diff --git a/claude/src/main/scala/sttp/ai/claude/agent/ClaudeAgent.scala b/claude/src/main/scala/sttp/ai/claude/agent/ClaudeAgent.scala
index c7631894..dae48ff8 100644
--- a/claude/src/main/scala/sttp/ai/claude/agent/ClaudeAgent.scala
+++ b/claude/src/main/scala/sttp/ai/claude/agent/ClaudeAgent.scala
@@ -16,7 +16,7 @@ import sttp.monad.IdentityMonad
 private[claude] class ClaudeAgentBackend[F[_]](
     client: ClaudeClient,
     modelName: String,
-    val tools: Seq[AgentTool[_]],
+    val tools: Seq[AgentTool[F, _]],
     val systemPrompt: Option[String],
     responseSchema: Option[ResponseSchema[_]]
 )(implicit monad: sttp.monad.MonadError[F])
@@ -27,7 +27,7 @@ private[claude] class ClaudeAgentBackend[F[_]](
   private val outputConfig: Option[OutputConfig] =
     responseSchema.map(rs => OutputConfig(format = Some(OutputFormat.JsonSchema(rs.schema))))
 
-  private def convertTool(tool: AgentTool[_]): Tool = {
+  private def convertTool(tool: AgentTool[F, _]): Tool = {
     val schemaCursor = tool.jsonSchema.asJson.hcursor
 
     val properties = schemaCursor
diff --git a/claude/src/test/scala/sttp/ai/claude/integration/ClaudeAgentIntegrationSpec.scala b/claude/src/test/scala/sttp/ai/claude/integration/ClaudeAgentIntegrationSpec.scala
index ff04f9b2..753f4534 100644
--- a/claude/src/test/scala/sttp/ai/claude/integration/ClaudeAgentIntegrationSpec.scala
+++ b/claude/src/test/scala/sttp/ai/claude/integration/ClaudeAgentIntegrationSpec.scala
@@ -13,7 +13,7 @@ class ClaudeAgentIntegrationSpec extends AgentIntegrationSpecBase {
   override def providerName: String = "Claude"
   override def apiKeyEnvVar: String = "ANTHROPIC_API_KEY"
 
-  override def createAgent(maxIterations: Int, tools: Seq[AgentTool[_]]): Agent[Identity] = {
+  override def createAgent(maxIterations: Int, tools: Seq[AgentTool[Identity, _]]): Agent[Identity] = {
     val config = ClaudeConfig.fromEnv
     val client = ClaudeClient(config)
     val agentConfig = AgentConfig[Identity](maxIterations = maxIterations, userTools = tools)
@@ -29,7 +29,7 @@ class ClaudeAgentIntegrationSpec extends AgentIntegrationSpecBase {
 
   override def createTypedAgent[T](
       maxIterations: Int,
-      tools: Seq[AgentTool[_]],
+      tools: Seq[AgentTool[Identity, _]],
       responseSchema: ResponseSchema[T]
   ): Agent[Identity] =
     ClaudeAgent
diff --git a/core/src/main/scala/sttp/ai/core/agent/Agent.scala b/core/src/main/scala/sttp/ai/core/agent/Agent.scala
index 8da1874c..ea3eccc8 100644
--- a/core/src/main/scala/sttp/ai/core/agent/Agent.scala
+++ b/core/src/main/scala/sttp/ai/core/agent/Agent.scala
@@ -121,7 +121,7 @@ class Agent[F[_]](
     }
   }
 
-  private def executeTool[T](tool: AgentTool[T], toolCall: ToolCall): F[String] =
+  private def executeTool[T](tool: AgentTool[F, T], toolCall: ToolCall): F[String] =
     monad
       .eval(decode[T](toolCall.input)(tool.codec).fold(throw _, identity))
       .map[Either[String, T]](Right(_))
@@ -134,7 +134,7 @@ class Agent[F[_]](
       .flatMap {
         case Left(errorMessage) => monad.unit(errorMessage)
         case Right(typedInput) =>
-          monad.eval(tool.execute(typedInput)).handleError { case e: Exception =>
+          tool.execute(typedInput).handleError { case e: Exception =>
             config.exceptionHandler.handleToolException(toolCall.toolName, e) match {
               case Left(errorMessage) => monad.unit(errorMessage)
               case Right(ex)          => monad.error(ex)
diff --git a/core/src/main/scala/sttp/ai/core/agent/AgentBackend.scala b/core/src/main/scala/sttp/ai/core/agent/AgentBackend.scala
index 519826d2..40e0977c 100644
--- a/core/src/main/scala/sttp/ai/core/agent/AgentBackend.scala
+++ b/core/src/main/scala/sttp/ai/core/agent/AgentBackend.scala
@@ -17,7 +17,7 @@ import sttp.client4.Backend
 trait AgentBackend[F[_]] {
 
