diff --git a/litellm/litellm_core_utils/prompt_templates/common_utils.py b/litellm/litellm_core_utils/prompt_templates/common_utils.py
index e555d7e8ec0..da2d75a0a38 100644
--- a/litellm/litellm_core_utils/prompt_templates/common_utils.py
+++ b/litellm/litellm_core_utils/prompt_templates/common_utils.py
@@ -11,7 +11,9 @@ from itertools import groupby, islice
 from os import PathLike
 from pathlib import Path
 from types import MappingProxyType
-from typing import TYPE_CHECKING, Any, Final, Literal, TypeVar, cast
+from typing import TYPE_CHECKING, Any, Final, Literal, TypedDict, TypeVar, cast
+
+from typing_extensions import ReadOnly
 
 import litellm
 from litellm import verbose_logger
@@ -1140,10 +1142,17 @@ def sanitize_input_schema_for_anthropic(input_schema: dict) -> "AnthropicInputSc
     (``AnthropicConfig._map_tool_helper``) and Anthropic Messages MCP paths run
     a schema through here so an external MCP schema cannot succeed on one route
     and 400 on the other.
+
+    A root that is a local ``$ref`` or a top-level combinator is resolved into an
+    object first. Without that, ``type: "object"`` and an empty ``properties``
+    are stamped over a schema whose fields live one level down, and the
+    allowlist then drops the combinator: a ``TypeAdapter(Union[A, B])`` tool
+    reaches Anthropic taking no arguments at all. An unresolvable root (external
+    or missing ``$ref``, a branch that cannot merge) is left alone.
     """
     from litellm.types.llms.anthropic import AnthropicInputSchema
 
-    normalized = dict(input_schema) if input_schema else {}
+    normalized = dict(flatten_top_level_schema_combinators(_inline_root_schema_ref(input_schema or {})))
     if normalized.get("type") != "object":
         normalized["type"] = "object"
     if "properties" not in normalized:
@@ -1204,6 +1213,53 @@ def _resolve_local_schema_ref(root: Mapping[str, object], ref: str) -> Mapping[s
     return target if isinstance(target, dict) else None
 
 
+class _AllOfSchema(TypedDict):
+    allOf: ReadOnly[Sequence[object]]
+
+
+def _both_constraints_apply(target_property: object, sibling_property: object) -> object:
+    """One property schema satisfying both sides of a ``$ref`` merge.
+
+    A plain dict rather than a ``MappingProxyType``, because this value is
+    serialised straight into the provider request and ``json`` cannot encode a
+    mapping proxy.
+    """
+    if target_property is None or target_property == sibling_property:
+        return sibling_property
+    both: Final = [target_property, sibling_property]  # mutable-ok: allOf is a JSON array; a tuple is not one
+    combined: Final[_AllOfSchema] = {"allOf": both}
+    return combined
+
+
+def _inline_root_schema_ref(schema: Mapping[str, object]) -> Mapping[str, object]:
+    """Merge a root-level local ``$ref`` with the schema it points at.
+
+    Per JSON Schema, keys beside a ``$ref`` apply on top of what it references
+    rather than being replaced by it. ``properties`` and ``required`` therefore
+    union, and a property both sides declare becomes an ``allOf`` of the two so
+    neither one's constraints are lost; Anthropic accepts a combinator nested
+    inside a property, only a root one is a problem. Replacing the root outright
+    would drop what the caller stated here, such as ``additionalProperties:
+    false``. A root without a ``$ref``, or one pointing outside the document or
+    at a missing name, is returned as is.
