diff --git a/contrib/mark3labs/mcp-go/option.go b/contrib/mark3labs/mcp-go/option.go
index 0abab682261..187373e23e5 100644
--- a/contrib/mark3labs/mcp-go/option.go
+++ b/contrib/mark3labs/mcp-go/option.go
@@ -32,6 +32,13 @@ type TracingConfig struct {
 	// If both IntentCaptureEnabled and IntentCaptureEnabledFunc are set, the
 	// predicate wins. If both are unset, intent capture is disabled.
 	IntentCaptureEnabledFunc func(ctx context.Context) bool
+	// RedactToolOutput replaces the tool result body sent to LLMObs with a
+	// fixed "[REDACTED]" string. Use this when data access control policies
+	// forbid forwarding tool output to LLMObs traces.
+	//
+	// The result.IsError flag is still honored for span error status — only
+	// the output content is redacted.
+	RedactToolOutput bool
 }
 
 // intentCapturePredicate returns the runtime predicate for intent capture,
@@ -83,6 +90,12 @@ func WithMCPServerTracing(options *TracingConfig) server.ServerOption {
 
 		server.WithHooks(hooks)(s)
 
+		// Register the redaction middleware first (when enabled) so its ctx
+		// flag is set before toolHandlerMiddleware annotates the LLMObs span.
+		if options.RedactToolOutput {
+			server.WithToolHandlerMiddleware(redactToolOutputMiddleware)(s)
+		}
+
 		// Register toolHandlerMiddleware first so it runs first (creates the span)
 		// Note: mcp-go middleware runs in registration order (first registered runs first)
 		server.WithToolHandlerMiddleware(toolHandlerMiddleware)(s)
diff --git a/contrib/mark3labs/mcp-go/tracing.go b/contrib/mark3labs/mcp-go/tracing.go
index 2b9bb3a8d38..188611436fe 100644
--- a/contrib/mark3labs/mcp-go/tracing.go
+++ b/contrib/mark3labs/mcp-go/tracing.go
@@ -31,6 +31,19 @@ func appendTracingHooks(hooks *server.Hooks) {
 	hooks.AddOnError(tracingHooks.onError)
 }
 
+// redactToolOutputKey is the context key set by redactToolOutputMiddleware
+// to flag the request's tool output as needing redaction in the LLMObs span.
+type redactToolOutputKey struct{}
+
+// redactToolOutputMiddleware is registered when TracingConfig.RedactToolOutput
+// is true; it tags the request context so toolHandlerMiddleware redacts the
+// tool output it later annotates onto the LLMObs span.
+var redactToolOutputMiddleware = func(next server.ToolHandlerFunc) server.ToolHandlerFunc {
+	return func(ctx context.Context, request mcp.CallToolRequest) (*mcp.CallToolResult, error) {
+		return next(context.WithValue(ctx, redactToolOutputKey{}, struct{}{}), request)
+	}
+}
+
 var toolHandlerMiddleware = func(next server.ToolHandlerFunc) server.ToolHandlerFunc {
 	return func(ctx context.Context, request mcp.CallToolRequest) (*mcp.CallToolResult, error) {
 		startOpts := []llmobs.StartSpanOption{
@@ -51,11 +64,15 @@ var toolHandlerMiddleware = func(next server.ToolHandlerFunc) server.ToolHandler
 			}
 			var outputText string
 			if result != nil {
-				resultJSON, marshalErr := json.Marshal(result)
-				if marshalErr != nil {
-					instr.Logger().Warn("mcp-go: failed to marshal tool result: %v", marshalErr)
+				if _, redact := ctx.Value(redactToolOutputKey{}).(struct{}); redact {
+					outputText = "[REDACTED]"
+				} else {
+					resultJSON, marshalErr := json.Marshal(result)
+					if marshalErr != nil {
+						instr.Logger().Warn("mcp-go: failed to marshal tool result: %v", marshalErr)
+					}
+					outputText = string(resultJSON)
 				}
-				outputText = string(resultJSON)
 			}
 
