diff --git a/package-lock.json b/package-lock.json
index 149eaf5..26a156b 100644
--- a/package-lock.json
+++ b/package-lock.json
@@ -563,6 +563,7 @@
         }
       ],
       "license": "MIT",
+      "peer": true,
       "engines": {
         "node": ">=18"
       },
@@ -604,6 +605,7 @@
         }
       ],
       "license": "MIT",
+      "peer": true,
       "engines": {
         "node": ">=18"
       }
@@ -1894,6 +1896,7 @@
       "integrity": "sha512-BtE0k6cjwjLZoZixN0t5AKP0kSzlGu7FctRXYuPAm//aaiZhmfq1JwdYpYr1brzEspYyFeF+8XF5j2VK6oalrA==",
       "dev": true,
       "license": "MIT",
+      "peer": true,
       "dependencies": {
         "@typescript-eslint/scope-manager": "8.54.0",
         "@typescript-eslint/types": "8.54.0",
@@ -2554,6 +2557,7 @@
       "integrity": "sha512-NZyJarBfL7nWwIq+FDL6Zp/yHEhePMNnnJ0y3qfieCrmNvYct8uvtiV41UvlSe6apAfk0fY1FbWx+NwfmpvtTg==",
       "dev": true,
       "license": "MIT",
+      "peer": true,
       "bin": {
         "acorn": "bin/acorn"
       },
@@ -4036,6 +4040,7 @@
       "integrity": "sha512-LEyamqS7W5HB3ujJyvi0HQK/dtVINZvd5mAAp9eT5S/ujByGjiZLCzPcHVzuXbpJDJF/cxwHlfceVUDZ2lnSTw==",
       "dev": true,
       "license": "MIT",
+      "peer": true,
       "dependencies": {
         "@eslint-community/eslint-utils": "^4.8.0",
         "@eslint-community/regexpp": "^4.12.1",
@@ -8648,6 +8653,7 @@
       "integrity": "sha512-5gTmgEY/sqK6gFXLIsQNH19lWb4ebPDLA4SdLP7dsWkIXHWlG66oPuVvXSGFPppYZz8ZDZq0dYYrbHfBCVUb1Q==",
       "dev": true,
       "license": "MIT",
+      "peer": true,
       "engines": {
         "node": ">=12"
       },
@@ -8883,6 +8889,7 @@
       "integrity": "sha512-jl1vZzPDinLr9eUt3J/t7V6FgNEw9QjvBPdysz9KfQDD41fQrC2Y4vKQdiaUpFT4bXlb1RHhLpp8wtm6M5TgSw==",
       "dev": true,
       "license": "Apache-2.0",
+      "peer": true,
       "bin": {
         "tsc": "bin/tsc",
         "tsserver": "bin/tsserver"
diff --git a/src/extension.ts b/src/extension.ts
index da7c837..367c330 100644
--- a/src/extension.ts
+++ b/src/extension.ts
@@ -1574,12 +1574,23 @@ class CopilotTokenTracker implements vscode.Disposable {
 						
 						// Detect tool calls from Copilot CLI
 						if (event.type === 'tool.call' || event.type === 'tool.result') {
-							analysis.toolCalls.total++;
 							const toolName = event.data?.toolName || event.toolName || 'unknown';
-							analysis.toolCalls.byTool[toolName] = (analysis.toolCalls.byTool[toolName] || 0) + 1;
+							
+							// Check if this is an MCP tool by name pattern
+							if (this.isMcpTool(toolName)) {
+								// Count as MCP tool
+								analysis.mcpTools.total++;
+								const serverName = this.extractMcpServerName(toolName);
+								analysis.mcpTools.byServer[serverName] = (analysis.mcpTools.byServer[serverName] || 0) + 1;
+								analysis.mcpTools.byTool[toolName] = (analysis.mcpTools.byTool[toolName] || 0) + 1;
+							} else {
+								// Count as regular tool call
+								analysis.toolCalls.total++;
+								analysis.toolCalls.byTool[toolName] = (analysis.toolCalls.byTool[toolName] || 0) + 1;
+							}
 						}
 						
