diff --git a/e2e/react-start/server-functions/src/routeTree.gen.ts b/e2e/react-start/server-functions/src/routeTree.gen.ts
index b2346f1b1a8..51327cb8164 100644
--- a/e2e/react-start/server-functions/src/routeTree.gen.ts
+++ b/e2e/react-start/server-functions/src/routeTree.gen.ts
@@ -17,6 +17,7 @@ import { Route as RawResponseRouteImport } from './routes/raw-response'
 import { Route as MultipartRouteImport } from './routes/multipart'
 import { Route as IsomorphicFnsRouteImport } from './routes/isomorphic-fns'
 import { Route as HeadersRouteImport } from './routes/headers'
+import { Route as FormdataContextRouteImport } from './routes/formdata-context'
 import { Route as EnvOnlyRouteImport } from './routes/env-only'
 import { Route as DeadCodePreserveRouteImport } from './routes/dead-code-preserve'
 import { Route as ConsistentRouteImport } from './routes/consistent'
@@ -77,6 +78,11 @@ const HeadersRoute = HeadersRouteImport.update({
   path: '/headers',
   getParentRoute: () => rootRouteImport,
 } as any)
+const FormdataContextRoute = FormdataContextRouteImport.update({
+  id: '/formdata-context',
+  path: '/formdata-context',
+  getParentRoute: () => rootRouteImport,
+} as any)
 const EnvOnlyRoute = EnvOnlyRouteImport.update({
   id: '/env-only',
   path: '/env-only',
@@ -182,6 +188,7 @@ export interface FileRoutesByFullPath {
   '/consistent': typeof ConsistentRoute
   '/dead-code-preserve': typeof DeadCodePreserveRoute
   '/env-only': typeof EnvOnlyRoute
+  '/formdata-context': typeof FormdataContextRoute
   '/headers': typeof HeadersRoute
   '/isomorphic-fns': typeof IsomorphicFnsRoute
   '/multipart': typeof MultipartRoute
@@ -211,6 +218,7 @@ export interface FileRoutesByTo {
   '/consistent': typeof ConsistentRoute
   '/dead-code-preserve': typeof DeadCodePreserveRoute
   '/env-only': typeof EnvOnlyRoute
+  '/formdata-context': typeof FormdataContextRoute
   '/headers': typeof HeadersRoute
   '/isomorphic-fns': typeof IsomorphicFnsRoute
   '/multipart': typeof MultipartRoute
@@ -241,6 +249,7 @@ export interface FileRoutesById {
   '/consistent': typeof ConsistentRoute
   '/dead-code-preserve': typeof DeadCodePreserveRoute
   '/env-only': typeof EnvOnlyRoute
+  '/formdata-context': typeof FormdataContextRoute
   '/headers': typeof HeadersRoute
   '/isomorphic-fns': typeof IsomorphicFnsRoute
   '/multipart': typeof MultipartRoute
@@ -272,6 +281,7 @@ export interface FileRouteTypes {
     | '/consistent'
     | '/dead-code-preserve'
     | '/env-only'
+    | '/formdata-context'
     | '/headers'
     | '/isomorphic-fns'
     | '/multipart'
@@ -301,6 +311,7 @@ export interface FileRouteTypes {
     | '/consistent'
     | '/dead-code-preserve'
     | '/env-only'
+    | '/formdata-context'
     | '/headers'
     | '/isomorphic-fns'
     | '/multipart'
@@ -330,6 +341,7 @@ export interface FileRouteTypes {
     | '/consistent'
     | '/dead-code-preserve'
     | '/env-only'
+    | '/formdata-context'
     | '/headers'
     | '/isomorphic-fns'
     | '/multipart'
@@ -360,6 +372,7 @@ export interface RootRouteChildren {
   ConsistentRoute: typeof ConsistentRoute
   DeadCodePreserveRoute: typeof DeadCodePreserveRoute
   EnvOnlyRoute: typeof EnvOnlyRoute
+  FormdataContextRoute: typeof FormdataContextRoute
   HeadersRoute: typeof HeadersRoute
   IsomorphicFnsRoute: typeof IsomorphicFnsRoute
   MultipartRoute: typeof MultipartRoute
@@ -442,6 +455,13 @@ declare module '@tanstack/react-router' {
       preLoaderRoute: typeof HeadersRouteImport
       parentRoute: typeof rootRouteImport
     }
+    '/formdata-context': {
+      id: '/formdata-context'
+      path: '/formdata-context'
+      fullPath: '/formdata-context'
+      preLoaderRoute: typeof FormdataContextRouteImport
+      parentRoute: typeof rootRouteImport
+    }
     '/env-only': {
       id: '/env-only'
       path: '/env-only'
@@ -584,6 +604,7 @@ const rootRouteChildren: RootRouteChildren = {
   ConsistentRoute: ConsistentRoute,
   DeadCodePreserveRoute: DeadCodePreserveRoute,
   EnvOnlyRoute: EnvOnlyRoute,
+  FormdataContextRoute: FormdataContextRoute,