 			toolSpan.Annotate(llmobs.WithAnnotatedTags(map[string]string{
diff --git a/contrib/mark3labs/mcp-go/tracing_test.go b/contrib/mark3labs/mcp-go/tracing_test.go
index bcebaa9d62a..8b097b2c324 100644
--- a/contrib/mark3labs/mcp-go/tracing_test.go
+++ b/contrib/mark3labs/mcp-go/tracing_test.go
@@ -347,6 +347,71 @@ func TestIntegrationToolCallStructuredError(t *testing.T) {
 	assert.Contains(t, outputStr, "Validation failed")
 }
 
+func TestRedactToolOutput(t *testing.T) {
+	tt := testTracer(t)
+	defer tt.Stop()
+
+	srv := server.NewMCPServer("test-server", "1.0.0",
+		WithMCPServerTracing(&TracingConfig{RedactToolOutput: true}))
+
+	calcTool := mcp.NewTool("calculator", mcp.WithDescription("A simple calculator"))
+	srv.AddTool(calcTool, func(ctx context.Context, request mcp.CallToolRequest) (*mcp.CallToolResult, error) {
+		return mcp.NewToolResultText(`{"result":42,"secret":"hunter2"}`), nil
+	})
+
+	ctx := context.Background()
+	session := &mockSession{id: "redact-session"}
+	session.Initialize()
+	ctx = srv.WithContext(ctx, session)
+
+	srv.HandleMessage(ctx, []byte(`{"jsonrpc":"2.0","id":1,"method":"tools/call","params":{"name":"calculator","arguments":{}}}`))
+
+	spans := tt.WaitForLLMObsSpans(t, 1)
+	require.Len(t, spans, 1)
+
+	toolSpan := spans[0]
+	outputMeta, ok := toolSpan.Meta["output"].(map[string]interface{})
+	require.True(t, ok)
+	assert.Equal(t, "[REDACTED]", outputMeta["value"])
+	// Sensitive content from the actual result must not leak.
+	outputJSON, err := json.Marshal(outputMeta)
+	require.NoError(t, err)
+	assert.NotContains(t, string(outputJSON), "hunter2")
+	assert.NotContains(t, string(outputJSON), "42")
+}
+
+func TestRedactToolOutputStillReportsIsError(t *testing.T) {
+	tt := testTracer(t)
+	defer tt.Stop()
+
+	srv := server.NewMCPServer("test-server", "1.0.0",
+		WithMCPServerTracing(&TracingConfig{RedactToolOutput: true}))
+
+	failTool := mcp.NewTool("failing", mcp.WithDescription("A failing tool"))
+	srv.AddTool(failTool, func(ctx context.Context, request mcp.CallToolRequest) (*mcp.CallToolResult, error) {
+		return mcp.NewToolResultError("permission denied: secret-detail"), nil
+	})
+
+	ctx := context.Background()
+	session := &mockSession{id: "redact-err"}
+	session.Initialize()
+	ctx = srv.WithContext(ctx, session)
+
+	srv.HandleMessage(ctx, []byte(`{"jsonrpc":"2.0","id":1,"method":"tools/call","params":{"name":"failing","arguments":{}}}`))
+
+	spans := tt.WaitForLLMObsSpans(t, 1)
+	require.Len(t, spans, 1)
+
+	toolSpan := spans[0]
+	assert.Contains(t, toolSpan.Meta, "error.message")
+	outputMeta, ok := toolSpan.Meta["output"].(map[string]interface{})
+	require.True(t, ok)
+	assert.Equal(t, "[REDACTED]", outputMeta["value"])
+	outputJSON, err := json.Marshal(outputMeta)
+	require.NoError(t, err)
+	assert.NotContains(t, string(outputJSON), "secret-detail")
+}
+
 func TestWithMCPServerTracingWithCustomHooks(t *testing.T) {
 	tt := testTracer(t)
 	defer tt.Stop()