diff --git a/tools/mcp_tool.py b/tools/mcp_tool.py
index c393a09f9a..aecc0cc230 100644
--- a/tools/mcp_tool.py
+++ b/tools/mcp_tool.py
@@ -1429,6 +1429,16 @@ def _handle_auth_error_and_retry(
                         break
                     time.sleep(0.25)
 
+        # A successful OAuth recovery is independent evidence that the
+        # server is viable again, so close the circuit breaker here —
+        # not only on retry success. Without this, a reconnect
+        # followed by a failing retry would leave the breaker pinned
+        # above threshold forever (the retry-exception branch below
+        # bumps the count again).  The post-reset retry still goes
+        # through _bump_server_error on failure, so a genuinely broken
+        # server will re-trip the breaker as normal.
+        _reset_server_error(server_name)
+
         try:
             result = retry_call()
             try: