diff --git a/src/Azure.DataApiBuilder.Mcp/Core/McpStdioServer.cs b/src/Azure.DataApiBuilder.Mcp/Core/McpStdioServer.cs
index 690098384b..7553a1d8e7 100644
--- a/src/Azure.DataApiBuilder.Mcp/Core/McpStdioServer.cs
+++ b/src/Azure.DataApiBuilder.Mcp/Core/McpStdioServer.cs
@@ -61,17 +61,20 @@ public McpStdioServer(McpToolRegistry toolRegistry, IServiceProvider serviceProv
         /// <returns>A task representing the asynchronous operation.</returns>
         public async Task RunAsync(CancellationToken cancellationToken)
         {
-            // Use UTF-8 WITHOUT BOM for stdin. Stdout is owned by McpStdoutWriter,
-            // which serializes all writes from McpStdioServer and the MCP logging
-            // pipeline so JSON-RPC frames cannot interleave at the byte level.
-            UTF8Encoding utf8NoBom = new(encoderShouldEmitUTF8Identifier: false);
-
-            using Stream stdin = Console.OpenStandardInput();
-            using StreamReader reader = new(stdin, utf8NoBom);
+            // Read through Console.In so tests can inject stdin and the process
+            // still follows the configured console input encoding in stdio mode.
+            TextReader reader = Console.In;
 
             while (!cancellationToken.IsCancellationRequested)
             {
                 string? line = await reader.ReadLineAsync(cancellationToken);
+
+                // EOF (stdin pipe closed) is a normal shutdown signal for stdio mode.
+                if (line is null)
+                {
+                    return;
+                }
+
                 if (string.IsNullOrWhiteSpace(line))
                 {
                     continue;
diff --git a/src/Service.Tests/UnitTests/McpStdioServerRunAsyncTests.cs b/src/Service.Tests/UnitTests/McpStdioServerRunAsyncTests.cs
new file mode 100644
index 0000000000..dda2f348f3
--- /dev/null
+++ b/src/Service.Tests/UnitTests/McpStdioServerRunAsyncTests.cs
@@ -0,0 +1,87 @@
+// Copyright (c) Microsoft Corporation.
+// Licensed under the MIT License.
+
+#nullable enable
+
+using System;
+using System.IO;
+using System.Threading;
+using System.Threading.Tasks;
+using Azure.DataApiBuilder.Mcp.Core;
+using Microsoft.Extensions.DependencyInjection;
+using Microsoft.VisualStudio.TestTools.UnitTesting;
+
+namespace Azure.DataApiBuilder.Service.Tests.UnitTests
+{
+    [TestClass]
+    public class McpStdioServerRunAsyncTests
+    {
+        [TestMethod]
+        public async Task RunAsync_EofOnStdin_ExitsGracefullyWithoutOutput()
+        {
+            (McpStdioServer server, StringWriter stdoutCapture) = CreateServerWithCapturedOutput();
+            TextReader originalIn = Console.In;
+
+            try
+            {
+                // Empty input immediately yields EOF (ReadLineAsync returns null).
+                Console.SetIn(new StringReader(string.Empty));
+
+                await server.RunAsync(CancellationToken.None);
+
+                Assert.AreEqual(string.Empty, stdoutCapture.ToString(),
+                    "Server should exit cleanly on EOF without emitting protocol output.");
+            }
+            finally
+            {
+                Console.SetIn(originalIn);
+            }
+        }
+
+        [TestMethod]
+        public async Task RunAsync_BlankLineThenShutdown_IgnoresBlankLineAndHandlesShutdown()
+        {
+            (McpStdioServer server, StringWriter stdoutCapture) = CreateServerWithCapturedOutput();
+            TextReader originalIn = Console.In;
+
+            try
+            {
+                Console.SetIn(new StringReader(Environment.NewLine +
+                    "{\"jsonrpc\":\"2.0\",\"id\":1,\"method\":\"shutdown\"}" +
+                    Environment.NewLine));
+
+                await server.RunAsync(CancellationToken.None);
+
+                string[] lines = stdoutCapture
+                    .ToString()
+                    .Split(Environment.NewLine, StringSplitOptions.RemoveEmptyEntries);
+
+                Assert.AreEqual(1, lines.Length,
+                    "Expected a single response line for shutdown request.");
+                StringAssert.Contains(lines[0], "\"id\":1");
+                StringAssert.Contains(lines[0], "\"ok\":true");
+            }
+            finally
+            {
+                Console.SetIn(originalIn);
+            }
+        }
+
+        private static (McpStdioServer server, StringWriter stdoutCapture) CreateServerWithCapturedOutput()
+        {
+            StringWriter stdoutCapture = new();
+            McpStdoutWriter stdoutWriter = new(stdoutCapture);
+
+            ServiceCollection services = new();
+            services.AddSingleton(stdoutWriter);
+            services.AddSingleton<McpToolRegistry>();
+            IServiceProvider serviceProvider = services.BuildServiceProvider();
+
+            McpStdioServer server = new(
+                serviceProvider.GetRequiredService<McpToolRegistry>(),
+                serviceProvider);
+
+            return (server, stdoutCapture);
+        }
+    }
+}