diff --git a/playground/PostgresEndToEnd/PostgresEndToEnd.JavaService/dependency-reduced-pom.xml b/playground/PostgresEndToEnd/PostgresEndToEnd.JavaService/dependency-reduced-pom.xml
index ceb176d9460..75ebb7ec18a 100644
--- a/playground/PostgresEndToEnd/PostgresEndToEnd.JavaService/dependency-reduced-pom.xml
+++ b/playground/PostgresEndToEnd/PostgresEndToEnd.JavaService/dependency-reduced-pom.xml
@@ -43,6 +43,45 @@
       </plugin>
     </plugins>
   </build>
+  <dependencyManagement>
+    <dependencies>
+      <dependency>
+        <groupId>org.eclipse.jetty</groupId>
+        <artifactId>jetty-server</artifactId>
+        <version>9.4.57.v20241219</version>
+      </dependency>
+      <dependency>
+        <groupId>org.postgresql</groupId>
+        <artifactId>postgresql</artifactId>
+        <version>42.7.2</version>
+      </dependency>
+      <dependency>
+        <groupId>io.netty</groupId>
+        <artifactId>netty-codec-http2</artifactId>
+        <version>4.1.124.Final</version>
+      </dependency>
+      <dependency>
+        <groupId>com.nimbusds</groupId>
+        <artifactId>nimbus-jose-jwt</artifactId>
+        <version>9.37.2</version>
+      </dependency>
+      <dependency>
+        <groupId>io.projectreactor.netty</groupId>
+        <artifactId>reactor-netty-core</artifactId>
+        <version>1.0.39</version>
+      </dependency>
+      <dependency>
+        <groupId>io.projectreactor.netty</groupId>
+        <artifactId>reactor-netty-http</artifactId>
+        <version>1.0.39</version>
+      </dependency>
+      <dependency>
+        <groupId>io.netty</groupId>
+        <artifactId>netty-handler</artifactId>
+        <version>4.1.118.Final</version>
+      </dependency>
+    </dependencies>
+  </dependencyManagement>
   <properties>
     <maven.compiler.target>17</maven.compiler.target>
     <maven.compiler.source>17</maven.compiler.source>
diff --git a/src/Aspire.Cli/Commands/AgentMcpCommand.cs b/src/Aspire.Cli/Commands/AgentMcpCommand.cs
index bb239d4ee48..3aff0911c2a 100644
--- a/src/Aspire.Cli/Commands/AgentMcpCommand.cs
+++ b/src/Aspire.Cli/Commands/AgentMcpCommand.cs
@@ -147,8 +147,12 @@ private async ValueTask<ListToolsResult> HandleListToolsAsync(RequestContext<Lis
             // Refresh resource tools if needed (e.g., AppHost selection changed or invalidated)
             if (!_resourceToolRefreshService.TryGetResourceToolMap(out var resourceToolMap))
             {
-                resourceToolMap = await _resourceToolRefreshService.RefreshResourceToolMapAsync(cancellationToken);
-                await _resourceToolRefreshService.SendToolsListChangedNotificationAsync(cancellationToken).ConfigureAwait(false);
+                // Don't send tools/list_changed here — the client already called tools/list
+                // and will receive the up-to-date result. Sending a notification during the
+                // list handler would cause the client to call tools/list again, creating an
+                // infinite loop when tool availability is unstable (e.g., container MCP tools
+                // oscillating between available/unavailable).
+                (resourceToolMap, _) = await _resourceToolRefreshService.RefreshResourceToolMapAsync(cancellationToken);
             }
 
             tools.AddRange(resourceToolMap.Select(x => new Tool
@@ -193,8 +197,12 @@ private async ValueTask<CallToolResult> HandleCallToolAsync(RequestContext<CallT
         // Refresh resource tools if needed (e.g., AppHost selection changed or invalidated)
         if (!_resourceToolRefreshService.TryGetResourceToolMap(out var resourceToolMap))
         {
-            resourceToolMap = await _resourceToolRefreshService.RefreshResourceToolMapAsync(cancellationToken);
-            await _resourceToolRefreshService.SendToolsListChangedNotificationAsync(cancellationToken).ConfigureAwait(false);
+            bool changed;
+            (resourceToolMap, changed) = await _resourceToolRefreshService.RefreshResourceToolMapAsync(cancellationToken);
+            if (changed)
+            {
+                await _resourceToolRefreshService.SendToolsListChangedNotificationAsync(cancellationToken).ConfigureAwait(false);
+            }
             toolsRefreshed = true;
         }
 
