diff --git a/tools/ui/src/lib/components/app/badges/BadgesModality.svelte b/tools/ui/src/lib/components/app/badges/BadgesModality.svelte
index 4eb3e7838d1..89a7a1f4ffc 100644
--- a/tools/ui/src/lib/components/app/badges/BadgesModality.svelte
+++ b/tools/ui/src/lib/components/app/badges/BadgesModality.svelte
@@ -1,5 +1,5 @@
 <script lang="ts">
-	import { Eye, Mic, Video } from '@lucide/svelte';
+	import { Image, Mic, Video } from '@lucide/svelte';
 	import { ModelModality } from '$lib/enums';
 
 	interface Props {
@@ -19,7 +19,7 @@
 			]}
 		>
 			{#if modality === ModelModality.VISION}
-				<Eye class="h-3 w-3" />
+				<Image class="h-3 w-3" />
 
 				Vision (Image)
 			{:else if modality === ModelModality.VIDEO}
diff --git a/tools/ui/src/lib/components/app/chat/ChatForm/ChatForm.svelte b/tools/ui/src/lib/components/app/chat/ChatForm/ChatForm.svelte
index 9152935f073..006ec39ce95 100644
--- a/tools/ui/src/lib/components/app/chat/ChatForm/ChatForm.svelte
+++ b/tools/ui/src/lib/components/app/chat/ChatForm/ChatForm.svelte
@@ -8,7 +8,8 @@
 		ChatFormInputFileInputInvisible,
 		ChatFormMcpResourcesList,
 		ChatFormPickers,
-		DialogMcpResourcesBrowser
+		DialogMcpResourcesBrowser,
+		DialogMcpServers
 	} from '$lib/components/app';
 	import {
 		CLIPBOARD_CONTENT_QUOTE_PREFIX,
@@ -151,9 +152,8 @@
 		getServerHome: () => toolsStore.serverHome ?? null,
 		getShowModelSelector: () => showModelSelector,
 		getValue: () => value,
-		hasCwdTools: () => toolsStore.hasEnabledCwdTools,
-		hasPrompts: () =>
-			mcpStore.hasPromptsCapability(conversationsStore.preferences.getAllMcpServerOverrides()),
+		hasCwdTools: () => conversationsStore.preferences.hasEnabledCwdTools(),
+		hasPrompts: () => mcpStore.hasPromptsCapability(),
 		openModelSelector: () => chatFormActionsRef?.openModelSelector(),
 		setCaretOffset: (offset) => inputRef?.setCaretOffset(offset),
 		setValue: (v) => {
@@ -183,6 +183,9 @@
 	let isResourceDialogOpen = $state(false);
 	let preSelectedResourceUri = $state<string | undefined>(undefined);
 
+	// MCP Servers Dialog State
+	let isMcpServersDialogOpen = $state(false);
+
 	let currentConfig = $derived(settingsStore.config);
 
 	let pasteLongTextToFileLength = $derived.by(() => {
@@ -618,6 +621,7 @@
 				onFileUpload={handleFileUpload}
 				onMcpPromptClick={showMcpPromptButton ? () => pickers.openPromptPicker() : undefined}
 				onMcpResourcesClick={() => (isResourceDialogOpen = true)}
+				onMcpSettingsClick={() => (isMcpServersDialogOpen = true)}
 				onMicClick={handleMicClick}
 				{onStop}
 				onSystemPromptClick={() => onSystemPromptClick?.({ files: uploadedFiles, message: value })}
@@ -630,7 +634,7 @@
 
 	<ContextGaugePopup />
 
-	{#if toolsStore.hasEnabledCwdTools}
+	{#if conversationsStore.preferences.hasEnabledCwdTools()}
 		<ChatFormCurrentWorkingDirectory
 			bind:query={pickers.workingDirectoryQuery}
 			customAnchor={mentionAnchor}
@@ -656,3 +660,5 @@
 	}}
 	preSelectedUri={preSelectedResourceUri}
 />
+
+<DialogMcpServers bind:open={isMcpServersDialogOpen} />
diff --git a/tools/ui/src/lib/components/app/chat/ChatForm/ChatFormActions/ChatFormActionAdd/ChatFormActionAddDropdown.svelte b/tools/ui/src/lib/components/app/chat/ChatForm/ChatFormActions/ChatFormActionAdd/ChatFormActionAddDropdown.svelte
index 02bfadb7e41..c33ffb7a36d 100644
--- a/tools/ui/src/lib/components/app/chat/ChatForm/ChatFormActions/ChatFormActionAdd/ChatFormActionAddDropdown.svelte
+++ b/tools/ui/src/lib/components/app/chat/ChatForm/ChatFormActions/ChatFormActionAdd/ChatFormActionAddDropdown.svelte
@@ -1,10 +1,6 @@
 <script lang="ts">
-	import { File, FolderOpen, MessageSquare, Plus, Zap } from '@lucide/svelte';
-	import {
-		ChatFormActionAddMcpServersSubmenu,
-		ChatFormActionAddReasoningSubmenu,
-		ChatFormActionAddToolsSubmenu
-	} from '$lib/components/app';
+	import { File, Image, MessageSquare, Mic, Plus, Video } from '@lucide/svelte';
+	import { ChatFormActionAddToolsSubmenu, McpLogo } from '$lib/components/app';
 	import { buttonVariants } from '$lib/components/ui/button';
 	import * as DropdownMenu from '$lib/components/ui/dropdown-menu';
 	import * as Tooltip from '$lib/components/ui/tooltip';
@@ -12,10 +8,10 @@
 	import {
 		ATTACHMENT_FILE_ITEMS,
 		ATTACHMENT_TOOLTIP_TEXT,
-		ICON_CLASS_DEFAULT,
-		TOOLTIP_DELAY_DURATION
+		ICON_CLASS_DEFAULT
 	} from '$lib/constants';
 	import { getChatFormActionsContext } from '$lib/contexts';
+	import { AttachmentAction, AttachmentItemEnabledWhen } from '$lib/enums';
 	import { useAttachmentMenu } from '$lib/hooks/use-attachment-menu.svelte';
 
 	interface Props {
@@ -31,11 +27,6 @@
 	// must not restore focus to the trigger on close
 	let suppressCloseAutoFocus = false;
 
-	function handleMcpSettingsClick() {
-		dropdownOpen = false;
-		chatFormActions.onMcpSettingsClick?.();
-	}
-
 	const attachmentMenu = useAttachmentMenu(
 		() => ({
 			hasAudioModality: chatFormActions.hasAudioModality,
@@ -54,6 +45,18 @@
 			dropdownOpen = false;
 		}
 	);
+
+	const FILE_MODALITY_ICONS: Record<string, { icon: typeof Image; label: string }> = {
+		[AttachmentItemEnabledWhen.HAS_AUDIO_MODALITY]: { icon: Mic, label: 'Audio' },
+		[AttachmentItemEnabledWhen.HAS_VIDEO_MODALITY]: { icon: Video, label: 'Video' },
+		[AttachmentItemEnabledWhen.HAS_VISION_MODALITY]: { icon: Image, label: 'Vision' }
+	};
+
+	const supportedModalities = $derived.by(() =>
+		ATTACHMENT_FILE_ITEMS.filter((item) => attachmentMenu.isItemEnabled(item.enabledWhen))
+			.map((item) => FILE_MODALITY_ICONS[item.enabledWhen ?? ''])
+			.filter((modality) => modality !== undefined)
+	);
 </script>
 
 <div class="flex items-center gap-1 {className}">
@@ -93,54 +96,32 @@
 				}
 			}}
 		>
-			<ChatFormActionAddReasoningSubmenu />
-
-			<DropdownMenu.Separator />
-
-			<DropdownMenu.Sub>
-				<DropdownMenu.SubTrigger class="flex cursor-pointer items-center gap-2">
-					<File class={ICON_CLASS_DEFAULT} />
+			<DropdownMenu.Item
+				class="flex cursor-pointer items-center gap-2"
+				onclick={() => attachmentMenu.callbacks[AttachmentAction.FILE_UPLOAD]()}
+			>
+				<File class={ICON_CLASS_DEFAULT} />
 
+				<span class="flex min-w-0 items-center gap-2">
 					<span>Add files</span>
-				</DropdownMenu.SubTrigger>
-
-				<DropdownMenu.SubContent class="w-48">
-					{#each ATTACHMENT_FILE_ITEMS as item (item.id)}
-						{@const enabled = attachmentMenu.isItemEnabled(item.enabledWhen)}
-						{#if enabled}
-							<DropdownMenu.Item
-								class="{item.class ?? ''} flex cursor-pointer items-center gap-2"
-								onclick={() => attachmentMenu.callbacks[item.action]()}
-							>
-								<item.icon class={ICON_CLASS_DEFAULT} />
-
-								<span>{item.label}</span>
-							</DropdownMenu.Item>
-						{:else if item.disabledTooltip}
-							<Tooltip.Root delayDuration={TOOLTIP_DELAY_DURATION}>
-								<Tooltip.Trigger tabindex={-1}>
-									{#snippet child({ props })}
-										<div {...props} class="cursor-default">
-											<DropdownMenu.Item
-												class="{item.class ?? ''} flex items-center gap-2"
-												disabled
-											>
-												<item.icon class={ICON_CLASS_DEFAULT} />
-
-												<span>{item.label}</span>
-											</DropdownMenu.Item>
-										</div>
-									{/snippet}
-								</Tooltip.Trigger>
-
-								<Tooltip.Content side="right">
-									<p>{item.disabledTooltip}</p>
-								</Tooltip.Content>
-							</Tooltip.Root>
-						{/if}
-					{/each}
-				</DropdownMenu.SubContent>
-			</DropdownMenu.Sub>
+
+					{#if supportedModalities.length > 0}
+						<span class="flex items-center gap-0.75 text-muted-foreground">
+							{#each supportedModalities as modality (modality.label)}
+								<Tooltip.Root>
+									<Tooltip.Trigger>
+										<modality.icon class="size-2.75" />
+									</Tooltip.Trigger>
+
+									<Tooltip.Content>
+										<p>{modality.label}</p>
+									</Tooltip.Content>
+								</Tooltip.Root>
+							{/each}
+						</span>
+					{/if}
+				</span>
+			</DropdownMenu.Item>
 
 			<DropdownMenu.Item
 				class="flex cursor-pointer items-center gap-2"
@@ -156,31 +137,14 @@
 
 			<ChatFormActionAddToolsSubmenu />
 
-			<ChatFormActionAddMcpServersSubmenu onMcpSettingsClick={handleMcpSettingsClick} />
-
-			{#if chatFormActions.hasMcpPromptsSupport}
-				<DropdownMenu.Separator />
-
-				<DropdownMenu.Item
-					class="flex cursor-pointer items-center gap-2"
-					onclick={chatFormActions.onMcpPromptClick}
-				>
-					<Zap class={ICON_CLASS_DEFAULT} />
-
-					<span>MCP Prompt</span>
-				</DropdownMenu.Item>
-			{/if}
-
-			{#if chatFormActions.hasMcpResourcesSupport}
-				<DropdownMenu.Item
-					class="flex cursor-pointer items-center gap-2"
-					onclick={chatFormActions.onMcpResourcesClick}
-				>
-					<FolderOpen class={ICON_CLASS_DEFAULT} />
+			<DropdownMenu.Item
+				class="flex cursor-pointer items-center gap-2"
+				onclick={chatFormActions.onMcpSettingsClick}
+			>
+				<McpLogo class={ICON_CLASS_DEFAULT} />
 
-					<span>MCP Resources</span>
-				</DropdownMenu.Item>
-			{/if}
+				<span>MCP Servers</span>
+			</DropdownMenu.Item>
 		</DropdownMenu.Content>
 	</DropdownMenu.Root>
 </div>
diff --git a/tools/ui/src/lib/components/app/chat/ChatForm/ChatFormActions/ChatFormActionAdd/ChatFormActionAddMcpServersSubmenu.svelte b/tools/ui/src/lib/components/app/chat/ChatForm/ChatFormActions/ChatFormActionAdd/ChatFormActionAddMcpServersSubmenu.svelte
deleted file mode 100644
index bceb43d2abd..00000000000
--- a/tools/ui/src/lib/components/app/chat/ChatForm/ChatFormActions/ChatFormActionAdd/ChatFormActionAddMcpServersSubmenu.svelte
+++ /dev/null
@@ -1,152 +0,0 @@
-<script lang="ts">
-	import { Plus, Settings } from '@lucide/svelte';
-	import { goto } from '$app/navigation';
-	import { DropdownMenuSearchable, McpLogo, McpServerIdentity } from '$lib/components/app';
-	import * as DropdownMenu from '$lib/components/ui/dropdown-menu';
-	import { Switch } from '$lib/components/ui/switch';
-	import { ICON_CLASS_DEFAULT, ROUTES } from '$lib/constants';
-	import { HealthCheckStatus } from '$lib/enums';
-	import { conversationsStore, mcpStore } from '$lib/stores';
-	import type { MCPServerSettingsEntry } from '$lib/types';
-
-	interface Props {
-		onMcpSettingsClick?: () => void;
-	}
-
-	let { onMcpSettingsClick }: Props = $props();
-
-	let mcpSearchQuery = $state('');
-	// Every configured server is listed; `enabled` is an on/off state,
-	// not a visibility filter, so a disabled server stays toggleable.
-	let mcpServers = $derived(mcpStore.getServers());
-	let hasMcpServers = $derived(mcpServers.length > 0);
-	let filteredMcpServers = $derived.by(() => {
-		const query = mcpSearchQuery.toLowerCase().trim();
-
-		if (!query) return mcpServers;
-
-		return mcpServers.filter((s) => {
-			const name = getServerLabel(s).toLowerCase();
-			const url = s.url.toLowerCase();
-
-			return name.includes(query) || url.includes(query);
-		});
-	});
-
-	function getServerLabel(server: MCPServerSettingsEntry): string {
-		return mcpStore.getServerLabel(server);
-	}
-
-	function isServerEnabledForChat(serverId: string): boolean {
-		return conversationsStore.preferences.isMcpServerEnabledForChat(serverId);
-	}
-
-	async function toggleServerForChat(serverId: string) {
-		await conversationsStore.preferences.toggleMcpServerForChat(serverId);
-	}
-
-	function handleMcpSubMenuOpen(open: boolean) {
-		if (open) {
-			mcpSearchQuery = '';
-			mcpStore.runHealthChecksForServers(mcpServers);
-		}
-	}
-
-	function handleMcpSettingsClick() {
-		onMcpSettingsClick?.();
-
-		goto(`${hasMcpServers ? '' : '?add'}${ROUTES.MCP_SERVERS}`);
-	}
-</script>
-
-<DropdownMenu.Root>
-	<DropdownMenu.Sub onOpenChange={handleMcpSubMenuOpen}>
-		<DropdownMenu.SubTrigger class="flex cursor-pointer items-center gap-2">
-			<McpLogo class={ICON_CLASS_DEFAULT} />
-
-			<span>MCP Servers</span>
-		</DropdownMenu.SubTrigger>
-
-		<DropdownMenu.SubContent class="w-72 pt-0">
-			{#if hasMcpServers}
-				<DropdownMenuSearchable
-					bind:searchValue={mcpSearchQuery}
-					emptyMessage="No servers found"
-					isEmpty={filteredMcpServers.length === 0}
-					placeholder="Search servers..."
-				>
-					<div class="max-h-64 overflow-y-auto">
-						{#each filteredMcpServers as server (server.id)}
-							{@const healthState = mcpStore.getHealthCheckState(server.id)}
-							{@const hasError = healthState.status === HealthCheckStatus.ERROR}
-							{@const isEnabledForChat = isServerEnabledForChat(server.id)}
-							{@const displayName = getServerLabel(server)}
-							{@const faviconUrl = mcpStore.getServerFavicon(server.id)}
-
-							<button
-								class="flex w-full items-center justify-between gap-2 rounded-sm px-2 py-2 text-left transition-colors hover:bg-accent disabled:cursor-not-allowed disabled:opacity-50"
-								disabled={hasError}
-								onclick={() => !hasError && toggleServerForChat(server.id)}
-								type="button"
-							>
-								<div class="flex min-w-0 flex-1 items-center gap-2">
-									<div class="min-w-0 flex-1">
-										<McpServerIdentity
-											{displayName}
-											{faviconUrl}
-											iconClass={ICON_CLASS_DEFAULT}
-											iconRounded="rounded-sm"
-											nameClass="text-sm"
-											showVersion={false}
-										/>
-									</div>
-
-									{#if hasError}
-										<span
-											class="shrink-0 rounded bg-destructive/15 px-1.5 py-0.5 text-xs text-destructive"
-										>
-											Error
-										</span>
-									{/if}
-								</div>
-
-								<Switch
-									checked={isEnabledForChat}
-									disabled={hasError}
-									onCheckedChange={() => toggleServerForChat(server.id)}
-									onclick={(e) => e.stopPropagation()}
-								/>
-							</button>
-						{/each}
-					</div>
-
-					{#snippet footer()}
-						<DropdownMenu.Item
-							class="flex cursor-pointer items-center gap-2"
-							onclick={handleMcpSettingsClick}
-						>
-							<Settings class={ICON_CLASS_DEFAULT} />
-
-							<span>Manage MCP Servers</span>
-						</DropdownMenu.Item>
-					{/snippet}
-				</DropdownMenuSearchable>
-			{:else}
-				<div class="px-2 py-3 text-center text-sm text-muted-foreground">
-					No MCP servers configured
-				</div>
-
-				<DropdownMenu.Separator />
-
-				<DropdownMenu.Item
-					class="flex cursor-pointer items-center gap-2"
-					onclick={handleMcpSettingsClick}
-				>
-					<Plus class={ICON_CLASS_DEFAULT} />
-
-					<span>Add MCP Servers</span>
-				</DropdownMenu.Item>
-			{/if}
-		</DropdownMenu.SubContent>
-	</DropdownMenu.Sub>
-</DropdownMenu.Root>
diff --git a/tools/ui/src/lib/components/app/chat/ChatForm/ChatFormActions/ChatFormActionAdd/ChatFormActionAddMcpSubmenu.svelte b/tools/ui/src/lib/components/app/chat/ChatForm/ChatFormActions/ChatFormActionAdd/ChatFormActionAddMcpSubmenu.svelte
new file mode 100644
index 00000000000..07439afd617
--- /dev/null
+++ b/tools/ui/src/lib/components/app/chat/ChatForm/ChatFormActions/ChatFormActionAdd/ChatFormActionAddMcpSubmenu.svelte
@@ -0,0 +1,51 @@
+<script lang="ts">
+	import { FolderOpen, Server, Zap } from '@lucide/svelte';
+	import { McpLogo } from '$lib/components/app';
+	import * as DropdownMenu from '$lib/components/ui/dropdown-menu';
+	import { ICON_CLASS_DEFAULT } from '$lib/constants';
+	import { getChatFormActionsContext } from '$lib/contexts';
+
+	const chatFormActions = getChatFormActionsContext();
+
+	function handleServersClick() {
+		chatFormActions.onMcpSettingsClick?.();
+	}
+</script>
+
+<DropdownMenu.Sub>
+	<DropdownMenu.SubTrigger class="flex cursor-pointer items-center gap-2">
+		<McpLogo class={ICON_CLASS_DEFAULT} />
+
+		<span>MCP</span>
+	</DropdownMenu.SubTrigger>
+
+	<DropdownMenu.SubContent class="w-48">
+		<DropdownMenu.Item class="flex cursor-pointer items-center gap-2" onclick={handleServersClick}>
+			<Server class={ICON_CLASS_DEFAULT} />
+
+			<span>Servers</span>
+		</DropdownMenu.Item>
+
+		{#if chatFormActions.hasMcpPromptsSupport}
+			<DropdownMenu.Item
+				class="flex cursor-pointer items-center gap-2"
+				onclick={chatFormActions.onMcpPromptClick}
+			>
+				<Zap class={ICON_CLASS_DEFAULT} />
+
+				<span>Prompts</span>
+			</DropdownMenu.Item>
+		{/if}
+
+		{#if chatFormActions.hasMcpResourcesSupport}
+			<DropdownMenu.Item
+				class="flex cursor-pointer items-center gap-2"
+				onclick={chatFormActions.onMcpResourcesClick}
+			>
+				<FolderOpen class={ICON_CLASS_DEFAULT} />
+
+				<span>Resources</span>
+			</DropdownMenu.Item>
+		{/if}
+	</DropdownMenu.SubContent>
+</DropdownMenu.Sub>
diff --git a/tools/ui/src/lib/components/app/chat/ChatForm/ChatFormActions/ChatFormActionAdd/ChatFormActionAddReasoningSubmenu.svelte b/tools/ui/src/lib/components/app/chat/ChatForm/ChatFormActions/ChatFormActionAdd/ChatFormActionAddReasoningSubmenu.svelte
index 1b6fc4b0209..197d6c2e590 100644
--- a/tools/ui/src/lib/components/app/chat/ChatForm/ChatFormActions/ChatFormActionAdd/ChatFormActionAddReasoningSubmenu.svelte
+++ b/tools/ui/src/lib/components/app/chat/ChatForm/ChatFormActions/ChatFormActionAdd/ChatFormActionAddReasoningSubmenu.svelte
@@ -8,70 +8,68 @@
 	const reasoning = useReasoningMenu();
 </script>
 
-{#if reasoning.modelSupportsThinking}
-	<DropdownMenu.Sub>
-		<DropdownMenu.SubTrigger class="flex cursor-pointer items-center gap-2">
-			{#if reasoning.thinkingEnabled}
-				<Lightbulb class="{ICON_CLASS_DEFAULT} shrink-0 text-amber-400" />
-			{:else if reasoning.isOff}
-				<LightbulbOff class="{ICON_CLASS_DEFAULT} shrink-0 text-muted-foreground" />
-			{:else}
-				<Lightbulb class="{ICON_CLASS_DEFAULT} shrink-0 text-muted-foreground" />
-			{/if}
+<DropdownMenu.Sub>
+	<DropdownMenu.SubTrigger class="flex cursor-pointer items-center gap-2">
+		{#if reasoning.isReasoningActive}
+			<Lightbulb class="{ICON_CLASS_DEFAULT} shrink-0 text-amber-400" />
+		{:else if reasoning.isOff}
+			<LightbulbOff class="{ICON_CLASS_DEFAULT} shrink-0 text-muted-foreground" />
+		{:else}
+			<Lightbulb class="{ICON_CLASS_DEFAULT} shrink-0 text-muted-foreground" />
+		{/if}
 
-			<span
-				class="text-sm inline-flex gap-2 {!reasoning.thinkingEnabled
-					? 'text-muted-foreground'
-					: ''}"
-			>
-				Reasoning
+		<span
+			class="text-sm inline-flex gap-2 {!reasoning.isReasoningActive
+				? 'text-muted-foreground'
+				: ''}"
+		>
+			Reasoning
 
-				<span class="capitalize text-muted-foreground">
-					{reasoning.currentEffort}
-				</span>
+			<span class="capitalize text-muted-foreground">
+				{reasoning.currentEffort}
 			</span>
-		</DropdownMenu.SubTrigger>
+		</span>
+	</DropdownMenu.SubTrigger>
 
-		<DropdownMenu.SubContent
-			class="w-60 bg-popover p-1.5 text-popover-foreground shadow-md outline-none"
-		>
-			{#each reasoning.levels as level (level.value)}
-				{@const tokenLabel = reasoning.tokenLabel(level)}
-				<DropdownMenu.Item
-					class="flex w-full cursor-pointer items-center gap-3 rounded-md px-2 py-1.75 text-left text-sm transition-colors hover:bg-accent {reasoning.isSelected(
-						level
-					)
-						? 'bg-accent'
-						: ''}"
-					onclick={() => reasoning.select(level)}
-				>
-					{#if reasoning.isSelected(level)}
-						<Check class="{ICON_CLASS_DEFAULT} shrink-0 text-foreground" />
-					{:else}
-						<div class="{ICON_CLASS_DEFAULT} shrink-0"></div>
-					{/if}
+	<DropdownMenu.SubContent
+		class="w-60 bg-popover p-1.5 text-popover-foreground shadow-md outline-none"
+	>
+		{#each reasoning.levels as level (level.value)}
+			{@const tokenLabel = reasoning.tokenLabel(level)}
+			<DropdownMenu.Item
+				class="flex w-full cursor-pointer items-center gap-3 rounded-md px-2 py-1.75 text-left text-sm transition-colors hover:bg-accent {reasoning.isSelected(
+					level
+				)
+					? 'bg-accent'
+					: ''}"
+				onclick={() => reasoning.select(level)}
+			>
+				{#if reasoning.isSelected(level)}
+					<Check class="{ICON_CLASS_DEFAULT} shrink-0 text-foreground" />
+				{:else}
+					<div class="{ICON_CLASS_DEFAULT} shrink-0"></div>
+				{/if}
 
