diff --git a/client/package.json b/client/package.json
index 888495c56..69021c86a 100644
--- a/client/package.json
+++ b/client/package.json
@@ -1,6 +1,6 @@
 {
   "name": "@modelcontextprotocol/inspector-client",
-  "version": "0.3.0",
+  "version": "0.4.0",
   "description": "Client-side application for the Model Context Protocol inspector",
   "license": "MIT",
   "author": "Anthropic, PBC (https://anthropic.com)",
@@ -21,7 +21,7 @@
     "preview": "vite preview"
   },
   "dependencies": {
-    "@modelcontextprotocol/sdk": "^1.0.3",
+    "@modelcontextprotocol/sdk": "^1.4.1",
     "@radix-ui/react-icons": "^1.3.0",
     "@radix-ui/react-label": "^2.1.0",
     "@radix-ui/react-select": "^2.1.2",
@@ -30,6 +30,7 @@
     "class-variance-authority": "^0.7.0",
     "clsx": "^2.1.1",
     "lucide-react": "^0.447.0",
+    "pkce-challenge": "^4.1.0",
     "react": "^18.3.1",
     "react-dom": "^18.3.1",
     "react-toastify": "^10.0.6",
diff --git a/client/src/App.tsx b/client/src/App.tsx
index f3791b2d0..246e035f4 100644
--- a/client/src/App.tsx
+++ b/client/src/App.tsx
@@ -1,5 +1,3 @@
-import { useDraggablePane } from "./lib/hooks/useDraggablePane";
-import { useConnection } from "./lib/hooks/useConnection";
 import {
   ClientRequest,
   CompatibilityCallToolResult,
@@ -10,15 +8,17 @@ import {
   ListPromptsResultSchema,
   ListResourcesResultSchema,
   ListResourceTemplatesResultSchema,
-  ReadResourceResultSchema,
   ListToolsResultSchema,
+  ReadResourceResultSchema,
   Resource,
   ResourceTemplate,
   Root,
   ServerNotification,
   Tool,
 } from "@modelcontextprotocol/sdk/types.js";
-import { useEffect, useRef, useState } from "react";
+import React, { Suspense, useEffect, useRef, useState } from "react";
+import { useConnection } from "./lib/hooks/useConnection";
+import { useDraggablePane } from "./lib/hooks/useDraggablePane";
 
 import { StdErrNotification } from "./lib/notificationTypes";
 
@@ -32,6 +32,7 @@ import {
   MessageSquare,
 } from "lucide-react";
 
+import { toast } from "react-toastify";
 import { z } from "zod";
 import "./App.css";
 import ConsoleTab from "./components/ConsoleTab";
@@ -49,6 +50,17 @@ const PROXY_PORT = params.get("proxyPort") ?? "3000";
 const PROXY_SERVER_URL = `http://localhost:${PROXY_PORT}`;
 
 const App = () => {
+  // Handle OAuth callback route
+  if (window.location.pathname === "/oauth/callback") {
+    const OAuthCallback = React.lazy(
+      () => import("./components/OAuthCallback"),
+    );
+    return (
+      <Suspense fallback={<div>Loading...</div>}>
+        <OAuthCallback />
+      </Suspense>
+    );
+  }
   const [resources, setResources] = useState<Resource[]>([]);
   const [resourceTemplates, setResourceTemplates] = useState<
     ResourceTemplate[]
@@ -71,8 +83,14 @@ const App = () => {
     return localStorage.getItem("lastArgs") || "";
   });
 
-  const [sseUrl, setSseUrl] = useState<string>("http://localhost:3001/sse");
-  const [transportType, setTransportType] = useState<"stdio" | "sse">("stdio");
+  const [sseUrl, setSseUrl] = useState<string>(() => {
+    return localStorage.getItem("lastSseUrl") || "http://localhost:3001/sse";
+  });
+  const [transportType, setTransportType] = useState<"stdio" | "sse">(() => {
+    return (
+      (localStorage.getItem("lastTransportType") as "stdio" | "sse") || "stdio"
+    );
+  });
   const [notifications, setNotifications] = useState<ServerNotification[]>([]);
   const [stdErrNotifications, setStdErrNotifications] = useState<
     StdErrNotification[]
@@ -190,6 +208,31 @@ const App = () => {
     localStorage.setItem("lastArgs", args);
   }, [args]);
 