   /** The tools available to the agent */
-  def tools: Seq[AgentTool[_]]
+  def tools: Seq[AgentTool[F, _]]
 
   /** Optional system prompt to guide the agent's behavior */
   def systemPrompt: Option[String]
diff --git a/core/src/main/scala/sttp/ai/core/agent/AgentBuilder.scala b/core/src/main/scala/sttp/ai/core/agent/AgentBuilder.scala
index 646e015f..df80cfe9 100644
--- a/core/src/main/scala/sttp/ai/core/agent/AgentBuilder.scala
+++ b/core/src/main/scala/sttp/ai/core/agent/AgentBuilder.scala
@@ -20,11 +20,11 @@ final class AgentBuilder[F[_]] private (
 
   def systemPrompt(prompt: String): AgentBuilder[F] = systemPrompt(_ => prompt)
 
-  def tools(values: Seq[AgentTool[_]]): AgentBuilder[F] = withConfig(config.copy(userTools = values))
+  def tools(values: Seq[AgentTool[F, _]]): AgentBuilder[F] = withConfig(config.copy(userTools = values))
 
-  def tools(first: AgentTool[_], rest: AgentTool[_]*): AgentBuilder[F] = tools(first +: rest)
+  def tools(first: AgentTool[F, _], rest: AgentTool[F, _]*): AgentBuilder[F] = tools(first +: rest)
 
-  def addTool(tool: AgentTool[_]): AgentBuilder[F] = withConfig(config.copy(userTools = config.userTools :+ tool))
+  def addTool(tool: AgentTool[F, _]): AgentBuilder[F] = withConfig(config.copy(userTools = config.userTools :+ tool))
 
   def exceptionHandler(handler: ExceptionHandler): AgentBuilder[F] = withConfig(config.copy(exceptionHandler = handler))
 
diff --git a/core/src/main/scala/sttp/ai/core/agent/AgentConfig.scala b/core/src/main/scala/sttp/ai/core/agent/AgentConfig.scala
index 05c45ee2..cab48eb7 100644
--- a/core/src/main/scala/sttp/ai/core/agent/AgentConfig.scala
+++ b/core/src/main/scala/sttp/ai/core/agent/AgentConfig.scala
@@ -5,7 +5,7 @@ import sttp.ai.core.agent.AgentConfig.SystemPromptParameters
 case class AgentConfig[F[_]](
     maxIterations: Int = 10,
     systemPromptBuilder: Option[SystemPromptParameters => String] = Some(AgentConfig.buildSystemPrompt),
-    userTools: Seq[AgentTool[_]] = Seq.empty,
+    userTools: Seq[AgentTool[F, _]] = Seq.empty[AgentTool[F, _]],
     exceptionHandler: ExceptionHandler = ExceptionHandler.default,
     responseSchema: Option[ResponseSchema[_]] = None,
     beforeToolCall: Option[ToolCall => F[Unit]] = None,
diff --git a/core/src/main/scala/sttp/ai/core/agent/AgentTool.scala b/core/src/main/scala/sttp/ai/core/agent/AgentTool.scala
index e7be099d..41298681 100644
--- a/core/src/main/scala/sttp/ai/core/agent/AgentTool.scala
+++ b/core/src/main/scala/sttp/ai/core/agent/AgentTool.scala
@@ -1,42 +1,57 @@
 package sttp.ai.core.agent
 
-import io.circe.{Codec, Decoder, Encoder, Json}
+import io.circe.{Codec, Json}
 import sttp.apispec.Schema
+import sttp.shared.Identity
 import sttp.tapir.{Schema => TapirSchema}
 import sttp.tapir.docs.apispec.schema.TapirSchemaToJsonSchema
 