diff --git a/src/Aspire.Cli/Mcp/IMcpResourceToolRefreshService.cs b/src/Aspire.Cli/Mcp/IMcpResourceToolRefreshService.cs
index b08357049e3..8d3c5f744b4 100644
--- a/src/Aspire.Cli/Mcp/IMcpResourceToolRefreshService.cs
+++ b/src/Aspire.Cli/Mcp/IMcpResourceToolRefreshService.cs
@@ -27,8 +27,8 @@ internal interface IMcpResourceToolRefreshService
     /// Refreshes the resource tool map by discovering MCP tools from connected resources.
     /// </summary>
     /// <param name="cancellationToken">The cancellation token.</param>
-    /// <returns>The refreshed resource tool map.</returns>
-    Task<IReadOnlyDictionary<string, ResourceToolEntry>> RefreshResourceToolMapAsync(CancellationToken cancellationToken);
+    /// <returns>A tuple containing the refreshed resource tool map and a flag indicating whether the tool set changed.</returns>
+    Task<(IReadOnlyDictionary<string, ResourceToolEntry> ToolMap, bool Changed)> RefreshResourceToolMapAsync(CancellationToken cancellationToken);
 
     /// <summary>
     /// Sends a tools list changed notification to connected MCP clients.
diff --git a/src/Aspire.Cli/Mcp/McpResourceToolRefreshService.cs b/src/Aspire.Cli/Mcp/McpResourceToolRefreshService.cs
index 95ecf656214..e3d3c368333 100644
--- a/src/Aspire.Cli/Mcp/McpResourceToolRefreshService.cs
+++ b/src/Aspire.Cli/Mcp/McpResourceToolRefreshService.cs
@@ -71,7 +71,7 @@ public async Task SendToolsListChangedNotificationAsync(CancellationToken cancel
     }
 
     /// <inheritdoc/>
-    public async Task<IReadOnlyDictionary<string, ResourceToolEntry>> RefreshResourceToolMapAsync(CancellationToken cancellationToken)
+    public async Task<(IReadOnlyDictionary<string, ResourceToolEntry> ToolMap, bool Changed)> RefreshResourceToolMapAsync(CancellationToken cancellationToken)
     {
         _logger.LogDebug("Refreshing resource tool map.");
 
@@ -95,10 +95,15 @@ public async Task<IReadOnlyDictionary<string, ResourceToolEntry>> RefreshResourc
                 {
                     Debug.Assert(resource.McpServer is not null);
 
+                    // Use DisplayName (the app-model name, e.g. "db1-mcp") rather than Name
+                    // (the DCP runtime ID, e.g. "db1-mcp-ypnvhwvw") because the AppHost resolves
+                    // resources by their app-model name in CallResourceMcpToolAsync.
+                    var routedResourceName = resource.DisplayName ?? resource.Name;
+
                     foreach (var tool in resource.McpServer.Tools)
                     {
-                        var exposedName = $"{resource.Name.Replace("-", "_")}_{tool.Name}";
-                        refreshedMap[exposedName] = new ResourceToolEntry(resource.Name, tool);
+                        var exposedName = $"{routedResourceName.Replace("-", "_")}_{tool.Name}";
+                        refreshedMap[exposedName] = new ResourceToolEntry(routedResourceName, tool);
 
                         _logger.LogDebug("{Tool}: {Description}", exposedName, tool.Description);
                     }
@@ -117,10 +122,38 @@ public async Task<IReadOnlyDictionary<string, ResourceToolEntry>> RefreshResourc
 
         lock (_lock)
         {
+            var changed = _resourceToolMap.Count != refreshedMap.Count;
+            if (!changed)
+            {
+                // Check for deleted tools (in old but not in new).
+                foreach (var key in _resourceToolMap.Keys)
+                {
+                    if (!refreshedMap.ContainsKey(key))
+                    {
+                        changed = true;
+                        break;
+                    }
+                }
+
+                // Check for new tools (in new but not in old).
+                if (!changed)
+                {
+                    foreach (var key in refreshedMap.Keys)
+                    {
+                        if (!_resourceToolMap.ContainsKey(key))
+                        {
+                            changed = true;
+                            break;
+                        }
+                    }
+                }
+            }
+
             _resourceToolMap = refreshedMap;
             _selectedAppHostPath = selectedAppHostPath;
             _invalidated = false;
-            return _resourceToolMap;
+            return (_resourceToolMap, changed);
         }
     }
+
 }
diff --git a/src/Aspire.Cli/Mcp/Tools/RefreshToolsTool.cs b/src/Aspire.Cli/Mcp/Tools/RefreshToolsTool.cs
index c8d3d5c4fef..e0a919c7333 100644
--- a/src/Aspire.Cli/Mcp/Tools/RefreshToolsTool.cs
+++ b/src/Aspire.Cli/Mcp/Tools/RefreshToolsTool.cs
@@ -19,7 +19,7 @@ public override JsonElement GetInputSchema()
 
