diff --git a/packages/fold-core/src/AgentRuntime/AgentRuntimeLayer.ts b/packages/fold-core/src/AgentRuntime/AgentRuntimeLayer.ts
index ae89b36..961f4f1 100644
--- a/packages/fold-core/src/AgentRuntime/AgentRuntimeLayer.ts
+++ b/packages/fold-core/src/AgentRuntime/AgentRuntimeLayer.ts
@@ -79,6 +79,20 @@ const assistantResultText = (message: Prompt.AssistantMessage): string | null =>
 	return text.length > 0 ? text : null
 }
 
+/**
+ * The tool as handed to `streamText`, which accepts any params while it reads the model's reply.
+ *
+ * With tool resolution disabled, `streamText` decodes each tool call's params against
+ * `tool.setParameters(Schema.toEncoded(tool.parametersSchema))`, so one bad call fails the whole reply and
+ * ends the run. Fold decodes params when it runs the tool (`toolkit.handle`), which turns a bad call into a
+ * failed tool result the model can fix. Only `setParameters` changes: providers build the tool's JSON
+ * schema from the unchanged `parametersSchema`, so the model sees the same schema.
+ */
+const acceptAnyParamsInReply = (tool: AnyTool): AnyTool =>
+	Object.assign(Object.create(Object.getPrototypeOf(tool)), tool, {
+		setParameters: () => tool.setParameters(Schema.Unknown),
+	})
+
 /** Live AgentRuntime layer wiring the EventLog, hooks, model, and tool settlement into the loop. */
 export const liveAgentRuntimeLayer: Layer.Layer<
 	AgentRuntime,
@@ -356,9 +370,9 @@ export const liveAgentRuntimeLayer: Layer.Layer<
 				// toolkit is filtered to the projected active names, so a tools-change entry binds the very
 				// next request. Handlers stay untouched - settlement still executes against the full Toolset.
 				const withHandler = yield* toolset.withHandler
-				const activeToolEntries = Object.entries(withHandler.tools).filter(([name]) =>
-					runtimeState.activeTools.includes(name),
-				)
+				const activeToolEntries = Object.entries(withHandler.tools)
+					.filter(([name]) => runtimeState.activeTools.includes(name))
+					.map(([name, tool]) => [name, acceptAnyParamsInReply(tool)] as const)
 				const toolkit: Toolkit.WithHandler<Record<string, AnyTool>> = {
 					tools: Object.fromEntries(activeToolEntries),
 					handle: withHandler.handle,
diff --git a/packages/fold-core/test/AgentRuntime/AgentRuntimeToolParams.vi.test.ts b/packages/fold-core/test/AgentRuntime/AgentRuntimeToolParams.vi.test.ts
new file mode 100644
index 0000000..0377617
--- /dev/null
+++ b/packages/fold-core/test/AgentRuntime/AgentRuntimeToolParams.vi.test.ts
@@ -0,0 +1,50 @@
+import { expect, it } from '@effect/vitest'
+import { Predicate, Effect, Ref } from 'effect'
+import { Tool } from 'effect/ai'
+
+import { AgentRuntime, type ToolResultLogEntry } from '../../src/index'
+import { makeScriptedLanguageModel, textTurn, toolCallTurn } from '../TestLayers/ScriptedLanguageModel'
+import { layerEchoTool, makeEchoRecorder } from '../TestLayers/TestTools'
+import { collectEntries } from '../ToolRuntime/ToolRuntimeTestHelpers'
+import { agentRuntimeBaseLayer, runInput, startInput } from './AgentRuntimeTestHelpers'
+
+it.effect('returns a tool call with bad params to the model as a failed tool result', () =>
+	Effect.gen(function* () {
+		const recorder = yield* makeEchoRecorder
+		const scripted = yield* makeScriptedLanguageModel([
+			toolCallTurn([{ id: 'provider-call-1', name: 'echo', params: { txet: 'hi' } }]),
+			textTurn('Fixed my call'),
+		])
+		const layer = agentRuntimeBaseLayer(scripted.layer, layerEchoTool(recorder))
+
+		const result = yield* Effect.gen(function* () {
+			const runtime = yield* AgentRuntime
+
+			yield* runtime.start(startInput())
+			const finished = yield* runtime.run(runInput('use the echo tool'))
+			const entries = yield* collectEntries
+			const calls = yield* Ref.get(recorder.calls)
+
+			return { finished, entries, calls }
+		}).pipe(Effect.provide(layer))
+
+		expect(result.calls).toEqual([])
+		expect(result.finished.outcome).toBe('completed')
+		expect(result.finished.resultText).toBe('Fixed my call')
+
+		const toolResult = result.entries.find((entry): entry is ToolResultLogEntry =>
+			Predicate.isTagged(entry, 'tool-result'),
+		)
+		const part = toolResult?.message.content.find((content) => content.type === 'tool-result')
+		expect(part).toMatchObject({
+			isFailure: true,
+			result: { reason: { _tag: 'ToolParameterValidationError', description: 'Missing key\n  at ["text"]' } },
+		})
+
+		// The model is still offered the tool's real params schema.
+		const requests = yield* scripted.requests
+		const echo = requests[0]?.tools.find((tool) => tool.name === 'echo')
+		if (echo === undefined) throw new Error('expected the echo tool on the first request')
+		expect(Tool.getJsonSchema(echo)).toMatchObject({ properties: { text: { type: 'string' } }, required: ['text'] })
+	}),
+)
diff --git a/packages/fold-core/test/TestLayers/ScriptedLanguageModel.ts b/packages/fold-core/test/TestLayers/ScriptedLanguageModel.ts
index c64fdfa..489433b 100644
--- a/packages/fold-core/test/TestLayers/ScriptedLanguageModel.ts
+++ b/packages/fold-core/test/TestLayers/ScriptedLanguageModel.ts
@@ -12,7 +12,7 @@
 import { AnthropicLanguageModel } from '@humanlayer/effect-ai-anthropic'
 import { OpenAiLanguageModel } from '@humanlayer/effect-ai-openai'
 import { Predicate, Effect, Layer, Ref, Stream } from 'effect'
-import { AiError, LanguageModel, type Prompt, type Response } from 'effect/ai'
+import { AiError, LanguageModel, type Prompt, type Response, type Tool } from 'effect/ai'
 
 /** Optional shaping for a scripted turn's finish part. */
 export type ScriptedFinishOptions = {
@@ -89,6 +89,8 @@ export type ScriptedRequest = {
 	readonly prompt: Prompt.Prompt
 	/** Tool names advertised to the model on this request. */
 	readonly toolNames: ReadonlyArray<string>
+	/** The tools as the provider received them, to build the schemas it advertises. */
+	readonly tools: ReadonlyArray<Tool.Any>
 	/** The OpenAI per-request Config in context at request time, or null when none was provided. */
 	readonly openAiConfig: typeof OpenAiLanguageModel.Config.Service | null
 	/** The Anthropic per-request Config in context at request time, or null when none was provided. */
@@ -136,6 +138,7 @@ export const makeScriptedLanguageModel = (turns: ReadonlyArray<ScriptedTurn>): E
 					{
 						prompt: options.prompt,
 						toolNames: options.tools.map((tool) => tool.name),
+						tools: options.tools,
 						openAiConfig: Predicate.isTagged(openAiConfig, 'Some') ? openAiConfig.value : null,
 						anthropicConfig: Predicate.isTagged(anthropicConfig, 'Some') ? anthropicConfig.value : null,
 					},