSchema raises instead of warning, so an unserializable return type fails construction.
-            self.output_schema = self._output_adapter(self.output_model).json_schema(schema_generator=StrictJsonSchema)
+            self.output_schema = _with_object_root(
+                self._output_adapter(self.output_model).json_schema(schema_generator=StrictJsonSchema)
+            )
 
     def _output_adapter(self, output_model: type[Any]) -> TypeAdapter[Any]:
         """The validator/serializer for `output_model`, built once and rebuilt only if the field is reassigned."""
diff --git a/tests/server/mcpserver/test_func_metadata.py b/tests/server/mcpserver/test_func_metadata.py
index eff3479279..e4cf47d686 100644
--- a/tests/server/mcpserver/test_func_metadata.py
+++ b/tests/server/mcpserver/test_func_metadata.py
@@ -628,6 +628,41 @@ def func_returning_person() -> PersonModel:  # pragma: no cover
     }
 
 
+def test_structured_output_recursive_model():
+    """A self-referential return type publishes its schema with `type: "object"` at
+    the root — pydantic emits a bare `$ref` root, which the published tool schema
+    contract rejects. The reference is wrapped (not inlined), which terminates on
+    recursive models."""
+
+    class Node(BaseModel):
+        name: str
+        children: list["Node"] = []
+
+    def func_returning_tree() -> Node:  # pragma: no cover
+        raise NotImplementedError
+
+    meta = func_metadata(func_returning_tree)
+    node_def: dict[str, Any] = {
+        "properties": {
+            "name": {"title": "Name", "type": "string"},
+            "children": {
+                "default": [],
+                "items": {"$ref": "#/$defs/Node"},
+                "title": "Children",
+                "type": "array",
+            },
+        },
+        "required": ["name"],
+        "title": "Node",
+        "type": "object",
+    }
+    assert meta.output_schema == {
+        "type": "object",
+        "allOf": [{"$ref": "#/$defs/Node"}],
+        "$defs": {"Node": node_def},
+    }
+
+
 def test_structured_output_primitives():
     """Test structured output with primitive return types"""
 
diff --git a/tests/server/mcpserver/test_server.py b/tests/server/mcpserver/test_server.py
index f9055a4ed4..053aefb844 100644
--- a/tests/server/mcpserver/test_server.py
+++ b/tests/server/mcpserver/test_server.py
@@ -2423,3 +2423,30 @@ async def refuse_listen(ctx: ServerRequestContext[Any, Any], call_next: Any) ->
                 pass  # pragma: no cover - the refusal precedes the stream
     assert exc_info.value.error.code == INVALID_REQUEST
     assert exc_info.value.error.message == "not permitted to watch the requested resources"
+
+
+@pytest.mark.anyio
+async def test_recursive_tool_output_schema_serves_on_legacy_sessions() -> None:
+    """A self-referential tool return type publishes `type: "object"` at the schema
+    root, so `tools/list` succeeds on 2025-11-25 sessions whose OutputSchema model
+    rejects a bare `$ref` root instead of failing the entire listing (#3337)."""
+
+    class Node(BaseModel):
+        name: str
+        children: list["Node"] = []
+
+    mcp = MCPServer("rec")
+
+    @mcp.tool()
+    def tree() -> Node:
+        return Node(name="root")
+
+    async with Client(mcp) as client:
+        tools = (await client.list_tools()).tools
+        assert tools[0].output_schema is not None
+        assert tools[0].output_schema["type"] == "object"
+
+    async with Client(mcp, mode="legacy") as client:
+        tools = (await client.list_tools()).tools
+        assert tools[0].output_schema is not None
+        assert tools[0].output_schema["type"] == "object"