     public override async ValueTask<CallToolResult> CallToolAsync(CallToolContext context, CancellationToken cancellationToken)
     {
-        var resourceToolMap = await refreshService.RefreshResourceToolMapAsync(cancellationToken).ConfigureAwait(false);
+        var (resourceToolMap, _) = await refreshService.RefreshResourceToolMapAsync(cancellationToken).ConfigureAwait(false);
         await refreshService.SendToolsListChangedNotificationAsync(cancellationToken).ConfigureAwait(false);
 
         var totalToolCount = KnownMcpTools.All.Count + resourceToolMap.Count;
diff --git a/tests/Aspire.Cli.Tests/Commands/AgentMcpCommandTests.cs b/tests/Aspire.Cli.Tests/Commands/AgentMcpCommandTests.cs
index dd7cb3e3587..a4110121431 100644
--- a/tests/Aspire.Cli.Tests/Commands/AgentMcpCommandTests.cs
+++ b/tests/Aspire.Cli.Tests/Commands/AgentMcpCommandTests.cs
@@ -165,8 +165,8 @@ public async Task McpServer_ListTools_IncludesResourceMcpTools()
             [
                 new ResourceSnapshot
                 {
-                    Name = "test-resource",
-                    DisplayName = "Test Resource",
+                    Name = "test-resource-abcd1234",
+                    DisplayName = "test-resource",
                     ResourceType = "Container",
                     State = "Running",
                     McpServer = new ResourceSnapshotMcpServer
@@ -202,8 +202,8 @@ public async Task McpServer_ListTools_IncludesResourceMcpTools()
         // Assert - Verify resource tools are included
         Assert.NotNull(tools);
 
-        // The resource tools should be exposed with a prefixed name: {resource_name}_{tool_name}
-        // Resource name "test-resource" becomes "test_resource" (dashes replaced with underscores)
+        // The resource tools should be exposed with a prefixed name using the DisplayName (app-model name):
+        // DisplayName "test-resource" becomes "test_resource" (dashes replaced with underscores)
         var resourceToolOne = tools.FirstOrDefault(t => t.Name == "test_resource_resource_tool_one");
         var resourceToolTwo = tools.FirstOrDefault(t => t.Name == "test_resource_resource_tool_two");
 
@@ -235,8 +235,8 @@ public async Task McpServer_CallTool_ResourceMcpTool_ReturnsResult()
             [
                 new ResourceSnapshot
                 {
-                    Name = "my-resource",
-                    DisplayName = "My Resource",
+                    Name = "my-resource-abcd1234",
+                    DisplayName = "my-resource",
                     ResourceType = "Container",
                     State = "Running",
                     McpServer = new ResourceSnapshotMcpServer
@@ -291,6 +291,69 @@ public async Task McpServer_CallTool_ResourceMcpTool_ReturnsResult()
         Assert.Equal("do_something", callToolName);
     }
 
+    [Fact]
+    public async Task McpServer_CallTool_ResourceMcpTool_UsesDisplayNameForRouting()
+    {
+        // Arrange - Simulate resource snapshots that use a unique resource id and a logical display name.
+        var expectedToolResult = "List schemas completed";
+        string? callResourceName = null;
+        string? callToolName = null;
+
+        var mockBackchannel = new TestAppHostAuxiliaryBackchannel
+        {
+            Hash = "test-apphost-hash",
+            IsInScope = true,
+            AppHostInfo = new AppHostInformation
+            {
+                AppHostPath = Path.Combine(_workspace.WorkspaceRoot.FullName, "TestAppHost", "TestAppHost.csproj"),
+                ProcessId = 12345
+            },
+            ResourceSnapshots =
+            [
+                new ResourceSnapshot
+                {
+                    Name = "db1-mcp-ypnvhwvw",
+                    DisplayName = "db1-mcp",
+                    ResourceType = "Container",
+                    State = "Running",
+                    McpServer = new ResourceSnapshotMcpServer
+                    {
+                        EndpointUrl = "http://localhost:8080/mcp",
+                        Tools =
+                        [
+                            new Tool
+                            {
+                                Name = "list_schemas",
+                                Description = "Lists database schemas"
+                            }
+                        ]
+                    }
+                }
+            ],
+            CallResourceMcpToolHandler = (resourceName, toolName, arguments, ct) =>
+            {
+                callResourceName = resourceName;
+                callToolName = toolName;
+                return Task.FromResult(new CallToolResult
+                {
+                    Content = [new TextContentBlock { Text = expectedToolResult }]
+                });
+            }
+        };
+
+        _backchannelMonitor.AddConnection(mockBackchannel.Hash, mockBackchannel.SocketPath, mockBackchannel);
+        await _mcpClient.CallToolAsync(KnownMcpTools.RefreshTools, cancellationToken: _cts.Token).DefaultTimeout();
+
+        // Act
+        var result = await _mcpClient.CallToolAsync("db1_mcp_list_schemas", cancellationToken: _cts.Token).DefaultTimeout();
+
+        // Assert
+        Assert.NotNull(result);
+        Assert.True(result.IsError is null or false, $"Tool returned error: {GetResultText(result)}");
+        Assert.Equal("db1-mcp", callResourceName);
+        Assert.Equal("list_schemas", callToolName);
+    }
+
     [Fact]
     public async Task McpServer_CallTool_ListAppHosts_ReturnsResult()
     {
@@ -347,6 +410,92 @@ public async Task McpServer_CallTool_RefreshTools_ReturnsResult()
         Assert.Equal(NotificationMethods.ToolListChangedNotification, notification.Method);
     }
 
