diff --git a/litellm/proxy/_experimental/mcp_server/mcp_server_manager.py b/litellm/proxy/_experimental/mcp_server/mcp_server_manager.py
index 1d7c0eaa116..82365be60ca 100644
--- a/litellm/proxy/_experimental/mcp_server/mcp_server_manager.py
+++ b/litellm/proxy/_experimental/mcp_server/mcp_server_manager.py
@@ -15,7 +15,6 @@ from typing import Any, Callable, Dict, List, Literal, Optional, Set, Tuple, Uni
 from urllib.parse import urlparse
 
 import anyio
-
 from fastapi import HTTPException
 from httpx import HTTPStatusError
 from mcp import ReadResourceResult, Resource
@@ -72,7 +71,9 @@ try:
     from mcp.shared.tool_name_validation import (
         validate_tool_name,  # pyright: ignore[reportAssignmentType]
     )
-    from mcp.shared.tool_name_validation import SEP_986_URL
+    from mcp.shared.tool_name_validation import (
+        SEP_986_URL,
+    )
 except ImportError:
     from pydantic import BaseModel
 
@@ -332,6 +333,15 @@ class MCPServerManager:
                 available_on_public_internet=bool(
                     server_config.get("available_on_public_internet", False)
                 ),
+                # Token Exchange (OBO) fields
+                token_exchange_endpoint=server_config.get(
+                    "token_exchange_endpoint", None
+                ),
+                audience=server_config.get("audience", None),
+                subject_token_type=server_config.get(
+                    "subject_token_type",
+                    "urn:ietf:params:oauth:token-type:access_token",
+                ),
             )
             self.config_mcp_servers[server_id] = new_server
 
@@ -636,6 +646,21 @@ class MCPServerManager:
                 getattr(mcp_server, "available_on_public_internet", False)
             ),
             updated_at=getattr(mcp_server, "updated_at", None),
+            # Token Exchange (OBO) fields — read from credentials JSON blob
+            token_exchange_endpoint=(
+                credentials_dict.get("token_exchange_endpoint")
+                if credentials_dict
+                else None
+            ),
+            audience=(
+                credentials_dict.get("audience") if credentials_dict else None
+            ),
+            subject_token_type=(
+                credentials_dict.get("subject_token_type")
+                if credentials_dict
+                else None
+            )
+            or "urn:ietf:params:oauth:token-type:access_token",
         )
         return new_server
 
@@ -832,6 +857,27 @@ class MCPServerManager:
     #########################################################
     # Methods that call the upstream MCP servers
     #########################################################
+    @staticmethod
+    def _extract_bearer_token(
+        oauth2_headers: Optional[Dict[str, str]],
+        raw_headers: Optional[Dict[str, str]],
+    ) -> Optional[str]:
+        """Extract the bare Bearer token from oauth2_headers or raw_headers.
+
+        Returns the token string without the ``Bearer `` prefix, or ``None``
+        if no Authorization header is found.
+        """
+        auth_value: Optional[str] = None
+        if oauth2_headers and "Authorization" in oauth2_headers:
+            auth_value = oauth2_headers["Authorization"]
+        elif raw_headers:
+            # raw_headers may have lowercase keys depending on the ASGI server
+            normalized = {k.lower(): v for k, v in raw_headers.items()}
+            auth_value = normalized.get("authorization")
+        if auth_value and auth_value.startswith("Bearer "):
+            return auth_value[len("Bearer "):]
+        return auth_value
+
     def _build_stdio_env(
         self,
         server: MCPServer,
@@ -865,25 +911,30 @@ class MCPServerManager:
         mcp_auth_header: Optional[Union[str, Dict[str, str]]] = None,
         extra_headers: Optional[Dict[str, str]] = None,
         stdio_env: Optional[Dict[str, str]] = None,
+        subject_token: Optional[str] = None,
     ) -> MCPClient:
         """
         Create an MCPClient instance for the given server.
 
         Auth resolution (single place for all auth logic):
         1. ``mcp_auth_header`` — per-request/per-user override
-        2. OAuth2 client_credentials token — auto-fetched and cached
-        3. ``server.authentication_token`` — static token from config/DB
+        2. OAuth2 Token Exchange (OBO) — exchange user token for scoped token
+        3. OAuth2 client_credentials token — auto-fetched and cached
+        4. ``server.authentication_token`` — static token from config/DB
 
         Args:
             server: The server configuration.
             mcp_auth_header: Optional per-request auth override.
             extra_headers: Additional headers to forward.
             stdio_env: Environment variables for stdio transport.
+            subject_token: Optional user JWT for token exchange (OBO) flow.
 
         Returns:
             Configured MCP client instance.
         """
-        auth_value = await resolve_mcp_auth(server, mcp_auth_header)
+        auth_value = await resolve_mcp_auth(
+            server, mcp_auth_header, subject_token=subject_token
+        )
 
         transport = server.transport or MCPTransport.sse
 
@@ -1942,9 +1993,12 @@ class MCPServerManager:
         if server_auth_header is None:
             server_auth_header = mcp_auth_header
 
-        # oauth2 headers
+        # Extract subject token for OAuth2 Token Exchange (OBO) flow
+        subject_token: Optional[str] = None
         extra_headers: Optional[Dict[str, str]] = None
-        if mcp_server.auth_type == MCPAuth.oauth2:
+        if mcp_server.auth_type == MCPAuth.oauth2_token_exchange:
+            subject_token = self._extract_bearer_token(oauth2_headers, raw_headers)
+        elif mcp_server.auth_type == MCPAuth.oauth2:
             extra_headers = oauth2_headers
 
         if mcp_server.extra_headers and raw_headers:
@@ -1974,6 +2028,7 @@ class MCPServerManager:
             mcp_auth_header=server_auth_header,
             extra_headers=extra_headers,
             stdio_env=stdio_env,
+            subject_token=subject_token,
         )
 
         call_tool_params = MCPCallToolRequestParams(