diff --git a/src/mcp/server/mcpserver/utilities/func_metadata.py b/src/mcp/server/mcpserver/utilities/func_metadata.py
index 2037b860a1..70c43f61a7 100644
--- a/src/mcp/server/mcpserver/utilities/func_metadata.py
+++ b/src/mcp/server/mcpserver/utilities/func_metadata.py
@@ -474,7 +474,7 @@ def _try_create_model_and_schema(
         # If we successfully created a model, try to get its schema
         # Use StrictJsonSchema to raise exceptions instead of warnings
         try:
-            schema = model.model_json_schema(schema_generator=StrictJsonSchema)
+            schema = _ensure_object_root_schema(model.model_json_schema(schema_generator=StrictJsonSchema))
         except (
             PydanticUserError,
             TypeError,
@@ -496,6 +496,45 @@ def _try_create_model_and_schema(
     return None, None, False
 
 
+def _ensure_object_root_schema(schema: dict[str, Any]) -> dict[str, Any]:
+    """Give recursive Pydantic schemas a root ``type: object``.
+
+    Self-referential models serialize as ``{"$defs": {...}, "$ref": "#/$defs/Name"}``
+    with no root type. That is valid JSON Schema and fine on 2026-07-28 sessions,
+    but 2025-11-25 ``Tool.outputSchema`` requires ``type: "object"`` at the root, so
+    a legacy ``tools/list`` fails validation for the entire listing (issue #3337).
+
+    Inline the root ``$ref`` when it points at an object definition, keeping ``$defs``
+    so nested self-references still resolve. Fall back to an ``allOf`` wrapper if the
+    target is not an object schema.
+    """
+    if schema.get("type") == "object":
+        return schema
+
+    ref = schema.get("$ref")
+    defs = schema.get("$defs")
+    if not isinstance(ref, str) or not ref.startswith("#/$defs/") or not isinstance(defs, dict):
+        return schema
+
+    name = ref.rsplit("/", 1)[-1]
+    target = defs.get(name)
+    if isinstance(target, dict) and target.get("type") == "object":
+        inlined = {
+            **target,
+            **{key: value for key, value in schema.items() if key not in ("$ref", "$defs") and key not in target},
+            "$defs": defs,
+        }
+        return inlined
+
+    wrapped: dict[str, Any] = {
+        "type": "object",
+        "allOf": [{"$ref": ref}],
+        "$defs": defs,
+        **{key: value for key, value in schema.items() if key not in ("$ref", "$defs", "type", "allOf")},
+    }
+    return wrapped
+
+
 _no_default = object()
 
 
diff --git a/tests/server/mcpserver/test_func_metadata.py b/tests/server/mcpserver/test_func_metadata.py
index 2dfe5d389d..7d407739b9 100644
--- a/tests/server/mcpserver/test_func_metadata.py
+++ b/tests/server/mcpserver/test_func_metadata.py
@@ -624,6 +624,27 @@ def func_returning_person() -> PersonModel:  # pragma: no cover
     }
 
 
+def test_structured_output_recursive_basemodel():
+    """Recursive BaseModel output schemas must have type: object at the root (#3337)."""
+
+    class Node(BaseModel):
+        name: str
+        children: list["Node"] = []
+
+    def tree() -> Node:  # pragma: no cover
+        return Node(name="root")
+
+    schema = func_metadata(tree).output_schema
+    assert schema is not None
+    assert schema["type"] == "object"
+    assert schema["title"] == "Node"
+    assert "name" in schema["properties"]
+    assert "children" in schema["properties"]
+    assert "$defs" in schema
+    assert "Node" in schema["$defs"]
+    assert "$ref" not in schema
+
+
 def test_structured_output_primitives():
     """Test structured output with primitive return types"""
 
diff --git a/tests/server/mcpserver/test_server.py b/tests/server/mcpserver/test_server.py
index 81b490c544..f0c5e0d098 100644
--- a/tests/server/mcpserver/test_server.py
+++ b/tests/server/mcpserver/test_server.py
@@ -524,6 +524,44 @@ def get_user(user_id: int) -> UserOutput:
             assert isinstance(result.content[0], TextContent)
             assert '"name": "John Doe"' in result.content[0].text
 
+    async def test_tool_recursive_output_schema_lists_on_legacy(self):
+        """Recursive return types must not fail the whole tools/list on 2025-11-25 (#3337)."""
+
+        class Node(BaseModel):
+            name: str
+            children: list["Node"] = []
+
+        def tree() -> Node:
+            """Return a tree node."""
+            return Node(name="root")
+
+        def other() -> int:
+            """Return an integer."""
+            return 1
+
+        mcp = MCPServer("rec")
+        mcp.add_tool(tree)
+        mcp.add_tool(other)
+
+        async with Client(mcp) as client:
+            tools = await client.list_tools()
+            names = sorted(t.name for t in tools.tools)
+            assert names == ["other", "tree"]
+            tree_tool = next(t for t in tools.tools if t.name == "tree")
+            assert tree_tool.output_schema is not None
+            assert tree_tool.output_schema["type"] == "object"
+
+        async with Client(mcp, mode="legacy") as client:
+            tools = await client.list_tools()
+            names = sorted(t.name for t in tools.tools)
+            assert names == ["other", "tree"]
+            tree_tool = next(t for t in tools.tools if t.name == "tree")
+            assert tree_tool.output_schema is not None
+            assert tree_tool.output_schema["type"] == "object"
+            other_tool = next(t for t in tools.tools if t.name == "other")
+            assert other_tool.output_schema is not None
+            assert other_tool.output_schema["type"] == "object"
+
     async def test_tool_structured_output_primitive(self):
         """Test tool with structured output returning primitive type"""