diff --git a/.cursor/rules/release-changelogs.mdc b/.cursor/rules/release-changelogs.mdc
index a5508dd7..d2470902 100644
--- a/.cursor/rules/release-changelogs.mdc
+++ b/.cursor/rules/release-changelogs.mdc
@@ -1,30 +1,17 @@
 ---
-description: writing changelog markdown when cutting a new release of the gem
-globs:
+description: Updating CHANGELOG.md before cutting a new release of the gem
+globs: CHANGELOG.md
 alwaysApply: false
 ---
-- output the changelog as markdown when asked.
+
+- start by refreshing your knowledge on the Keep a Changelog convention by reading the format spec referenced at the top of CHANGELOG.md
+- stick to Keep a Changelog
+- entries should be terse and in a top-level flat list: do not nest
+- follow this format for entries:
+  - Terse description of the change (#nnn)
 - git tags are used to mark the commit that cut a new release of the gem
 - the gem version is located in [version.rb](mdc:lib/mcp/version.rb)
 - use the git history, especially merge commits from PRs to construct the changelog
-- when necessary, look at the diff of files changed to determine whether a PR should be listed in
-  - ## Added; adds new functionality
-  - ## Changed; alters functionality; especially backward compatible changes
-  - ## Fixed; bugfixes that are forward compatible
-
-use the following format for changelogs:
-
-```
-## Added
-- New functionality added that was not present before
-
-## Changed
-- Alterations to functionality that may indicate breaking changes
-
-## Fixed
-- Bug fixes
-
-#### Full change list:
-- [Name of the PR #123](https:/github.com/modelcontextprotocol/ruby-sdk/pull/123) @github-author-username
-- [Name of the PR #456](https:/github.com/modelcontextprotocol/ruby-sdk/pull/456) @another-github-author
-```
+- when necessary, look at the diff of files changed to determine the true nature of the change
+- maintenance PRs that don't concern end users of the gem should not be listed in the changelog
+- when checking PRs, see if there's an upstream remote, and if so, fetch PRs from upstream instead of origin
diff --git a/CHANGELOG.md b/CHANGELOG.md
new file mode 100644
index 00000000..71a520f0
--- /dev/null
+++ b/CHANGELOG.md
@@ -0,0 +1,29 @@
+# Changelog
+
+All notable changes to this project will be documented in this file.
+
+The format is based on [Keep a Changelog](https://keepachangelog.com/en/1.1.0/),
+and this project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0.html).
+
+## [Unreleased]
+
+### Added
+
+- Custom methods support via `define_custom_method` (#75)
+- Streamable HTTP transport implementation (#33)
+- Tool argument validation against schemas (#43)
+
+### Changed
+
+- Server context is now optional for Tools and Prompts (#54)
+- Improved capability handling and removed automatic capability determination (#61, #63)
+- Refactored architecture in preparation for client support (#27)
+
+### Fixed
+
+- Input schema validation for schemas without required fields (#73)
+- Error handling when sending notifications (#70)
+
+## [0.1.0] - 2025-05-30
+
+Initial release