-					<span class="flex-1">{level.label}</span>
+				<span class="flex-1">{level.label}</span>
 
-					{#if tokenLabel}
-						<span class="text-[11px] text-muted-foreground opacity-60">
-							{tokenLabel}
-						</span>
-					{/if}
+				{#if tokenLabel}
+					<span class="text-[11px] text-muted-foreground opacity-60">
+						{tokenLabel}
+					</span>
+				{/if}
 
-					{#if level.hasInfo}
-						<Tooltip.Root>
-							<Tooltip.Trigger>
-								<Info class="h-3.5 w-3.5 shrink-0 text-muted-foreground" />
-							</Tooltip.Trigger>
+				{#if level.hasInfo}
+					<Tooltip.Root>
+						<Tooltip.Trigger>
+							<Info class="h-3.5 w-3.5 shrink-0 text-muted-foreground" />
+						</Tooltip.Trigger>
 
-							<Tooltip.Content side="left">
-								<p>Maximum reasoning effort with extended context usage</p>
-							</Tooltip.Content>
-						</Tooltip.Root>
-					{/if}
-				</DropdownMenu.Item>
-			{/each}
-		</DropdownMenu.SubContent>
-	</DropdownMenu.Sub>
-{/if}
+						<Tooltip.Content side="left">
+							<p>Maximum reasoning effort with extended context usage</p>
+						</Tooltip.Content>
+					</Tooltip.Root>
+				{/if}
+			</DropdownMenu.Item>
+		{/each}
+	</DropdownMenu.SubContent>
+</DropdownMenu.Sub>
diff --git a/tools/ui/src/lib/components/app/chat/ChatForm/ChatFormActions/ChatFormActionAdd/ChatFormActionAddSheet.svelte b/tools/ui/src/lib/components/app/chat/ChatForm/ChatFormActions/ChatFormActionAdd/ChatFormActionAddSheet.svelte
index 2f69dc96de7..e8da0af6b9e 100644
--- a/tools/ui/src/lib/components/app/chat/ChatForm/ChatFormActions/ChatFormActionAdd/ChatFormActionAddSheet.svelte
+++ b/tools/ui/src/lib/components/app/chat/ChatForm/ChatFormActions/ChatFormActionAdd/ChatFormActionAddSheet.svelte
@@ -1,18 +1,10 @@
 <script lang="ts">
-	import { File, FolderOpen, MessageSquare, Zap } from '@lucide/svelte';
-	import {
-		Check,
-		ChevronDown,
-		ChevronRight,
-		Lightbulb,
-		LightbulbOff,
-		PencilRuler
-	} from '@lucide/svelte';
+	import { File, MessageSquare } from '@lucide/svelte';
+	import { ChevronDown, ChevronRight, PencilRuler } from '@lucide/svelte';
 	import { McpLogo } from '$lib/components/app';
 	import { Checkbox } from '$lib/components/ui/checkbox';
 	import * as Collapsible from '$lib/components/ui/collapsible';
 	import * as Sheet from '$lib/components/ui/sheet';
-	import { Switch } from '$lib/components/ui/switch';
 	import * as Tooltip from '$lib/components/ui/tooltip';
 	import {
 		ATTACHMENT_FILE_ITEMS,
@@ -20,12 +12,10 @@
 		TOOLTIP_DELAY_DURATION
 	} from '$lib/constants';
 	import { getChatFormActionsContext } from '$lib/contexts';
-	import { HealthCheckStatus } from '$lib/enums';
 	import { AttachmentAction } from '$lib/enums/attachment.enums';
 	import { useAttachmentMenu } from '$lib/hooks/use-attachment-menu.svelte';
-	import { useReasoningMenu } from '$lib/hooks/use-reasoning-menu.svelte';
 	import { useToolsPanel } from '$lib/hooks/use-tools-panel.svelte';
-	import { conversationsStore, mcpStore } from '$lib/stores';
+	import type { ToolGroup } from '$lib/types';
 	import type { Snippet } from 'svelte';
 
 	interface Props {
@@ -38,10 +28,8 @@
 	const chatFormActions = getChatFormActionsContext();
 
 	let sheetOpen = $state(false);
-	let reasoningExpanded = $state(false);
 	let filesExpanded = $state(true);
 	let toolsExpanded = $state(false);
-	let mcpExpanded = $state(false);
 
 	const attachmentMenu = useAttachmentMenu(
 		() => ({
@@ -63,15 +51,12 @@
 	);
 
 	const toolsPanel = useToolsPanel();
-	const reasoning = useReasoningMenu();
 
 	const sheetItemClass =
 		'flex w-full items-center gap-3 rounded-md px-3 py-2.5 text-left text-sm transition-colors hover:bg-accent active:bg-accent disabled:cursor-not-allowed disabled:opacity-50';
 
 	const sheetItemRowClass =
 		'flex w-full items-center justify-between gap-2 rounded-md px-3 py-2 text-left text-sm transition-colors hover:bg-accent';
-
-	let mcpServers = $derived(mcpStore.getServers());
 </script>
 
 <div class="flex items-center gap-1 {className}">
@@ -88,65 +73,6 @@
 			</Sheet.Header>
 
 			<div class="flex flex-col gap-1 px-1.5 pb-2">
-				{#if reasoning.modelSupportsThinking}
-					<Collapsible.Root
-						onOpenChange={(open) => (reasoningExpanded = open)}
-						open={reasoningExpanded}
-					>
-						<Collapsible.Trigger class={sheetItemClass}>
-							{#if reasoningExpanded}
-								<ChevronDown class="{ICON_CLASS_DEFAULT} shrink-0" />
-							{:else}
-								<ChevronRight class="{ICON_CLASS_DEFAULT} shrink-0" />
-							{/if}
-
-							{#if reasoning.thinkingEnabled}
-								<Lightbulb class="{ICON_CLASS_DEFAULT} shrink-0 text-amber-400" />
-							{:else if reasoning.isOff}
-								<LightbulbOff class="{ICON_CLASS_DEFAULT} shrink-0 text-muted-foreground" />
-							{:else}
-								<Lightbulb class="{ICON_CLASS_DEFAULT} shrink-0 text-muted-foreground" />
-							{/if}
-
-							<span class="flex-1">Reasoning</span>
-
-							<span class="text-xs capitalize text-muted-foreground">
-								{reasoning.currentEffort}
-							</span>
-						</Collapsible.Trigger>
-
-						<Collapsible.Content>
-							<div class="flex flex-col gap-0.5 pl-4">
-								{#each reasoning.levels as level (level.value)}
-									{@const tokenLabel = reasoning.tokenLabel(level)}
-									<button
-										class:bg-accent={reasoning.isSelected(level)}
-										class={sheetItemRowClass}
-										onclick={() => reasoning.select(level)}
-										type="button"
-									>
-										<div class="flex min-w-0 items-center gap-3">
-											{#if reasoning.isSelected(level)}
-												<Check class="{ICON_CLASS_DEFAULT} shrink-0 text-foreground" />
-											{:else}
-												<div class="{ICON_CLASS_DEFAULT} shrink-0"></div>
-											{/if}
-
-											<span class="text-sm">{level.label}</span>
-										</div>
-
-										{#if tokenLabel}
-											<span class="shrink-0 text-[11px] text-muted-foreground opacity-60">
-												{tokenLabel}
-											</span>
-										{/if}
-									</button>
-								{/each}
-							</div>
-						</Collapsible.Content>
-					</Collapsible.Root>
-				{/if}
-
 				<Collapsible.Root onOpenChange={(open) => (filesExpanded = open)} open={filesExpanded}>
 					<Collapsible.Trigger class={sheetItemClass}>
 						{#if filesExpanded}
@@ -194,80 +120,15 @@
 					</Collapsible.Content>
 				</Collapsible.Root>
 
-				<Collapsible.Root onOpenChange={(open) => (mcpExpanded = open)} open={mcpExpanded}>
-					<Collapsible.Trigger class={sheetItemClass}>
-						{#if mcpExpanded}
-							<ChevronDown class="{ICON_CLASS_DEFAULT} shrink-0" />
-						{:else}
-							<ChevronRight class="{ICON_CLASS_DEFAULT} shrink-0" />
-						{/if}
-
-						<McpLogo class="inline {ICON_CLASS_DEFAULT} shrink-0" />
-
-						<span class="flex-1">MCP Servers</span>
-
-						<span class="text-xs text-muted-foreground">
-							{mcpServers.length} server{mcpServers.length !== 1 ? 's' : ''}
-						</span>
-					</Collapsible.Trigger>
-
-					<Collapsible.Content>
-						<div class="flex flex-col gap-0.5 pl-4">
-							{#each mcpServers as server (server.id)}
-								{@const healthState = mcpStore.getHealthCheckState(server.id)}
-								{@const hasError = healthState.status === HealthCheckStatus.ERROR}
-								{@const displayName = mcpStore.getServerLabel(server)}
-								{@const faviconUrl = mcpStore.getServerFavicon(server.id)}
-								{@const isEnabled = conversationsStore.preferences.isMcpServerEnabledForChat(
-									server.id
-								)}
-
-								<button
-									class={sheetItemRowClass}
-									disabled={hasError}
-									onclick={() =>
-										!hasError && conversationsStore.preferences.toggleMcpServerForChat(server.id)}
-									type="button"
-								>
-									<div class="flex min-w-0 flex-1 items-center gap-2">
-										{#if faviconUrl}
-											<img
-												alt=""
-												class="{ICON_CLASS_DEFAULT} shrink-0 rounded-sm"
-												onerror={(e) => {
-													(e.currentTarget as HTMLImageElement).style.display = 'none';
-												}}
-												src={faviconUrl}
-											/>
-										{/if}
-
-										<span class="min-w-0 truncate text-sm">{displayName}</span>
-									</div>
-
-									{#if hasError}
-										<span
-											class="shrink-0 rounded bg-destructive/15 px-1.5 py-0.5 text-xs text-destructive"
-										>
-											Error
-										</span>
-									{:else}
-										<Switch
-											checked={isEnabled}
-											onCheckedChange={() =>
-												conversationsStore.preferences.toggleMcpServerForChat(server.id)}
-										/>
-									{/if}
-								</button>
-							{/each}
+				<button
+					class={sheetItemClass}
+					onclick={() => attachmentMenu.callbacks[AttachmentAction.SYSTEM_PROMPT_CLICK]()}
+					type="button"
+				>
+					<MessageSquare class="{ICON_CLASS_DEFAULT} shrink-0" />
 
-							{#if mcpServers.length === 0}
-								<div class="px-3 py-2 text-center text-sm text-muted-foreground">
-									No MCP servers configured
-								</div>
-							{/if}
-						</div>
-					</Collapsible.Content>
-				</Collapsible.Root>
+					<span>System Message</span>
+				</button>
 
 				{#if toolsPanel.totalToolCount > 0}
 					<Collapsible.Root onOpenChange={(open) => (toolsExpanded = open)} open={toolsExpanded}>
@@ -289,40 +150,12 @@
 
 						<Collapsible.Content>
 							<div class="flex flex-col gap-0.5 pl-4">
-								{#each toolsPanel.activeGroups as group (group.key)}
-									{@const checked = toolsPanel.isGroupChecked(group)}
-									{@const enabledCount = toolsPanel.getEnabledToolCount(group)}
-									{@const favicon = toolsPanel.getFavicon(group)}
+								{#each toolsPanel.categoryGroups as group (group.key)}
+									{@render sheetGroupRow(group)}
+								{/each}
 
-									<button
-										class={sheetItemRowClass}
-										onclick={() => toolsPanel.toggleGroupByKey(group.key)}
-										type="button"
-									>
-										{#if favicon}
-											<img
-												alt=""
-												class="{ICON_CLASS_DEFAULT} shrink-0 rounded-sm"
-												onerror={(e) => {
-													(e.currentTarget as HTMLImageElement).style.display = 'none';
-												}}
-												src={favicon}
-											/>
-										{/if}
-
-										<span class="min-w-0 flex-1 truncate text-sm font-medium">{group.label}</span>
-
-										<span class="shrink-0 text-xs text-muted-foreground">
-											{enabledCount}/{group.tools.length}
-										</span>
-
-										<Checkbox
-											{checked}
-											class="{ICON_CLASS_DEFAULT} shrink-0"
-											onCheckedChange={() => toolsPanel.toggleGroupByKey(group.key)}
-											onclick={(e) => e.stopPropagation()}
-										/>
-									</button>
+								{#each toolsPanel.mcpGroups as group (group.key)}
+									{@render sheetGroupRow(group)}
 								{/each}
 							</div>
 						</Collapsible.Content>
@@ -331,38 +164,54 @@
 
 				<button
 					class={sheetItemClass}
-					onclick={() => attachmentMenu.callbacks[AttachmentAction.SYSTEM_PROMPT_CLICK]()}
+					onclick={() => {
+						sheetOpen = false;
+						chatFormActions.onMcpSettingsClick?.();
+					}}
 					type="button"
 				>
-					<MessageSquare class="{ICON_CLASS_DEFAULT} shrink-0" />
+					<McpLogo class="inline {ICON_CLASS_DEFAULT} shrink-0" />
 
-					<span>System Message</span>
+					<span>MCP Servers</span>
 				</button>
-
-				{#if chatFormActions.hasMcpPromptsSupport}
-					<button
-						class={sheetItemClass}
-						onclick={() => attachmentMenu.callbacks[AttachmentAction.MCP_PROMPT_CLICK]()}
-						type="button"
-					>
-						<Zap class="{ICON_CLASS_DEFAULT} shrink-0" />
-
-						<span>MCP Prompt</span>
-					</button>
-				{/if}
-
-				{#if chatFormActions.hasMcpResourcesSupport}
-					<button
-						class={sheetItemClass}
-						onclick={() => attachmentMenu.callbacks[AttachmentAction.MCP_RESOURCES_CLICK]()}
-						type="button"
-					>
-						<FolderOpen class="{ICON_CLASS_DEFAULT} shrink-0" />
-
-						<span>MCP Resources</span>
-					</button>
-				{/if}
 			</div>
 		</Sheet.Content>
 	</Sheet.Root>
 </div>
+
+{#snippet sheetGroupRow(group: ToolGroup)}
+	{@const checked = toolsPanel.isGroupChecked(group)}
+	{@const enabledCount = toolsPanel.getEnabledToolCount(group)}
+	{@const favicon = toolsPanel.getFavicon(group)}
+	{@const groupDisabled = toolsPanel.isGroupDisabled(group)}
+
+	<button
+		class="{sheetItemRowClass} {groupDisabled ? 'opacity-50' : ''}"
+		onclick={() => toolsPanel.toggleGroupByKey(group.key)}
+		type="button"
+	>
+		{#if favicon}
+			<img
+				alt=""
+				class="{ICON_CLASS_DEFAULT} shrink-0 rounded-sm"
+				onerror={(e) => {
+					(e.currentTarget as HTMLImageElement).style.display = 'none';
+				}}
+				src={favicon}
+			/>
+		{/if}
+
+		<span class="min-w-0 flex-1 truncate text-sm font-medium">{group.label}</span>
+
+		<span class="shrink-0 text-xs text-muted-foreground">
+			{enabledCount}/{group.tools.length}
+		</span>
+
+		<Checkbox
+			{checked}
+			class="{ICON_CLASS_DEFAULT} shrink-0"
+			onCheckedChange={() => toolsPanel.toggleGroupByKey(group.key)}
+			onclick={(e) => e.stopPropagation()}
+		/>
+	</button>
+{/snippet}
diff --git a/tools/ui/src/lib/components/app/chat/ChatForm/ChatFormActions/ChatFormActionAdd/ChatFormActionAddToolsSubmenu.svelte b/tools/ui/src/lib/components/app/chat/ChatForm/ChatFormActions/ChatFormActionAdd/ChatFormActionAddToolsSubmenu.svelte
index 40fed27c70a..79f533b22fc 100644
--- a/tools/ui/src/lib/components/app/chat/ChatForm/ChatFormActions/ChatFormActionAdd/ChatFormActionAddToolsSubmenu.svelte
+++ b/tools/ui/src/lib/components/app/chat/ChatForm/ChatFormActions/ChatFormActionAdd/ChatFormActionAddToolsSubmenu.svelte
@@ -7,6 +7,7 @@
 	import { CLI_FLAGS, ICON_CLASS_DEFAULT } from '$lib/constants';
 	import { useToolsPanel } from '$lib/hooks/use-tools-panel.svelte';
 	import { mcpStore, toolsStore } from '$lib/stores';
+	import type { ToolGroup } from '$lib/types';
 
 	const toolsPanel = useToolsPanel();
 	const hasMcpServersAvailable = $derived(mcpStore.getServers().length > 0);
@@ -62,95 +63,107 @@
 			{/if}
 		{:else}
 			<div class="max-h-80 overflow-y-auto p-2 pr-1">
-				{#each toolsPanel.activeGroups as group (group.key)}
-					{@const isExpanded = toolsPanel.expandedGroups.has(group.key)}
-					{@const checked = toolsPanel.isGroupChecked(group)}
-					{@const favicon = toolsPanel.getFavicon(group)}
-
-					<Collapsible.Root
-						onOpenChange={() => toolsPanel.toggleGroupExpanded(group.key)}
-						open={isExpanded}
-					>
-						<div class="flex items-center gap-1">
-							<Collapsible.Trigger
-								class="flex min-w-0 flex-1 items-center gap-2 rounded px-2 py-1.5 text-sm hover:bg-muted/50"
-							>
-								{#if isExpanded}
-									<ChevronDown class="h-3.5 w-3.5 shrink-0" />
-								{:else}
-									<ChevronRight class="h-3.5 w-3.5 shrink-0" />
-								{/if}
-
-								<span class="inline-flex min-w-0 items-center gap-1.5 font-medium">
-									{#if favicon}
-										<img
-											alt=""
-											class="{ICON_CLASS_DEFAULT} shrink-0 rounded-sm"
-											onerror={(e) => {
-												(e.currentTarget as HTMLImageElement).style.display = 'none';
-											}}
-											src={favicon}
-										/>
-									{/if}
-
-									<span class="truncate">{group.label}</span>
-								</span>
-
-								<span class="ml-auto shrink-0 text-xs text-muted-foreground">
-									{toolsPanel.getEnabledToolCount(group)}/{group.tools.length}
-								</span>
-							</Collapsible.Trigger>
-
-							<Tooltip.Root>
-								<Tooltip.Trigger>
-									{#snippet child({ props })}
-										<Checkbox
-											{...props}
-											{checked}
-											class="mr-2 {ICON_CLASS_DEFAULT} shrink-0"
-											onCheckedChange={() => toolsPanel.toggleGroupByKey(group.key)}
-										/>
-									{/snippet}
-								</Tooltip.Trigger>
-
-								<Tooltip.Content side="right">
-									<p>
-										{checked ? 'Disable' : 'Enable'}
-										{group.tools.length} tool{group.tools.length !== 1 ? 's' : ''}
-									</p>
-								</Tooltip.Content>
-							</Tooltip.Root>
-						</div>
-
-						<Collapsible.Content>
-							<div class="ml-4 flex flex-col gap-0.5 border-l border-border/50 pl-2">
-								{#each group.tools as entry (entry.key)}
-									{@const enabled = toolsStore.isToolEnabled(entry.key)}
-									<button
-										class="flex w-full items-center gap-2 rounded px-2 py-1.5 text-left text-sm transition-colors hover:bg-muted/50"
-										onclick={() => toolsStore.toggleTool(entry.key)}
-										type="button"
-									>
-										<span
-											class="flex size-4 shrink-0 items-center justify-center rounded-[4px] border border-input data-[state=checked]:border-primary data-[state=checked]:bg-primary data-[state=checked]:text-primary-foreground"
-											data-slot="checkbox"
-											data-state={enabled ? 'checked' : 'unchecked'}
-										>
-											{#if enabled}
-												<Check class="size-3.5" />
-											{/if}
-										</span>
-
-										<span class="min-w-0 flex-1 truncate font-mono text-[12px]">
-											{entry.definition.function.name}
-										</span>
-									</button>
-								{/each}
-							</div>
-						</Collapsible.Content>
-					</Collapsible.Root>
+				{#each toolsPanel.categoryGroups as group (group.key)}
+					{@render groupRow(group)}
+				{/each}
+
+				{#each toolsPanel.mcpGroups as group (group.key)}
+					{@render groupRow(group)}
 				{/each}
 			</div>
 		{/if}
 	</DropdownMenu.SubContent>
 </DropdownMenu.Sub>
+
+{#snippet groupRow(group: ToolGroup)}
+	{@const isExpanded = toolsPanel.expandedGroups.has(group.key)}
+	{@const checked = toolsPanel.isGroupChecked(group)}
+	{@const favicon = toolsPanel.getFavicon(group)}
+	{@const groupDisabled = toolsPanel.isGroupDisabled(group)}
+
+	<Collapsible.Root
+		onOpenChange={() => toolsPanel.toggleGroupExpanded(group.key)}
+		open={isExpanded}
+	>
+		<div class="flex items-center gap-1 {groupDisabled ? 'opacity-50' : ''}">
+			<Collapsible.Trigger
+				class="flex min-w-0 flex-1 items-center gap-2 rounded px-2 py-1.5 text-sm hover:bg-muted/50"
+			>
+				{#if isExpanded}
+					<ChevronDown class="h-3.5 w-3.5 shrink-0" />
+				{:else}
+					<ChevronRight class="h-3.5 w-3.5 shrink-0" />
+				{/if}
+
+				<span class="inline-flex min-w-0 items-center gap-1.5 font-medium">
+					{#if favicon}
+						<img
+							alt=""
+							class="{ICON_CLASS_DEFAULT} shrink-0 rounded-sm"
+							onerror={(e) => {
+								(e.currentTarget as HTMLImageElement).style.display = 'none';
+							}}
+							src={favicon}
+						/>
+					{/if}
+
+					<span class="truncate">{group.label}</span>
+				</span>
+
+				<span class="ml-auto shrink-0 text-xs text-muted-foreground">
+					{toolsPanel.getEnabledToolCount(group)}/{group.tools.length}
+				</span>
+			</Collapsible.Trigger>
+
+			<Tooltip.Root>
+				<Tooltip.Trigger>
+					{#snippet child({ props })}
+						<Checkbox
+							{...props}
+							{checked}
+							class="mr-2 {ICON_CLASS_DEFAULT} shrink-0"
+							onCheckedChange={() => toolsPanel.toggleGroupByKey(group.key)}
+						/>
+					{/snippet}
+				</Tooltip.Trigger>
+
+				<Tooltip.Content side="right">
+					<p>
+						{checked ? 'Disable' : 'Enable'}
+						{group.tools.length} tool{group.tools.length !== 1 ? 's' : ''}
+					</p>
+				</Tooltip.Content>
+			</Tooltip.Root>
+		</div>
+
+		<Collapsible.Content>
+			<div class="ml-4 flex flex-col gap-0.5 border-l border-border/50 pl-2">
+				{#each group.tools as entry (entry.key)}
+					{@const enabled = toolsPanel.isToolEnabled(entry)}
+					{@const parentDisabled = toolsPanel.isToolParentDisabled(entry)}
+					<button
+						class="flex w-full items-center gap-2 rounded px-2 py-1.5 text-left text-sm transition-colors hover:bg-muted/50 {parentDisabled
+							? 'opacity-50'
+							: ''}"
+						onclick={() => toolsPanel.toggleTool(entry)}
+						type="button"
+					>
+						<span
+							class="flex size-4 shrink-0 items-center justify-center rounded-[4px] border border-input data-[state=checked]:border-primary data-[state=checked]:bg-primary data-[state=checked]:text-primary-foreground"
+							data-slot="checkbox"
+							data-state={enabled ? 'checked' : 'unchecked'}
+						>
+							{#if enabled}
+								<Check class="size-3.5" />
+							{/if}
+						</span>
+
+						<span class="min-w-0 flex-1 truncate font-mono text-[12px]">
+							{entry.definition.function.name}
+						</span>
+					</button>
+				{/each}
+			</div>
+		</Collapsible.Content>
+	</Collapsible.Root>
+{/snippet}
diff --git a/tools/ui/src/lib/components/app/chat/ChatForm/ChatFormActions/ChatFormActions.svelte b/tools/ui/src/lib/components/app/chat/ChatForm/ChatFormActions/ChatFormActions.svelte
index 97351b3a6cb..2fcb1ed5f8e 100644
--- a/tools/ui/src/lib/components/app/chat/ChatForm/ChatFormActions/ChatFormActions.svelte
+++ b/tools/ui/src/lib/components/app/chat/ChatForm/ChatFormActions/ChatFormActions.svelte
@@ -1,6 +1,5 @@
 <script lang="ts">
 	import { SkipForward, Square } from '@lucide/svelte';
-	import { goto } from '$app/navigation';
 	import { page } from '$app/state';
 	import {
 		ChatFormActionModels,
@@ -10,7 +9,7 @@
 		ChatFormContextGauge
 	} from '$lib/components/app';
 	import { Button } from '$lib/components/ui/button';
-	import { ICON_CLASS_DEFAULT, ROUTES } from '$lib/constants';
+	import { ICON_CLASS_DEFAULT } from '$lib/constants';
 	import { setChatFormActionsContext } from '$lib/contexts';
 	import { FileTypeCategory, MessageRole } from '$lib/enums';
 	import { ChatService } from '$lib/services';
@@ -34,6 +33,7 @@
 		onSystemPromptClick?: () => void;
 		onMcpPromptClick?: () => void;
 		onMcpResourcesClick?: () => void;
+		onMcpSettingsClick?: () => void;
 	}
 
 	let {
@@ -47,6 +47,7 @@
 		onFileUpload,
 		onMcpPromptClick,
 		onMcpResourcesClick,
+		onMcpSettingsClick,
 		onMicClick,
 		onStop,
 		onSystemPromptClick,
@@ -57,17 +58,9 @@
 
 	let currentConfig = $derived(settingsStore.config);
 
