diff --git a/CHANGELOG.md b/CHANGELOG.md
index 2747d30..c922093 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -4,6 +4,9 @@
   being refused with `409 Conflict`. A client that drops its stream is not
   noticed until the next write, so its reconnect was refused, failing clients
   such as Cursor.
+- A tool error reply (`isError: true`) from a tool with an `output_schema` is
+  no longer checked against the schema. The client gets the tool's error text
+  instead of `Invalid tool output: $: expected object`.
 
 ## 0.7.0 (2026-10-04)
 
diff --git a/lib/phantom/router.ex b/lib/phantom/router.ex
index b9590b7..0eac457 100644
--- a/lib/phantom/router.ex
+++ b/lib/phantom/router.ex
@@ -2198,6 +2198,8 @@ defmodule Phantom.Router do
 
   defp validate_output(:tool, %{output_schema: nil}, _formatted), do: :ok
 
+  defp validate_output(:tool, _spec, %{isError: true}), do: :ok
+
   defp validate_output(:tool, %{output_schema: schema}, formatted) do
     content = formatted[:structuredContent] || formatted["structuredContent"]
 
diff --git a/test/phantom/output_schema_test.exs b/test/phantom/output_schema_test.exs
new file mode 100644
index 0000000..344b437
--- /dev/null
+++ b/test/phantom/output_schema_test.exs
@@ -0,0 +1,43 @@
+defmodule Phantom.OutputSchemaTest do
+  use ExUnit.Case, async: true
+
+  defmodule Router do
+    use Phantom.Router, name: "OutputSchema", vsn: "1.0"
+
+    @output_schema %{
+      type: "object",
+      required: [:message],
+      properties: %{message: %{type: "string"}}
+    }
+
+    tool :failing_tool, description: "Always fails", output_schema: @output_schema
+    tool :invalid_output_tool, description: "Breaks its schema", output_schema: @output_schema
+
+    def failing_tool(_params, session) do
+      {:reply, Phantom.Tool.error("reason"), session}
+    end
+
+    def invalid_output_tool(_params, session) do
+      {:reply, %{message: 1}, session}
+    end
+  end
+
+  import Phantom.Test
+
+  setup do
+    Phantom.Test.start(router: Router)
+    {:ok, session: build_session(Router)}
+  end
+
+  test "an error reply skips output schema validation", %{session: session} do
+    session
+    |> call_tool(:failing_tool, %{})
+    |> assert_tool_error("reason")
+  end
+
+  test "a success reply that violates the output schema is rejected", %{session: session} do
+    session
+    |> call_tool(:invalid_output_tool, %{})
+    |> assert_tool_error(~r/Invalid tool output/)
+  end
+end