-						// Detect MCP tools
+						// Detect MCP tools from explicit MCP events
 						if (event.type === 'mcp.tool.call' || (event.data?.mcpServer)) {
 							analysis.mcpTools.total++;
 							const serverName = event.data?.mcpServer || 'unknown';
@@ -1691,12 +1702,23 @@ class CopilotTokenTracker implements vscode.Disposable {
 							// Detect tool invocations
 							if (responseItem.kind === 'toolInvocationSerialized' || 
 							    responseItem.kind === 'prepareToolInvocation') {
-								analysis.toolCalls.total++;
 								const toolName = responseItem.toolId ||
 								                responseItem.toolName || 
 								                responseItem.invocationMessage?.toolName || 
 								                'unknown';
-								analysis.toolCalls.byTool[toolName] = (analysis.toolCalls.byTool[toolName] || 0) + 1;
+								
+								// Check if this is an MCP tool by name pattern
+								if (this.isMcpTool(toolName)) {
+									// Count as MCP tool
+									analysis.mcpTools.total++;
+									const serverName = this.extractMcpServerName(toolName);
+									analysis.mcpTools.byServer[serverName] = (analysis.mcpTools.byServer[serverName] || 0) + 1;
+									analysis.mcpTools.byTool[toolName] = (analysis.mcpTools.byTool[toolName] || 0) + 1;
+								} else {
+									// Count as regular tool call
+									analysis.toolCalls.total++;
+									analysis.toolCalls.byTool[toolName] = (analysis.toolCalls.byTool[toolName] || 0) + 1;
+								}
 							}
 							
 							// Detect MCP servers starting
@@ -1791,6 +1813,27 @@ class CopilotTokenTracker implements vscode.Disposable {
 		}
 	}
 
+	/**
+	 * Check if a tool name indicates it's an MCP (Model Context Protocol) tool.
+	 * MCP tools are identified by names starting with "mcp." or "mcp_"
+	 */
+	private isMcpTool(toolName: string): boolean {
+		return toolName.startsWith('mcp.') || toolName.startsWith('mcp_');
+	}
+
+	/**
+	 * Extract server name from an MCP tool name.
+	 * MCP tool names follow the format: mcp.server.tool or mcp_server_tool
+	 */
+	private extractMcpServerName(toolName: string): string {
+		// Remove the mcp. or mcp_ prefix
+		const withoutPrefix = toolName.replace(/^mcp[._]/, '');
+		// Split on . or _ and take the first part
+		const parts = withoutPrefix.split(/[._]/);
+		// Return the first non-empty part, or 'unknown' if none exist
+		return parts[0] || 'unknown';
+	}
+
 	/**
 	 * Analyze text for context references like #file, #selection, @workspace
 	 */
@@ -2577,11 +2620,27 @@ class CopilotTokenTracker implements vscode.Disposable {
 							if ((event.type === 'tool.call' || event.type === 'tool.result') && turns.length > 0) {
 								const lastTurn = turns[turns.length - 1];
 								const toolName = event.data?.toolName || event.toolName || 'unknown';
-								lastTurn.toolCalls.push({
-									toolName,
-									arguments: event.type === 'tool.call' ? JSON.stringify(event.data?.arguments || {}) : undefined,
-									result: event.type === 'tool.result' ? event.data?.output : undefined
-								});
+								
+								// Check if this is an MCP tool by name pattern
+								if (this.isMcpTool(toolName)) {
+									const serverName = this.extractMcpServerName(toolName);
+									lastTurn.mcpTools.push({ server: serverName, tool: toolName });
+								} else {
+									// Add to regular tool calls
+									lastTurn.toolCalls.push({
+										toolName,
+										arguments: event.type === 'tool.call' ? JSON.stringify(event.data?.arguments || {}) : undefined,
+										result: event.type === 'tool.result' ? event.data?.output : undefined
+									});
+								}
+							}
+							
+							// Handle explicit MCP tool calls from CLI
+							if ((event.type === 'mcp.tool.call' || event.data?.mcpServer) && turns.length > 0) {
+								const lastTurn = turns[turns.length - 1];
+								const serverName = event.data?.mcpServer || 'unknown';
+								const toolName = event.data?.toolName || event.toolName || 'unknown';
+								lastTurn.mcpTools.push({ server: serverName, tool: toolName });
 							}
 						} catch {
 							// Skip malformed lines
@@ -2736,11 +2795,19 @@ class CopilotTokenTracker implements vscode.Disposable {
 			// Extract tool invocations
 			if (item.kind === 'toolInvocationSerialized' || item.kind === 'prepareToolInvocation') {
 				const toolName = item.toolId || item.toolName || item.invocationMessage?.toolName || item.toolSpecificData?.kind || 'unknown';
-				toolCalls.push({
-					toolName,
-					arguments: item.input ? JSON.stringify(item.input) : undefined,
-					result: item.result ? (typeof item.result === 'string' ? item.result : JSON.stringify(item.result)) : undefined
-				});
+				
+				// Check if this is an MCP tool by name pattern
+				if (this.isMcpTool(toolName)) {
+					const serverName = this.extractMcpServerName(toolName);
+					mcpTools.push({ server: serverName, tool: toolName });
+				} else {
+					// Add to regular tool calls
+					toolCalls.push({
+						toolName,
+						arguments: item.input ? JSON.stringify(item.input) : undefined,
+						result: item.result ? (typeof item.result === 'string' ? item.result : JSON.stringify(item.result)) : undefined
+					});
+				}
 			}
 			
 			// Extract MCP tools