-	let hasMcpPromptsSupport = $derived.by(() => {
-		const perChatOverrides = conversationsStore.preferences.getAllMcpServerOverrides();
+	let hasMcpPromptsSupport = $derived.by(() => mcpStore.hasPromptsCapability());
 
-		return mcpStore.hasPromptsCapability(perChatOverrides);
-	});
-
-	let hasMcpResourcesSupport = $derived.by(() => {
-		const perChatOverrides = conversationsStore.preferences.getAllMcpServerOverrides();
-
-		return mcpStore.hasResourcesCapability(perChatOverrides);
-	});
+	let hasMcpResourcesSupport = $derived.by(() => mcpStore.hasResourcesCapability());
 
 	let hasAudioModality = $state(false);
 	let hasVideoModality = $state(false);
@@ -163,7 +156,7 @@
 			return onMcpResourcesClick;
 		},
 		get onMcpSettingsClick() {
-			return () => goto(ROUTES.MCP_SERVERS);
+			return onMcpSettingsClick;
 		},
 		get onSystemPromptClick() {
 			return onSystemPromptClick;
diff --git a/tools/ui/src/lib/components/app/chat/ChatForm/ChatFormPickers/ChatFormPickerMcpPrompts/ChatFormPickerMcpPrompts.svelte b/tools/ui/src/lib/components/app/chat/ChatForm/ChatFormPickers/ChatFormPickerMcpPrompts/ChatFormPickerMcpPrompts.svelte
index 353d6e7bafe..f6a3ee13479 100644
--- a/tools/ui/src/lib/components/app/chat/ChatForm/ChatFormPickers/ChatFormPickerMcpPrompts/ChatFormPickerMcpPrompts.svelte
+++ b/tools/ui/src/lib/components/app/chat/ChatForm/ChatFormPickers/ChatFormPickerMcpPrompts/ChatFormPickerMcpPrompts.svelte
@@ -9,7 +9,7 @@
 	} from '$lib/components/app/chat';
 	import Badge from '$lib/components/ui/badge/badge.svelte';
 	import { KeyboardKey } from '$lib/enums';
-	import { conversationsStore, mcpStore } from '$lib/stores';
+	import { mcpStore } from '$lib/stores';
 	import type { GetPromptResult, MCPPromptInfo, MCPServerSettingsEntry } from '$lib/types';
 	import { debounce, uuid } from '$lib/utils';
 	import { SvelteMap } from 'svelte/reactivity';
@@ -87,8 +87,7 @@
 		isLoading = true;
 
 		try {
-			const perChatOverrides = conversationsStore.preferences.getAllMcpServerOverrides();
-			const initialized = await mcpStore.ensureInitialized(perChatOverrides);
+			const initialized = await mcpStore.ensureInitialized();
 
 			if (!initialized) {
 				prompts = [];
diff --git a/tools/ui/src/lib/components/app/chat/index.ts b/tools/ui/src/lib/components/app/chat/index.ts
index a96ae378919..61ec242e907 100644
--- a/tools/ui/src/lib/components/app/chat/index.ts
+++ b/tools/ui/src/lib/components/app/chat/index.ts
@@ -221,25 +221,17 @@ export { default as ChatFormActionModels } from './ChatForm/ChatFormActions/Chat
 export { default as ChatFormActionAddToolsSubmenu } from './ChatForm/ChatFormActions/ChatFormActionAdd/ChatFormActionAddToolsSubmenu.svelte';
 
 /**
- * Dropdown submenu for managing MCP servers in the chat form.
+ * Dropdown submenu for MCP prompts and resources in the chat form.
  *
- * Displays a searchable list of enabled MCP servers with toggle switches
- * to enable/disable each server for chat. Shows server favicon, health status,
- * and a "Manage MCP Servers" settings link.
- *
- * Features:
- * - Search/filter servers by name or URL
- * - Per-server toggle to enable/disable for chat
- * - Health check indicator (shows "Error" badge for failed servers)
- * - Server favicon display
- * - Settings link to manage MCP server configuration
+ * Shows an "MCP" sub-menu item with entries for MCP Prompts and MCP
+ * Resources. Only visible when the server supports them.
  *
  * @example
  * ```svelte
- * <ChatFormActionAddMcpServersSubmenu onMcpSettingsClick={handleMcpSettingsClick} />
+ * <ChatFormActionAddMcpSubmenu />
  * ```
  */
-export { default as ChatFormActionAddMcpServersSubmenu } from './ChatForm/ChatFormActions/ChatFormActionAdd/ChatFormActionAddMcpServersSubmenu.svelte';
+export { default as ChatFormActionAddMcpSubmenu } from './ChatForm/ChatFormActions/ChatFormActionAdd/ChatFormActionAddMcpSubmenu.svelte';
 
 /**
  * Dropdown submenu for selecting reasoning effort level.
diff --git a/tools/ui/src/lib/components/app/dialogs/DialogMcpResourcesBrowser.svelte b/tools/ui/src/lib/components/app/dialogs/DialogMcpResourcesBrowser.svelte
index 8804cb7ea7f..82a07477d14 100644
--- a/tools/ui/src/lib/components/app/dialogs/DialogMcpResourcesBrowser.svelte
+++ b/tools/ui/src/lib/components/app/dialogs/DialogMcpResourcesBrowser.svelte
@@ -8,7 +8,7 @@
 	import { Button } from '$lib/components/ui/button';
 	import * as Dialog from '$lib/components/ui/dialog';
 	import { ICON_CLASS_DEFAULT } from '$lib/constants';
-	import { conversationsStore, mcpStore } from '$lib/stores';
+	import { mcpStore } from '$lib/stores';
 	import type { MCPResourceContent, MCPResourceInfo, MCPResourceTemplateInfo } from '$lib/types';
 	import { getResourceDisplayName } from '$lib/utils';
 	import { SvelteSet } from 'svelte/reactivity';
@@ -48,8 +48,7 @@
 	});
 
 	async function loadResources() {
-		const perChatOverrides = conversationsStore.preferences.getAllMcpServerOverrides();
-		const initialized = await mcpStore.ensureInitialized(perChatOverrides);
+		const initialized = await mcpStore.ensureInitialized();
 
 		if (initialized) {
 			await mcpStore.fetchAllResources();
@@ -253,7 +252,7 @@
 </script>
 
 <Dialog.Root onOpenChange={handleOpenChange} {open}>
-	<Dialog.Content class="max-h-[80vh] !max-w-4xl overflow-hidden p-0">
+	<Dialog.Content class="max-h-[80vh] md:max-w-4xl! w-full! overflow-hidden p-0">
 		<Dialog.Header class="border-b border-border/30 px-6 py-4">
 			<Dialog.Title class="flex items-center gap-2">
 				<FolderOpen class="h-5 w-5" />
diff --git a/tools/ui/src/lib/components/app/dialogs/DialogMcpServerAddNew.svelte b/tools/ui/src/lib/components/app/dialogs/DialogMcpServerAddNew.svelte
index ae8b24cb2d3..bc28a754c61 100644
--- a/tools/ui/src/lib/components/app/dialogs/DialogMcpServerAddNew.svelte
+++ b/tools/ui/src/lib/components/app/dialogs/DialogMcpServerAddNew.svelte
@@ -10,7 +10,7 @@
 		RECOMMENDED_MCP_SERVERS
 	} from '$lib/constants';
 	import { BooleanString, HealthCheckStatus } from '$lib/enums';
-	import { conversationsStore, mcpStore } from '$lib/stores';
+	import { mcpStore } from '$lib/stores';
 	import { canonicalizeServerUrl, parseHeadersToArray, uuid } from '$lib/utils';
 
 	interface Props {
@@ -234,8 +234,6 @@
 			useProxy: newServerUseProxy
 		});
 
-		conversationsStore.preferences.setMcpServerOverride(newServerId, true);
-
 		handleOpenChange(false);
 	}
 
@@ -246,7 +244,7 @@
 </script>
 
 <Dialog.Root onOpenChange={handleOpenChange} {open}>
-	<Dialog.Content class="sm:max-w-2xl">
+	<Dialog.Content class="max-w-2xl!">
 		<Dialog.Header>
 			<Dialog.Title class="select-none">Add New MCP Server</Dialog.Title>
 		</Dialog.Header>
diff --git a/tools/ui/src/lib/components/app/dialogs/DialogMcpServers.svelte b/tools/ui/src/lib/components/app/dialogs/DialogMcpServers.svelte
new file mode 100644
index 00000000000..2eaaa0a6577
--- /dev/null
+++ b/tools/ui/src/lib/components/app/dialogs/DialogMcpServers.svelte
@@ -0,0 +1,33 @@
+<script lang="ts">
+	import { McpLogo } from '$lib/components/app';
+	import { SettingsMcpServers } from '$lib/components/app/settings';
+	import * as Dialog from '$lib/components/ui/dialog';
+
+	interface Props {
+		open?: boolean;
+		onOpenChange?: (open: boolean) => void;
+	}
+
+	let { onOpenChange, open = $bindable(false) }: Props = $props();
+
+	function handleOpenChange(value: boolean) {
+		open = value;
+		onOpenChange?.(value);
+	}
+</script>
+
+<Dialog.Root onOpenChange={handleOpenChange} {open}>
+	<Dialog.Content
+		class="md:h-[calc(100vh-4rem)]! md:max-h-240! md:w-[calc(100vw-4rem)]! md:max-w-360! flex flex-col"
+	>
+		<Dialog.Header>
+			<Dialog.Title class="flex items-center gap-2">
+				<McpLogo class="h-5 w-5" />
+
+				<span>MCP Servers</span>
+			</Dialog.Title>
+		</Dialog.Header>
+
+		<SettingsMcpServers class="mt-4" />
+	</Dialog.Content>
+</Dialog.Root>
diff --git a/tools/ui/src/lib/components/app/dialogs/DialogMermaidPreview.svelte b/tools/ui/src/lib/components/app/dialogs/DialogMermaidPreview.svelte
index 09e53442ac6..e741373497a 100644
--- a/tools/ui/src/lib/components/app/dialogs/DialogMermaidPreview.svelte
+++ b/tools/ui/src/lib/components/app/dialogs/DialogMermaidPreview.svelte
@@ -14,6 +14,7 @@
 <Dialog.Root bind:open {onOpenChange}>
 	<Dialog.Content
 		class="z-999999 grid max-h-full max-w-full! grid-rows-[1fr_auto] overflow-hidden p-0 md:h-[90vh] md:max-w-[90vw]!"
+		showCloseButton
 	>
 		<MermaidPreview {svgHtml} />
 	</Dialog.Content>
diff --git a/tools/ui/src/lib/components/app/dialogs/DialogSettingsChat.svelte b/tools/ui/src/lib/components/app/dialogs/DialogSettingsChat.svelte
new file mode 100644
index 00000000000..5e0046aae52
--- /dev/null
+++ b/tools/ui/src/lib/components/app/dialogs/DialogSettingsChat.svelte
@@ -0,0 +1,34 @@
+<script lang="ts">
+	import { Settings } from '@lucide/svelte';
+	import { SettingsChat } from '$lib/components/app/settings';
+	import * as Dialog from '$lib/components/ui/dialog';
+
+	interface Props {
+		open?: boolean;
+		onOpenChange?: (open: boolean) => void;
+		initialSection?: string;
+	}
+
+	let { initialSection, onOpenChange, open = $bindable(false) }: Props = $props();
+
+	function handleOpenChange(value: boolean) {
+		open = value;
+		onOpenChange?.(value);
+	}
+</script>
+
+<Dialog.Root onOpenChange={handleOpenChange} {open}>
+	<Dialog.Content
+		class="md:h-[calc(100vh-4rem)]! md:max-h-240! md:w-[calc(100vw-4rem)]! md:max-w-6xl! flex flex-col p-0 md:p-6 gap-0"
+	>
+		<Dialog.Header class="md:p-0 p-4">
+			<Dialog.Title class="flex items-center gap-2">
+				<Settings class="h-5 w-5" />
+
+				<span>Settings</span>
+			</Dialog.Title>
+		</Dialog.Header>
+
+		<SettingsChat {initialSection} onClose={() => (open = false)} onSectionChange={() => {}} />
+	</Dialog.Content>
+</Dialog.Root>
diff --git a/tools/ui/src/lib/components/app/dialogs/index.ts b/tools/ui/src/lib/components/app/dialogs/index.ts
index 38aa0993549..1ffa7a2b9e2 100644
--- a/tools/ui/src/lib/components/app/dialogs/index.ts
+++ b/tools/ui/src/lib/components/app/dialogs/index.ts
@@ -18,6 +18,23 @@
  */
 export { default as DialogMcpServerAddNew } from './DialogMcpServerAddNew.svelte';
 
+/**
+ * **DialogMcpServers** - MCP servers dialog shown from the chat form
+ *
+ * Shows the same MCP server list as the `/mcp-servers` route inside a modal
+ * dialog.
+ */
+export { default as DialogMcpServers } from './DialogMcpServers.svelte';
+
+/**
+ * **DialogSettingsChat** - Chat settings shown in a modal dialog
+ *
+ * Wraps the full SettingsChat layout (sidebar, mobile header, fields, footer)
+ * inside a ShadCN Dialog instead of a dedicated route. Section switching is
+ * handled in-app via `onSectionChange` rather than URL navigation.
+ */
+export { default as DialogSettingsChat } from './DialogSettingsChat.svelte';
+
 /**
  * **DialogExportSettings** - Settings export dialog with sensitive data warning
  *
diff --git a/tools/ui/src/lib/components/app/mcp/McpActiveServersAvatars.svelte b/tools/ui/src/lib/components/app/mcp/McpActiveServersAvatars.svelte
index ea274d5aa79..5ac7a7fae6a 100644
--- a/tools/ui/src/lib/components/app/mcp/McpActiveServersAvatars.svelte
+++ b/tools/ui/src/lib/components/app/mcp/McpActiveServersAvatars.svelte
@@ -3,7 +3,7 @@
 	import * as Tooltip from '$lib/components/ui/tooltip';
 	import { ICON_CLASS_DEFAULT, MAX_DISPLAYED_MCP_AVATARS } from '$lib/constants';
 	import { HealthCheckStatus } from '$lib/enums';
-	import { conversationsStore, mcpStore } from '$lib/stores';
+	import { mcpStore } from '$lib/stores';
 
 	interface Props {
 		class?: string;
@@ -13,11 +13,7 @@
 	let { class: className = '', onclick }: Props = $props();
 
 	let mcpServers = $derived(mcpStore.getServers().filter((s) => s.enabled));
-	let enabledMcpServersForChat = $derived(
-		mcpServers.filter(
-			(s) => conversationsStore.preferences.isMcpServerEnabledForChat(s.id) && s.url.trim()
-		)
-	);
+	let enabledMcpServersForChat = $derived(mcpServers.filter((s) => s.url.trim()));
 	let healthyEnabledMcpServers = $derived(
 		enabledMcpServersForChat.filter((s) => {
 			const healthState = mcpStore.getHealthCheckState(s.id);
diff --git a/tools/ui/src/lib/components/app/mcp/McpCapabilitiesBadges.svelte b/tools/ui/src/lib/components/app/mcp/McpCapabilitiesBadges.svelte
index 632cd3e8a72..59695470365 100644
--- a/tools/ui/src/lib/components/app/mcp/McpCapabilitiesBadges.svelte
+++ b/tools/ui/src/lib/components/app/mcp/McpCapabilitiesBadges.svelte
@@ -1,13 +1,22 @@
 <script lang="ts">
-	import { Database, FileText, ListChecks, MessageSquare, Sparkles, Wrench } from '@lucide/svelte';
+	import {
+		Database,
+		ExternalLink,
+		FileText,
+		ListChecks,
+		MessageSquare,
+		Sparkles,
+		Wrench
+	} from '@lucide/svelte';
 	import { Badge } from '$lib/components/ui/badge';
 	import type { MCPCapabilitiesInfo } from '$lib/types';
 
 	interface Props {
 		capabilities?: MCPCapabilitiesInfo;
+		onBrowseResources?: () => void;
 	}
 
-	let { capabilities }: Props = $props();
+	let { capabilities, onBrowseResources }: Props = $props();
 </script>
 
 {#if capabilities}
@@ -20,10 +29,24 @@
 	{/if}
 
 	{#if capabilities.server.resources}
-		<Badge class="h-5 gap-1 bg-blue-50 px-1.5 text-[10px] dark:bg-blue-950" variant="outline">
+		<Badge
+			class="h-5 cursor-pointer gap-1 bg-blue-50 px-1.5 text-[10px] transition-colors hover:bg-blue-100 dark:bg-blue-950 dark:hover:bg-blue-900"
+			onclick={onBrowseResources}
+			onkeydown={(e) => {
+				if (e.key === 'Enter' || e.key === ' ') {
+					e.preventDefault();
+					onBrowseResources?.();
+				}
+			}}
+			role="button"
+			tabindex={0}
+			variant="outline"
+		>
 			<Database class="h-3 w-3 text-blue-600 dark:text-blue-400" />
 
 			Resources
+
+			<ExternalLink class="h-3 w-3 text-blue-600 dark:text-blue-400" />
 		</Badge>
 	{/if}
 
diff --git a/tools/ui/src/lib/components/app/mcp/McpServerCard/McpServerCard.svelte b/tools/ui/src/lib/components/app/mcp/McpServerCard/McpServerCard.svelte
index 84383d59eac..6e9a9953851 100644
--- a/tools/ui/src/lib/components/app/mcp/McpServerCard/McpServerCard.svelte
+++ b/tools/ui/src/lib/components/app/mcp/McpServerCard/McpServerCard.svelte
@@ -22,9 +22,10 @@
 		onToggle: (enabled: boolean) => void;
 		onUpdate: (updates: Partial<MCPServerSettingsEntry>) => void;
 		onDelete: () => void;
+		onBrowseResources?: () => void;
 	}
 
-	let { enabled, onDelete, onToggle, onUpdate, server }: Props = $props();
+	let { enabled, onBrowseResources, onDelete, onToggle, onUpdate, server }: Props = $props();
 
 	let healthState = $derived<HealthCheckState>(mcpStore.getHealthCheckState(server.id));
 	let displayName = $derived(mcpStore.getServerLabel(server));
@@ -125,6 +126,7 @@
 			{displayName}
 			enabled={enabled ?? server.enabled}
 			{faviconUrl}
+			{onBrowseResources}
 			{onToggle}
 			{serverInfo}
 			{transportType}
@@ -191,12 +193,14 @@
 				</div>
 			{/if}
 
-			<McpServerCardActions
-				{isHealthChecking}
-				onDelete={handleDeleteClick}
-				onEdit={startEditing}
-				onRefresh={handleHealthCheck}
-			/>
+			<div class="flex items-center gap-2">
+				<McpServerCardActions
+					{isHealthChecking}
+					onDelete={handleDeleteClick}
+					onEdit={startEditing}
+					onRefresh={handleHealthCheck}
+				/>
+			</div>
 		</div>
 	{/if}
 </Card.Root>
diff --git a/tools/ui/src/lib/components/app/mcp/McpServerCard/McpServerCardHeader.svelte b/tools/ui/src/lib/components/app/mcp/McpServerCard/McpServerCardHeader.svelte
index 30369d6509f..9baded678e0 100644
--- a/tools/ui/src/lib/components/app/mcp/McpServerCard/McpServerCardHeader.svelte
+++ b/tools/ui/src/lib/components/app/mcp/McpServerCard/McpServerCardHeader.svelte
@@ -12,6 +12,7 @@
 		enabled: boolean;
 		disabled?: boolean;
 		onToggle: (enabled: boolean) => void;
+		onBrowseResources?: () => void;
 		serverInfo?: MCPServerInfo;
 		capabilities?: MCPCapabilitiesInfo;
 		transportType?: MCPTransportType;
@@ -23,6 +24,7 @@
 		displayName,
 		enabled,
 		faviconUrl,
+		onBrowseResources,
 		onToggle,
 		serverInfo,
 		transportType
@@ -57,7 +59,7 @@
 					{/if}
 
 					{#if capabilities}
-						<McpCapabilitiesBadges {capabilities} />
+						<McpCapabilitiesBadges {capabilities} {onBrowseResources} />
 					{/if}
 				</div>
 			{/if}
diff --git a/tools/ui/src/lib/components/app/models/ModelId.svelte b/tools/ui/src/lib/components/app/models/ModelId.svelte
index cae0a7e3ed1..ea700580a0a 100644
--- a/tools/ui/src/lib/components/app/models/ModelId.svelte
+++ b/tools/ui/src/lib/components/app/models/ModelId.svelte
@@ -1,16 +1,22 @@
 <script lang="ts">
+	import { Image, Lightbulb, Mic, Video } from '@lucide/svelte';
 	import { TruncatedText } from '$lib/components/app';
+	import * as Tooltip from '$lib/components/ui/tooltip';
 	import { ModelsService } from '$lib/services/models.service';
 	import { settingsStore } from '$lib/stores';
+	import type { ModelModalities } from '$lib/types/models';
 
 	interface Props {
 		modelId: string;
 		hideOrgName?: boolean;
 		showRaw?: boolean;
+		showRawTooltip?: boolean;
 		hideQuantization?: boolean;
 		hideTags?: boolean;
 		aliases?: string[];
 		tags?: string[];
+		modalities?: ModelModalities;
+		supportsThinking?: boolean;
 		class?: string;
 	}
 
@@ -20,8 +26,11 @@
 		hideOrgName = false,
 		hideQuantization,
 		hideTags,
+		modalities,
 		modelId,
 		showRaw = undefined,
+		showRawTooltip = false,
+		supportsThinking = false,
 		tags,
 		...rest
 	}: Props = $props();
@@ -42,6 +51,9 @@
 
 	let uniqueAliases = $derived([...new Set(aliases ?? [])]);
 	let uniqueTags = $derived([...new Set([...(parsed.tags ?? []), ...(tags ?? [])])]);
+	let hasModalityIcons = $derived(
+		supportsThinking || modalities?.vision || modalities?.video || modalities?.audio
+	);
 
 	let primaryAlias = $derived(uniqueAliases.length === 1 ? uniqueAliases[0] : null);
 	let displayName = $derived(primaryAlias ?? parsed.modelName ?? modelId);
@@ -50,37 +62,107 @@
 {#if resolvedShowRaw}
 	<TruncatedText class="font-medium {className}" showTooltip={false} text={modelId} {...rest} />
 {:else}
-	<span class="flex min-w-0 flex-wrap items-center gap-1 {className}" {...rest}>
+	{#snippet nameAndBadges()}
 		<span class="min-w-0 truncate font-medium">
 			{#if !hideOrgName && parsed.orgName}{parsed.orgName}/{/if}{displayName}
 		</span>
 