+    """
+    ref: Final = schema.get("$ref")
+    if not isinstance(ref, str):
+        return schema
+    target: Final = _resolve_local_schema_ref(schema, ref)
+    if target is None:
+        return schema
+    siblings: Final = MappingProxyType({key: value for key, value in schema.items() if key != "$ref"})
+    target_properties: Final = _schema_properties(target)
+    sibling_wins: Final = MappingProxyType({**target_properties, **_schema_properties(siblings)})
+    properties: Final = {  # mutable-ok: tool parameters are JSON dicts, and a mapping proxy will not serialise
+        name: _both_constraints_apply(target_properties.get(name), value) for name, value in sibling_wins.items()
+    }
+    required: Final = sorted(_schema_required_names(target) | _schema_required_names(siblings))
+    required_update: Final = MappingProxyType({"required": required}) if required else _EMPTY_SCHEMA
+    return MappingProxyType({**target, **siblings, "properties": properties, **required_update})
+
+
 def _mergeable_branch(
     root: Mapping[str, object],
     branch: object,
@@ -1237,6 +1293,18 @@ def _is_object_schema(schema: Mapping[str, object]) -> bool:
     return schema.get("type") == "object" or ("type" not in schema and "properties" in schema)
 
 
+def _distinct_branches(branches: tuple[Mapping[str, object], ...]) -> tuple[Mapping[str, object], ...]:
+    """Collapse branches that resolved to the same object.
+
+    Repeated ``$ref``s share one memoised result, so a schema declaring the same
+    reference thousands of times would otherwise re-merge its properties once per
+    branch. Merging a branch again cannot change the outcome: property merges are
+    idempotent, and so are the union and intersection used for ``required``.
+    """
+    by_identity: Final = MappingProxyType({id(branch): branch for branch in branches})
+    return tuple(by_identity.values())
+
+
 def _flatten_schema_against_root(
     schema: Mapping[str, object],
     root: Mapping[str, object],
@@ -1265,7 +1333,8 @@ def _flatten_schema_against_root(
     if any(branch is None for _, group in raw_branch_groups for branch in group):
         return schema
     branch_groups: Final = tuple(
-        (combinator, tuple(branch for branch in group if branch is not None)) for combinator, group in raw_branch_groups
+        (combinator, _distinct_branches(tuple(branch for branch in group if branch is not None)))
+        for combinator, group in raw_branch_groups
     )
     branches: Final = tuple(branch for _, group in branch_groups for branch in group)
     is_object_schema: Final = _is_object_schema(schema) or (
diff --git a/tests/unit/litellm_core_utils/prompt_templates/test_litellm_core_utils_prompt_templates_common_utils.py b/tests/unit/litellm_core_utils/prompt_templates/test_litellm_core_utils_prompt_templates_common_utils.py
index 45fc93f04c1..138998db16a 100644
--- a/tests/unit/litellm_core_utils/prompt_templates/test_litellm_core_utils_prompt_templates_common_utils.py
+++ b/tests/unit/litellm_core_utils/prompt_templates/test_litellm_core_utils_prompt_templates_common_utils.py
@@ -1990,3 +1990,236 @@ class TestMergeConsecutiveSystemMessages:
         )
 
         assert merged == [{"role": "system"}, {"role": "user", "content": "Hi"}]
+
+
+class TestSanitizeInputSchemaForAnthropic:
+    """Anthropic rejects a tool schema whose root is a union or a ``$ref``, so the
+    sanitizer coerces one into an object. Stamping ``type: "object"`` and an empty
+    ``properties`` over a root whose fields live one level down, then dropping the
+    combinator with the allowlist, sent a ``TypeAdapter(Union[A, B])`` tool to
+    Anthropic taking no arguments at all (#43157)."""
+
+    A: Final = {
+        "type": "object",
+        "properties": {"kind": {"type": "string"}, "a": {"type": "string"}},
+        "required": ["kind", "a"],
+    }
+    B: Final = {
+        "type": "object",
+        "properties": {"kind": {"type": "string"}, "b": {"type": "integer"}},
+        "required": ["kind", "b"],
+    }
+
+    def _union_root(self, combinator: str) -> dict[str, object]:
+        return {"$defs": {"A": self.A, "B": self.B}, combinator: [{"$ref": "#/$defs/A"}, {"$ref": "#/$defs/B"}]}
+
+    @pytest.mark.parametrize("combinator", ["anyOf", "oneOf"])
+    def test_union_root_keeps_every_branch_field(self, combinator):
+        from litellm.litellm_core_utils.prompt_templates.common_utils import (
+            sanitize_input_schema_for_anthropic,
+        )
+
+        result = sanitize_input_schema_for_anthropic(self._union_root(combinator))
+
+        assert sorted(result["properties"]) == [
+            "a",
+            "b",
+            "kind",
+        ], f"a {combinator} root must keep its branches' fields, got {dict(result)}"
+
+    def test_ref_root_keeps_the_keys_declared_beside_it(self):
+        """JSON Schema applies keys beside a ``$ref`` on top of what it references.
