diff --git a/src/sequentialthinking/__tests__/schema.test.ts b/src/sequentialthinking/__tests__/schema.test.ts
new file mode 100644
index 0000000000..a0ac9b9a6e
--- /dev/null
+++ b/src/sequentialthinking/__tests__/schema.test.ts
@@ -0,0 +1,62 @@
+import { describe, it, expect } from 'vitest';
+import { z } from 'zod';
+
+const coercedBoolean = z.union([
+  z.boolean(),
+  z.string().transform((val, ctx) => {
+    const lower = val.toLowerCase();
+    if (lower === "true") return true;
+    if (lower === "false") return false;
+    ctx.addIssue({
+      code: z.ZodIssueCode.custom,
+      message: "Expected boolean string (\"true\" or \"false\")",
+    });
+    return z.NEVER;
+  }),
+]);
+
+const inputSchema = {
+  thought: z.string().describe("Your current thinking step"),
+  nextThoughtNeeded: coercedBoolean.describe("Whether another thought step is needed"),
+  thoughtNumber: z.coerce.number().int().min(1).describe("Current thought number (numeric value, e.g., 1, 2, 3)"),
+  totalThoughts: z.coerce.number().int().min(1).describe("Estimated total thoughts needed (numeric value, e.g., 5, 10)"),
+  isRevision: coercedBoolean.optional().describe("Whether this revises previous thinking"),
+  revisesThought: z.coerce.number().int().min(1).optional().describe("Which thought is being reconsidered"),
+  branchFromThought: z.coerce.number().int().min(1).optional().describe("Branching point thought number"),
+  branchId: z.string().optional().describe("Branch identifier"),
+  needsMoreThoughts: coercedBoolean.optional().describe("If more thoughts are needed")
+};
+
+describe('coercedBoolean & Tool Schema', () => {
+  it('correctly parses native boolean values', () => {
+    expect(coercedBoolean.parse(true)).toBe(true);
+    expect(coercedBoolean.parse(false)).toBe(false);
+  });
+
+  it('correctly coerces boolean strings case-insensitively', () => {
+    expect(coercedBoolean.parse('true')).toBe(true);
+    expect(coercedBoolean.parse('TRUE')).toBe(true);
+    expect(coercedBoolean.parse('True')).toBe(true);
+    expect(coercedBoolean.parse('false')).toBe(false);
+    expect(coercedBoolean.parse('FALSE')).toBe(false);
+    expect(coercedBoolean.parse('False')).toBe(false);
+  });
+
+  it('rejects invalid boolean strings and types', () => {
+    expect(() => coercedBoolean.parse('notaboolean')).toThrow();
+    expect(() => coercedBoolean.parse(123)).toThrow();
+    expect(() => coercedBoolean.parse({})).toThrow();
+  });
+
+  it('preserves nextThoughtNeeded in schema required fields', () => {
+    const objectSchema = z.object(inputSchema);
+    const jsonSchema = z.toJSONSchema(objectSchema, { io: 'input' }) as { required?: string[] };
+    expect(jsonSchema.required).toBeDefined();
+    expect(jsonSchema.required).toContain('thought');
+    expect(jsonSchema.required).toContain('nextThoughtNeeded');
+    expect(jsonSchema.required).toContain('thoughtNumber');
+    expect(jsonSchema.required).toContain('totalThoughts');
+    expect(jsonSchema.required).not.toContain('isRevision');
+    expect(jsonSchema.required).not.toContain('needsMoreThoughts');
+  });
+});
diff --git a/src/sequentialthinking/index.ts b/src/sequentialthinking/index.ts
index 217845bb3d..b673e3dd5f 100644
--- a/src/sequentialthinking/index.ts
+++ b/src/sequentialthinking/index.ts
@@ -5,15 +5,20 @@ import { StdioServerTransport } from "@modelcontextprotocol/sdk/server/stdio.js"
 import { z } from "zod";
 import { SequentialThinkingServer } from './lib.js';
 
-/** Safe boolean coercion that correctly handles string "false" */
-const coercedBoolean = z.preprocess((val) => {
-  if (typeof val === "boolean") return val;
-  if (typeof val === "string") {
-    if (val.toLowerCase() === "true") return true;
-    if (val.toLowerCase() === "false") return false;
-  }
-  return val;
-}, z.boolean());
+/** Safe boolean coercion that correctly handles string "false" and survives JSON Schema generation */
+const coercedBoolean = z.union([
+  z.boolean(),
+  z.string().transform((val, ctx) => {
+    const lower = val.toLowerCase();
+    if (lower === "true") return true;
+    if (lower === "false") return false;
+    ctx.addIssue({
+      code: z.ZodIssueCode.custom,
+      message: "Expected boolean string (\"true\" or \"false\")",
+    });
+    return z.NEVER;
+  }),
+]);
 
 const server = new McpServer({
   name: "sequential-thinking-server",