-		{#if parsed.params}
-			<span class={badgeClass}>
-				{parsed.params}{parsed.activatedParams ? `-${parsed.activatedParams}` : ''}
-			</span>
-		{/if}
+		<span class="inline-flex items-center gap-1">
+			{#if parsed.params}
+				<span class={badgeClass}>
+					{parsed.params}{parsed.activatedParams ? `-${parsed.activatedParams}` : ''}
+				</span>
+			{/if}
 
-		{#if parsed.quantization && !resolvedHideQuantization}
-			<span class={badgeClass}>
-				{parsed.quantization}
-			</span>
-		{/if}
+			{#if parsed.quantization && !resolvedHideQuantization}
+				<span class={badgeClass}>
+					{parsed.quantization}
+				</span>
+			{/if}
 
-		{#if primaryAlias}
-			{#if primaryAlias !== parsed.modelName}
-				<span class={badgeClass}>{parsed.modelName ?? modelId}</span>
+			{#if primaryAlias}
+				{#if primaryAlias !== parsed.modelName}
+					<span class={badgeClass}>{parsed.modelName ?? modelId}</span>
+				{/if}
+			{:else if uniqueAliases.length > 1}
+				{#each uniqueAliases as alias (alias)}
+					<span class={badgeClass}>{alias}</span>
+				{/each}
 			{/if}
-		{:else if uniqueAliases.length > 1}
-			{#each uniqueAliases as alias (alias)}
-				<span class={badgeClass}>{alias}</span>
-			{/each}
+
+			{#if uniqueTags.length > 0 && !resolvedHideTags}
+				{#each uniqueTags as tag (tag)}
+					<span class={tagBadgeClass}>{tag}</span>
+				{/each}
+			{/if}
+		</span>
+	{/snippet}
+
+	<span class="flex min-w-0 items-center gap-1.5 {className}" {...rest}>
+		{#if showRawTooltip}
+			<Tooltip.Root>
+				<Tooltip.Trigger class="flex min-w-0 items-center gap-1.5">
+					{@render nameAndBadges()}
+				</Tooltip.Trigger>
+
+				<Tooltip.Content>
+					<p>{modelId}</p>
+				</Tooltip.Content>
+			</Tooltip.Root>
+		{:else}
+			{@render nameAndBadges()}
 		{/if}
 
-		{#if uniqueTags.length > 0 && !resolvedHideTags}
-			{#each uniqueTags as tag (tag)}
-				<span class={tagBadgeClass}>{tag}</span>
-			{/each}
+		{#if hasModalityIcons}
+			<span class="inline-flex items-center gap-1.25 text-muted-foreground">
+				{#if supportsThinking}
+					<Tooltip.Root>
+						<Tooltip.Trigger>
+							<Lightbulb class="h-3 w-3 text-muted-foreground" />
+						</Tooltip.Trigger>
+
+						<Tooltip.Content>
+							<p>Reasoning</p>
+						</Tooltip.Content>
+					</Tooltip.Root>
+				{/if}
+
+				{#if modalities?.vision}
+					<Tooltip.Root>
+						<Tooltip.Trigger>
+							<Image class="h-3 w-3 text-muted-foreground" />
+						</Tooltip.Trigger>
+
+						<Tooltip.Content>
+							<p>Vision</p>
+						</Tooltip.Content>
+					</Tooltip.Root>
+				{/if}
+
+				{#if modalities?.video}
+					<Tooltip.Root>
+						<Tooltip.Trigger>
+							<Video class="h-3 w-3 text-muted-foreground" />
+						</Tooltip.Trigger>
+
+						<Tooltip.Content>
+							<p>Video</p>
+						</Tooltip.Content>
+					</Tooltip.Root>
+				{/if}
+
+				{#if modalities?.audio}
+					<Tooltip.Root>
+						<Tooltip.Trigger>
+							<Mic class="h-3 w-3 text-muted-foreground" />
+						</Tooltip.Trigger>
+
+						<Tooltip.Content>
+							<p>Audio</p>
+						</Tooltip.Content>
+					</Tooltip.Root>
+				{/if}
+			</span>
 		{/if}
 	</span>
 {/if}
diff --git a/tools/ui/src/lib/components/app/models/ModelsSelectorDropdown.svelte b/tools/ui/src/lib/components/app/models/ModelsSelectorDropdown.svelte
index 1e1798e2faf..30dedcbae90 100644
--- a/tools/ui/src/lib/components/app/models/ModelsSelectorDropdown.svelte
+++ b/tools/ui/src/lib/components/app/models/ModelsSelectorDropdown.svelte
@@ -1,8 +1,9 @@
 <script lang="ts">
 	import ModelLoadHighlight from './ModelLoadHighlight.svelte';
 	import type { ModelItem } from './utils';
-	import { ChevronDown, Loader2 } from '@lucide/svelte';
+	import { ChevronDown, Lightbulb, Loader2 } from '@lucide/svelte';
 	import {
+		ChatFormActionAddReasoningSubmenu,
 		DialogModelInformation,
 		DropdownMenuSearchable,
 		ModelId,
@@ -11,10 +12,11 @@
 	} from '$lib/components/app';
 	import * as DropdownMenu from '$lib/components/ui/dropdown-menu';
 	import * as Tooltip from '$lib/components/ui/tooltip';
-	import { MODEL_SELECTOR_ICON } from '$lib/constants';
+	import { MODEL_SELECTOR_ICON, SETTINGS_KEYS } from '$lib/constants';
 	import { KeyboardKey, ServerModelStatus } from '$lib/enums';
 	import { useModelsSelector } from '$lib/hooks/use-models-selector.svelte';
-	import { modelsStore } from '$lib/stores';
+	import { useReasoningMenu } from '$lib/hooks/use-reasoning-menu.svelte';
+	import { modelsStore, settingsStore } from '$lib/stores';
 	import { modelLoadFraction } from '$lib/utils';
 
 	interface Props {
@@ -37,6 +39,9 @@
 
 	let isOpen = $state(false);
 	let highlightedId = $state<string | null>(null);
+	// The model submenu opens together with the menu so the list and its search
+	// box are immediately available, as before the submenu was introduced
+	let modelSubOpen = $state(false);
 
 	const ms = useModelsSelector({
 		currentModel: () => currentModel,
@@ -44,24 +49,41 @@
 		onOpenChange: (open) => {
 			isOpen = open;
 			highlightedId = null;
+
+			if (open) {
+				// Defer submenu open so the Sub component is mounted first;
+				// setting bind:open synchronously can be lost if the Sub hasn't
+				// rendered yet.
+				queueMicrotask(() => {
+					if (isOpen) modelSubOpen = true;
+				});
+			} else {
+				modelSubOpen = false;
+			}
 		},
 		useGlobalSelection: () => useGlobalSelection
 	});
 
+	const reasoning = useReasoningMenu();
+
+	const showOrgNameInTrigger = $derived(
+		settingsStore.config[SETTINGS_KEYS.SHOW_MODEL_ORG_NAME_IN_TRIGGER] ?? false
+	);
+
 	$effect(() => {
 		void ms.searchTerm;
 		highlightedId = null;
 	});
 
-	// Focus the dropdown's search box without scrolling the page. bits-ui
+	// Focus the model submenu's search box without scrolling the page. bits-ui
 	// auto-focuses the opened content by default, which can yank the page
 	// scroll; we prevent that on the Content and refocus the search here.
 	$effect(() => {
-		if (!isOpen) return;
+		if (!isOpen || !modelSubOpen) return;
 
 		requestAnimationFrame(() => {
 			const search = document.querySelector<HTMLElement>(
-				'[data-slot="dropdown-menu-content"] input'
+				'[data-slot="dropdown-menu-sub-content"] input'
 			);
 
 			search?.focus({ preventScroll: true });
@@ -188,7 +210,7 @@
 							<DropdownMenu.Trigger
 								{...props}
 								class={[
-									`relative inline-grid cursor-pointer grid-cols-[1fr_auto_1fr] items-center gap-1.5 rounded-sm bg-background px-1.5 py-1 text-xs shadow-sm transition hover:bg-muted-foreground/20 focus:outline-none focus-visible:ring-2 focus-visible:ring-ring focus-visible:ring-offset-2 disabled:cursor-not-allowed disabled:opacity-60 dark:bg-muted-foreground/15 dark:text-secondary-foreground`,
+									`relative inline-grid cursor-pointer grid-cols-[1fr_auto_1fr] items-center gap-1 rounded-sm bg-background px-1.5 py-1 text-xs shadow-sm transition hover:bg-muted-foreground/20 focus:outline-none focus-visible:ring-2 focus-visible:ring-ring focus-visible:ring-offset-2 disabled:cursor-not-allowed disabled:opacity-60 dark:bg-muted-foreground/15 dark:text-secondary-foreground`,
 									!ms.isCurrentModelInCache
 										? 'bg-red-400/10 !text-red-400 hover:bg-red-400/20 hover:text-red-400'
 										: forceForegroundText
@@ -203,16 +225,22 @@
 							>
 								<MODEL_SELECTOR_ICON class="h-3.5 w-3.5 shrink-0" />
 
-								{#if selectedOption}
-									<ModelId
-										class="min-w-0 overflow-hidden"
-										hideOrgName={false}
-										hideQuantization
-										modelId={selectedOption.model}
-									/>
-								{:else}
-									<span class="min-w-0 font-medium">Select model</span>
-								{/if}
+								<span class="flex min-w-0 items-center gap-1">
+									{#if selectedOption}
+										<ModelId
+											class="min-w-0 overflow-hidden"
+											hideOrgName={!showOrgNameInTrigger}
+											hideQuantization
+											modelId={selectedOption.model}
+										/>
+									{:else}
+										<span class="min-w-0 font-medium">Select model</span>
+									{/if}
+
+									{#if reasoning.isReasoningActive}
+										<Lightbulb class="h-3.5 w-3.5 shrink-0 text-amber-400" />
+									{/if}
+								</span>
 
 								{#if ms.updating || ms.isLoadingModel}
 									<Loader2 class="h-3 w-3.5 shrink-0 animate-spin" />
@@ -236,73 +264,94 @@
 
 				<DropdownMenu.Content
 					align="end"
-					class="w-full max-w-[100vw] pt-0 sm:w-max sm:max-w-[calc(100vw-2rem)]"
+					class="w-full md:min-w-64 md:max-w-80 max-w-[calc(100vw-2rem)]"
 					onOpenAutoFocus={(event) => event.preventDefault()}
 				>
-					<DropdownMenuSearchable
-						emptyMessage="No models found."
-						isEmpty={ms.filteredOptions.length === 0 && ms.isCurrentModelInCache}
-						onSearchChange={(v) => ms.setSearchTerm(v)}
-						onSearchKeyDown={handleSearchKeyDown}
-						placeholder="Search models..."
-						searchValue={ms.searchTerm}
-					>
-						<div class="models-list">
-							{#if !ms.isCurrentModelInCache && currentModel}
-								<!-- Show unavailable model as first option (disabled) -->
-								<button
-									aria-disabled="true"
-									aria-selected="true"
-									class="flex w-full cursor-not-allowed items-center bg-red-400/10 p-2 text-left text-sm text-red-400"
-									disabled
-									role="option"
-									type="button"
-								>
-									<ModelId class="flex-1" hideQuantization modelId={currentModel} />
-
-									<span class="ml-2 text-xs whitespace-nowrap opacity-70">(not available)</span>
-								</button>
-							{/if}
+					<DropdownMenu.Sub bind:open={modelSubOpen}>
+						<DropdownMenu.SubTrigger class="flex cursor-pointer items-center gap-2">
+							<MODEL_SELECTOR_ICON class="h-4 w-4" />
 
-							{#if ms.filteredOptions.length === 0}
-								<p class="px-4 py-3 text-sm text-muted-foreground">No models found.</p>
+							{#if selectedOption}
+								<ModelId
+									class="min-w-0 flex-1 overflow-hidden"
+									hideOrgName={!showOrgNameInTrigger}
+									hideQuantization
+									modelId={selectedOption.model}
+								/>
+							{:else}
+								<span class="min-w-0 flex-1 truncate text-muted-foreground">No model</span>
 							{/if}
+						</DropdownMenu.SubTrigger>
+
+						<DropdownMenu.SubContent class="w-100 max-w-[calc(100vw-2rem)] pt-0">
+							<DropdownMenuSearchable
+								emptyMessage="No models found."
+								isEmpty={ms.filteredOptions.length === 0 && ms.isCurrentModelInCache}
+								onSearchChange={(v) => ms.setSearchTerm(v)}
+								onSearchKeyDown={handleSearchKeyDown}
+								placeholder="Search models..."
+								searchValue={ms.searchTerm}
+							>
+								<div class="models-list">
+									{#if !ms.isCurrentModelInCache && currentModel}
+										<!-- Show unavailable model as first option (disabled) -->
+										<button
+											aria-disabled="true"
+											aria-selected="true"
+											class="flex w-full cursor-not-allowed items-center bg-red-400/10 p-2 text-left text-sm text-red-400"
+											disabled
+											role="option"
+											type="button"
+										>
+											<ModelId class="flex-1" hideQuantization modelId={currentModel} />
+
+											<span class="ml-2 text-xs whitespace-nowrap opacity-70">(not available)</span>
+										</button>
+									{/if}
+
+									{#if ms.filteredOptions.length === 0}
+										<p class="px-4 py-3 text-sm text-muted-foreground">No models found.</p>
+									{/if}
+
+									{#snippet modelOption(item: ModelItem, hideOrgName: boolean)}
+										{@const { option } = item}
+										{@const isSelected = currentModel === option.model || ms.activeId === option.id}
+										{@const isHighlighted = option.id === highlightedId}
+										{@const isFav = ms.isFavorite(option.model)}
+
+										<ModelsSelectorOption
+											{hideOrgName}
+											{isFav}
+											{isHighlighted}
+											{isSelected}
+											onInfoClick={ms.handleInfoClick}
+											onKeyDown={(event) => {
+												if (event.key === KeyboardKey.ENTER || event.key === KeyboardKey.SPACE) {
+													event.preventDefault();
+													void handleModelKeyAction(option.id, event.altKey);
+												}
+											}}
+											onMouseEnter={() => (highlightedId = option.id)}
+											onSelect={ms.handleSelect}
+											{option}
+										/>
+									{/snippet}
+
+									<ModelsSelectorList
+										activeId={ms.activeId}
+										{currentModel}
+										groups={ms.groupedFilteredOptions}
+										onInfoClick={ms.handleInfoClick}
+										onSelect={ms.handleSelect}
+										renderOption={modelOption}
+										sectionHeaderClass="my-1.5 px-2 py-2 text-[13px] font-semibold text-muted-foreground/70 select-none"
+									/>
+								</div>
+							</DropdownMenuSearchable>
+						</DropdownMenu.SubContent>
+					</DropdownMenu.Sub>
 
-							{#snippet modelOption(item: ModelItem, hideOrgName: boolean)}
-								{@const { option } = item}
-								{@const isSelected = currentModel === option.model || ms.activeId === option.id}
-								{@const isHighlighted = option.id === highlightedId}
-								{@const isFav = ms.isFavorite(option.model)}
-
-								<ModelsSelectorOption
-									{hideOrgName}
-									{isFav}
-									{isHighlighted}
-									{isSelected}
-									onInfoClick={ms.handleInfoClick}
-									onKeyDown={(event) => {
-										if (event.key === KeyboardKey.ENTER || event.key === KeyboardKey.SPACE) {
-											event.preventDefault();
-											void handleModelKeyAction(option.id, event.altKey);
-										}
-									}}
-									onMouseEnter={() => (highlightedId = option.id)}
-									onSelect={ms.handleSelect}
-									{option}
-								/>
-							{/snippet}
-
-							<ModelsSelectorList
-								activeId={ms.activeId}
-								{currentModel}
-								groups={ms.groupedFilteredOptions}
-								onInfoClick={ms.handleInfoClick}
-								onSelect={ms.handleSelect}
-								renderOption={modelOption}
-								sectionHeaderClass="my-1.5 px-2 py-2 text-[13px] font-semibold text-muted-foreground/70 select-none"
-							/>
-						</div>
-					</DropdownMenuSearchable>
+					<ChatFormActionAddReasoningSubmenu />
 				</DropdownMenu.Content>
 			</DropdownMenu.Root>
 		{:else}
@@ -332,12 +381,16 @@
 							{#if selectedOption}
 								<ModelId
 									class="min-w-0 overflow-hidden"
-									hideOrgName={false}
+									hideOrgName={!showOrgNameInTrigger}
 									hideQuantization
 									modelId={selectedOption.model}
 								/>
 							{/if}
 
+							{#if reasoning.isReasoningActive}
+								<Lightbulb class="h-3.5 w-3.5 shrink-0 text-amber-400" />
+							{/if}
+
 							{#if ms.updating}
 								<Loader2 class="h-3 w-3.5 shrink-0 animate-spin" />
 							{/if}
diff --git a/tools/ui/src/lib/components/app/models/ModelsSelectorOption.svelte b/tools/ui/src/lib/components/app/models/ModelsSelectorOption.svelte
index 77e626c3e12..16bc4f89762 100644
--- a/tools/ui/src/lib/components/app/models/ModelsSelectorOption.svelte
+++ b/tools/ui/src/lib/components/app/models/ModelsSelectorOption.svelte
@@ -58,6 +58,8 @@
 	let loadProgress = $derived(isLoading ? modelsStore.status.getLoadProgress(option.model) : null);
 	let loadPercent = $derived(Math.round(modelLoadFraction(loadProgress) * 100));
 	let loadTitle = $derived(modelLoadProgressText(loadProgress));
+	let modalities = $derived(option.modalities);
+	let supportsThinking = $derived(modelsStore.props.checkModelSupportsThinking(option.model));
 </script>
 
 <div
@@ -65,9 +67,11 @@
 	class={[
 		'group relative flex w-full items-center gap-2 rounded-sm p-2 text-left text-sm transition focus:outline-none',
 		'cursor-pointer',
-		isSelected && 'bg-accent/50 text-accent-foreground',
+		isSelected && !isHighlighted && 'bg-accent/50',
 		isHighlighted && 'bg-accent',
-		!isSelected && !isHighlighted && 'hover:bg-muted',
+		(isSelected || isHighlighted) && 'text-accent-foreground',
+		'hover:bg-accent',
+		'focus:bg-accent',
 		isLoaded ? 'text-popover-foreground' : 'text-muted-foreground'
 	]}
 	onclick={() => onSelect(option.id)}
@@ -81,7 +85,10 @@
 		aliases={option.aliases}
 		class="flex-1"
 		{hideOrgName}
+		{modalities}
 		modelId={option.model}
+		showRawTooltip
+		{supportsThinking}
 		tags={option.tags}
 	/>
 
diff --git a/tools/ui/src/lib/components/app/models/utils.ts b/tools/ui/src/lib/components/app/models/utils.ts
index b78e7085b70..35bfb58a257 100644
--- a/tools/ui/src/lib/components/app/models/utils.ts
+++ b/tools/ui/src/lib/components/app/models/utils.ts
@@ -1,3 +1,4 @@
+import { ModelModality } from '$lib/enums';
 import type { ModelOption } from '$lib/types/models';
 import { SvelteMap } from 'svelte/reactivity';
 
@@ -17,6 +18,23 @@ export interface GroupedModelOptions {
 	available: OrgGroup[];
 }
 
+function matchesModality(option: ModelOption, term: string): boolean {
+	const modalities = option.modalities;
+
+	if (!modalities) return false;
+
+	switch (term) {
+		case ModelModality.VISION.toLowerCase():
+			return modalities.vision;
+		case ModelModality.AUDIO.toLowerCase():
+			return modalities.audio;
+		case ModelModality.VIDEO.toLowerCase():
+			return modalities.video;
+		default:
+			return false;
+	}
+}
+
 export function filterModelOptions(options: ModelOption[], searchTerm: string): ModelOption[] {
 	const term = searchTerm.trim().toLowerCase();
 
@@ -27,7 +45,8 @@ export function filterModelOptions(options: ModelOption[], searchTerm: string):
 			option.model.toLowerCase().includes(term) ||
 			option.name?.toLowerCase().includes(term) ||
 			option.aliases?.some((alias: string) => alias.toLowerCase().includes(term)) ||
-			option.tags?.some((tag: string) => tag.toLowerCase().includes(term))
+			option.tags?.some((tag: string) => tag.toLowerCase().includes(term)) ||
+			matchesModality(option, term)
 	);
 }
 
diff --git a/tools/ui/src/lib/components/app/navigation/SidebarNavigation/SidebarNavigation.svelte b/tools/ui/src/lib/components/app/navigation/SidebarNavigation/SidebarNavigation.svelte
index dfe55b5e290..8bf12279e3c 100644
--- a/tools/ui/src/lib/components/app/navigation/SidebarNavigation/SidebarNavigation.svelte
+++ b/tools/ui/src/lib/components/app/navigation/SidebarNavigation/SidebarNavigation.svelte
@@ -5,6 +5,7 @@
 	import {
 		ActionIcon,
 		DialogConversationRename,
+		DialogSettingsChat,
 		Logo,
 		SidebarNavigationActions,
 		SidebarNavigationConversationList
@@ -91,6 +92,7 @@
 	let selectedIds = new SvelteSet<string>();
 
 	let renameDialogOpen = $state(false);
+	let settingsDialogOpen = $state(false);
 	let renameTargetConversationId = $state<string | null>(null);
 	let renameDraft = $state('');
 	let renameOriginalTitle = $state('');
@@ -308,7 +310,7 @@
 
 <svelte:window bind:innerWidth onkeydown={handleKeydown} />
 
-{#if innerWidth > 768 || (!page.url.hash.includes(ROUTES.SETTINGS) && !page.url.hash.includes(ROUTES.MCP_SERVERS) && !page.url.hash.includes(ROUTES.SEARCH))}
+{#if innerWidth > 768 || !page.url.hash.includes(ROUTES.SEARCH)}
 	<aside
 		class={[
 			'fixed md:sticky top-2 left-2 md:left-0 md:ml-2 md:mt-2 pt-2 z-10 w-[calc(100dvw-1rem)]',
@@ -400,6 +402,7 @@
 					isSearchModeActive = false;
 					searchQuery = '';
 				}}
+				onSettingsClick={() => (settingsDialogOpen = true)}
 			/>
 
 			{#if uiStore.isSidebarExpanded || isOnMobile}
@@ -447,6 +450,8 @@
 	onConfirm={handleRenameConfirm}
 />
 
+<DialogSettingsChat bind:open={settingsDialogOpen} />
+
 <style>
 	aside {
 		@media (max-width: 768px) {
diff --git a/tools/ui/src/lib/components/app/navigation/SidebarNavigation/SidebarNavigationActions.svelte b/tools/ui/src/lib/components/app/navigation/SidebarNavigation/SidebarNavigationActions.svelte
index 9df658e037e..6bc2ca2d7fd 100644
--- a/tools/ui/src/lib/components/app/navigation/SidebarNavigation/SidebarNavigationActions.svelte
+++ b/tools/ui/src/lib/components/app/navigation/SidebarNavigation/SidebarNavigationActions.svelte
@@ -26,6 +26,7 @@
 		onSearchDeactivated?: () => void;
 		onSearchClick?: () => void;
 		onNewChat?: () => void;
+		onSettingsClick?: () => void;
 	}
 
 	let {
@@ -35,6 +36,7 @@
 		onNewChat,
 		onSearchClick,
 		onSearchDeactivated,
+		onSettingsClick,
 		searchQuery = $bindable('')
 	}: Props = $props();
 
