diff --git a/packages/core/src/config/config.ts b/packages/core/src/config/config.ts
index 546ac455b6..097146276e 100644
--- a/packages/core/src/config/config.ts
+++ b/packages/core/src/config/config.ts
@@ -1278,6 +1278,24 @@ export class Config {
     return this.userMemory;
   }
 
+  /**
+   * Refreshes the MCP context, including memory, tools, and system instructions.
+   */
+  async refreshMcpContext(): Promise<void> {
+    if (this.experimentalJitContext && this.contextManager) {
+      await this.contextManager.refresh();
+    } else {
+      const { refreshServerHierarchicalMemory } = await import(
+        '../utils/memoryDiscovery.js'
+      );
+      await refreshServerHierarchicalMemory(this);
+    }
+    if (this.geminiClient?.isInitialized()) {
+      await this.geminiClient.setTools();
+      await this.geminiClient.updateSystemInstruction();
+    }
+  }
+
   setUserMemory(newUserMemory: string): void {
     this.userMemory = newUserMemory;
   }
diff --git a/packages/core/src/tools/mcp-client-manager.test.ts b/packages/core/src/tools/mcp-client-manager.test.ts
index ba035d54f1..27c6984a7c 100644
--- a/packages/core/src/tools/mcp-client-manager.test.ts
+++ b/packages/core/src/tools/mcp-client-manager.test.ts
@@ -53,6 +53,7 @@ describe('McpClientManager', () => {
       getGeminiClient: vi.fn().mockReturnValue({
         isInitialized: vi.fn(),
       }),
+      refreshMcpContext: vi.fn(),
     } as unknown as Config);
     toolRegistry = {} as ToolRegistry;
   });
@@ -69,6 +70,24 @@ describe('McpClientManager', () => {
     await manager.startConfiguredMcpServers();
     expect(mockedMcpClient.connect).toHaveBeenCalledOnce();
     expect(mockedMcpClient.discover).toHaveBeenCalledOnce();
+    expect(mockConfig.refreshMcpContext).toHaveBeenCalledOnce();
+  });
+
+  it('should batch context refresh when starting multiple servers', async () => {
+    mockConfig.getMcpServers.mockReturnValue({
+      'server-1': {},
+      'server-2': {},
+      'server-3': {},
+    });
+    const manager = new McpClientManager(toolRegistry, mockConfig);
+    await manager.startConfiguredMcpServers();
+
+    // Each client should be connected/discovered
+    expect(mockedMcpClient.connect).toHaveBeenCalledTimes(3);
+    expect(mockedMcpClient.discover).toHaveBeenCalledTimes(3);
+
+    // But context refresh should happen only once
+    expect(mockConfig.refreshMcpContext).toHaveBeenCalledOnce();
   });
 
   it('should update global discovery state', async () => {
@@ -239,14 +258,16 @@ describe('McpClientManager', () => {
       const instructions = manager.getMcpInstructions();
 
       expect(instructions).toContain(
-        "# Instructions for MCP Server 'server-with-instructions'",
+        "The following are instructions provided by the tool server 'server-with-instructions':",
       );
+      expect(instructions).toContain('---[start of server instructions]---');
       expect(instructions).toContain(
         'Instructions for server-with-instructions',
       );
+      expect(instructions).toContain('---[end of server instructions]---');
 
       expect(instructions).not.toContain(
-        "# Instructions for MCP Server 'server-without-instructions'",
+        "The following are instructions provided by the tool server 'server-without-instructions':",
       );
     });
   });
diff --git a/packages/core/src/tools/mcp-client-manager.ts b/packages/core/src/tools/mcp-client-manager.ts
index cc4602334c..a4619756f0 100644
--- a/packages/core/src/tools/mcp-client-manager.ts
+++ b/packages/core/src/tools/mcp-client-manager.ts
@@ -33,6 +33,7 @@ export class McpClientManager {
   private discoveryPromise: Promise<void> | undefined;
   private discoveryState: MCPDiscoveryState = MCPDiscoveryState.NOT_STARTED;
   private readonly eventEmitter?: EventEmitter;
+  private pendingRefreshPromise: Promise<void> | null = null;
   private readonly blockedMcpServers: Array<{
     name: string;
     extensionName: string;
@@ -66,10 +67,11 @@ export class McpClientManager {
   async stopExtension(extension: GeminiCLIExtension) {
     debugLogger.log(`Unloading extension: ${extension.name}`);
     await Promise.all(
-      Object.keys(extension.mcpServers ?? {}).map(
-        this.disconnectClient.bind(this),
+      Object.keys(extension.mcpServers ?? {}).map((name) =>
+        this.disconnectClient(name, true),
       ),
     );
+    await this.cliConfig.refreshMcpContext();
   }
 