+    [Fact]
+    public async Task McpServer_ListTools_DoesNotSendToolsListChangedNotification()
+    {
+        // Arrange - Create a mock backchannel with a resource that has MCP tools
+        // This simulates the db-mcp scenario where resource tools become available
+        var mockBackchannel = new TestAppHostAuxiliaryBackchannel
+        {
+            Hash = "test-apphost-hash",
+            IsInScope = true,
+            AppHostInfo = new AppHostInformation
+            {
+                AppHostPath = Path.Combine(_workspace.WorkspaceRoot.FullName, "TestAppHost", "TestAppHost.csproj"),
+                ProcessId = 12345
+            },
+            ResourceSnapshots =
+            [
+                new ResourceSnapshot
+                {
+                    Name = "db-mcp-abcd1234",
+                    DisplayName = "db-mcp",
+                    ResourceType = "Container",
+                    State = "Running",
+                    McpServer = new ResourceSnapshotMcpServer
+                    {
+                        EndpointUrl = "http://localhost:8080/mcp",
+                        Tools =
+                        [
+                            new Tool
+                            {
+                                Name = "query_database",
+                                Description = "Query a database"
+                            }
+                        ]
+                    }
+                }
+            ]
+        };
+
+        // Register the mock backchannel so resource tools will be discovered
+        _backchannelMonitor.AddConnection(mockBackchannel.Hash, mockBackchannel.SocketPath, mockBackchannel);
+
+        // Set up a channel to detect any tools/list_changed notifications
+        var notificationCount = 0;
+        await using var notificationHandler = _mcpClient.RegisterNotificationHandler(
+            NotificationMethods.ToolListChangedNotification,
+            (notification, cancellationToken) =>
+            {
+                Interlocked.Increment(ref notificationCount);
+                return default;
+            });
+
+        // Act - Call ListTools which should discover the resource tools via refresh
+        // but should NOT send a tools/list_changed notification (that would cause an infinite loop)
+        var tools = await _mcpClient.ListToolsAsync(cancellationToken: _cts.Token).DefaultTimeout();
+
+        // Assert - tools should include the resource tool
+        Assert.NotNull(tools);
+        var dbMcpTool = tools.FirstOrDefault(t => t.Name == "db_mcp_query_database");
+        Assert.NotNull(dbMcpTool);
+
+        // Assert - no tools/list_changed notification should have been sent.
+        using var timeoutCts = new CancellationTokenSource(TimeSpan.FromMilliseconds(200));
+        var notificationChannel = Channel.CreateUnbounded<JsonRpcNotification>();
+        await using var channelHandler = _mcpClient.RegisterNotificationHandler(
+            NotificationMethods.ToolListChangedNotification,
+            (notification, _) =>
+            {
+                notificationChannel.Writer.TryWrite(notification);
+                return default;
+            });
+
+        var received = false;
+        try
+        {
+            await notificationChannel.Reader.ReadAsync(timeoutCts.Token);
+            received = true;
+        }
+        catch (OperationCanceledException)
+        {
+            // Expected — no notification arrived within the timeout
+        }
+
+        Assert.False(received, "tools/list_changed notification should not be sent during tools/list handling");
+        Assert.Equal(0, notificationCount);
+    }
+
     [Fact]
     public async Task McpServer_CallTool_UnknownTool_ReturnsError()
     {