@@ -115,14 +117,16 @@
 							onNewChat?.();
 							void conversationsStore.openNewChat();
 						}
-					: item.route
-						? () => {
-								onNewChat?.();
-								goto(item.route!);
-							}
-						: isSearchOnMobile
-							? undefined
-							: onSearchClick}
+					: item.action === SidebarAction.SETTINGS
+						? () => onSettingsClick?.()
+						: item.route
+							? () => {
+									onNewChat?.();
+									goto(item.route!);
+								}
+							: isSearchOnMobile
+								? undefined
+								: onSearchClick}
 			{@const itemTransition = {
 				delay: !initialized ? i * ICON_STRIP_TRANSITION_DELAY_MULTIPLIER : 0,
 				duration: ICON_STRIP_TRANSITION_DURATION,
@@ -169,14 +173,16 @@
 							onNewChat?.();
 							void conversationsStore.openNewChat();
 						}
-					: item.route
-						? () => {
-								onNewChat?.();
-								goto(item.route!);
-							}
-						: isSearchOnMobile
-							? undefined
-							: onSearchClick}
+					: item.action === SidebarAction.SETTINGS
+						? () => onSettingsClick?.()
+						: item.route
+							? () => {
+									onNewChat?.();
+									goto(item.route!);
+								}
+							: isSearchOnMobile
+								? undefined
+								: onSearchClick}
 			{@const itemTransition = {
 				delay: !initialized ? i * ICON_STRIP_TRANSITION_DELAY_MULTIPLIER : 0,
 				duration: ICON_STRIP_TRANSITION_DURATION,
diff --git a/tools/ui/src/lib/components/app/settings/SettingsChat/SettingsChat.svelte b/tools/ui/src/lib/components/app/settings/SettingsChat/SettingsChat.svelte
index 347e8484bdc..87939007598 100644
--- a/tools/ui/src/lib/components/app/settings/SettingsChat/SettingsChat.svelte
+++ b/tools/ui/src/lib/components/app/settings/SettingsChat/SettingsChat.svelte
@@ -1,7 +1,5 @@
 <script lang="ts">
 	import { RefreshCw } from '@lucide/svelte';
-	import { goto } from '$app/navigation';
-	import { page } from '$app/state';
 	import {
 		SettingsChatDesktopSidebar,
 		SettingsChatFields,
@@ -18,21 +16,29 @@
 		SETTINGS_SECTION_SLUGS
 	} from '$lib/constants';
 	import { ColorMode } from '$lib/enums/ui.enums';
-	import { RouterService } from '$lib/services/router.service';
-	import { modelsStore, serverStore, settingsReferrer, settingsStore } from '$lib/stores';
-	import type { SettingsSection } from '$lib/types';
+	import { modelsStore, serverStore, settingsStore } from '$lib/stores';
+	import type { SettingsSection, SettingsSectionTitle } from '$lib/types';
 	import { setMode } from 'mode-watcher';
 	import { fade } from 'svelte/transition';
 	interface Props {
 		initialSection?: string;
-		getSectionHref?: (section: SettingsSection) => string;
+		onSectionChange?: (section: SettingsSectionTitle) => void;
+		onClose?: () => void;
 	}
 
-	let { getSectionHref, initialSection }: Props = $props();
+	let { initialSection, onClose, onSectionChange }: Props = $props();
 
-	let activeSlug = $derived(
-		initialSection ?? (page.params as Record<string, string | undefined>).section ?? 'general'
-	);
+	let activeSlug = $derived(initialSection ?? 'general');
+
+	function handleSectionChange(section: SettingsSectionTitle) {
+		const found = SETTINGS_CHAT_SECTIONS.find((s) => s.title === section);
+
+		if (found) {
+			activeSlug = found.slug;
+		}
+
+		onSectionChange?.(section);
+	}
 
 	let currentSection = $derived(
 		SETTINGS_CHAT_SECTIONS.find((section) => section.slug === activeSlug) ||
@@ -115,7 +121,7 @@
 		}
 
 		settingsStore.updateMultipleConfig(processedConfig);
-		goto(settingsReferrer.url);
+		onClose?.();
 	}
 
 	export function reset() {
@@ -123,32 +129,24 @@
 	}
 </script>
 
-<div in:fade={{ duration: 150 }} class="mx-auto flex h-full w-full flex-col md:pl-8">
-	<div class="flex flex-1 flex-col gap-4 md:flex-row">
+<div in:fade={{ duration: 150 }} class="mx-auto flex h-full w-full flex-col">
+	<div class="flex flex-1 flex-col md:flex-row md:gap-4">
 		<SettingsChatDesktopSidebar
-			getHref={getSectionHref ??
-				((section: SettingsSection) => RouterService.settings(section.slug))}
 			isActive={(section: SettingsSection) => section.slug === activeSlug}
+			onSectionChange={handleSectionChange}
 			sections={SETTINGS_CHAT_SECTIONS}
 		/>
 
 		<SettingsChatMobileHeader
 			bind:this={mobileHeader}
-			getHref={getSectionHref ??
-				((section: SettingsSection) => RouterService.settings(section.slug))}
 			isActive={(section: SettingsSection) => section.slug === activeSlug}
+			onSectionChange={handleSectionChange}
 			sections={SETTINGS_CHAT_SECTIONS}
 		/>
 
-		<div class="mx-auto max-w-3xl flex-1">
-			<div class="space-y-6 p-4 md:p-6 md:pt-28">
+		<div class="mx-auto max-w-2xl px-4 flex-1 md:mt-4">
+			<div class="space-y-6 pt-3">
 				<div class="grid">
-					<div class="mb-6 flex items-center gap-2 border-b border-border/30 pb-6 md:flex">
-						<currentSection.icon class="h-5 w-5" />
-
-						<h3 class="text-lg font-semibold">{currentSection.title}</h3>
-					</div>
-
 					{#if currentSection.slug === SETTINGS_SECTION_SLUGS.TOOLS}
 						<SettingsChatToolsTab />
 					{:else if currentSection.slug === SETTINGS_SECTION_SLUGS.IMPORT_EXPORT}
diff --git a/tools/ui/src/lib/components/app/settings/SettingsChatDesktopSidebar.svelte b/tools/ui/src/lib/components/app/settings/SettingsChatDesktopSidebar.svelte
index 08671da2ff1..68a73cc4e8f 100644
--- a/tools/ui/src/lib/components/app/settings/SettingsChatDesktopSidebar.svelte
+++ b/tools/ui/src/lib/components/app/settings/SettingsChatDesktopSidebar.svelte
@@ -1,54 +1,31 @@
 <script lang="ts">
-	import { Settings } from '@lucide/svelte';
 	import { ICON_CLASS_DEFAULT } from '$lib/constants';
 	import type { SettingsSection, SettingsSectionTitle } from '$lib/types';
 
 	interface Props {
 		sections: SettingsSection[];
 		isActive: (section: SettingsSection) => boolean;
-		getHref?: (section: SettingsSection) => string;
 		onSectionChange?: (section: SettingsSectionTitle) => void;
 	}
 
-	let { getHref, isActive, onSectionChange, sections }: Props = $props();
+	let { isActive, onSectionChange, sections }: Props = $props();
 </script>
 
-<div class="sticky top-2 hidden w-64 flex-col self-start bg-background py-4 md:flex gap-6">
-	<div class="flex items-center gap-2 py-2">
-		<Settings class="h-5 w-5 md:h-6 md:w-6" />
-
-		<h1 class="text-xl font-semibold md:text-2xl">Settings</h1>
-	</div>
-
+<div class="sticky top-12 hidden w-64 flex-col self-start bg-background md:flex gap-6">
 	<nav class="space-y-1">
 		{#each sections as section (section.title)}
-			{#if getHref}
-				<a
-					class="flex w-full cursor-pointer items-center gap-3 rounded-lg px-3 py-2 text-left text-sm no-underline transition-colors hover:bg-accent {isActive(
-						section
-					)
-						? 'bg-accent text-accent-foreground'
-						: 'text-muted-foreground'}"
-					href={getHref(section)}
-				>
-					<section.icon class={ICON_CLASS_DEFAULT} />
-
-					<span class="ml-2">{section.title}</span>
-				</a>
-			{:else}
-				<button
-					class="flex w-full cursor-pointer items-center gap-3 rounded-lg px-3 py-2 text-left text-sm transition-colors hover:bg-accent {isActive(
-						section
-					)
-						? 'bg-accent text-accent-foreground'
-						: 'text-muted-foreground'}"
-					onclick={() => onSectionChange?.(section.title)}
-				>
-					<section.icon class={ICON_CLASS_DEFAULT} />
+			<button
+				class="flex w-full cursor-pointer items-center gap-3 rounded-lg px-3 py-2 text-left text-sm transition-colors hover:bg-accent {isActive(
+					section
+				)
+					? 'bg-accent text-accent-foreground'
+					: 'text-muted-foreground'}"
+				onclick={() => onSectionChange?.(section.title)}
+			>
+				<section.icon class={ICON_CLASS_DEFAULT} />
 
-					<span class="ml-2">{section.title}</span>
-				</button>
-			{/if}
+				<span class="ml-2">{section.title}</span>
+			</button>
 		{/each}
 	</nav>
 </div>
diff --git a/tools/ui/src/lib/components/app/settings/SettingsChatMobileHeader.svelte b/tools/ui/src/lib/components/app/settings/SettingsChatMobileHeader.svelte
index 887d28489c2..ab85ef5eeeb 100644
--- a/tools/ui/src/lib/components/app/settings/SettingsChatMobileHeader.svelte
+++ b/tools/ui/src/lib/components/app/settings/SettingsChatMobileHeader.svelte
@@ -1,5 +1,4 @@
 <script lang="ts">
-	import { Settings } from '@lucide/svelte';
 	import { ScrollCarousel } from '$lib/components/app';
 	import { ICON_CLASS_DEFAULT, UI_DATA_ATTRS } from '$lib/constants';
 	import { BooleanString } from '$lib/enums';
@@ -10,11 +9,10 @@
 	interface Props {
 		sections: SettingsSection[];
 		isActive: (section: SettingsSection) => boolean;
-		getHref?: (section: SettingsSection) => string;
 		onSectionChange?: (section: SettingsSectionTitle) => void;
 	}
 
-	let { getHref, isActive, onSectionChange, sections }: Props = $props();
+	let { isActive, onSectionChange, sections }: Props = $props();
 
 	const carousel = useScrollCarousel();
 
@@ -37,51 +35,26 @@
 	}
 </script>
 
-<div class="sticky top-0 z-10 flex flex-col bg-background md:hidden">
-	<div class="flex items-center gap-2 px-4 pt-4 pb-2 md:pt-6">
-		<Settings class="h-5 w-5 md:h-6 md:w-6" />
-
-		<h1 class="text-xl font-semibold md:text-2xl">Settings</h1>
-	</div>
-
-	<div class="border-b border-border/30 py-2">
+<div class="flex flex-col bg-background md:hidden sticky top-13 z-50">
+	<div class="border-b border-border/30">
 		<ScrollCarousel alwaysShowArrows {carousel} containerClass="py-2" innerClass="gap-2">
 			{#each sections as section (section.title)}
-				{#if getHref}
-					<a
-						class="flex cursor-pointer items-center gap-2 rounded-lg px-3 py-2 text-sm whitespace-nowrap no-underline transition-colors first:ml-4 last:mr-4 hover:bg-accent {isActive(
-							section
-						)
-							? 'bg-accent text-accent-foreground'
-							: 'text-muted-foreground'}"
-						{...{ [UI_DATA_ATTRS.ACTIVE]: isActive(section) }}
-						href={getHref(section)}
-						onclick={(e: MouseEvent) => {
-							carousel.scrollToCenter(e.currentTarget as HTMLElement);
-						}}
-					>
-						<section.icon class="{ICON_CLASS_DEFAULT} flex-shrink-0" />
-
-						<span>{section.title}</span>
-					</a>
-				{:else}
-					<button
-						class="flex cursor-pointer items-center gap-2 rounded-lg px-3 py-2 text-sm whitespace-nowrap transition-colors first:ml-4 last:mr-4 hover:bg-accent {isActive(
-							section
-						)
-							? 'bg-accent text-accent-foreground'
-							: 'text-muted-foreground'}"
-						{...{ [UI_DATA_ATTRS.ACTIVE]: isActive(section) }}
-						onclick={(e: MouseEvent) => {
-							onSectionChange?.(section.title);
-							carousel.scrollToCenter(e.currentTarget as HTMLElement);
-						}}
-					>
-						<section.icon class="{ICON_CLASS_DEFAULT} flex-shrink-0" />
-
-						<span>{section.title}</span>
-					</button>
-				{/if}
+				<button
+					class="flex cursor-pointer items-center gap-2 rounded-lg px-3 py-2 text-sm whitespace-nowrap transition-colors first:ml-4 last:mr-4 hover:bg-accent {isActive(
+						section
+					)
+						? 'bg-accent text-accent-foreground'
+						: 'text-muted-foreground'}"
+					{...{ [UI_DATA_ATTRS.ACTIVE]: isActive(section) }}
+					onclick={(e: MouseEvent) => {
+						onSectionChange?.(section.title);
+						carousel.scrollToCenter(e.currentTarget as HTMLElement);
+					}}
+				>
+					<section.icon class="{ICON_CLASS_DEFAULT} flex-shrink-0" />
+
+					<span>{section.title}</span>
+				</button>
 			{/each}
 		</ScrollCarousel>
 	</div>
diff --git a/tools/ui/src/lib/components/app/settings/SettingsFooter.svelte b/tools/ui/src/lib/components/app/settings/SettingsFooter.svelte
index 0f59a831f94..04efde9df52 100644
--- a/tools/ui/src/lib/components/app/settings/SettingsFooter.svelte
+++ b/tools/ui/src/lib/components/app/settings/SettingsFooter.svelte
@@ -29,7 +29,7 @@
 	}
 </script>
 
-<div class="sticky bottom-0 mx-auto mt-4 flex w-full justify-between p-6">
+<div class="sticky bottom-0 mx-auto mt-4 flex w-full justify-between pb-4 md:pb-0">
 	<div class="flex gap-2">
 		<Button onclick={handleResetClick} variant="outline">
 			<RotateCcw class="h-3 w-3" />
diff --git a/tools/ui/src/lib/components/app/settings/SettingsMcpServers.svelte b/tools/ui/src/lib/components/app/settings/SettingsMcpServers.svelte
index 5cbd249f1e2..c0cf0000d3f 100644
--- a/tools/ui/src/lib/components/app/settings/SettingsMcpServers.svelte
+++ b/tools/ui/src/lib/components/app/settings/SettingsMcpServers.svelte
@@ -1,16 +1,13 @@
 <script lang="ts">
-	import McpLogo from '../mcp/McpLogo.svelte';
-	import { Plus, X } from '@lucide/svelte';
-	import { browser } from '$app/environment';
-	import { goto, replaceState } from '$app/navigation';
+	import { Plus } from '@lucide/svelte';
+	import { replaceState } from '$app/navigation';
 	import { page } from '$app/state';
-	import { ActionIcon, McpServerCard, McpServerCardSkeleton } from '$lib/components/app';
-	import { DialogMcpServerAddNew } from '$lib/components/app/dialogs';
+	import { McpServerCard, McpServerCardSkeleton } from '$lib/components/app';
+	import { DialogMcpResourcesBrowser, DialogMcpServerAddNew } from '$lib/components/app/dialogs';
 	import { Button } from '$lib/components/ui/button';
 	import * as Empty from '$lib/components/ui/empty';
-	import { ROUTES } from '$lib/constants';
 	import { HealthCheckStatus } from '$lib/enums';
-	import { conversationsStore, mcpStore, toolsStore } from '$lib/stores';
+	import { mcpStore, toolsStore } from '$lib/stores';
 	import { onMount } from 'svelte';
 	import { fade } from 'svelte/transition';
 
@@ -23,26 +20,7 @@
 	let servers = $derived(mcpStore.getServers());
 
 	let isAddingServer = $state(false);
-
-	let previousRouteId = $state<string | null>(null);
-
-	$effect(() => {
-		const currentId = page.route.id;
-
-		return () => {
-			previousRouteId = currentId;
-		};
-	});
-
-	function handleClose() {
-		const prevIsMcpServers = previousRouteId === '/mcp-servers';
-
-		if (browser && window.history.length > 1 && !prevIsMcpServers) {
-			history.back();
-		} else {
-			goto(ROUTES.START);
-		}
-	}
+	let isResourcesDialogOpen = $state(false);
 
 	onMount(() => {
 		if (page.url.searchParams.has('add')) {
@@ -71,25 +49,13 @@
 	}
 </script>
 
-<div in:fade={{ duration: 150 }} class="flex min-h-[calc(100dvh-4rem)] flex-col">
-	<div class="fixed top-4.5 right-4 z-50 md:hidden">
-		<ActionIcon icon={X} onclick={handleClose} tooltip="Close" />
-	</div>
-
-	<div
-		class="sticky top-0 z-10 mt-4 mb-2 flex items-start gap-4 md:p-4 p-0 px-4 md:justify-between md:px-8"
-	>
-		<div class="flex items-center gap-2">
-			<McpLogo class="h-5 w-5 md:h-6 md:w-6" />
-
-			<h1 class="text-lg font-semibold md:text-2xl">MCP Servers</h1>
-		</div>
-	</div>
-
+<div in:fade={{ duration: 150 }} class="flex flex-col h-full">
 	<DialogMcpServerAddNew bind:open={isAddingServer} />
 
+	<DialogMcpResourcesBrowser bind:open={isResourcesDialogOpen} />
+
 	{#if servers.length === 0}
-		<div class="flex flex-1 items-center justify-center py-16">
+		<div class="flex flex-1 items-center justify-center pb-20 pt-10 my-auto">
 			<Empty.Root class="max-w-md">
 				<Empty.Header>
 					<Empty.Media variant="icon">
@@ -112,22 +78,21 @@
 		</div>
 	{:else}
 		<div
-			class="grid gap-3 {className}"
-			style="grid-template-columns: repeat(auto-fill, minmax(min(32rem, calc(100dvw - 2rem)), 1fr));"
+			class="grid gap-4 {className}"
+			style="grid-template-columns: repeat(auto-fill, minmax(min(25rem, calc(100dvw - 4rem)), 1fr));"
 		>
 			{#each servers as server (server.id)}
 				{#if isServerPending(server.id, server.enabled)}
 					<McpServerCardSkeleton />
 				{:else}
 					<McpServerCard
-						enabled={conversationsStore.preferences.isMcpServerEnabledForChat(server.id)}
+						enabled={server.enabled}
+						onBrowseResources={() => (isResourcesDialogOpen = true)}
 						onDelete={() => mcpStore.removeServer(server.id)}
 						onToggle={async () => {
-							const wasEnabled = conversationsStore.preferences.isMcpServerEnabledForChat(
-								server.id
-							);
+							const wasEnabled = server.enabled;
 
-							await conversationsStore.preferences.toggleMcpServerForChat(server.id);
+							mcpStore.updateServer(server.id, { enabled: !wasEnabled });
 
 							if (!wasEnabled) {
 								// Promote the connection so tools/prompts/resources become
diff --git a/tools/ui/src/lib/components/app/settings/index.ts b/tools/ui/src/lib/components/app/settings/index.ts
index 9318fd4d302..7473e6af8e4 100644
--- a/tools/ui/src/lib/components/app/settings/index.ts
+++ b/tools/ui/src/lib/components/app/settings/index.ts
@@ -1,21 +1,21 @@
 /**
  * Full chat settings page layout with sidebar, mobile header, and content area.
  * Manages local configuration state, section navigation, and context setup.
- * Accepts an optional `initialSection` prop to override the URL-based section resolution.
+ * Accepts an optional `initialSection` prop to set the initial active section.
  */
 export { default as SettingsChat } from './SettingsChat/SettingsChat.svelte';
 
 /**
  * Desktop sidebar navigation for chat settings.
  * Displays a list of settings sections with icons and titles.
- * Supports both hash-link navigation (via `getHref`) and in-app section switching (via `onSectionChange`).
+ * Switches sections in-app via `onSectionChange`.
  */
 export { default as SettingsChatDesktopSidebar } from './SettingsChatDesktopSidebar.svelte';
 
 /**
  * Mobile header with a horizontally scrollable section picker for chat settings.
  * Shows chevron buttons for scroll navigation and highlights the active section.
- * Supports both hash-link navigation (via `getHref`) and in-app section switching (via `onSectionChange`).
+ * Switches sections in-app via `onSectionChange`.
  */
 export { default as SettingsChatMobileHeader } from './SettingsChatMobileHeader.svelte';
 
diff --git a/tools/ui/src/lib/components/ui/dialog/dialog-close.svelte b/tools/ui/src/lib/components/ui/dialog/dialog-close.svelte
index e8a96a77316..cd957a9bf8d 100644
--- a/tools/ui/src/lib/components/ui/dialog/dialog-close.svelte
+++ b/tools/ui/src/lib/components/ui/dialog/dialog-close.svelte
@@ -5,3 +5,9 @@
 </script>
 
 <DialogPrimitive.Close bind:ref data-slot="dialog-close" {...restProps} />
+
+<style>
+	:global([data-dialog-close]) {
+		z-index: 999;
+	}
+</style>
diff --git a/tools/ui/src/lib/components/ui/dialog/dialog-content.svelte b/tools/ui/src/lib/components/ui/dialog/dialog-content.svelte
index e6b2a641d5d..8a1a5909d57 100644
--- a/tools/ui/src/lib/components/ui/dialog/dialog-content.svelte
+++ b/tools/ui/src/lib/components/ui/dialog/dialog-content.svelte
@@ -10,7 +10,7 @@
 		class: className,
 		portalProps,
 		ref = $bindable(null),
-		showCloseButton = true,
+		showCloseButton = false,
 		...restProps
 	}: WithoutChildrenOrChild<DialogPrimitive.ContentProps> & {
 		portalProps?: DialogPrimitive.PortalProps;
@@ -25,7 +25,8 @@
 	<DialogPrimitive.Content
 		bind:ref
 		class={cn(
-			`fixed top-[50%] left-[50%] z-50 grid max-h-[100dvh] w-full max-w-[calc(100%-2rem)] translate-x-[-50%] translate-y-[-50%] gap-4 overflow-y-auto rounded-lg border border-border/30 bg-background p-6 shadow-lg duration-200 data-[state=closed]:animate-out data-[state=closed]:fade-out-0 data-[state=closed]:fill-mode-forwards data-[state=closed]:zoom-out-95 data-[state=open]:animate-in data-[state=open]:fade-in-0 data-[state=open]:zoom-in-95 sm:max-w-lg md:max-h-[100vh]`,
+			`fixed top-[50%] left-[50%] z-50 grid translate-x-[-50%] translate-y-[-50%] gap-4 overflow-y-auto rounded-lg border border-border/30 bg-background p-6 shadow-lg duration-200 data-[state=closed]:animate-out data-[state=closed]:fade-out-0 data-[state=closed]:fill-mode-forwards data-[state=closed]:zoom-out-95 data-[state=open]:animate-in data-[state=open]:fade-in-0 data-[state=open]:zoom-in-95`,
+			'max-h-[100dvh] max-w-full size-auto sm:max-w-lg md:w-auto md:size-auto md:max-w-[calc(100%-2rem)]',
 			className
 		)}
 		data-slot="dialog-content"
diff --git a/tools/ui/src/lib/components/ui/dialog/dialog-header.svelte b/tools/ui/src/lib/components/ui/dialog/dialog-header.svelte
index f5626941455..fd590e18604 100644
--- a/tools/ui/src/lib/components/ui/dialog/dialog-header.svelte
+++ b/tools/ui/src/lib/components/ui/dialog/dialog-header.svelte
@@ -1,20 +1,43 @@
 <script lang="ts">
+	import XIcon from '@lucide/svelte/icons/x';
 	import { cn, type WithElementRef } from '$lib/components/ui/utils';
+	import { Dialog as DialogPrimitive } from 'bits-ui';
 	import type { HTMLAttributes } from 'svelte/elements';
 
 	let {
 		children,
 		class: className,
 		ref = $bindable(null),
+		showCloseButton = true,
 		...restProps
-	}: WithElementRef<HTMLAttributes<HTMLDivElement>> = $props();
+	}: WithElementRef<HTMLAttributes<HTMLDivElement>> & {
+		showCloseButton?: boolean;
+	} = $props();
 </script>
 
