diff --git a/.changeset/mcp-preserve-inputschema-defs.md b/.changeset/mcp-preserve-inputschema-defs.md
new file mode 100644
index 000000000..2493e4083
--- /dev/null
+++ b/.changeset/mcp-preserve-inputschema-defs.md
@@ -0,0 +1,5 @@
+---
+'@truefoundry/trueforge-core': patch
+---
+
+Keep local `$defs`/`definitions` containers when converting preloaded MCP tool input schemas, so `$ref` pointers resolve instead of being dropped.
diff --git a/packages/trueforge-core/src/core/mcp/convertMCPServers.ts b/packages/trueforge-core/src/core/mcp/convertMCPServers.ts
index 9da2e6b3f..d31e3a421 100644
--- a/packages/trueforge-core/src/core/mcp/convertMCPServers.ts
+++ b/packages/trueforge-core/src/core/mcp/convertMCPServers.ts
@@ -76,6 +76,9 @@ export async function convertMCPServersToTools(params: {
       const { name: toolName } = getUniqueSanitizedToolName(mcpTool.name, registeredNames);
       registeredNames.add(toolName);
       const description = `mcp server: ${serverName}\n${mcpTool.description ?? ''}`;
+      // Keep local definition containers so `$ref`s inside `properties` (e.g. FastMCP-style
+      // `#/$defs/<Model>` pointers to nested pydantic models) resolve on the wire.
+      const { $defs, definitions } = mcpTool.inputSchema;
       tools.push({
         type: 'function',
         function: {
@@ -85,6 +88,8 @@ export async function convertMCPServersToTools(params: {
             type: 'object',
             properties: mcpTool.inputSchema.properties ?? {},
             required: mcpTool.inputSchema.required ?? [],
+            ...($defs !== undefined ? { $defs } : {}),
+            ...(definitions !== undefined ? { definitions } : {}),
           },
         },
       });
diff --git a/packages/trueforge-core/tests/core/mcp/convertMCPServersSchema.test.ts b/packages/trueforge-core/tests/core/mcp/convertMCPServersSchema.test.ts
new file mode 100644
index 000000000..d7ff29026
--- /dev/null
+++ b/packages/trueforge-core/tests/core/mcp/convertMCPServersSchema.test.ts
@@ -0,0 +1,83 @@
+import type { ChatCompletionTool } from 'openai/resources/chat/completions';
+import type { AgentToolSchema, IToolSet, ListToolsResponse } from '../../../src/core/mcp/IMCPServer';
+import { convertMCPServersToTools } from '../../../src/core/mcp/convertMCPServers';
+import '../harnessMocks';
+import { makeMockIMCPServer } from '../harnessMocks';
+
+/** FastMCP hoists nested models to top-level `$defs` with `#/$defs/<Model>` refs. */
+const FASTMCP_STYLE_INPUT_SCHEMA = {
+  type: 'object' as const,
+  properties: {
+    name: { type: 'string' },
+    address: { $ref: '#/$defs/Address' },
+  },
+  required: ['name', 'address'],
+  $defs: {
+    Address: {
+      type: 'object',
+      properties: { street: { type: 'string' }, city: { type: 'string' } },
+      required: ['street', 'city'],
+    },
+  },
+};
+
+/** Draft-04 spelling still emitted by older generators. */
+const DRAFT04_DEFINITIONS_INPUT_SCHEMA = {
+  type: 'object' as const,
+  properties: {
+    address: { $ref: '#/definitions/Address' },
+  },
+  required: ['address'],
+  definitions: {
+    Address: {
+      type: 'object',
+      properties: { city: { type: 'string' } },
+      required: ['city'],
+    },
+  },
+};
+
+function makeServer(name: string, tools: AgentToolSchema[]): IToolSet {
+  const base = makeMockIMCPServer({ name, preload: true, tools });
+  return {
+    ...base,
+    listTools: jest.fn((): Promise<ListToolsResponse> =>
+      Promise.resolve({
+        result: { tools },
+        wasInitialized: undefined,
+      }),
+    ),
+  };
+}
+
+function functionParameters(tool: ChatCompletionTool | undefined): Record<string, unknown> | undefined {
+  if (tool === undefined || tool.type !== 'function') {
+    throw new Error('Expected a function tool');
+  }
+  return tool.function.parameters;
+}
+
+async function convertParameters(inputSchema: AgentToolSchema['inputSchema']) {
+  const tools: AgentToolSchema[] = [{ name: 'probe', description: 'probe', inputSchema, preload: true }];
+  const { convertedTools } = await convertMCPServersToTools({
+    tfyManagedServers: [],
+    userServers: [makeServer('server', tools)],
+  });
+  expect(convertedTools.tools).toHaveLength(1);
+  return functionParameters(convertedTools.tools[0]);
+}
+
+describe('convertMCPServersToTools JSON Schema containers', () => {
+  it.each([
+    ['$defs', FASTMCP_STYLE_INPUT_SCHEMA, FASTMCP_STYLE_INPUT_SCHEMA.$defs],
+    ['definitions', DRAFT04_DEFINITIONS_INPUT_SCHEMA, DRAFT04_DEFINITIONS_INPUT_SCHEMA.definitions],
+  ] as const)('preserves top-level %s so local $refs stay resolvable', async (container, inputSchema, expected) => {
+    const parameters = await convertParameters(inputSchema);
+    expect(parameters?.[container]).toEqual(expected);
+  });
+
+  it('does not introduce $defs or definitions for schemas without them', async () => {
+    const parameters = await convertParameters({ type: 'object', properties: {} });
+    expect(parameters).toEqual({ type: 'object', properties: {}, required: [] });
+  });
+});