+
+        Replacing the root with the target instead would silently drop constraints
+        the caller stated here, such as ``additionalProperties``.
+        """
+        from litellm.litellm_core_utils.prompt_templates.common_utils import (
+            sanitize_input_schema_for_anthropic,
+        )
+
+        result = sanitize_input_schema_for_anthropic(
+            {
+                "$defs": {"A": self.A},
+                "$ref": "#/$defs/A",
+                "properties": {"sibling": {"type": "string"}},
+                "required": ["sibling"],
+                "additionalProperties": False,
+            }
+        )
+
+        assert sorted(result["properties"]) == [
+            "a",
+            "kind",
+            "sibling",
+        ], f"the target's fields and the sibling's must both survive, got {dict(result)}"
+        assert sorted(result["required"]) == [
+            "a",
+            "kind",
+            "sibling",
+        ], f"both required lists must survive, got {dict(result)}"
+        assert result.get("additionalProperties") is False, (
+            f"a constraint stated beside the $ref must not be dropped, got {dict(result)}"
+        )
+
+    def test_a_property_declared_on_both_sides_of_a_ref_keeps_both_constraints(self):
+        """Keys beside a ``$ref`` apply on top of it, so where both declare the
+        same property neither constraint may be dropped. Anthropic accepts a
+        combinator nested inside a property, so both can be carried."""
+        from litellm.litellm_core_utils.prompt_templates.common_utils import (
+            sanitize_input_schema_for_anthropic,
+        )
+
+        result = sanitize_input_schema_for_anthropic(
+            {
+                "$defs": {"A": {"type": "object", "properties": {"a": {"type": "string", "minLength": 5}}}},
+                "$ref": "#/$defs/A",
+                "properties": {"a": {"type": "string", "maxLength": 9}},
+            }
+        )
+
+        assert result["properties"]["a"] == {
+            "allOf": [{"type": "string", "minLength": 5}, {"type": "string", "maxLength": 9}]
+        }, f"both sides' constraints on a shared property must survive, got {dict(result)}"
+
+    def test_a_property_identical_on_both_sides_is_not_wrapped(self):
+        from litellm.litellm_core_utils.prompt_templates.common_utils import (
+            sanitize_input_schema_for_anthropic,
+        )
+
+        shared = {"type": "string"}
+
+        result = sanitize_input_schema_for_anthropic(
+            {
+                "$defs": {"A": {"type": "object", "properties": {"a": shared}}},
+                "$ref": "#/$defs/A",
+                "properties": {"a": shared},
+            }
+        )
+
+        assert result["properties"]["a"] == shared, f"identical declarations need no allOf wrapper, got {dict(result)}"
+
+    def test_ref_root_resolves_to_the_schema_it_points_at(self):
+        from litellm.litellm_core_utils.prompt_templates.common_utils import (
+            sanitize_input_schema_for_anthropic,
+        )
+
+        result = sanitize_input_schema_for_anthropic({"$defs": {"A": self.A}, "$ref": "#/$defs/A"})
+
+        assert sorted(result["properties"]) == ["a", "kind"], f"a $ref root must inline its target, got {dict(result)}"
+        assert sorted(result["required"]) == ["a", "kind"], (
+            f"the target's required list must survive, got {dict(result)}"
+        )
+
+    def test_union_required_narrows_to_the_fields_every_branch_demands(self):
+        """Merging branches is lossy by design: only what all of them require stays
+        required, which is the tradeoff OpenAI and Azure already accept via the
+        shared flattening helper."""