+<!--
+	Header is `sticky`, so it stays at the top while the dialog body scrolls. The close
+	button lives here (not in the body) so it sticks together with the title. `sticky`
+	makes it the containing block, so the close can be absolutely placed at its corner.
+-->
 <div
 	bind:this={ref}
-	class={cn('flex flex-col gap-2 text-center sm:text-left', className)}
+	class={cn(
+		'flex flex-col gap-2 text-center sm:text-left sticky top-0 z-50 bg-background md:bg-transparent',
+		className
+	)}
 	data-slot="dialog-header"
 	{...restProps}
 >
 	{@render children?.()}
+
+	{#if showCloseButton}
+		<DialogPrimitive.Close
+			class="absolute top-0 right-0 rounded-xs opacity-70 ring-offset-background transition-opacity hover:opacity-100 focus:ring-2 focus:ring-ring focus:ring-offset-2 focus:outline-hidden disabled:pointer-events-none [&_svg]:pointer-events-none [&_svg]:shrink-0 [&_svg:not([class*='size-'])]:size-4"
+		>
+			<XIcon />
+
+			<span class="sr-only">Close</span>
+		</DialogPrimitive.Close>
+	{/if}
 </div>
diff --git a/tools/ui/src/lib/constants/routes.constants.ts b/tools/ui/src/lib/constants/routes.constants.ts
index d46acfd780b..1f518a75862 100644
--- a/tools/ui/src/lib/constants/routes.constants.ts
+++ b/tools/ui/src/lib/constants/routes.constants.ts
@@ -15,10 +15,6 @@ export const ROUTES = {
 	MCP_SERVERS: '#/mcp-servers',
 	/** Search — mobile-only full-page conversation search. */
 	SEARCH: '#/search',
-	/** Settings base — for dynamic settings URLs use RouterService. */
-	SETTINGS: '#/settings',
-	/** Exit destination for the settings view (fallback when no referrer). */
-	SETTINGS_EXIT: '#/',
 	/** Root — start of the app. */
 	START: '#/'
 } as const;
diff --git a/tools/ui/src/lib/constants/settings-keys.constants.ts b/tools/ui/src/lib/constants/settings-keys.constants.ts
index c8761c7587a..2c923cee385 100644
--- a/tools/ui/src/lib/constants/settings-keys.constants.ts
+++ b/tools/ui/src/lib/constants/settings-keys.constants.ts
@@ -54,6 +54,7 @@ export const SETTINGS_KEYS = {
 	SHOW_FULL_PATH_IN_MENTIONS: 'showFullPathInMentions',
 	// Display
 	SHOW_MESSAGE_STATS: 'showMessageStats',
+	SHOW_MODEL_ORG_NAME_IN_TRIGGER: 'showModelOrgNameInTrigger',
 	SHOW_MODEL_QUANTIZATION: 'showModelQuantization',
 	SHOW_MODEL_TAGS: 'showModelTags',
 	SHOW_RAW_MODEL_NAMES: 'showRawModelNames',
diff --git a/tools/ui/src/lib/constants/settings.constants.ts b/tools/ui/src/lib/constants/settings.constants.ts
index b4699af1974..7140bbcc4a1 100644
--- a/tools/ui/src/lib/constants/settings.constants.ts
+++ b/tools/ui/src/lib/constants/settings.constants.ts
@@ -111,9 +111,8 @@ export const SETTINGS_REGISTRY: SettingsSectionEntry[] = [
 				type: SettingsFieldType.CHECKBOX
 			},
 			{
-				defaultValue: false,
+				defaultValue: true,
 				help: 'Automatically show microphone button instead of send button when textarea is empty for models with audio modality support.',
-				isExperimental: true,
 				key: SETTINGS_KEYS.AUTO_MIC_ON_EMPTY,
 				label: 'Show microphone on empty input',
 				type: SettingsFieldType.CHECKBOX
@@ -283,6 +282,13 @@ export const SETTINGS_REGISTRY: SettingsSectionEntry[] = [
 				label: 'Show model tags',
 				type: SettingsFieldType.CHECKBOX
 			},
+			{
+				defaultValue: false,
+				help: 'Display the organization name in the model selector trigger button.',
+				key: SETTINGS_KEYS.SHOW_MODEL_ORG_NAME_IN_TRIGGER,
+				label: 'Show organization name in model selector trigger',
+				type: SettingsFieldType.CHECKBOX
+			},
 			{
 				defaultValue: false,
 				help: 'Display the current build version in the bottom-right corner of the interface.',
diff --git a/tools/ui/src/lib/constants/storage.constants.ts b/tools/ui/src/lib/constants/storage.constants.ts
index 918ee450868..0aad7c77064 100644
--- a/tools/ui/src/lib/constants/storage.constants.ts
+++ b/tools/ui/src/lib/constants/storage.constants.ts
@@ -20,6 +20,9 @@ export const DISABLED_TOOLS_LOCALSTORAGE_KEY = `${STORAGE_APP_NAME}.disabledTool
 
 /** Disabled tools keyed by stable selection identity, no migration from the name based key */
 export const DISABLED_TOOL_KEYS_LOCALSTORAGE_KEY = `${STORAGE_APP_NAME}.disabledToolKeys`;
+
+/** Default disabled tool categories, seeded into newly created conversations */
+export const DISABLED_TOOL_CATEGORIES_LOCALSTORAGE_KEY = `${STORAGE_APP_NAME}.disabledToolCategories`;
 export const FAVORITE_MODELS_LOCALSTORAGE_KEY = `${STORAGE_APP_NAME}.favoriteModels`;
 export const REASONING_EFFORT_DEFAULT_LOCALSTORAGE_KEY = `${STORAGE_APP_NAME}.reasoningEffortDefault`;
 export const CONVERSATION_TABS_LOCALSTORAGE_KEY = `${STORAGE_APP_NAME}.conversationTabs`;
diff --git a/tools/ui/src/lib/constants/ui.constants.ts b/tools/ui/src/lib/constants/ui.constants.ts
index 0f56b8d5607..f40cecfb614 100644
--- a/tools/ui/src/lib/constants/ui.constants.ts
+++ b/tools/ui/src/lib/constants/ui.constants.ts
@@ -1,6 +1,4 @@
-import { ROUTES } from './routes.constants';
 import { Package, Search, Settings, SquarePen } from '@lucide/svelte';
-import McpLogo from '$lib/components/app/mcp/McpLogo.svelte';
 import { SidebarAction, ToolSource } from '$lib/enums';
 import type { DesktopIconStripItem } from '$lib/types';
 
@@ -64,15 +62,8 @@ export const SIDEBAR_ACTIONS_ITEMS: DesktopIconStripItem[] = [
 	},
 	{ icon: Search, keys: ['cmd', 'k'], tooltip: 'Search' },
 	{
-		activeRouteId: '/mcp-servers',
-		icon: McpLogo,
-		route: ROUTES.MCP_SERVERS,
-		tooltip: 'MCP Servers'
-	},
-	{
-		activeUrlIncludes: '#/settings',
+		action: SidebarAction.SETTINGS,
 		icon: Settings,
-		route: `${ROUTES.SETTINGS}/general`,
 		tooltip: 'Settings'
 	}
 ];
diff --git a/tools/ui/src/lib/enums/ui.enums.ts b/tools/ui/src/lib/enums/ui.enums.ts
index 34bbf72c527..4eda1d69113 100644
--- a/tools/ui/src/lib/enums/ui.enums.ts
+++ b/tools/ui/src/lib/enums/ui.enums.ts
@@ -23,7 +23,8 @@ export enum ScrollCarouselVariant {
  * Sidebar icon strip actions handled directly by the sidebar.
  */
 export enum SidebarAction {
-	NEW_CHAT = 'new-chat'
+	NEW_CHAT = 'new-chat',
+	SETTINGS = 'settings'
 }
 
 /**
diff --git a/tools/ui/src/lib/hooks/use-reasoning-menu.svelte.ts b/tools/ui/src/lib/hooks/use-reasoning-menu.svelte.ts
index 2cb9c906095..3c52d7ab276 100644
--- a/tools/ui/src/lib/hooks/use-reasoning-menu.svelte.ts
+++ b/tools/ui/src/lib/hooks/use-reasoning-menu.svelte.ts
@@ -8,6 +8,7 @@ import { getConversationModel } from '$lib/utils';
 export interface UseReasoningMenuReturn {
 	readonly modelSupportsThinking: boolean;
 	readonly thinkingEnabled: boolean;
+	readonly isReasoningActive: boolean;
 	readonly isOff: boolean;
 	readonly currentEffort: ReasoningEffort;
 	readonly levels: ReasoningEffortLevel[];
@@ -59,6 +60,12 @@ export function useReasoningMenu(): UseReasoningMenuReturn {
 	const thinkingEnabled = $derived(
 		currentEffort !== ReasoningEffort.OFF && currentEffort !== ReasoningEffort.DEFAULT
 	);
+	// Thinking is effectively on (lightbulb lit) either when an explicit effort
+	// is selected, or when the effort is left at "Default" and the model
+	// supports thinking.
+	const isReasoningActive = $derived(
+		thinkingEnabled || (currentEffort === ReasoningEffort.DEFAULT && modelSupportsThinking)
+	);
 
 	return {
 		get currentEffort() {
@@ -67,6 +74,9 @@ export function useReasoningMenu(): UseReasoningMenuReturn {
 		get isOff() {
 			return currentEffort === ReasoningEffort.OFF;
 		},
+		get isReasoningActive() {
+			return isReasoningActive;
+		},
 		isSelected(level: ReasoningEffortLevel): boolean {
 			return currentEffort === level.value;
 		},
diff --git a/tools/ui/src/lib/hooks/use-settings-navigation.svelte.ts b/tools/ui/src/lib/hooks/use-settings-navigation.svelte.ts
deleted file mode 100644
index b1b0456a838..00000000000
--- a/tools/ui/src/lib/hooks/use-settings-navigation.svelte.ts
+++ /dev/null
@@ -1,45 +0,0 @@
-import { beforeNavigate } from '$app/navigation';
-import { page } from '$app/state';
-import { ROUTES } from '$lib/constants';
-import { settingsReferrer } from '$lib/stores';
-
-export interface ChatSettings {
-	reset: () => void;
-}
-
-export function useSettingsNavigation() {
-	const subroute = $state({
-		activePanel: 'chat' as 'chat' | 'settings' | 'mcp',
-		chatSettingsRef: undefined as ChatSettings | undefined
-	});
-	const isSettingsRoute = $derived(!!page.route.id?.startsWith('/settings'));
-
-	beforeNavigate(({ from, to }) => {
-		if (to?.route?.id?.startsWith('/settings') && !from?.route?.id?.startsWith('/settings')) {
-			settingsReferrer.url = window.location.hash || ROUTES.START;
-		}
-	});
-
-	$effect(() => {
-		if (subroute.activePanel === 'settings' && subroute.chatSettingsRef) {
-			subroute.chatSettingsRef.reset();
-		}
-	});
-
-	// Return to chat when navigating to a new route
-	$effect(() => {
-		void page.url;
-
-		subroute.activePanel = 'chat';
-	});
-
-	return {
-		get isSettingsRoute() {
-			return isSettingsRoute;
-		},
-
-		get panel() {
-			return subroute;
-		}
-	};
-}
diff --git a/tools/ui/src/lib/hooks/use-tools-panel.svelte.ts b/tools/ui/src/lib/hooks/use-tools-panel.svelte.ts
index e9dc0dcab69..2c287a4848a 100644
--- a/tools/ui/src/lib/hooks/use-tools-panel.svelte.ts
+++ b/tools/ui/src/lib/hooks/use-tools-panel.svelte.ts
@@ -1,22 +1,27 @@
 import { CLI_FLAGS } from '$lib/constants';
 import { ToolSource } from '$lib/enums';
 import { conversationsStore, mcpStore, toolsStore } from '$lib/stores';
-import type { ToolGroup } from '$lib/types';
+import type { ToolEntry, ToolGroup } from '$lib/types';
 import { SvelteSet } from 'svelte/reactivity';
 
 export interface UseToolsPanelReturn {
 	readonly expandedGroups: SvelteSet<string>;
-	readonly groups: ToolGroup[];
-	readonly activeGroups: ToolGroup[];
+	readonly categoryGroups: ToolGroup[];
+	readonly mcpGroups: ToolGroup[];
 	readonly totalToolCount: number;
 	readonly noToolsInfoMessage: string | null;
+	readonly mcpCategoryEnabled: boolean;
 	isGroupChecked(group: ToolGroup): boolean;
 	getEnabledToolCount(group: ToolGroup): number;
 	getFavicon(group: ToolGroup): string | null;
 	isGroupDisabled(group: ToolGroup): boolean;
+	isToolEnabled(entry: ToolEntry): boolean;
+	isToolParentDisabled(entry: ToolEntry): boolean;
+	toggleTool(entry: ToolEntry): void;
 	toggleGroupExpanded(key: string): void;
 	/** Toggle all tools in a group by its stable key (avoids stale group object references). */
 	toggleGroupByKey(key: string): void;
+	toggleMcpCategory(): void;
 	handleOpen(): void;
 }
 
@@ -26,19 +31,21 @@ export interface UseToolsPanelReturn {
  * Used by both the desktop dropdown (`ChatFormActionAddToolsSubmenu`)
  * and the mobile sheet (`ChatFormActionAddSheet`) to avoid
  * duplicating group filtering, checked-state derivation, and favicon logic.
+ *
+ * All toggle state routes through `conversationsStore.preferences`: with an
+ * active conversation it edits that conversation's tool policy, on the
+ * new-chat screen it edits the global defaults seeded into new conversations.
  */
 export function useToolsPanel(): UseToolsPanelReturn {
 	const expandedGroups = new SvelteSet<string>();
 	const groups = $derived(toolsStore.toolGroups);
-	const activeGroups = $derived(
-		groups.filter(
-			(g) =>
-				g.source !== ToolSource.MCP ||
-				!g.serverId ||
-				conversationsStore.preferences.isMcpServerEnabledForChat(g.serverId)
-		)
+	// non-MCP groups are 1:1 with tool categories; MCP tools group per server
+	const categoryGroups = $derived(groups.filter((g) => g.source !== ToolSource.MCP));
+	const mcpGroups = $derived(groups.filter((g) => g.source === ToolSource.MCP));
+	const totalToolCount = $derived(groups.reduce((n, g) => n + g.tools.length, 0));
+	const mcpCategoryEnabled = $derived(
+		conversationsStore.preferences.isCategoryEnabled(ToolSource.MCP)
 	);
-	const totalToolCount = $derived(activeGroups.reduce((n, g) => n + g.tools.length, 0));
 	const noToolsInfoMessage = $derived.by(() => {
 		if (toolsStore.loading) return null;
 
@@ -56,11 +63,11 @@ export function useToolsPanel(): UseToolsPanelReturn {
 	});
 
 	function isGroupChecked(group: ToolGroup): boolean {
-		return toolsStore.isGroupFullyEnabled(group);
+		return conversationsStore.preferences.isGroupChecked(group);
 	}
 
 	function getEnabledToolCount(group: ToolGroup): number {
-		return group.tools.filter((tool) => toolsStore.isToolEnabled(tool.key)).length;
+		return group.tools.filter((tool) => conversationsStore.preferences.isToolActive(tool)).length;
 	}
 
 	function getFavicon(group: ToolGroup): string | null {
@@ -70,13 +77,25 @@ export function useToolsPanel(): UseToolsPanelReturn {
 	}
 
 	function isGroupDisabled(group: ToolGroup): boolean {
+		// MCP server groups gray out while the whole MCP category is off
 		return (
 			group.source === ToolSource.MCP &&
-			!!group.serverId &&
-			!conversationsStore.preferences.isMcpServerEnabledForChat(group.serverId)
+			!conversationsStore.preferences.isCategoryEnabled(ToolSource.MCP)
 		);
 	}
 
+	function isToolEnabled(entry: ToolEntry): boolean {
+		return conversationsStore.preferences.isToolEnabled(entry.key);
+	}
+
+	function isToolParentDisabled(entry: ToolEntry): boolean {
+		return conversationsStore.preferences.isToolParentDisabled(entry);
+	}
+
+	function toggleTool(entry: ToolEntry): void {
+		void conversationsStore.preferences.toggleTool(entry.key);
+	}
+
 	function toggleGroupExpanded(key: string): void {
 		if (expandedGroups.has(key)) {
 			expandedGroups.delete(key);
@@ -87,11 +106,15 @@ export function useToolsPanel(): UseToolsPanelReturn {
 
 	function toggleGroupByKey(key: string): void {
 		// Find current group by key to get up-to-date tool references
-		const group = activeGroups.find((g) => g.key === key);
+		const group = groups.find((g) => g.key === key);
 
 		if (!group) return;
 
-		toolsStore.toggleGroup(group);
+		void conversationsStore.preferences.toggleGroup(group);
+	}
+
+	function toggleMcpCategory(): void {
+		void conversationsStore.preferences.toggleCategory(ToolSource.MCP);
 	}
 
 	function handleOpen(): void {
@@ -103,23 +126,30 @@ export function useToolsPanel(): UseToolsPanelReturn {
 	}
 
 	return {
-		get activeGroups() {
-			return activeGroups;
+		get categoryGroups() {
+			return categoryGroups;
 		},
 		expandedGroups,
 		getEnabledToolCount,
 		getFavicon,
-		get groups() {
-			return groups;
-		},
 		handleOpen,
 		isGroupChecked,
 		isGroupDisabled,
+		isToolEnabled,
+		isToolParentDisabled,
+		get mcpCategoryEnabled() {
+			return mcpCategoryEnabled;
+		},
+		get mcpGroups() {
+			return mcpGroups;
+		},
 		get noToolsInfoMessage() {
 			return noToolsInfoMessage;
 		},
 		toggleGroupByKey,
 		toggleGroupExpanded,
+		toggleMcpCategory,
+		toggleTool,
 		get totalToolCount() {
 			return totalToolCount;
 		}
diff --git a/tools/ui/src/lib/services/index.ts b/tools/ui/src/lib/services/index.ts
index 31750056600..cfd0077acc9 100644
--- a/tools/ui/src/lib/services/index.ts
+++ b/tools/ui/src/lib/services/index.ts
@@ -307,7 +307,6 @@ export { SandboxService } from './sandbox.service';
  *
  * **Key Responsibilities:**
  * - Build chat URLs for specific conversations: `RouterService.chat(id)` → `#/chat/:id`
- * - Build settings URLs for sections: `RouterService.settings(section)` → `#/settings/:section`
  *
  * @see ROUTES in constants/routes.ts — static route base paths
  */
diff --git a/tools/ui/src/lib/services/migration.service.ts b/tools/ui/src/lib/services/migration.service.ts
index 5d321b3ba28..1b3ecd61209 100644
--- a/tools/ui/src/lib/services/migration.service.ts
+++ b/tools/ui/src/lib/services/migration.service.ts
@@ -11,6 +11,7 @@
 import {
 	CONFIG_LOCALSTORAGE_KEY,
 	DB_APP_NAME_DEPRECATED,
+	DISABLED_TOOL_KEYS_LOCALSTORAGE_KEY,
 	IDXDB_STORES,
 	IDXDB_TABLES,
 	LEGACY_AGENTIC_REGEX,
@@ -21,6 +22,7 @@ import {
 	STORAGE_APP_NAME_DEPRECATED
 } from '$lib/constants';
 import { BooleanString, MessageRole } from '$lib/enums';
+import type { McpServerOverride } from '$lib/types/database';
 import Dexie from 'dexie';
 
 // Types
@@ -737,6 +739,61 @@ const mcpDefaultOverridesMergeMigration: Migration = {
 			);
 	}
 };
+const MCP_SERVER_OVERRIDES_TO_TOOL_POLICY_MIGRATION_ID = 'mcp-server-overrides-to-tool-policy-v1';
+const mcpServerOverridesToToolPolicyMigration: Migration = {
+	description:
+		'Seed per-conversation disabled tool keys from the global defaults and legacy per-conversation MCP server overrides (legacy field preserved)',
+	id: MCP_SERVER_OVERRIDES_TO_TOOL_POLICY_MIGRATION_ID,
+
+	async run(): Promise<void> {
+		// The global disabled set used to apply to every conversation; it is now
+		// the defaults seeded into newly created conversations, so existing rows
+		// are seeded with it to keep their behavior unchanged.
+		let defaults: string[] = [];
+
+		try {
+			const raw = localStorage.getItem(DISABLED_TOOL_KEYS_LOCALSTORAGE_KEY);
+
+			if (raw) {
+				const parsed: unknown = JSON.parse(raw);
+
+				if (Array.isArray(parsed)) {
+					defaults = parsed.filter((k): k is string => typeof k === 'string');
+				}
+			}
+		} catch {
+			return;
+		}
+
+		const db = await getDatabaseService();
+		const conversations = await db.getAllConversations();
+
+		let migratedCount = 0;
+
+		for (const conv of conversations) {
+			// re-run safety: a row that already has a policy is left alone
+			if (conv.disabledTools !== undefined) continue;
+
+			// A legacy per-conversation server disable becomes a server-scoped tool
+			// key (same format as toolsStore.getMcpServerToolsKey). Per-conversation
+			// enables are dropped: the global server flag governs now.
+			const serverGroupKeys = (conv.mcpServerOverrides ?? [])
+				.filter((o: McpServerOverride) => !o.enabled)
+				.map((o: McpServerOverride) => `mcp:${o.serverId}`);
+			const disabledTools = [...new Set([...defaults, ...serverGroupKeys])];
+
+			if (disabledTools.length === 0) continue;
+
+			await db.updateConversation(conv.id, { disabledTools });
+			migratedCount++;
+		}
+
+		if (import.meta.env.DEV && import.meta.env.VITE_DEBUG)
+			console.log(
+				`[Migration] MCP server overrides -> tool policy: updated ${migratedCount} conversations`
+			);
+	}
+};
 const migrations: Migration[] = [
 	localStorageMigration,
 	idxdbMigration,
@@ -746,7 +803,8 @@ const migrations: Migration[] = [
 	mcpDefaultEnabledMigration,
 	mcpDefaultOverridesMergeMigration,
 	configTypesMigration,
-	renderKeysMigration
+	renderKeysMigration,
+	mcpServerOverridesToToolPolicyMigration
 ];
 
 export const MigrationService = {
diff --git a/tools/ui/src/lib/services/models.service.ts b/tools/ui/src/lib/services/models.service.ts
index bb1bbd356a7..b0fcca0eec0 100644
--- a/tools/ui/src/lib/services/models.service.ts
+++ b/tools/ui/src/lib/services/models.service.ts
@@ -187,8 +187,17 @@ export class ModelsService {
 
 		// 6. Model name = segments before params; tags = remaining segments after params
 		const pivotIdx = paramsIdx !== MODEL_ID.NOT_FOUND ? paramsIdx : segments.length;
+		const modelSegments = segments.slice(0, pivotIdx);
+
+		// strip trailing container-format segments (e.g. GGUF) from the model name
+		while (
+			modelSegments.length > 0 &&
+			MODEL_ID.IGNORED_SEGMENTS.has(modelSegments[modelSegments.length - 1].toUpperCase())
+		) {
+			modelSegments.pop();
+		}
 
-		result.modelName = segments.slice(0, pivotIdx).join(MODEL_ID.SEGMENT_SEPARATOR) || null;
+		result.modelName = modelSegments.join(MODEL_ID.SEGMENT_SEPARATOR) || null;
 
 		if (paramsIdx !== MODEL_ID.NOT_FOUND) {
 			result.tags = segments.slice(paramsIdx + 1).filter((_, relIdx) => {
diff --git a/tools/ui/src/lib/services/router.service.ts b/tools/ui/src/lib/services/router.service.ts
index 217de38f3a8..a16731d6dba 100644
--- a/tools/ui/src/lib/services/router.service.ts
+++ b/tools/ui/src/lib/services/router.service.ts
@@ -1,8 +1,7 @@
 /**
  * RouterService - Builds app route paths
  *
- * Returns chat and settings route strings from a single source of truth
- * (ROUTES). No state.
+ * Returns chat route strings from a single source of truth (ROUTES). No state.
  */
 
 import { ROUTES } from '$lib/constants';
@@ -11,8 +10,4 @@ export class RouterService {
 	static chat(id: string): string {
 		return `${ROUTES.CHAT}/${id}`;
 	}
-
-	static settings(section: string): string {
-		return `${ROUTES.SETTINGS}/${section}`;
-	}
 }
diff --git a/tools/ui/src/lib/stores/agentic/index.svelte.ts b/tools/ui/src/lib/stores/agentic/index.svelte.ts
index a91e0ba46fa..4d94519db7b 100644
--- a/tools/ui/src/lib/stores/agentic/index.svelte.ts
+++ b/tools/ui/src/lib/stores/agentic/index.svelte.ts
@@ -44,7 +44,6 @@ import type {
 	AgenticFlowParams,
 	AgenticFlowResult,
 	AgenticSession,
-	McpServerOverride,
 	MCPToolCall,
 	SettingsConfigType,
 	ToolExecutionResult
@@ -201,10 +200,10 @@ class AgenticStore {
 		return active;
 	}
 
