diff --git a/litellm/proxy/_experimental/mcp_server/mcp_server_manager.py b/litellm/proxy/_experimental/mcp_server/mcp_server_manager.py
index c17e83afcb9..2a9da964887 100644
--- a/litellm/proxy/_experimental/mcp_server/mcp_server_manager.py
+++ b/litellm/proxy/_experimental/mcp_server/mcp_server_manager.py
@@ -2925,8 +2925,10 @@ class MCPServerManager:
             handler = get_async_httpx_client(llm_provider=httpxSpecialProvider.MCP)
             response = await handler.get(server_url, stream=True)
             status_code = response.status_code
-            response.raise_for_status()
-            await response.aclose()
+            try:
+                response.raise_for_status()
+            finally:
+                await response.aclose()
             (
                 authorization_servers,
                 resource_scopes,
diff --git a/tests/test_litellm/proxy/_experimental/mcp_server/test_mcp_server_manager.py b/tests/test_litellm/proxy/_experimental/mcp_server/test_mcp_server_manager.py
index 2e030d54245..975ca7c060c 100644
--- a/tests/test_litellm/proxy/_experimental/mcp_server/test_mcp_server_manager.py
+++ b/tests/test_litellm/proxy/_experimental/mcp_server/test_mcp_server_manager.py
@@ -7097,6 +7097,38 @@ class TestOBOEndpointDiscovery:
         mock_fetch_auth.assert_not_awaited()
         assert result is None or result.token_url is None
 
+    @pytest.mark.asyncio
+    async def test_descovery_metadata_closes_stream_on_401_oauth_challenge(self):
+        manager = MCPServerManager()
+        server_url = "https://example.com/mcp"
+        request = httpx.Request("GET", server_url)
+        error_response = MagicMock()
+        error_response.headers = {}
+
+        streaming_response = MagicMock()
+        streaming_response.status_code = 401
+        streaming_response.raise_for_status = MagicMock(
+            side_effect=httpx.HTTPStatusError("unauthorized", request=request, response=error_response)
+        )
+        streaming_response.aclose = AsyncMock()
+
+        mock_handler = MagicMock()
+        mock_handler.get = AsyncMock(return_value=streaming_response)
+
+        with (
+            patch(
+                "litellm.proxy._experimental.mcp_server.mcp_server_manager.get_async_httpx_client",
+                return_value=mock_handler,
+            ),
+            patch.object(manager, "_attempt_well_known_discovery", AsyncMock(return_value=([], None))),
+            patch.object(manager, "_fetch_oauth_metadata_from_resource", AsyncMock(return_value=([], None))),
+            patch.object(manager, "_fetch_authorization_server_metadata", AsyncMock(return_value=None)),
+        ):
+            result = await manager._descovery_metadata(server_url)
+
+        streaming_response.aclose.assert_awaited_once()
+        assert result is None
+
     @pytest.mark.asyncio
     async def test_descovery_metadata_returns_none_for_no_auth_sse_server(self):
         manager = MCPServerManager()