   HeadersRoute: HeadersRoute,
   IsomorphicFnsRoute: IsomorphicFnsRoute,
   MultipartRoute: MultipartRoute,
diff --git a/e2e/react-start/server-functions/src/routes/formdata-context.tsx b/e2e/react-start/server-functions/src/routes/formdata-context.tsx
new file mode 100644
index 00000000000..08aed62c2ed
--- /dev/null
+++ b/e2e/react-start/server-functions/src/routes/formdata-context.tsx
@@ -0,0 +1,147 @@
+import { createFileRoute } from '@tanstack/react-router'
+import { createMiddleware, createServerFn } from '@tanstack/react-start'
+import React from 'react'
+import { z } from 'zod'
+
+// Middleware that creates context on client and sends it to server
+const testMiddleware = createMiddleware({ type: 'function' })
+  .client(async ({ next }) => {
+    const testString = 'context-from-middleware-' + Date.now()
+    return next({
+      sendContext: { testString },
+    })
+  })
+  .server(async ({ next, context }) => {
+    if (!context.testString) {
+      throw new Error(
+        'BUG: testString is missing from server middleware context!',
+      )
+    }
+    return await next({ context: { ...context } })
+  })
+
+// Server function with FormData
+export const formDataWithContextFn = createServerFn({ method: 'POST' })
+  .middleware([testMiddleware])
+  .inputValidator((data: unknown) => {
+    const formData = z.instanceof(FormData).parse(data)
+    return {
+      name: z.string().parse(formData.get('name')),
+    }
+  })
+  .handler(({ data, context }) => {
+    if (!context.testString) {
+      throw new Error('BUG: testString is missing in handler context!')
+    }
+    return {
+      success: true,
+      name: data.name,
+      testString: context.testString,
+      hasContext: true,
+    }
+  })
+
+// Server function without parameters
+export const simpleTestFn = createServerFn({ method: 'POST' })
+  .middleware([testMiddleware])
+  .handler(({ context }) => {
+    if (!context.testString) {
+      throw new Error('BUG: testString is missing in handler context!')
+    }
+    return {
+      success: true,
+      testString: context.testString,
+      hasContext: true,
+    }
+  })
+
+export const Route = createFileRoute('/formdata-context')({
+  component: FormDataContextComponent,
+})
+
+function FormDataContextComponent() {
+  const [result, setResult] = React.useState<any>(null)
+  const [error, setError] = React.useState<string | null>(null)
+  const [loading, setLoading] = React.useState<string | null>(null)
+
+  const testValues = {
+    name: 'TestUser',
+    expectedContextValue: 'context-from-middleware',
+  }
+
+  const handleClick = async (fn: () => Promise<any>, type: string) => {
+    setLoading(type)
+    setError(null)
+    setResult(null)
+    try {
+      const response = await fn()
+      setResult(response)
+    } catch (err) {
+      setError(err instanceof Error ? err.message : 'Unknown error')
+    } finally {
+      setLoading(null)
+    }
+  }
+
+  return (
+    <div className="p-2 m-2 grid gap-2">
+      <h3>FormData with Context Test</h3>
+      <div className="overflow-y-auto">
+        Expected context value:{' '}
+        <code>
+          <pre data-testid="expected-formdata-context-value">
+            {testValues.expectedContextValue}
+          </pre>
+        </code>
+      </div>
+      <div className="flex gap-4">
+        <button
+          type="button"
+          onClick={() =>
+            handleClick(
+              () =>
+                formDataWithContextFn({
+                  data: (() => {
+                    const fd = new FormData()
+                    fd.append('name', testValues.name)
+                    return fd
+                  })(),
+                }),
+              'formdata',
+            )
+          }
+          disabled={!!loading}
+          data-testid="test-formdata-context-btn"
+          className="rounded-md bg-white px-2.5 py-1.5 text-sm font-semibold text-gray-900 shadow-xs ring-1 ring-inset ring-gray-300 hover:bg-gray-50 disabled:opacity-50"
+        >
+          {loading === 'formdata'
+            ? 'Calling...'