+  useEffect(() => {
+    localStorage.setItem("lastSseUrl", sseUrl);
+  }, [sseUrl]);
+
+  useEffect(() => {
+    localStorage.setItem("lastTransportType", transportType);
+  }, [transportType]);
+
+  // Auto-connect if serverUrl is provided in URL params (e.g. after OAuth callback)
+  useEffect(() => {
+    const serverUrl = params.get("serverUrl");
+    if (serverUrl) {
+      setSseUrl(serverUrl);
+      setTransportType("sse");
+      // Remove serverUrl from URL without reloading the page
+      const newUrl = new URL(window.location.href);
+      newUrl.searchParams.delete("serverUrl");
+      window.history.replaceState({}, "", newUrl.toString());
+      // Show success toast for OAuth
+      toast.success("Successfully authenticated with OAuth");
+      // Connect to the server
+      connectMcpServer();
+    }
+  }, []);
+
   useEffect(() => {
     fetch(`${PROXY_SERVER_URL}/config`)
       .then((response) => response.json())
diff --git a/client/src/components/OAuthCallback.tsx b/client/src/components/OAuthCallback.tsx
new file mode 100644
index 000000000..a7439df94
--- /dev/null
+++ b/client/src/components/OAuthCallback.tsx
@@ -0,0 +1,48 @@
+import { useEffect, useRef } from "react";
+import { handleOAuthCallback } from "../lib/auth";
+import { SESSION_KEYS } from "../lib/constants";
+
+const OAuthCallback = () => {
+  const hasProcessedRef = useRef(false);
+
+  useEffect(() => {
+    const handleCallback = async () => {
+      // Skip if we've already processed this callback
+      if (hasProcessedRef.current) {
+        return;
+      }
+      hasProcessedRef.current = true;
+
+      const params = new URLSearchParams(window.location.search);
+      const code = params.get("code");
+      const serverUrl = sessionStorage.getItem(SESSION_KEYS.SERVER_URL);
+
+      if (!code || !serverUrl) {
+        console.error("Missing code or server URL");
+        window.location.href = "/";
+        return;
+      }
+
+      try {
+        const accessToken = await handleOAuthCallback(serverUrl, code);
+        // Store the access token for future use
+        sessionStorage.setItem(SESSION_KEYS.ACCESS_TOKEN, accessToken);
+        // Redirect back to the main app with server URL to trigger auto-connect
+        window.location.href = `/?serverUrl=${encodeURIComponent(serverUrl)}`;
+      } catch (error) {
+        console.error("OAuth callback error:", error);
+        window.location.href = "/";
+      }
+    };
+
+    void handleCallback();
+  }, []);
+
+  return (
+    <div className="flex items-center justify-center h-screen">
+      <p className="text-lg text-gray-500">Processing OAuth callback...</p>
+    </div>
+  );
+};
+
+export default OAuthCallback;
diff --git a/client/src/lib/auth.ts b/client/src/lib/auth.ts
new file mode 100644
index 000000000..0417731d9
--- /dev/null
+++ b/client/src/lib/auth.ts
@@ -0,0 +1,93 @@
+import pkceChallenge from "pkce-challenge";
+import { SESSION_KEYS } from "./constants";
+
+export interface OAuthMetadata {
+  authorization_endpoint: string;
+  token_endpoint: string;
+}
+
+export async function discoverOAuthMetadata(
+  serverUrl: string,
+): Promise<OAuthMetadata> {
+  try {
+    const url = new URL("/.well-known/oauth-authorization-server", serverUrl);
+    const response = await fetch(url.toString());
+
+    if (response.ok) {
+      const metadata = await response.json();
+      return {
+        authorization_endpoint: metadata.authorization_endpoint,
+        token_endpoint: metadata.token_endpoint,
+      };
+    }
+  } catch (error) {
+    console.warn("OAuth metadata discovery failed:", error);
+  }
+
+  // Fall back to default endpoints
+  const baseUrl = new URL(serverUrl);
+  return {
+    authorization_endpoint: new URL("/authorize", baseUrl).toString(),
+    token_endpoint: new URL("/token", baseUrl).toString(),
+  };
+}
+
+export async function startOAuthFlow(serverUrl: string): Promise<string> {
+  // Generate PKCE challenge
+  const challenge = await pkceChallenge();
+  const codeVerifier = challenge.code_verifier;
+  const codeChallenge = challenge.code_challenge;
+
+  // Store code verifier for later use
+  sessionStorage.setItem(SESSION_KEYS.CODE_VERIFIER, codeVerifier);
+
+  // Discover OAuth endpoints
+  const metadata = await discoverOAuthMetadata(serverUrl);
+
+  // Build authorization URL
+  const authUrl = new URL(metadata.authorization_endpoint);
+  authUrl.searchParams.set("response_type", "code");
+  authUrl.searchParams.set("code_challenge", codeChallenge);
+  authUrl.searchParams.set("code_challenge_method", "S256");
+  authUrl.searchParams.set(
+    "redirect_uri",
+    window.location.origin + "/oauth/callback",
+  );
+
+  return authUrl.toString();
+}
+
+export async function handleOAuthCallback(
+  serverUrl: string,
+  code: string,
+): Promise<string> {
+  // Get stored code verifier
+  const codeVerifier = sessionStorage.getItem(SESSION_KEYS.CODE_VERIFIER);
+  if (!codeVerifier) {
+    throw new Error("No code verifier found");
+  }
+
+  // Discover OAuth endpoints
+  const metadata = await discoverOAuthMetadata(serverUrl);
+
+  // Exchange code for tokens
+  const response = await fetch(metadata.token_endpoint, {
+    method: "POST",
+    headers: {
+      "Content-Type": "application/json",
+    },
+    body: JSON.stringify({
+      grant_type: "authorization_code",
+      code,
+      code_verifier: codeVerifier,
+      redirect_uri: window.location.origin + "/oauth/callback",
+    }),
+  });
+
+  if (!response.ok) {
+    throw new Error("Token exchange failed");
+  }
+
+  const data = await response.json();
+  return data.access_token;
+}
diff --git a/client/src/lib/constants.ts b/client/src/lib/constants.ts
new file mode 100644
index 000000000..e302b52fe
--- /dev/null
+++ b/client/src/lib/constants.ts
@@ -0,0 +1,6 @@
+// OAuth-related session storage keys
+export const SESSION_KEYS = {
+  CODE_VERIFIER: "mcp_code_verifier",
+  SERVER_URL: "mcp_server_url",
+  ACCESS_TOKEN: "mcp_access_token",
+} as const;
diff --git a/client/src/lib/hooks/useConnection.ts b/client/src/lib/hooks/useConnection.ts
index ef937d173..de2d29ecc 100644
--- a/client/src/lib/hooks/useConnection.ts
+++ b/client/src/lib/hooks/useConnection.ts
@@ -1,5 +1,8 @@
 import { Client } from "@modelcontextprotocol/sdk/client/index.js";
-import { SSEClientTransport } from "@modelcontextprotocol/sdk/client/sse.js";
+import {
+  SSEClientTransport,
+  SseError,
+} from "@modelcontextprotocol/sdk/client/sse.js";
 import {
   ClientNotification,
   ClientRequest,
@@ -12,8 +15,10 @@ import {
 } from "@modelcontextprotocol/sdk/types.js";
 import { useState } from "react";
 import { toast } from "react-toastify";
-import { Notification, StdErrNotificationSchema } from "../notificationTypes";
 import { z } from "zod";
+import { startOAuthFlow } from "../auth";
+import { SESSION_KEYS } from "../constants";
+import { Notification, StdErrNotificationSchema } from "../notificationTypes";
 
