diff --git a/src/strands/types/_events.py b/src/strands/types/_events.py
index 1a7f48d4b..ccdab1846 100644
--- a/src/strands/types/_events.py
+++ b/src/strands/types/_events.py
@@ -275,24 +275,19 @@ def is_callback_event(self) -> bool:
 class ToolStreamEvent(TypedEvent):
     """Event emitted when a tool yields sub-events as part of tool execution."""
 
-    def __init__(self, tool_use: ToolUse, tool_sub_event: Any) -> None:
+    def __init__(self, tool_use: ToolUse, tool_stream_data: Any) -> None:
         """Initialize with tool streaming data.
 
         Args:
             tool_use: The tool invocation producing the stream
-            tool_sub_event: The yielded event from the tool execution
+            tool_stream_data: The yielded event from the tool execution
         """
-        super().__init__({"tool_stream_tool_use": tool_use, "tool_stream_event": tool_sub_event})
+        super().__init__({"tool_stream_event": {"tool_use": tool_use, "data": tool_stream_data}})
 
     @property
     def tool_use_id(self) -> str:
         """The toolUseId associated with this stream."""
-        return cast(str, cast(ToolUse, self.get("tool_stream_tool_use")).get("toolUseId"))
-
-    @property
-    @override
-    def is_callback_event(self) -> bool:
-        return False
+        return cast(str, cast(ToolUse, cast(dict, self.get("tool_stream_event")).get("tool_use")).get("toolUseId"))
 
 
 class ModelMessageEvent(TypedEvent):
diff --git a/tests/strands/agent/hooks/test_agent_events.py b/tests/strands/agent/hooks/test_agent_events.py
index 04b832259..07f55b724 100644
--- a/tests/strands/agent/hooks/test_agent_events.py
+++ b/tests/strands/agent/hooks/test_agent_events.py
@@ -260,18 +260,22 @@ async def test_stream_e2e_success(alist):
                 "role": "assistant",
             }
         },
+        {
+            "tool_stream_event": {
+                "data": {"tool_streaming": True},
+                "tool_use": {"input": {}, "name": "streaming_tool", "toolUseId": "12345"},
+            }
+        },
+        {
+            "tool_stream_event": {
+                "data": "Final result",
+                "tool_use": {"input": {}, "name": "streaming_tool", "toolUseId": "12345"},
+            }
+        },
         {
             "message": {
                 "content": [
-                    {
-                        "toolResult": {
-                            # TODO update this text when we get tool streaming implemented; right now this
-                            # TODO is of the form '<async_generator object streaming_tool at 0x107d18a00>'
-                            "content": [{"text": ANY}],
-                            "status": "success",
-                            "toolUseId": "12345",
-                        }
-                    },
+                    {"toolResult": {"content": [{"text": "Final result"}], "status": "success", "toolUseId": "12345"}}
                 ],
                 "role": "user",
             }
diff --git a/tests/strands/tools/test_decorator.py b/tests/strands/tools/test_decorator.py
index a13c2833e..5b4b5cdda 100644
--- a/tests/strands/tools/test_decorator.py
+++ b/tests/strands/tools/test_decorator.py
@@ -3,14 +3,14 @@
 """
 
 from asyncio import Queue
-from typing import Any, Dict, Optional, Union
+from typing import Any, AsyncGenerator, Dict, Optional, Union
 from unittest.mock import MagicMock
 
 import pytest
 
 import strands
 from strands import Agent
-from strands.types._events import ToolResultEvent
+from strands.types._events import ToolResultEvent, ToolStreamEvent
 from strands.types.tools import AgentTool, ToolContext, ToolUse
 