+            : 'Call Server Function (FormData)'}
+        </button>
+        <button
+          type="button"
+          onClick={() => handleClick(() => simpleTestFn(), 'simple')}
+          disabled={!!loading}
+          data-testid="test-simple-context-btn"
+          className="rounded-md bg-white px-2.5 py-1.5 text-sm font-semibold text-gray-900 shadow-xs ring-1 ring-inset ring-gray-300 hover:bg-gray-50 disabled:opacity-50"
+        >
+          {loading === 'simple'
+            ? 'Calling...'
+            : 'Call Server Function (No Params)'}
+        </button>
+      </div>
+      {error && (
+        <div data-testid="formdata-context-error" className="text-red-500">
+          Error: {error}
+        </div>
+      )}
+      {result && (
+        <div className="overflow-y-auto">
+          <pre data-testid="formdata-context-result">
+            {JSON.stringify(result, null, 2)}
+          </pre>
+        </div>
+      )}
+    </div>
+  )
+}
diff --git a/e2e/react-start/server-functions/tests/server-functions.spec.ts b/e2e/react-start/server-functions/tests/server-functions.spec.ts
index ecf59969939..b384be2ea6f 100644
--- a/e2e/react-start/server-functions/tests/server-functions.spec.ts
+++ b/e2e/react-start/server-functions/tests/server-functions.spec.ts
@@ -184,6 +184,58 @@ test('Server function can correctly send and receive FormData', async ({
   ).toContainText(expected)
 })
 
+test('server function correctly passes context when using FormData', async ({
+  page,
+}) => {
+  await page.goto('/formdata-context')
+
+  await page.waitForLoadState('networkidle')
+
+  const expectedContextValue =
+    (await page.getByTestId('expected-formdata-context-value').textContent()) ||
+    ''
+  expect(expectedContextValue).toBe('context-from-middleware')
+
+  // Test FormData function
+  await page.getByTestId('test-formdata-context-btn').click()
+  await page.waitForLoadState('networkidle')
+
+  // Wait for the result to appear
+  await page.waitForSelector('[data-testid="formdata-context-result"]')
+
+  const resultText =
+    (await page.getByTestId('formdata-context-result').textContent()) || ''
+  expect(resultText).not.toBe('')
+
+  const result = JSON.parse(resultText)
+
+  // Verify context was passed correctly for FormData function
+  expect(result.success).toBe(true)
+  expect(result.hasContext).toBe(true)
+  expect(result.name).toBe('TestUser')
+  expect(result.testString).toBeDefined()
+  expect(result.testString).toContain('context-from-middleware')
+
+  // Test simple function (no parameters)
+  await page.getByTestId('test-simple-context-btn').click()
+  await page.waitForLoadState('networkidle')
+
+  // Wait for the result to appear
+  await page.waitForSelector('[data-testid="formdata-context-result"]')
+
+  const simpleResultText =
+    (await page.getByTestId('formdata-context-result').textContent()) || ''
+  expect(simpleResultText).not.toBe('')
+
+  const simpleResult = JSON.parse(simpleResultText)
+
+  // Verify context was passed correctly for simple function
+  expect(simpleResult.success).toBe(true)
+  expect(simpleResult.hasContext).toBe(true)
+  expect(simpleResult.testString).toBeDefined()
+  expect(simpleResult.testString).toContain('context-from-middleware')
+})
+
 test('server function can correctly send and receive headers', async ({
   page,
 }) => {
diff --git a/packages/start-server-core/src/server-functions-handler.ts b/packages/start-server-core/src/server-functions-handler.ts
index ec9042ec473..8cd98cf30be 100644
--- a/packages/start-server-core/src/server-functions-handler.ts
+++ b/packages/start-server-core/src/server-functions-handler.ts
@@ -88,8 +88,14 @@ export const handleServerAction = async ({
           if (typeof serializedContext === 'string') {
             try {
               const parsedContext = JSON.parse(serializedContext)
-              if (typeof parsedContext === 'object' && parsedContext) {
-                params.context = { ...context, ...parsedContext }
+              const deserializedContext = fromJSON(parsedContext, {
+                plugins: serovalPlugins,
+              })
+              if (
+                typeof deserializedContext === 'object' &&
+                deserializedContext
+              ) {
+                params.context = { ...context, ...deserializedContext }
               }
             } catch {}
           }