+        from litellm.litellm_core_utils.prompt_templates.common_utils import (
+            sanitize_input_schema_for_anthropic,
+        )
+
+        result = sanitize_input_schema_for_anthropic(self._union_root("anyOf"))
+
+        assert sorted(result.get("required", [])) == ["kind"], (
+            f"only the field both branches require stays required, got {dict(result)}"
+        )
+
+    @pytest.mark.parametrize(
+        "name, schema, expected_properties",
+        [
+            ("plain object", {"type": "object", "properties": {"x": {"type": "string"}}}, ["x"]),
+            ("no-arg tool", {"type": "object", "properties": {}}, []),
+            ("empty schema", {}, []),
+            ("external $ref root", {"$ref": "https://example.com/schema.json"}, []),
+            ("missing $ref target", {"$defs": {}, "$ref": "#/$defs/Nope"}, []),
+        ],
+    )
+    def test_shapes_the_sanitizer_already_handled_are_untouched(self, name, schema, expected_properties):
+        from litellm.litellm_core_utils.prompt_templates.common_utils import (
+            sanitize_input_schema_for_anthropic,
+        )
+
+        result = sanitize_input_schema_for_anthropic(schema)
+
+        assert sorted(result["properties"]) == expected_properties, f"{name} should be unchanged, got {dict(result)}"
+        assert result["type"] == "object", f"{name} must still be coerced to an object, got {dict(result)}"
+
+    def test_a_combinator_nested_inside_a_property_is_left_alone(self):
+        """Anthropic accepts nested combinators; only the root shape is a problem."""
+        from litellm.litellm_core_utils.prompt_templates.common_utils import (
+            sanitize_input_schema_for_anthropic,
+        )
+
+        nested = {"anyOf": [{"type": "string"}, {"type": "integer"}]}
+
+        result = sanitize_input_schema_for_anthropic({"type": "object", "properties": {"x": nested}})
+
+        assert result["properties"]["x"] == nested, f"a nested union must survive verbatim, got {dict(result)}"
+
+    def test_repeating_one_ref_branch_costs_no_more_than_declaring_it_once(self):
+        """Repeated ``$ref``s share one memoised result, so merging them again
+        cannot change the outcome. A schema repeating a reference thousands of
+        times must therefore agree with the same schema declaring it once, which
+        is what stops a compact payload amplifying into per-branch merge work."""
+        from litellm.litellm_core_utils.prompt_templates.common_utils import (
+            sanitize_input_schema_for_anthropic,
+        )
+
+        defs = {"$defs": {"A": self.A}}
+        once = sanitize_input_schema_for_anthropic({**defs, "anyOf": [{"$ref": "#/$defs/A"}]})
+        many = sanitize_input_schema_for_anthropic({**defs, "anyOf": [{"$ref": "#/$defs/A"}] * 2000})
+
+        assert dict(many) == dict(once), f"repeating a branch must not change the result, got {dict(many)}"
+
+    @pytest.mark.parametrize(
+        "name, root",
+        [
+            ("ref root", {"$ref": "#/$defs/A"}),
+            ("union root", {"anyOf": [{"$ref": "#/$defs/A"}, {"$ref": "#/$defs/B"}]}),
+        ],
+    )
+    def test_the_sanitized_schema_can_be_serialized_onto_the_wire(self, name, root):
+        """The result is JSON-encoded into the provider request, so every value in
+        it has to be encodable. A mapping proxy is not."""
+        from litellm.litellm_core_utils.prompt_templates.common_utils import (
+            sanitize_input_schema_for_anthropic,
+        )
+
+        result = sanitize_input_schema_for_anthropic({"$defs": {"A": self.A, "B": self.B}, **root})
+
+        assert json.loads(json.dumps(result))["properties"], (
+            f"{name} must survive a JSON round trip, got {dict(result)}"
+        )
+
+    def test_a_pydantic_union_tool_reaches_anthropic_with_its_arguments(self):
+        """The reporter's path: Pydantic emits a root ``anyOf`` over ``$defs``."""
+        from typing import Literal
+
+        from pydantic import BaseModel, TypeAdapter
+
+        from litellm.llms.anthropic.chat.transformation import AnthropicConfig
+
+        class Alpha(BaseModel):
+            kind: Literal["a"]
+            a: str
+
+        class Beta(BaseModel):
+            kind: Literal["b"]
+            b: int
+
+        tool = {
+            "type": "function",
+            "function": {
+                "name": "record",
+                "description": "record an event",
+                "parameters": TypeAdapter(Alpha | Beta).json_schema(),
+            },
+        }
+
+        mapped, _ = AnthropicConfig()._map_tools([tool])
+
+        assert sorted(mapped[0]["input_schema"]["properties"]) == [
+            "a",
+            "b",
+            "kind",
+        ], f"the tool must reach Anthropic with arguments, got {mapped[0]['input_schema']}"