 
@@ -1222,3 +1222,144 @@ def context_tool(message: str, agent: Agent, tool_context: str) -> str:
             "toolUseId": "test-id-2",
         }
     )
+
+
+@pytest.mark.asyncio
+async def test_tool_async_generator():
+    """Test that async generators yield results appropriately."""
+
+    @strands.tool(context=False)
+    async def async_generator() -> AsyncGenerator:
+        """Tool that expects tool_context as a regular string parameter."""
+        yield 0
+        yield "Value 1"
+        yield {"nested": "value"}
+        yield {
+            "status": "success",
+            "content": [{"text": "Looks like tool result"}],
+            "toolUseId": "test-id-2",
+        }
+        yield "final result"
+
+    tool: AgentTool = async_generator
+    tool_use: ToolUse = {
+        "toolUseId": "test-id-2",
+        "name": "context_tool",
+        "input": {"message": "some_message", "tool_context": "my_custom_context_string"},
+    }
+    generator = tool.stream(
+        tool_use=tool_use,
+        invocation_state={
+            "agent": Agent(name="test_agent"),
+        },
+    )
+    act_results = [value async for value in generator]
+    exp_results = [
+        ToolStreamEvent(tool_use, 0),
+        ToolStreamEvent(tool_use, "Value 1"),
+        ToolStreamEvent(tool_use, {"nested": "value"}),
+        ToolStreamEvent(
+            tool_use,
+            {
+                "status": "success",
+                "content": [{"text": "Looks like tool result"}],
+                "toolUseId": "test-id-2",
+            },
+        ),
+        ToolStreamEvent(tool_use, "final result"),
+        ToolResultEvent(
+            {
+                "status": "success",
+                "content": [{"text": "final result"}],
+                "toolUseId": "test-id-2",
+            }
+        ),
+    ]
+
+    assert act_results == exp_results
+
+
+@pytest.mark.asyncio
+async def test_tool_async_generator_exceptions_result_in_error():
+    """Test that async generators handle exceptions."""
+
+    @strands.tool(context=False)
+    async def async_generator() -> AsyncGenerator:
+        """Tool that expects tool_context as a regular string parameter."""
+        yield 13
+        raise ValueError("It's an error!")
+
+    tool: AgentTool = async_generator
+    tool_use: ToolUse = {
+        "toolUseId": "test-id-2",
+        "name": "context_tool",
+        "input": {"message": "some_message", "tool_context": "my_custom_context_string"},
+    }
+    generator = tool.stream(
+        tool_use=tool_use,
+        invocation_state={
+            "agent": Agent(name="test_agent"),
+        },
+    )
+    act_results = [value async for value in generator]
+    exp_results = [
+        ToolStreamEvent(tool_use, 13),
+        ToolResultEvent(
+            {
+                "status": "error",
+                "content": [{"text": "Error: It's an error!"}],
+                "toolUseId": "test-id-2",
+            }
+        ),
+    ]
+
+    assert act_results == exp_results
+
+
+@pytest.mark.asyncio
+async def test_tool_async_generator_yield_object_result():
+    """Test that async generators handle exceptions."""
+
+    @strands.tool(context=False)
+    async def async_generator() -> AsyncGenerator:
+        """Tool that expects tool_context as a regular string parameter."""
+        yield 13
+        yield {
+            "status": "success",
+            "content": [{"text": "final result"}],
+            "toolUseId": "test-id-2",
+        }
+
+    tool: AgentTool = async_generator
+    tool_use: ToolUse = {
+        "toolUseId": "test-id-2",
+        "name": "context_tool",
+        "input": {"message": "some_message", "tool_context": "my_custom_context_string"},
+    }
+    generator = tool.stream(
+        tool_use=tool_use,
+        invocation_state={
+            "agent": Agent(name="test_agent"),
+        },
+    )
+    act_results = [value async for value in generator]
+    exp_results = [
+        ToolStreamEvent(tool_use, 13),
+        ToolStreamEvent(
+            tool_use,
+            {
+                "status": "success",
+                "content": [{"text": "final result"}],
+                "toolUseId": "test-id-2",
+            },
+        ),
+        ToolResultEvent(
+            {
+                "status": "success",
+                "content": [{"text": "final result"}],
+                "toolUseId": "test-id-2",
+            }
+        ),
+    ]
+
+    assert act_results == exp_results