 const DEFAULT_REQUEST_TIMEOUT_MSEC = 10000;
 
@@ -144,7 +149,20 @@ export function useConnection({
         backendUrl.searchParams.append("url", sseUrl);
       }
 
-      const clientTransport = new SSEClientTransport(backendUrl);
+      const headers: HeadersInit = {};
+      const accessToken = sessionStorage.getItem(SESSION_KEYS.ACCESS_TOKEN);
+      if (accessToken) {
+        headers["Authorization"] = `Bearer ${accessToken}`;
+      }
+
+      const clientTransport = new SSEClientTransport(backendUrl, {
+        eventSourceInit: {
+          fetch: (url, init) => fetch(url, { ...init, headers }),
+        },
+        requestInit: {
+          headers,
+        },
+      });
 
       if (onNotification) {
         client.setNotificationHandler(
@@ -160,7 +178,20 @@ export function useConnection({
         );
       }
 
-      await client.connect(clientTransport);
+      try {
+        await client.connect(clientTransport);
+      } catch (error) {
+        console.error("Failed to connect to MCP server:", error);
+        if (error instanceof SseError && error.code === 401) {
+          // Store the server URL for the callback handler
+          sessionStorage.setItem(SESSION_KEYS.SERVER_URL, sseUrl);
+          const redirectUrl = await startOAuthFlow(sseUrl);
+          window.location.href = redirectUrl;
+          return;
+        }
+
+        throw error;
+      }
 
       const capabilities = client.getServerCapabilities();
       setServerCapabilities(capabilities ?? null);
diff --git a/client/vite.config.ts b/client/vite.config.ts
index dd3bd0164..b3d0f4577 100644
--- a/client/vite.config.ts
+++ b/client/vite.config.ts
@@ -1,10 +1,11 @@
+import react from "@vitejs/plugin-react";
 import path from "path";
 import { defineConfig } from "vite";
-import react from "@vitejs/plugin-react";
 
