diff --git a/pkg/runtime/runtime.go b/pkg/runtime/runtime.go
index e8610106a..bc09fa732 100644
--- a/pkg/runtime/runtime.go
+++ b/pkg/runtime/runtime.go
@@ -1437,29 +1437,27 @@ func (r *LocalRuntime) processToolCalls(ctx context.Context, sess *session.Sessi
 
 		slog.Debug("Processing tool call", "agent", a.Name(), "tool", toolCall.Function.Name, "session_id", sess.ID)
 
-		// Find the tool - first check runtime tools, then agent tools
-		var tool tools.Tool
-		var runTool func()
+		// Resolve the tool: it must be in the agent's tool set to be callable.
+		// After a handoff the model may hallucinate tools it saw in the
+		// conversation history from a previous agent; rejecting unknown
+		// tools with an error response lets it self-correct.
+		tool, available := agentToolMap[toolCall.Function.Name]
+		if !available {
+			slog.Warn("Tool call for unavailable tool", "agent", a.Name(), "tool", toolCall.Function.Name, "session_id", sess.ID)
+			errTool := tools.Tool{Name: toolCall.Function.Name}
+			r.addToolErrorResponse(ctx, sess, toolCall, errTool, events, a, fmt.Sprintf("Tool '%s' is not available. You can only use the tools provided to you.", toolCall.Function.Name))
+			callSpan.SetStatus(codes.Error, "tool not available")
+			callSpan.End()
+			continue
+		}
 
+		// Pick the handler: runtime-managed tools (transfer_task, handoff)
+		// have dedicated handlers; everything else goes through the toolset.
+		var runTool func()
 		if def, exists := r.toolMap[toolCall.Function.Name]; exists {
-			// Validate that the tool is actually available to this agent
-			if _, available := agentToolMap[toolCall.Function.Name]; !available {
-				slog.Warn("Tool call rejected: tool not available to agent", "agent", a.Name(), "tool", toolCall.Function.Name, "session_id", sess.ID)
-				r.addToolErrorResponse(ctx, sess, toolCall, def.tool, events, a, fmt.Sprintf("Tool '%s' is not available to this agent (%s).", toolCall.Function.Name, a.Name()))
-				callSpan.SetStatus(codes.Error, "tool not available to agent")
-				callSpan.End()
-				continue
-			}
-			tool = def.tool
-			runTool = func() { r.runAgentTool(callCtx, def.handler, sess, toolCall, def.tool, events, a) }
-		} else if t, exists := agentToolMap[toolCall.Function.Name]; exists {
-			tool = t
-			runTool = func() { r.runTool(callCtx, t, toolCall, events, sess, a) }
+			runTool = func() { r.runAgentTool(callCtx, def.handler, sess, toolCall, tool, events, a) }
 		} else {
-			// Tool not found - skip
-			callSpan.SetStatus(codes.Ok, "tool not found")
-			callSpan.End()
-			continue
+			runTool = func() { r.runTool(callCtx, tool, toolCall, events, sess, a) }
 		}
 
 		// Execute tool with approval check
diff --git a/pkg/runtime/runtime_test.go b/pkg/runtime/runtime_test.go
index 15ae30567..a1c1250ca 100644
--- a/pkg/runtime/runtime_test.go
+++ b/pkg/runtime/runtime_test.go
@@ -862,20 +862,16 @@ func TestSummarize_EmptySession(t *testing.T) {
 	require.Contains(t, warningMsg, "empty", "warning message should mention empty session")
 }
 
-func TestProcessToolCalls_UnknownTool_NoToolResultMessage(t *testing.T) {
-	// Build a runtime with a simple agent but no tools registered matching the call
+func TestProcessToolCalls_UnknownTool_ReturnsErrorResponse(t *testing.T) {
 	root := agent.New("root", "You are a test agent", agent.WithModel(&mockProvider{}))
 	tm := team.New(team.WithAgents(root))
 
 	rt, err := NewLocalRuntime(tm, WithSessionCompaction(false), WithModelStore(mockModelStore{}))
 	require.NoError(t, err)
-
-	// Register default tools (contains only transfer_task) to ensure unknown tool isn't matched
 	rt.registerDefaultTools()
 
 	sess := session.New(session.WithUserMessage("Start"))
 
-	// Simulate a model-issued tool call to a non-existent tool
 	calls := []tools.ToolCall{{
 		ID:       "tool-unknown-1",
 		Type:     "function",
@@ -883,23 +879,20 @@ func TestProcessToolCalls_UnknownTool_NoToolResultMessage(t *testing.T) {
 	}}
 
 	events := make(chan Event, 10)
-
-	// No agentTools provided and runtime toolMap doesn't have this tool name
 	rt.processToolCalls(t.Context(), sess, calls, nil, events)
-
-	// Drain events channel
 	close(events)
 	for range events {
 	}
 
-	var sawToolMsg bool
+	// The model must receive an error tool response so it can self-correct.
+	var toolContent string
 	for _, it := range sess.Messages {
 		if it.IsMessage() && it.Message.Message.Role == chat.MessageRoleTool && it.Message.Message.ToolCallID == "tool-unknown-1" {
-			sawToolMsg = true
-			break
+			toolContent = it.Message.Message.Content
 		}
 	}
-	require.False(t, sawToolMsg, "no tool result should be added for unknown tool; this reproduces invalid sequencing state")
+	require.NotEmpty(t, toolContent, "expected an error tool response for unknown tools")
+	assert.Contains(t, toolContent, "not available")
 }
 
 func TestEmitStartupInfo(t *testing.T) {