-	getConfig(settings: SettingsConfigType, perChatOverrides?: McpServerOverride[]): AgenticConfig {
+	getConfig(settings: SettingsConfigType): AgenticConfig {
 		const maxTurns = Number(settings.agenticMaxTurns) || DEFAULT_AGENTIC_CONFIG.maxTurns;
 		const hasTools =
-			mcpStore.hasEnabledServers(perChatOverrides) ||
+			mcpStore.hasEnabledServers() ||
 			toolsStore.serverTools.length > 0 ||
 			toolsStore.browserTools.length > 0 ||
 			toolsStore.customTools.length > 0;
@@ -309,8 +308,8 @@ class AgenticStore {
 			flowRootMessageId,
 			messages,
 			options = {},
-			perChatOverrides,
-			signal
+			signal,
+			toolPolicy
 		} = params;
 
 		// Clear any pending permissions/continue requests for this conversation when starting a new flow
@@ -321,21 +320,24 @@ class AgenticStore {
 			await toolsStore.fetchServerTools();
 		}
 
-		const agenticConfig = this.getConfig(settingsStore.config, perChatOverrides);
+		const agenticConfig = this.getConfig(settingsStore.config);
 
 		if (!agenticConfig.enabled) return { handled: false };
 
-		const hasMcpServers = mcpStore.hasEnabledServers(perChatOverrides);
+		const hasMcpServers = mcpStore.hasEnabledServers();
 
 		if (hasMcpServers) {
-			const initialized = await mcpStore.ensureInitialized(perChatOverrides);
+			const initialized = await mcpStore.ensureInitialized();
 
 			if (!initialized) {
 				console.log('[AgenticStore] MCP not initialized');
 			}
 		}
 
-		const tools = toolsStore.getEnabledToolsForLLM();
+		const tools = toolsStore.getEnabledToolsForLLM(
+			new Set(toolPolicy?.disabledTools ?? []),
+			new Set(toolPolicy?.disabledToolCategories ?? [])
+		);
 
 		if (tools.length === 0) {
 			return { handled: false };
diff --git a/tools/ui/src/lib/stores/chat/index.svelte.ts b/tools/ui/src/lib/stores/chat/index.svelte.ts
index aab824fd715..296c2cca582 100644
--- a/tools/ui/src/lib/stores/chat/index.svelte.ts
+++ b/tools/ui/src/lib/stores/chat/index.svelte.ts
@@ -1132,7 +1132,10 @@ class ChatStore implements ChatStreamHost, ChatFlowsHost {
 				await DatabaseService.updateMessage(messageId, updates);
 			}
 		};
-		const perChatOverrides = conversationsStore.preferences.getAllMcpServerOverrides();
+		const toolPolicy = {
+			disabledToolCategories: conversationsStore.preferences.getDisabledToolCategories(),
+			disabledTools: conversationsStore.preferences.getDisabledTools()
+		};
 
 		{
 			const agenticResult = await agenticStore.runAgenticFlow({
@@ -1144,8 +1147,8 @@ class ChatStore implements ChatStreamHost, ChatFlowsHost {
 					...this.getApiOptions(),
 					...(effectiveModel ? { model: effectiveModel } : {})
 				},
-				perChatOverrides,
-				signal: abortController.signal
+				signal: abortController.signal,
+				toolPolicy
 			});
 
 			if (agenticResult.handled) {
diff --git a/tools/ui/src/lib/stores/conversations/index.svelte.ts b/tools/ui/src/lib/stores/conversations/index.svelte.ts
index 98bf6a0310a..f2082ebefce 100644
--- a/tools/ui/src/lib/stores/conversations/index.svelte.ts
+++ b/tools/ui/src/lib/stores/conversations/index.svelte.ts
@@ -251,12 +251,15 @@ class ConversationsStore implements ConversationsPreferencesHost {
 	 */
 	async createConversation(name?: string): Promise<string> {
 		const conversationName = name || `Chat ${new Date().toLocaleString()}`;
-		// Working directory and reasoning effort picked on the new-chat screen
-		// get threaded into the new conversation here, then cleared so they
-		// don't bleed onto subsequent new chats.
+		// The tool policy is seeded from the current defaults: edits made inside
+		// the conversation afterwards live on its row and do not flow back into
+		// the defaults. Working directory picked on the new-chat screen gets
+		// threaded in here too, then cleared so it doesn't bleed onto subsequent
+		// new chats.
 		const conversation = await DatabaseService.createConversation(conversationName, {
 			cwd: this.preferences.pendingCwd ?? undefined,
-			reasoningEffort: this.preferences.pendingReasoningEffort
+			reasoningEffort: this.preferences.pendingReasoningEffort,
+			...this.preferences.getToolPolicySnapshot()
 		});
 
 		this.preferences.pendingCwd = null;
diff --git a/tools/ui/src/lib/stores/conversations/preferences.svelte.ts b/tools/ui/src/lib/stores/conversations/preferences.svelte.ts
index fea92860334..8106a0d85a4 100644
--- a/tools/ui/src/lib/stores/conversations/preferences.svelte.ts
+++ b/tools/ui/src/lib/stores/conversations/preferences.svelte.ts
@@ -1,21 +1,22 @@
 /**
  * ConversationPreferences - Per-chat options with global fallback
  *
- * Owns the options that resolve per conversation: MCP server overrides,
- * reasoning effort, and the working directory. Cwd and reasoning effort are
- * buffered as pending state and threaded into the next created conversation
- * by the host; MCP server overrides edit the sparse `mcpServerOverrides`
- * list on the active row (new-chat toggles edit the server's global flag).
+ * Owns the options that resolve per conversation: the tool policy (disabled
+ * categories and tool keys), reasoning effort, and the working directory.
+ * Tool picks made on the empty new-chat screen edit the global defaults
+ * directly (they seed every newly created conversation); cwd and reasoning
+ * effort are buffered as pending state and threaded into the next created
+ * conversation by the host.
  * Created and owned by conversationsStore; the host owns the conversation
  * rows these options persist onto.
  */
 
 import { REASONING_EFFORT_DEFAULT_LOCALSTORAGE_KEY } from '$lib/constants';
-import { ReasoningEffort } from '$lib/enums';
+import { ReasoningEffort, ToolSource } from '$lib/enums';
 import { DatabaseService } from '$lib/services/database.service';
 // direct imports between stores, not via the barrel, to avoid circular deps
-import { mcpStore } from '$lib/stores/mcp/index.svelte';
-import type { McpServerOverride } from '$lib/types/database';
+import { toolsStore } from '$lib/stores/tools.svelte';
+import type { DatabaseConversation, ToolEntry, ToolGroup } from '$lib/types';
 
 /** Load reasoning effort default from localStorage, DEFAULT defers to the server */
 function loadReasoningEffortDefault(): ReasoningEffort {
@@ -48,6 +49,18 @@ export interface ConversationsPreferencesHost {
 	applyConversationUpdate(id: string, updates: Partial<DatabaseConversation>): void;
 }
 
+/** Effective disabled tool keys: conversation row, falling back to defaults. */
+function buildDisabledTools(conv: DatabaseConversation | null): Set<string> {
+	return new Set(conv ? (conv.disabledTools ?? []) : [...toolsStore.disabledTools]);
+}
+
+/** Effective disabled tool categories: conversation row, falling back to defaults. */
+function buildDisabledToolCategories(conv: DatabaseConversation | null): Set<ToolSource> {
+	return new Set(
+		conv ? (conv.disabledToolCategories ?? []) : [...toolsStore.disabledToolCategories]
+	);
+}
+
 export class ConversationPreferences {
 	/**
 	 * Working directory picked on the empty new-chat screen, before any
@@ -61,36 +74,35 @@ export class ConversationPreferences {
 	/** Global (non-conversation-specific) reasoning effort default */
 	pendingReasoningEffort = $state<ReasoningEffort>(loadReasoningEffortDefault());
 
-	constructor(private host: ConversationsPreferencesHost) {}
-
-	/**
-	 * Gets the effective override list for the current conversation:
-	 * one entry per configured server, resolved per server. The stored
-	 * per-conversation list is sparse and only holds explicit toggles.
-	 */
-	getAllMcpServerOverrides(): McpServerOverride[] {
-		const overrides = this.host.activeConversation?.mcpServerOverrides;
-
-		return mcpStore.getServers().map((s) => {
-			const override = overrides?.find((o: McpServerOverride) => o.serverId === s.id);
+	private get _disabledToolCategories(): Set<ToolSource> {
+		return buildDisabledToolCategories(this.host.activeConversation);
+	}
 
-			return { enabled: override?.enabled ?? s.enabled, serverId: s.id };
-		});
+	// getters, not $derived fields: lazy evaluation keeps them off the class
+	// field initialization order (host is assigned by the constructor), and
+	// reads of the underlying $state stay tracked in reactive contexts
+	private get _disabledTools(): Set<string> {
+		return buildDisabledTools(this.host.activeConversation);
 	}
 
 	/**
-	 * Gets the effective MCP server override for a specific server.
-	 * A per-conversation override wins when present; a server without one
-	 * resolves to its `mcpServers[i].enabled` default.
+	 *
+	 *
+	 * Tool Policy
+	 *
+	 *
 	 */
-	getMcpServerOverride(serverId: string): McpServerOverride | undefined {
-		const override = this.host.activeConversation?.mcpServerOverrides?.find(
-			(o: McpServerOverride) => o.serverId === serverId
-		);
 
-		if (override) return override;
+	constructor(private host: ConversationsPreferencesHost) {}
 
-		return this.getDefaultOverride(serverId);
+	/** Effective disabled tool categories for the current context, captured at flow start. */
+	getDisabledToolCategories(): ToolSource[] {
+		return [...this._disabledToolCategories];
+	}
+
+	/** Effective disabled tool keys for the current context, captured at flow start. */
+	getDisabledTools(): string[] {
+		return [...this._disabledTools];
 	}
 
 	/**
@@ -114,16 +126,56 @@ export class ConversationPreferences {
 		return this.pendingReasoningEffort;
 	}
 
-	/** Checks if an MCP server is enabled for the active conversation. */
-	isMcpServerEnabledForChat(serverId: string): boolean {
-		const override = this.getMcpServerOverride(serverId);
+	/** Defaults snapshot for seeding a newly created conversation. */
+	getToolPolicySnapshot(): { disabledTools?: string[]; disabledToolCategories?: ToolSource[] } {
+		const disabledTools = [...toolsStore.disabledTools];
+		const disabledToolCategories = [...toolsStore.disabledToolCategories];
+
+		return {
+			disabledToolCategories: disabledToolCategories.length ? disabledToolCategories : undefined,
+			disabledTools: disabledTools.length ? disabledTools : undefined
+		};
+	}
+
+	hasEnabledCwdTools(): boolean {
+		return toolsStore.hasEnabledCwdTools(this._disabledTools, this._disabledToolCategories);
+	}
+
+	isCategoryEnabled(source: ToolSource): boolean {
+		return !this._disabledToolCategories.has(source);
+	}
+
+	/** Group checkbox state: the category flag, or the server key for MCP groups. */
+	isGroupChecked(group: ToolGroup): boolean {
+		return group.source === ToolSource.MCP && group.serverId
+			? this.isServerToolsEnabled(group.serverId)
+			: this.isCategoryEnabled(group.source);
+	}
+
+	/** Server-scoped MCP group state: one key disables all of that server's tools. */
+	isServerToolsEnabled(serverId: string): boolean {
+		return this.isToolEnabled(toolsStore.getMcpServerToolsKey(serverId));
+	}
+
+	/** Effective state: own key, MCP server group key, and category all on. */
+	isToolActive(entry: ToolEntry): boolean {
+		return toolsStore.isEntryEnabled(entry, this._disabledTools, this._disabledToolCategories);
+	}
 
-		return override?.enabled ?? false;
+	/** Own-level state: the tool key itself, ignoring category and server group. */
+	isToolEnabled(key: string): boolean {
+		return !this._disabledTools.has(key);
 	}
 
-	/** Removes MCP server override for the active conversation. */
-	async removeMcpServerOverride(serverId: string): Promise<void> {
-		await this.setMcpServerOverride(serverId, undefined);
+	/** True when a parent level (category or MCP server group) disables this entry. */
+	isToolParentDisabled(entry: ToolEntry): boolean {
+		if (!this.isCategoryEnabled(entry.source)) return true;
+
+		return (
+			entry.source === ToolSource.MCP &&
+			!!entry.serverId &&
+			!this.isServerToolsEnabled(entry.serverId)
+		);
 	}
 
 	/** Reload persisted defaults, e.g. when the active conversation is cleared. */
@@ -166,96 +218,110 @@ export class ConversationPreferences {
 	}
 
 	/**
-	 * Sets or removes MCP server override for the active conversation.
-	 * If no conversation exists, persists `enabled` onto `mcpServers[i].enabled`
-	 * (the single source of truth for new-chat defaults).
+	 * Sets the reasoning effort for the active conversation.
+	 * If no conversation exists, stores the global default.
+	 * @param effort - The effort level ('default' | 'off' | 'low' | 'medium' | 'high' | 'max')
 	 */
-	async setMcpServerOverride(serverId: string, enabled: boolean | undefined): Promise<void> {
+	async setReasoningEffort(effort: ReasoningEffort): Promise<void> {
 		if (!this.host.activeConversation) {
-			if (enabled !== undefined) {
-				mcpStore.updateServer(serverId, { enabled });
-			}
+			this.pendingReasoningEffort = effort;
+			saveReasoningEffortDefault(effort);
 
 			return;
 		}
 
-		// Clone to plain objects to avoid Proxy serialization issues with IndexedDB
-		const currentOverrides = (this.host.activeConversation.mcpServerOverrides || []).map(
-			(o: McpServerOverride) => ({
-				enabled: o.enabled,
-				serverId: o.serverId
-			})
-		);
+		this.host.applyConversationUpdate(this.host.activeConversation.id, {
+			reasoningEffort: effort
+		});
+
+		await DatabaseService.updateConversation(this.host.activeConversation.id, {
+			reasoningEffort: effort
+		});
+	}
 
-		let newOverrides: McpServerOverride[];
+	async toggleCategory(source: ToolSource): Promise<void> {
+		const conv: DatabaseConversation | null = this.host.activeConversation;
 
-		if (enabled === undefined) {
-			newOverrides = currentOverrides.filter((o: McpServerOverride) => o.serverId !== serverId);
-		} else {
-			const existingIndex = currentOverrides.findIndex(
-				(o: McpServerOverride) => o.serverId === serverId
-			);
-
-			if (existingIndex >= 0) {
-				newOverrides = [...currentOverrides];
-				newOverrides[existingIndex] = { enabled, serverId };
-			} else {
-				newOverrides = [...currentOverrides, { enabled, serverId }];
-			}
+		if (!conv) {
+			toolsStore.toggleCategory(source);
+
+			return;
 		}
 
-		const overrides = newOverrides.length > 0 ? newOverrides : undefined;
-		const id = this.host.activeConversation.id;
+		const next = buildDisabledToolCategories(conv);
 
-		this.host.applyConversationUpdate(id, {
-			mcpServerOverrides: overrides
-		});
+		if (next.has(source)) next.delete(source);
+		else next.add(source);
 
-		await DatabaseService.updateConversation(id, {
-			mcpServerOverrides: overrides
-		});
+		await this.persistDisabledToolCategories(next);
+	}
+
+	async toggleGroup(group: ToolGroup): Promise<void> {
+		if (group.source === ToolSource.MCP && group.serverId) {
+			await this.toggleServerTools(group.serverId);
+		} else {
+			await this.toggleCategory(group.source);
+		}
+	}
+
+	async toggleServerTools(serverId: string): Promise<void> {
+		await this.toggleTool(toolsStore.getMcpServerToolsKey(serverId));
 	}
 
 	/**
-	 * Sets the reasoning effort for the active conversation.
-	 * If no conversation exists, stores the global default.
-	 * @param effort - The effort level ('default' | 'off' | 'low' | 'medium' | 'high' | 'max')
+	 *
+	 *
+	 * Reasoning Effort
+	 *
+	 *
 	 */
-	async setReasoningEffort(effort: ReasoningEffort): Promise<void> {
-		if (!this.host.activeConversation) {
-			this.pendingReasoningEffort = effort;
-			saveReasoningEffortDefault(effort);
+
+	async toggleTool(key: string): Promise<void> {
+		const conv: DatabaseConversation | null = this.host.activeConversation;
+
+		if (!conv) {
+			toolsStore.toggleTool(key);
 
 			return;
 		}
 
-		const id = this.host.activeConversation.id;
+		const next = buildDisabledTools(conv);
 
-		this.host.applyConversationUpdate(id, {
-			reasoningEffort: effort
-		});
+		if (next.has(key)) next.delete(key);
+		else next.add(key);
 
-		await DatabaseService.updateConversation(id, {
-			reasoningEffort: effort
-		});
+		await this.persistDisabledTools(next);
 	}
 
-	/** Toggles MCP server enabled state for the active conversation. */
-	async toggleMcpServerForChat(serverId: string): Promise<void> {
-		const currentEnabled = this.isMcpServerEnabledForChat(serverId);
+	private async persistDisabledToolCategories(disabled: Set<ToolSource>): Promise<void> {
+		const conv = this.host.activeConversation;
+
+		if (!conv) return;
+
+		const disabledToolCategories = disabled.size ? [...disabled] : undefined;
 
-		await this.setMcpServerOverride(serverId, !currentEnabled);
+		this.host.applyConversationUpdate(conv.id, { disabledToolCategories });
+
+		await DatabaseService.updateConversation(conv.id, { disabledToolCategories });
 	}
 
 	/**
-	 * Resolve the default enabled value for a server: its own `enabled`
-	 * flag in `mcpServers`, so the global on/off state lives in one place.
+	 *
+	 *
+	 * Working Directory
+	 *
+	 *
 	 */
-	private getDefaultOverride(serverId: string): McpServerOverride | undefined {
-		const server = mcpStore.getServers().find((s) => s.id === serverId);
 
-		if (!server) return undefined;
+	private async persistDisabledTools(disabled: Set<string>): Promise<void> {
+		const conv = this.host.activeConversation;
+
+		if (!conv) return;
+
+		const disabledTools = disabled.size ? [...disabled] : undefined;
+
+		this.host.applyConversationUpdate(conv.id, { disabledTools });
 
-		return { enabled: server.enabled, serverId };
+		await DatabaseService.updateConversation(conv.id, { disabledTools });
 	}
 }
diff --git a/tools/ui/src/lib/stores/index.ts b/tools/ui/src/lib/stores/index.ts
index 40ddd10bfd1..b571699072b 100644
--- a/tools/ui/src/lib/stores/index.ts
+++ b/tools/ui/src/lib/stores/index.ts
@@ -49,8 +49,6 @@ export { uiStore } from './ui.svelte';
 // SETTINGS / UI PREFERENCES
 export { settingsStore } from './settings/index.svelte';
 
-export { settingsReferrer } from './settings/referrer.svelte';
-
 export { permissionsStore } from './permissions.svelte';
 
 // TOOLS
diff --git a/tools/ui/src/lib/stores/mcp/index.svelte.ts b/tools/ui/src/lib/stores/mcp/index.svelte.ts
index ccd53bc9d2f..ce9c4fbe3a0 100644
--- a/tools/ui/src/lib/stores/mcp/index.svelte.ts
+++ b/tools/ui/src/lib/stores/mcp/index.svelte.ts
@@ -37,7 +37,7 @@ import type {
 	Tool,
 	ToolExecutionResult
 } from '$lib/types';
-import type { DatabaseMessageExtraMcpResource, McpServerOverride } from '$lib/types/database';
+import type { DatabaseMessageExtraMcpResource } from '$lib/types/database';
 import type { SettingsConfigType } from '$lib/types/settings';
 import {
 	detectMcpTransportFromUrl,
@@ -306,12 +306,12 @@ class MCPStore implements McpHealthHost {
 		return extras;
 	}
 
-	async ensureInitialized(perChatOverrides?: McpServerOverride[]): Promise<boolean> {
+	async ensureInitialized(): Promise<boolean> {
 		if (!browser) {
 			return false;
 		}
 
-		const mcpConfig = this.buildMcpClientConfig(settingsStore.config, perChatOverrides);
+		const mcpConfig = this.buildMcpClientConfig(settingsStore.config);
 		const signature = mcpConfig ? JSON.stringify(mcpConfig) : null;
 
 		if (!signature) {
@@ -512,14 +512,6 @@ class MCPStore implements McpHealthHost {
 		return this.connections;
 	}
 
-	getEnabledServersForConversation(
-		perChatOverrides?: McpServerOverride[]
-	): MCPServerSettingsEntry[] {
-		return this.getServers().filter((server) => {
-			return this.checkServerEnabled(server, perChatOverrides);
-		});
-	}
-
 	/**
 	 * Check if a server already has an active connection that can be reused.
 	 * Returns the existing connection if available.
@@ -811,8 +803,8 @@ class MCPStore implements McpHealthHost {
 		);
 	}
 
-	hasEnabledServers(perChatOverrides?: McpServerOverride[]): boolean {
-		return Boolean(this.buildMcpClientConfig(settingsStore.config, perChatOverrides));
+	hasEnabledServers(): boolean {
+		return Boolean(this.buildMcpClientConfig(settingsStore.config));
 	}
 
 	/**
@@ -820,18 +812,12 @@ class MCPStore implements McpHealthHost {
 	 * Uses health check state since servers may not have active connections until
 	 * the user actually sends a message or uses prompts.
 	 */
-	hasPromptsCapability(perChatOverrides?: McpServerOverride[]): boolean {
-		let enabledServerIds: Set<string>;
-
-		if (perChatOverrides !== undefined) {
-			enabledServerIds = new Set(perChatOverrides.filter((o) => o.enabled).map((o) => o.serverId));
-		} else {
-			enabledServerIds = new Set(
-				this.getServers()
-					.filter((s) => s.enabled)
-					.map((s) => s.id)
-			);
-		}
+	hasPromptsCapability(): boolean {
+		const enabledServerIds = new Set(
+			this.getServers()
+				.filter((s) => s.enabled)
+				.map((s) => s.id)
+		);
 
 		if (enabledServerIds.size === 0) {
 			return false;
@@ -874,18 +860,12 @@ class MCPStore implements McpHealthHost {
 	 * Uses health check state since servers may not have active connections until
 	 * the user actually sends a message or uses prompts.
 	 */
-	hasResourcesCapability(perChatOverrides?: McpServerOverride[]): boolean {
-		let enabledServerIds: Set<string>;
-
-		if (perChatOverrides !== undefined) {
-			enabledServerIds = new Set(perChatOverrides.filter((o) => o.enabled).map((o) => o.serverId));
-		} else {
-			enabledServerIds = new Set(
-				this.getServers()
-					.filter((s) => s.enabled)
-					.map((s) => s.id)
-			);
-		}
+	hasResourcesCapability(): boolean {
+		const enabledServerIds = new Set(
+			this.getServers()
+				.filter((s) => s.enabled)
+				.map((s) => s.id)
+		);
 
 		if (enabledServerIds.size === 0) {
 			return false;
@@ -1185,10 +1165,7 @@ class MCPStore implements McpHealthHost {
 	/**
 	 * Builds MCP client configuration from settings.
 	 */
-	private buildMcpClientConfig(
-		cfg: SettingsConfigType,
-		perChatOverrides?: McpServerOverride[]
-	): MCPClientConfig | undefined {
+	private buildMcpClientConfig(cfg: SettingsConfigType): MCPClientConfig | undefined {
 		const rawServers = parseMcpServerSettings(cfg.mcpServers);
 
 		if (!rawServers.length) {
@@ -1198,7 +1175,7 @@ class MCPStore implements McpHealthHost {
 		const servers: Record<string, MCPServerConfig> = {};
 
 		for (const [index, entry] of rawServers.entries()) {
-			if (!this.checkServerEnabled(entry, perChatOverrides)) continue;
+			if (!entry.enabled) continue;
 
 			const normalized = this.buildServerConfig(entry);
 
@@ -1252,20 +1229,6 @@ class MCPStore implements McpHealthHost {
 		};
 	}
 
-	/**
-	 * Checks if a server is enabled for a given chat.
-	 * A per-chat override wins when present; a server without one resolves
-	 * to its own `enabled` flag in `mcpServers`.
-	 */
-	private checkServerEnabled(
-		server: MCPServerSettingsEntry,
-		perChatOverrides?: McpServerOverride[]
-	): boolean {
-		const override = perChatOverrides?.find((o) => o.serverId === server.id);
-
-		return override?.enabled ?? server.enabled;
-	}
-
 	private createListChangedHandlers(serverName: string): ListChangedHandlers {
 		return {
 			prompts: {
diff --git a/tools/ui/src/lib/stores/settings/referrer.svelte.ts b/tools/ui/src/lib/stores/settings/referrer.svelte.ts
deleted file mode 100644
index d1055cc6e8e..00000000000
--- a/tools/ui/src/lib/stores/settings/referrer.svelte.ts
+++ /dev/null
@@ -1,19 +0,0 @@
-/**
- * settingsReferrer - Remembers the settings route to return to after exit
- *
- * Tracks the last settings section the user was on so the app can return
- * there after a fallback exit. Standalone reactive value, no host.
- */
-
-import { ROUTES } from '$lib/constants';
-
-let _url = $state<string>(ROUTES.SETTINGS_EXIT);
-
-export const settingsReferrer = {
-	get url() {
-		return _url;
-	},
-	set url(value: string) {
-		_url = value;
-	}
-};
diff --git a/tools/ui/src/lib/stores/tools.svelte.ts b/tools/ui/src/lib/stores/tools.svelte.ts
index e255b8a43ec..dbbaee05a1d 100644
--- a/tools/ui/src/lib/stores/tools.svelte.ts
+++ b/tools/ui/src/lib/stores/tools.svelte.ts
@@ -12,6 +12,7 @@ import {
 	buildBrowserInfoToolDefinition,
 	buildGetDatetimeToolDefinition,
 	buildReadMediaToolDefinition,
+	DISABLED_TOOL_CATEGORIES_LOCALSTORAGE_KEY,
 	DISABLED_TOOL_KEYS_LOCALSTORAGE_KEY,
 	HOME_TILDE,
 	TOOL_GROUP_LABELS,
@@ -37,6 +38,9 @@ import { SvelteMap, SvelteSet } from 'svelte/reactivity';
 /** Stable selection identity for a tool, shared by the disabled set and the permission store */
 
 class ToolsStore {
+	// default disabled tool categories, seeded into newly created conversations;
+	// the per-conversation policy lives on the conversation row
+	private _disabledToolCategories = $state(new SvelteSet<ToolSource>());
 	private _disabledTools = $state(new SvelteSet<string>());
 	private _error = $state<string | null>(null);
 	private _loading = $state(false);
@@ -150,6 +154,10 @@ class ToolsStore {
 		}
 	}
 
+	get disabledToolCategories(): ReadonlySet<ToolSource> {
+		return this._disabledToolCategories;
+	}
+
 	get disabledTools(): SvelteSet<string> {
 		return this._disabledTools;
 	}
@@ -158,26 +166,6 @@ class ToolsStore {
 		return this._error;
 	}
 
-	/**
-	 * Check if a working directory is worth setting: at least one server tool
-	 * that reads it is both served and left enabled by the user.
-	 */
-	get hasEnabledCwdTools(): boolean {
-		return this._serverTools.some((def) => {
-			const name = def.function.name;
-
-			return (
-				this.cwdAwareTools.has(name) &&
-				!this._disabledTools.has(this.toolKey(ToolSource.SERVER, name))
-			);
-		});
-	}
-
-	/** Check if there are any enabled tools available (server, MCP, or custom) */
-	get hasEnabledTools(): boolean {
-		return this.getEnabledToolsForLLM().length > 0;
-	}
-
 	get isToolsEndpointUnreachable(): boolean {
 		return this._toolsEndpointUnreachable;
 	}
@@ -271,17 +259,14 @@ class ToolsStore {
 		}
 	}
 
-	/**
-	 * Enabled tool definitions for sending to the LLM.
-	 * MCP tool schemas are normalized here so the wire payload is consistent
-	 * across all four sources (server, browser/sandbox, MCP, custom JSON).
-	 * The API identifies tools by name, so a name is sent at most once.
-	 */
-	getEnabledToolsForLLM(): OpenAIToolDefinition[] {
+	getEnabledToolsForLLM(
+		disabledTools: ReadonlySet<string> = this._disabledTools,
+		disabledCategories: ReadonlySet<ToolSource> = this._disabledToolCategories
+	): OpenAIToolDefinition[] {
 		const enabledNames = new SvelteSet<string>();
 
 		for (const entry of this.allTools) {
-			if (!this._disabledTools.has(entry.key)) {
+			if (this.isEntryEnabled(entry, disabledTools, disabledCategories)) {
 				enabledNames.add(entry.definition.function.name);
 			}
 		}
@@ -306,6 +291,11 @@ class ToolsStore {
 		return result;
 	}
 
+	/** Server-scoped tool key: disabling it disables all of that server's tools. */
+	getMcpServerToolsKey(serverId: string): string {
+		return `mcp:${serverId}`;
+	}
+
 	/** Permission key for a tool name, identical to the selection key */
 	getPermissionKey(toolName: string): string | null {
 		return this.findEntryByName(toolName)?.key ?? null;
@@ -333,6 +323,26 @@ class ToolsStore {
 		return this.findEntryByName(toolName)?.source ?? null;
 	}
 
+	/**
+	 * Check if a working directory is worth setting: at least one server tool
+	 * that reads it is both served and left enabled by the given policy
+	 * (defaults to the global defaults).
+	 */
+	hasEnabledCwdTools(
+		disabledTools: ReadonlySet<string> = this._disabledTools,
+		disabledCategories: ReadonlySet<ToolSource> = this._disabledToolCategories
+	): boolean {
+		if (disabledCategories.has(ToolSource.SERVER)) return false;
+
+		return this._serverTools.some((def) => {
+			const name = def.function.name;
+
+			return (
+				this.cwdAwareTools.has(name) && !disabledTools.has(this.toolKey(ToolSource.SERVER, name))
+			);
+		});
+	}
+
 	/**
 	 * Load persisted disabled tools and fetch the builtin tool list.
 	 * Called by initStores() after migrations have run.
@@ -357,11 +367,56 @@ class ToolsStore {
 			console.error('[ToolsStore] Failed to load disabled tools from localStorage:', err);
 		}
 
+		try {
+			const stored = localStorage.getItem(DISABLED_TOOL_CATEGORIES_LOCALSTORAGE_KEY);
+
+			if (stored) {
+				const parsed = JSON.parse(stored);
+
+				if (Array.isArray(parsed)) {
+					for (const key of parsed) {
+						if (Object.values(ToolSource).includes(key)) {
+							this._disabledToolCategories.add(key as ToolSource);
+						}
+					}
+				}
+			}
+		} catch (err) {
+			console.error('[ToolsStore] Failed to load disabled tool categories from localStorage:', err);
+		}
+
 		this.fetchServerTools();
 	}
 
-	isGroupFullyEnabled(group: ToolGroup): boolean {
-		return group.tools.length > 0 && group.tools.every((t) => this.isToolEnabled(t.key));
+	isCategoryEnabled(source: ToolSource): boolean {
+		return !this._disabledToolCategories.has(source);
+	}
+
+	/**
+	 * Enabled tool definitions for sending to the LLM.
+	 * MCP tool schemas are normalized here so the wire payload is consistent
+	 * across all four sources (server, browser/sandbox, MCP, custom JSON).
+	 * The API identifies tools by name, so a name is sent at most once.
+	 */
+	/**
+	 * The single enable rule for a tool entry: its category must be on, its
+	 * own key must not be disabled, and for MCP tools the server-scoped group
+	 * key must not be disabled either.
+	 */
+	isEntryEnabled(
+		entry: ToolEntry,
+		disabledTools: ReadonlySet<string>,
+		disabledCategories: ReadonlySet<ToolSource>
+	): boolean {
+		if (disabledCategories.has(entry.source)) return false;
+
+		if (disabledTools.has(entry.key)) return false;
+
+		if (entry.source === ToolSource.MCP && entry.serverId) {
+			return !disabledTools.has(this.getMcpServerToolsKey(entry.serverId));
+		}
+
+		return true;
 	}
 
 	isToolEnabled(key: string): boolean {
@@ -394,6 +449,16 @@ class ToolsStore {
 		return this._serverHome;
 	}
 
+	setCategoryEnabled(source: ToolSource, enabled: boolean): void {
+		if (enabled) {
+			this._disabledToolCategories.delete(source);
+		} else {
+			this._disabledToolCategories.add(source);
+		}
+
+		this.persistDisabledToolCategories();
+	}
+
 	setToolEnabled(key: string, enabled: boolean): void {
 		if (enabled) {
 			this._disabledTools.delete(key);
@@ -402,15 +467,8 @@ class ToolsStore {
 		}
 	}
 
-	toggleGroup(group: ToolGroup): void {
-		const allEnabled = group.tools.every((t) => this.isToolEnabled(t.key));
-		const target = !allEnabled;
-
-		for (const tool of group.tools) {
-			if (target) this._disabledTools.delete(tool.key);
-			else this._disabledTools.add(tool.key);
-		}
-		this.persistDisabledTools();
+	toggleCategory(source: ToolSource): void {
+		this.setCategoryEnabled(source, !this.isCategoryEnabled(source));
 	}
 
 	toggleTool(key: string): void {
@@ -602,6 +660,17 @@ class ToolsStore {
 		return normalized;
 	}
 
+	private persistDisabledToolCategories(): void {
+		try {
+			localStorage.setItem(
+				DISABLED_TOOL_CATEGORIES_LOCALSTORAGE_KEY,
+				JSON.stringify([...this._disabledToolCategories])
+			);
+		} catch {
+			// ignore storage errors
+		}
+	}
+
 	private persistDisabledTools(): void {
 		try {
 			localStorage.setItem(
diff --git a/tools/ui/src/lib/types/agentic.d.ts b/tools/ui/src/lib/types/agentic.d.ts
index 1a604476bf9..c60e283fb6f 100644
--- a/tools/ui/src/lib/types/agentic.d.ts
+++ b/tools/ui/src/lib/types/agentic.d.ts
@@ -15,7 +15,7 @@ import type {
 	DatabaseMessageExtraAudioFile,
 	DatabaseMessageExtraImageFile
 } from './database';
-import type { MessageRole } from '$lib/enums';
+import type { MessageRole, ToolSource } from '$lib/enums';
 import { AgenticSectionType, ContinueIntentKind, ToolCallType } from '$lib/enums';
 
 /**
@@ -162,6 +162,12 @@ export interface AgenticFlowOptions {
 /**
  * Parameters for starting an agentic flow
  */
+/** Per-conversation tool policy, captured at flow start */
+export interface AgenticToolPolicy {
+	disabledToolCategories: ToolSource[];
+	disabledTools: string[];
+}
+
 export interface AgenticFlowParams {
 	conversationId: string;
 	/** ID of the flow's first assistant message, used to keep its stats live */
@@ -170,7 +176,7 @@ export interface AgenticFlowParams {
 	options?: AgenticFlowOptions;
 	callbacks: AgenticFlowCallbacks;
 	signal?: AbortSignal;
-	perChatOverrides?: McpServerOverride[];
+	toolPolicy?: AgenticToolPolicy;
 }
 
 /**
diff --git a/tools/ui/src/lib/types/database.d.ts b/tools/ui/src/lib/types/database.d.ts
index b239aa0251b..57b77f06cd2 100644
--- a/tools/ui/src/lib/types/database.d.ts
+++ b/tools/ui/src/lib/types/database.d.ts
@@ -1,6 +1,11 @@
-import { AttachmentType, ReasoningEffort } from '$lib/enums';
+import { AttachmentType, ReasoningEffort, ToolSource } from '$lib/enums';
 import type { ChatMessageTimings, ChatMessageType, ChatRole } from '$lib/types/chat';
 
+/**
+ * @deprecated Legacy per-conversation MCP server flags. MCP server enabled
+ * state is global now; per-conversation tool policy lives in
+ * `disabledTools` / `disabledToolCategories`. Read by the migration only.
+ */
 export interface McpServerOverride {
 	serverId: string;
 	enabled: boolean;
@@ -11,10 +16,15 @@ export interface DatabaseConversation {
 	id: string;
 	lastModified: number;
 	name: string;
+	/** @deprecated See {@link McpServerOverride}. Kept on rows for downgrade compatibility. */
 	mcpServerOverrides?: McpServerOverride[];
 	thinkingEnabled?: boolean;
 	reasoningEffort?: ReasoningEffort;
 	cwd?: string;
+	/** Tool keys disabled for this conversation, incl. server-scoped MCP group keys (`mcp:<serverId>`) */
+	disabledTools?: string[];
+	/** Tool categories disabled for this conversation */
+	disabledToolCategories?: ToolSource[];
 	forkedFromConversationId?: string;
 	pinned?: boolean;
 }
diff --git a/tools/ui/src/routes/mcp-servers/+page.svelte b/tools/ui/src/routes/mcp-servers/+page.svelte
deleted file mode 100644
index 1758134c391..00000000000
--- a/tools/ui/src/routes/mcp-servers/+page.svelte
+++ /dev/null
@@ -1,5 +0,0 @@
-<script lang="ts">
-	import { SettingsMcpServers } from '$lib/components/app/settings';
-</script>
-
-<SettingsMcpServers class="mx-auto w-full p-4 md:p-8 md:py-8" />
diff --git a/tools/ui/src/routes/settings/+layout.svelte b/tools/ui/src/routes/settings/+layout.svelte
deleted file mode 100644
index 1eeb10772a3..00000000000
--- a/tools/ui/src/routes/settings/+layout.svelte
+++ /dev/null
@@ -1,38 +0,0 @@
-<script lang="ts">
-	import { X } from '@lucide/svelte';
-	import { browser } from '$app/environment';
-	import { goto } from '$app/navigation';
-	import { page } from '$app/state';
-	import { ActionIcon } from '$lib/components/app';
-	import { ROUTES } from '$lib/constants';
-
-	let { children } = $props();
-
-	let previousRouteId = $state<string | null>(null);
-
-	$effect(() => {
-		const currentId = page.route.id;
-
-		return () => {
-			previousRouteId = currentId;
-		};
-	});
-
-	function handleClose() {
-		const prevIsSettings = previousRouteId?.startsWith('/settings');
-
-		if (browser && window.history.length > 1 && !prevIsSettings) {
-			history.back();
-		} else {
-			goto(ROUTES.SETTINGS_EXIT);
-		}
-	}
-</script>
-
-<div class="fixed top-4.5 right-4 z-50 md:hidden">
-	<ActionIcon icon={X} onclick={handleClose} tooltip="Close" />
-</div>
-
-<div class="min-h-full">
-	{@render children?.()}
-</div>
diff --git a/tools/ui/src/routes/settings/[[section]]/+page.svelte b/tools/ui/src/routes/settings/[[section]]/+page.svelte
deleted file mode 100644
index d4faae04490..00000000000
--- a/tools/ui/src/routes/settings/[[section]]/+page.svelte
+++ /dev/null
@@ -1,15 +0,0 @@
-<script lang="ts">
-	import { afterNavigate, replaceState } from '$app/navigation';
-	import { page } from '$app/state';
-	import { SettingsChat } from '$lib/components/app/settings';
-	import { SETTINGS_SECTION_SLUGS } from '$lib/constants';
-	import { RouterService } from '$lib/services';
-
-	afterNavigate(() => {
-		if (!page.params.section) {
-			replaceState(RouterService.settings(SETTINGS_SECTION_SLUGS.GENERAL), {});
-		}
-	});
-</script>
-
-<SettingsChat initialSection={(page.params as Record<string, string | undefined>).section} />
diff --git a/tools/ui/tests/unit/mcp-override-fallback.test.ts b/tools/ui/tests/unit/mcp-override-fallback.test.ts
deleted file mode 100644
index 12ed6e4c4b4..00000000000
--- a/tools/ui/tests/unit/mcp-override-fallback.test.ts
+++ /dev/null
@@ -1,151 +0,0 @@
-import { CONFIG_LOCALSTORAGE_KEY, SETTINGS_KEYS } from '$lib/constants';
-import type { DatabaseConversation } from '$lib/types/database';
-import { afterEach, beforeAll, beforeEach, describe, expect, it } from 'vitest';
-
-// node env unit project has no DOM, install a minimal localStorage backed by a Map
-beforeAll(() => {
-	const store = new Map<string, string>();
-	const polyfill: Storage = {
-		clear: () => store.clear(),
-		getItem: (k) => (store.has(k) ? store.get(k)! : null),
-		key: (i) => Array.from(store.keys())[i] ?? null,
-		get length() {
-			return store.size;
-		},
-		removeItem: (k) => {
-			store.delete(k);
-		},
-		setItem: (k, v) => {
-			store.set(k, String(v));
-		}
-	};
-
-	(globalThis as unknown as { localStorage: Storage }).localStorage = polyfill;
-});
-
-/**
- * Regression coverage for the bug where MCP servers flipped to "disabled"
- * after sending the first message on a fresh chat (see comment in
- * `MCPStore.createConversation`: empty `mcpServerOverrides` should inherit
- * `mcpServers[i].enabled`, not be treated as all-off).
- */
-describe('conversationsStore MCP override resolution', () => {
-	beforeEach(async () => {
-		localStorage.clear();
-		// Two configured servers: alpha is globally disabled, bravo enabled.
-		localStorage.setItem(
-			CONFIG_LOCALSTORAGE_KEY,
-			JSON.stringify({
-				[SETTINGS_KEYS.MCP_SERVERS]: JSON.stringify([
-					{ enabled: false, id: 'alpha', url: 'https://alpha.example.com/mcp' },
-					{ enabled: true, id: 'bravo', url: 'https://bravo.example.com/mcp' }
-				])
-			})
-		);
-
-		// The settings store constructor bails in node env (no `browser`),
-		// so seed the config directly. The shape mirrors what `loadConfig`
-		// would build from localStorage.
-		const { settingsStore } = await import('$lib/stores/settings/index.svelte');
-		const raw = localStorage.getItem(CONFIG_LOCALSTORAGE_KEY) ?? '{}';
-		const saved = JSON.parse(raw) as Record<string, unknown>;
-
-		settingsStore.config = {
-			...settingsStore.config,
-			[SETTINGS_KEYS.MCP_SERVERS]: saved[SETTINGS_KEYS.MCP_SERVERS]
-		};
-	});
-
-	afterEach(() => {
-		localStorage.clear();
-	});
-
-	function makeConversation(
-		overrides?: { serverId: string; enabled: boolean }[]
-	): DatabaseConversation {
-		return {
-			currNode: null,
-			id: 'conv-1',
-			lastModified: 0,
-			mcpServerOverrides: overrides,
-			name: 'Test chat'
-		};
-	}
-
-	it('inherits server.enabled when no conversation is active', async () => {
-		const { conversationsStore } = await import('$lib/stores/conversations/index.svelte');
-
-		conversationsStore.activeConversation = null;
-
-		expect(conversationsStore.preferences.isMcpServerEnabledForChat('alpha')).toBe(false);
-		expect(conversationsStore.preferences.isMcpServerEnabledForChat('bravo')).toBe(true);
-	});
-
-	it('inherits server.enabled on a newly created chat with no overrides', async () => {
-		const { conversationsStore } = await import('$lib/stores/conversations/index.svelte');
-
-		conversationsStore.activeConversation = makeConversation();
-
-		// Empty override list: must fall back to global server.enabled, not all-off.
-		expect(conversationsStore.preferences.isMcpServerEnabledForChat('alpha')).toBe(false);
-		expect(conversationsStore.preferences.isMcpServerEnabledForChat('bravo')).toBe(true);
-	});
-
-	it('inherits server.enabled on a newly created chat when overrides is undefined', async () => {
-		const { conversationsStore } = await import('$lib/stores/conversations/index.svelte');
-
-		conversationsStore.activeConversation = makeConversation(undefined);
-
-		expect(conversationsStore.preferences.isMcpServerEnabledForChat('alpha')).toBe(false);
-		expect(conversationsStore.preferences.isMcpServerEnabledForChat('bravo')).toBe(true);
-	});
-
-	it('uses explicit per-chat overrides, with defaults for non-overridden servers', async () => {
-		const { conversationsStore } = await import('$lib/stores/conversations/index.svelte');
-
-		// Override flips bravo off for this chat, alpha keeps its global default.
-		conversationsStore.activeConversation = makeConversation([
-			{ enabled: false, serverId: 'bravo' }
-		]);
-
-		expect(conversationsStore.preferences.isMcpServerEnabledForChat('alpha')).toBe(false);
-		expect(conversationsStore.preferences.isMcpServerEnabledForChat('bravo')).toBe(false);
-	});
-
-	it('getAllMcpServerOverrides returns a complete list merged from defaults', async () => {
-		const { conversationsStore } = await import('$lib/stores/conversations/index.svelte');
-
-		conversationsStore.activeConversation = makeConversation([
-			{ enabled: true, serverId: 'alpha' }
-		]);
-
-		expect(conversationsStore.preferences.getAllMcpServerOverrides()).toEqual([
-			{ enabled: true, serverId: 'alpha' },
-			{ enabled: true, serverId: 'bravo' }
-		]);
-	});
-
-	it('getAllMcpServerOverrides falls back to defaults when there are no explicit overrides', async () => {
-		const { conversationsStore } = await import('$lib/stores/conversations/index.svelte');
-
-		conversationsStore.activeConversation = makeConversation();
-
-		expect(conversationsStore.preferences.getAllMcpServerOverrides()).toEqual([
-			{ enabled: false, serverId: 'alpha' },
-			{ enabled: true, serverId: 'bravo' }
-		]);
-	});
-
-	it('getMcpServerOverride returns the global default when the server has no explicit override', async () => {
-		const { conversationsStore } = await import('$lib/stores/conversations/index.svelte');
-
-		conversationsStore.activeConversation = makeConversation([
-			{ enabled: true, serverId: 'alpha' }
-		]);
-
-		expect(conversationsStore.preferences.getMcpServerOverride('bravo')).toEqual({
-			enabled: true,
-			serverId: 'bravo'
-		});
-	});
-});
diff --git a/tools/ui/tests/unit/model-id-parser.test.ts b/tools/ui/tests/unit/model-id-parser.test.ts
index 3dac1dfaba7..5903f196abf 100644
--- a/tools/ui/tests/unit/model-id-parser.test.ts
+++ b/tools/ui/tests/unit/model-id-parser.test.ts
@@ -97,6 +97,38 @@ describe('parseModelId', () => {
 		});
 	});
 
+	it('strips trailing container format segments from model names', () => {
+		expect(parseModelId('unsloth/DeepSeek-V4-Flash-0731-GGUF:Q2_K_XL')).toStrictEqual({
+			activatedParams: null,
+			modelName: 'DeepSeek-V4-Flash-0731',
+			orgName: 'unsloth',
+			params: null,
+			quantization: 'Q2_K_XL',
+			raw: 'unsloth/DeepSeek-V4-Flash-0731-GGUF:Q2_K_XL',
+			tags: []
+		});
+
+		expect(parseModelId('unsloth/Laguna-S-2.1-GGUF:Q4_K_XL')).toStrictEqual({
+			activatedParams: null,
+			modelName: 'Laguna-S-2.1',
+			orgName: 'unsloth',
+			params: null,
+			quantization: 'Q4_K_XL',
+			raw: 'unsloth/Laguna-S-2.1-GGUF:Q4_K_XL',
+			tags: []
+		});
+
+		expect(parseModelId('org/Model-Name-GGUF')).toStrictEqual({
+			activatedParams: null,
+			modelName: 'Model-Name',
+			orgName: 'org',
+			params: null,
+			quantization: null,
+			raw: 'org/Model-Name-GGUF',
+			tags: []
+		});
+	});
+
 	it('handles real-world examples correctly', () => {
 		expect(parseModelId('meta-llama/Llama-3.1-8B')).toStrictEqual({
 			activatedParams: null,