-trait AgentTool[T] {
+trait AgentTool[F[_], T] {
   def name: String
   def description: String
   def jsonSchema: Schema
   def codec: Codec[T]
-  def execute(input: T): String
+  def execute(input: T): F[String]
 }
 
 object AgentTool {
+
   def fromFunction[T](
       toolName: String,
       toolDescription: String
-  )(f: T => String)(implicit tapirSchema: TapirSchema[T], toolCodec: Codec[T]): AgentTool[T] =
-    new AgentTool[T] {
+  )(f: T => String)(implicit tapirSchema: TapirSchema[T], toolCodec: Codec[T]): AgentTool[Identity, T] =
+    fromFunctionF[Identity, T](toolName, toolDescription)(f)
+
+  def fromFunctionF[F[_], T](
+      toolName: String,
+      toolDescription: String
+  )(f: T => F[String])(implicit tapirSchema: TapirSchema[T], toolCodec: Codec[T]): AgentTool[F, T] =
+    new AgentTool[F, T] {
       override def name: String = toolName
       override def description: String = toolDescription
       override def jsonSchema: Schema =
         TapirSchemaToJsonSchema(tapirSchema, markOptionsAsNullable = true)
       override def codec: Codec[T] = toolCodec
-      override def execute(input: T): String = f(input)
+      override def execute(input: T): F[String] = f(input)
     }
 
   def dynamic(
       toolName: String,
       toolDescription: String,
       toolSchema: Schema
-  )(f: Map[String, Json] => String): AgentTool[Map[String, Json]] =
-    new AgentTool[Map[String, Json]] {
+  )(f: Map[String, Json] => String): AgentTool[Identity, Map[String, Json]] =
+    dynamicF[Identity](toolName, toolDescription, toolSchema)(f)
+
+  def dynamicF[F[_]](
+      toolName: String,
+      toolDescription: String,
+      toolSchema: Schema
+  )(f: Map[String, Json] => F[String]): AgentTool[F, Map[String, Json]] =
+    new AgentTool[F, Map[String, Json]] {
       override def name: String = toolName
       override def description: String = toolDescription
       override def jsonSchema: Schema = toolSchema
       override def codec: Codec[Map[String, Json]] = Codec.implied
-      override def execute(input: Map[String, Json]): String = f(input)
+      override def execute(input: Map[String, Json]): F[String] = f(input)
     }
 }
diff --git a/core/src/test/scala/sttp/ai/core/agent/AgentSpec.scala b/core/src/test/scala/sttp/ai/core/agent/AgentSpec.scala
index bea32e3b..ae94c83e 100644
--- a/core/src/test/scala/sttp/ai/core/agent/AgentSpec.scala
+++ b/core/src/test/scala/sttp/ai/core/agent/AgentSpec.scala
@@ -17,7 +17,7 @@ class AgentSpec extends AnyFlatSpec with Matchers with OptionValues {
     private var callCount = 0
     var receivedHistories: Seq[ConversationHistory] = Seq.empty
 
-    override def tools: Seq[AgentTool[_]] = Seq.empty
+    override def tools: Seq[AgentTool[Identity, _]] = Seq.empty
     override def systemPrompt: Option[String] = None
 
     override def sendRequest(
diff --git a/core/src/test/scala/sttp/ai/core/agent/integration/AgentIntegrationSpecBase.scala b/core/src/test/scala/sttp/ai/core/agent/integration/AgentIntegrationSpecBase.scala
index ce367f1f..446d5db6 100644
--- a/core/src/test/scala/sttp/ai/core/agent/integration/AgentIntegrationSpecBase.scala
+++ b/core/src/test/scala/sttp/ai/core/agent/integration/AgentIntegrationSpecBase.scala
@@ -14,11 +14,11 @@ abstract class AgentIntegrationSpecBase extends AnyFlatSpec with Matchers {
 
   def providerName: String
   def apiKeyEnvVar: String
-  def createAgent(maxIterations: Int, tools: Seq[AgentTool[_]]): Agent[Identity]
+  def createAgent(maxIterations: Int, tools: Seq[AgentTool[Identity, _]]): Agent[Identity]
 
   def createTypedAgent[T](
       maxIterations: Int,
-      tools: Seq[AgentTool[_]],
+      tools: Seq[AgentTool[Identity, _]],
       responseSchema: ResponseSchema[T]
   ): Agent[Identity] =
     cancel(s"$providerName typed agent factory not implemented for this spec")
@@ -29,7 +29,7 @@ abstract class AgentIntegrationSpecBase extends AnyFlatSpec with Matchers {
   implicit val calculatorInputCodec: Codec[CalculatorInput] = deriveCodec
   implicit val calculatorInputSchema: Schema[CalculatorInput] = Schema.derived
 
