diff --git a/tests/tools/test_image_generation_env.py b/tests/tools/test_image_generation_env.py
new file mode 100644
index 000000000..fc4e65533
--- /dev/null
+++ b/tests/tools/test_image_generation_env.py
@@ -0,0 +1,39 @@
+"""FAL_KEY env var normalization (whitespace-only treated as unset)."""
+
+
+def test_fal_key_whitespace_is_unset(monkeypatch):
+    # Whitespace-only FAL_KEY must NOT register as configured, and the managed
+    # gateway fallback must be disabled for this assertion to be meaningful.
+    monkeypatch.setenv("FAL_KEY", "   ")
+
+    from tools import image_generation_tool
+
+    monkeypatch.setattr(
+        image_generation_tool, "_resolve_managed_fal_gateway", lambda: None
+    )
+
+    assert image_generation_tool.check_fal_api_key() is False
+
+
+def test_fal_key_valid(monkeypatch):
+    monkeypatch.setenv("FAL_KEY", "sk-test")
+
+    from tools import image_generation_tool
+
+    monkeypatch.setattr(
+        image_generation_tool, "_resolve_managed_fal_gateway", lambda: None
+    )
+
+    assert image_generation_tool.check_fal_api_key() is True
+
+
+def test_fal_key_empty_is_unset(monkeypatch):
+    monkeypatch.setenv("FAL_KEY", "")
+
+    from tools import image_generation_tool
+
+    monkeypatch.setattr(
+        image_generation_tool, "_resolve_managed_fal_gateway", lambda: None
+    )
+
+    assert image_generation_tool.check_fal_api_key() is False
diff --git a/tools/image_generation_tool.py b/tools/image_generation_tool.py
index 13f17abe3..e10b8453c 100644
--- a/tools/image_generation_tool.py
+++ b/tools/image_generation_tool.py
@@ -623,7 +623,9 @@ def image_generate_tool(
         if not prompt or not isinstance(prompt, str) or len(prompt.strip()) == 0:
             raise ValueError("Prompt is required and must be a non-empty string")
 
-        if not (os.getenv("FAL_KEY") or _resolve_managed_fal_gateway()):
+        fal_key_value = os.getenv("FAL_KEY")
+        fal_key_set = bool(fal_key_value and fal_key_value.strip())
+        if not (fal_key_set or _resolve_managed_fal_gateway()):
             message = "FAL_KEY environment variable not set"
             if managed_nous_tools_enabled():
                 message += " and managed FAL gateway is unavailable"
@@ -734,7 +736,9 @@ def image_generate_tool(
 
 def check_fal_api_key() -> bool:
     """True if the FAL.ai API key (direct or managed gateway) is available."""
-    return bool(os.getenv("FAL_KEY") or _resolve_managed_fal_gateway())
+    fal_key_value = os.getenv("FAL_KEY")
+    fal_key_set = bool(fal_key_value and fal_key_value.strip())
+    return bool(fal_key_set or _resolve_managed_fal_gateway())
 
 
 def check_image_generation_requirements() -> bool: