diff --git a/litellm/proxy/_experimental/mcp_server/server.py b/litellm/proxy/_experimental/mcp_server/server.py
index 49e88334df3..a72a4309ea0 100644
--- a/litellm/proxy/_experimental/mcp_server/server.py
+++ b/litellm/proxy/_experimental/mcp_server/server.py
@@ -3399,8 +3399,12 @@ if MCP_AVAILABLE:
         async def wrapped_send(message: Message) -> None:
             if message.get("type") == "http.response.start":
                 for key, value in message.get("headers", []):
-                    if key.lower() == b"mcp-session-id":
-                        session_id = value.decode()
+                    header_name = key if isinstance(key, bytes) else str(key).encode()
+                    if header_name.lower() == b"mcp-session-id":
+                        session_id = (
+                            value.decode() if isinstance(value, bytes) else str(value)
+                        )
+                        auth_context_var.set(auth_user)
                         _stateful_session_auth_contexts[session_id] = auth_user
                         _stateful_session_auth_context_last_seen[session_id] = (
                             time.monotonic()
diff --git a/tests/test_litellm/proxy/_experimental/mcp_server/test_mcp_server.py b/tests/test_litellm/proxy/_experimental/mcp_server/test_mcp_server.py
index 821c13e6592..db497ea0a0c 100644
--- a/tests/test_litellm/proxy/_experimental/mcp_server/test_mcp_server.py
+++ b/tests/test_litellm/proxy/_experimental/mcp_server/test_mcp_server.py
@@ -1408,6 +1408,54 @@ async def test_stateful_mcp_requests_refresh_session_auth_context():
     mcp_server._stateful_session_auth_contexts.pop(session_id, None)
 
 
+@pytest.mark.asyncio
+async def test_initialize_response_capture_accepts_str_headers_and_sets_auth_context():
+    try:
+        from litellm.proxy._experimental.mcp_server import server as mcp_server
+    except ImportError:
+        pytest.skip("MCP server not available")
+
+    session_id = "initialize-session-1"
+    auth_user = mcp_server.MCPAuthenticatedUser(
+        user_api_key_auth=UserAPIKeyAuth(api_key="initialize-key", user_id="user-a")
+    )
+    previous_auth_user = mcp_server.MCPAuthenticatedUser(
+        user_api_key_auth=UserAPIKeyAuth(api_key="previous-key", user_id="user-b")
+    )
+    sent_messages = []
+
+    async def send(message):
+        sent_messages.append(message)
+
+    wrapped_send = mcp_server._wrap_send_with_stateful_session_auth_context(
+        send,
+        auth_user,
+        "owner-fingerprint",
+    )
+    token = mcp_server.auth_context_var.set(previous_auth_user)
+    try:
+        await wrapped_send(
+            {
+                "type": "http.response.start",
+                "headers": [("mcp-session-id", session_id)],
+            }
+        )
+
+        assert mcp_server.auth_context_var.get() is auth_user
+        assert mcp_server._stateful_session_auth_contexts[session_id] is auth_user
+        assert mcp_server._stateful_session_owners[session_id] == "owner-fingerprint"
+        assert session_id in mcp_server._stateful_session_auth_context_last_seen
+        assert sent_messages == [
+            {
+                "type": "http.response.start",
+                "headers": [("mcp-session-id", session_id)],
+            }
+        ]
+    finally:
+        mcp_server.auth_context_var.reset(token)
+        mcp_server._remove_stateful_session_tracking(session_id)
+
+
 @pytest.mark.asyncio
 async def test_stateful_mcp_auth_contexts_expire_with_idle_sessions():
     """Expired session auth contexts should not remain in memory indefinitely."""