-  protected val calculatorTool: AgentTool[CalculatorInput] = AgentTool.fromFunction(
+  protected val calculatorTool: AgentTool[Identity, CalculatorInput] = AgentTool.fromFunction(
     "calculator",
     "Perform basic arithmetic operations (one of: `add`, `subtract`, `multiply`, `divide`)"
   ) { (input: CalculatorInput) =>
@@ -47,7 +47,7 @@ abstract class AgentIntegrationSpecBase extends AnyFlatSpec with Matchers {
   implicit val weatherInputCodec: Codec[WeatherInput] = deriveCodec
   implicit val weatherInputSchema: Schema[WeatherInput] = Schema.derived
 
-  protected val weatherTool: AgentTool[WeatherInput] = AgentTool.fromFunction(
+  protected val weatherTool: AgentTool[Identity, WeatherInput] = AgentTool.fromFunction(
     "get_weather",
     "Get current weather for a city"
   ) { (input: WeatherInput) =>
@@ -84,7 +84,7 @@ abstract class AgentIntegrationSpecBase extends AnyFlatSpec with Matchers {
       s"Should have at least $min iterations, but had ${result.iterations}"
     )
 
-  def withAgent[T](maxIter: Int, tools: Seq[AgentTool[_]])(test: (Agent[Identity], Backend[Identity]) => T): T = {
+  def withAgent[T](maxIter: Int, tools: Seq[AgentTool[Identity, _]])(test: (Agent[Identity], Backend[Identity]) => T): T = {
     if (maybeApiKey.isEmpty) {
       cancel(s"$apiKeyEnvVar not defined - skipping integration test")
     }
diff --git a/openai/src/main/scala/sttp/ai/openai/agent/OpenAIAgent.scala b/openai/src/main/scala/sttp/ai/openai/agent/OpenAIAgent.scala
index 2d8c36d8..c2d6e54f 100644
--- a/openai/src/main/scala/sttp/ai/openai/agent/OpenAIAgent.scala
+++ b/openai/src/main/scala/sttp/ai/openai/agent/OpenAIAgent.scala
@@ -12,7 +12,7 @@ import sttp.monad.IdentityMonad
 private[openai] class OpenAIAgentBackend[F[_]](
     openAI: OpenAI,
     modelName: String,
-    val tools: Seq[AgentTool[_]],
+    val tools: Seq[AgentTool[F, _]],
     val systemPrompt: Option[String],
     responseSchema: Option[ResponseSchema[_]]
 )(implicit monad: sttp.monad.MonadError[F])
@@ -29,7 +29,7 @@ private[openai] class OpenAIAgentBackend[F[_]](
     )
   }
 
-  private def convertTool(tool: AgentTool[_]): Tool.Function = {
+  private def convertTool(tool: AgentTool[F, _]): Tool.Function = {
     val schema = tool.jsonSchema
     val schemaJson = SchemaSupport.schemaCodec(schema)
 
diff --git a/openai/src/test/scala/sttp/ai/openai/integration/OpenAIAgentIntegrationSpec.scala b/openai/src/test/scala/sttp/ai/openai/integration/OpenAIAgentIntegrationSpec.scala
index 4c1ed5f6..e98220ed 100644
--- a/openai/src/test/scala/sttp/ai/openai/integration/OpenAIAgentIntegrationSpec.scala
+++ b/openai/src/test/scala/sttp/ai/openai/integration/OpenAIAgentIntegrationSpec.scala
@@ -12,7 +12,7 @@ class OpenAIAgentIntegrationSpec extends AgentIntegrationSpecBase {
   override def providerName: String = "OpenAI"
   override def apiKeyEnvVar: String = "OPENAI_API_KEY"
 
-  override def createAgent(maxIterations: Int, tools: Seq[AgentTool[_]]): Agent[Identity] = {
+  override def createAgent(maxIterations: Int, tools: Seq[AgentTool[Identity, _]]): Agent[Identity] = {
     val openai = OpenAI.fromEnv
     val agentConfig = AgentConfig[Identity](maxIterations = maxIterations, userTools = tools)
     val agentBackend = new OpenAIAgentBackend[Identity](
@@ -27,7 +27,7 @@ class OpenAIAgentIntegrationSpec extends AgentIntegrationSpecBase {
 
   override def createTypedAgent[T](
       maxIterations: Int,
-      tools: Seq[AgentTool[_]],
+      tools: Seq[AgentTool[Identity, _]],
       responseSchema: ResponseSchema[T]
   ): Agent[Identity] = {
     val openai = OpenAI.fromEnv