   /**
@@ -89,6 +91,7 @@ export class McpClientManager {
         }),
       ),
     );
+    await this.cliConfig.refreshMcpContext();
   }
 
   private isAllowedMcpServer(name: string) {
@@ -111,7 +114,7 @@ export class McpClientManager {
     return true;
   }
 
-  private async disconnectClient(name: string) {
+  private async disconnectClient(name: string, skipRefresh = false) {
     const existing = this.clients.get(name);
     if (existing) {
       try {
@@ -123,11 +126,10 @@ export class McpClientManager {
           `Error stopping client '${name}': ${getErrorMessage(error)}`,
         );
       } finally {
-        // This is required to update the content generator configuration with the
-        // new tool configuration.
-        const geminiClient = this.cliConfig.getGeminiClient();
-        if (geminiClient.isInitialized()) {
-          await geminiClient.setTools();
+        if (!skipRefresh) {
+          // This is required to update the content generator configuration with the
+          // new tool configuration and system instructions.
+          await this.cliConfig.refreshMcpContext();
         }
       }
     }
@@ -183,10 +185,7 @@ export class McpClientManager {
               this.cliConfig.getDebugMode(),
               async () => {
                 debugLogger.log('Tools changed, updating Gemini context...');
-                const geminiClient = this.cliConfig.getGeminiClient();
-                if (geminiClient.isInitialized()) {
-                  await geminiClient.setTools();
-                }
+                await this.scheduleMcpContextRefresh();
               },
             );
           if (!existing) {
@@ -219,12 +218,6 @@ export class McpClientManager {
             error,
           );
         } finally {
-          // This is required to update the content generator configuration with the
-          // new tool configuration.
-          const geminiClient = this.cliConfig.getGeminiClient();
-          if (geminiClient.isInitialized()) {
-            await geminiClient.setTools();
-          }
           resolve();
         }
       })().catch(reject);
@@ -282,6 +275,7 @@ export class McpClientManager {
         this.maybeDiscoverMcpServer(name, config),
       ),
     );
+    await this.cliConfig.refreshMcpContext();
   }
 
   /**
@@ -303,6 +297,7 @@ export class McpClientManager {
         }
       }),
     );
+    await this.cliConfig.refreshMcpContext();
   }
 
   /**
@@ -314,6 +309,7 @@ export class McpClientManager {
       throw new Error(`No MCP server registered with the name "${name}"`);
     }
     await this.maybeDiscoverMcpServer(name, client.getServerConfig());
+    await this.cliConfig.refreshMcpContext();
   }
 
   /**
@@ -360,13 +356,35 @@ export class McpClientManager {
       const clientInstructions = client.getInstructions();
       if (clientInstructions) {
         instructions.push(
-          `# Instructions for MCP Server '${name}'\n${clientInstructions}`,
+          `The following are instructions provided by the tool server '${name}':\n---[start of server instructions]---\n${clientInstructions}\n---[end of server instructions]---`,
         );
       }
     }
     return instructions.join('\n\n');
   }
 
+  private async scheduleMcpContextRefresh(): Promise<void> {
+    if (this.pendingRefreshPromise) {
+      return this.pendingRefreshPromise;
+    }
+
+    this.pendingRefreshPromise = (async () => {
+      // Debounce to coalesce multiple rapid updates
+      await new Promise((resolve) => setTimeout(resolve, 300));
+      try {
+        await this.cliConfig.refreshMcpContext();
+      } catch (error) {
+        debugLogger.error(
+          `Error refreshing MCP context: ${getErrorMessage(error)}`,
+        );
+      } finally {
+        this.pendingRefreshPromise = null;
+      }
+    })();
+
+    return this.pendingRefreshPromise;
+  }
+
   getMcpServerCount(): number {
     return this.clients.size;
   }