 // https://vitejs.dev/config/
 export default defineConfig({
   plugins: [react()],
+  server: {},
   resolve: {
     alias: {
       "@": path.resolve(__dirname, "./src"),
diff --git a/package-lock.json b/package-lock.json
index c5e4d8825..0260f1798 100644
--- a/package-lock.json
+++ b/package-lock.json
@@ -1,12 +1,12 @@
 {
   "name": "@modelcontextprotocol/inspector",
-  "version": "0.3.0",
+  "version": "0.4.0",
   "lockfileVersion": 3,
   "requires": true,
   "packages": {
     "": {
       "name": "@modelcontextprotocol/inspector",
-      "version": "0.3.0",
+      "version": "0.4.0",
       "license": "MIT",
       "workspaces": [
         "client",
@@ -31,10 +31,10 @@
     },
     "client": {
       "name": "@modelcontextprotocol/inspector-client",
-      "version": "0.3.0",
+      "version": "0.4.0",
       "license": "MIT",
       "dependencies": {
-        "@modelcontextprotocol/sdk": "^1.0.3",
+        "@modelcontextprotocol/sdk": "^1.4.1",
         "@radix-ui/react-icons": "^1.3.0",
         "@radix-ui/react-label": "^2.1.0",
         "@radix-ui/react-select": "^2.1.2",
@@ -43,6 +43,7 @@
         "class-variance-authority": "^0.7.0",
         "clsx": "^2.1.1",
         "lucide-react": "^0.447.0",
+        "pkce-challenge": "^4.1.0",
         "react": "^18.3.1",
         "react-dom": "^18.3.1",
         "react-toastify": "^10.0.6",
@@ -1205,13 +1206,31 @@
       "link": true
     },
     "node_modules/@modelcontextprotocol/sdk": {
-      "version": "1.0.3",
-      "resolved": "https://registry.npmjs.org/@modelcontextprotocol/sdk/-/sdk-1.0.3.tgz",
-      "integrity": "sha512-2as3cX/VJ0YBHGmdv3GFyTpoM8q2gqE98zh3Vf1NwnsSY0h3mvoO07MUzfygCKkWsFjcZm4otIiqD6Xh7kiSBQ==",
+      "version": "1.4.1",
+      "resolved": "https://registry.npmjs.org/@modelcontextprotocol/sdk/-/sdk-1.4.1.tgz",
+      "integrity": "sha512-wS6YC4lkUZ9QpP+/7NBTlVNiEvsnyl0xF7rRusLF+RsG0xDPc/zWR7fEEyhKnnNutGsDAZh59l/AeoWGwIb1+g==",
+      "license": "MIT",
       "dependencies": {
         "content-type": "^1.0.5",
+        "eventsource": "^3.0.2",
         "raw-body": "^3.0.0",
-        "zod": "^3.23.8"
+        "zod": "^3.23.8",
+        "zod-to-json-schema": "^3.24.1"
+      },
+      "engines": {
+        "node": ">=18"
+      }
+    },
+    "node_modules/@modelcontextprotocol/sdk/node_modules/eventsource": {
+      "version": "3.0.2",
+      "resolved": "https://registry.npmjs.org/eventsource/-/eventsource-3.0.2.tgz",
+      "integrity": "sha512-YolzkJNxsTL3tCJMWFxpxtG2sCjbZ4LQUBUrkdaJK0ub0p6lmJt+2+1SwhKjLc652lpH9L/79Ptez972H9tphw==",
+      "license": "MIT",
+      "dependencies": {
+        "eventsource-parser": "^3.0.0"
+      },
+      "engines": {
+        "node": ">=18.0.0"
       }
     },
     "node_modules/@nodelib/fs.scandir": {
@@ -2257,13 +2276,6 @@
       "dev": true,
       "license": "MIT"
     },
-    "node_modules/@types/eventsource": {
-      "version": "1.1.15",
-      "resolved": "https://registry.npmjs.org/@types/eventsource/-/eventsource-1.1.15.tgz",
-      "integrity": "sha512-XQmGcbnxUNa06HR3VBVkc9+A2Vpi9ZyLJcdS5dwaQQ/4ZMWFO+5c90FnMUpbtMZwB/FChoYHwuVg8TvkECacTA==",
-      "dev": true,
-      "license": "MIT"
-    },
     "node_modules/@types/express": {
       "version": "4.17.21",
       "resolved": "https://registry.npmjs.org/@types/express/-/express-4.17.21.tgz",
@@ -3688,13 +3700,13 @@
         "node": ">= 0.6"
       }
     },
-    "node_modules/eventsource": {
-      "version": "2.0.2",
-      "resolved": "https://registry.npmjs.org/eventsource/-/eventsource-2.0.2.tgz",
-      "integrity": "sha512-IzUmBGPR3+oUG9dUeXynyNmf91/3zUSJg1lCktzKw47OXuhco54U3r9B7O4XX+Rb1Itm9OZ2b0RkTs10bICOxA==",
+    "node_modules/eventsource-parser": {
+      "version": "3.0.0",
+      "resolved": "https://registry.npmjs.org/eventsource-parser/-/eventsource-parser-3.0.0.tgz",
+      "integrity": "sha512-T1C0XCUimhxVQzW4zFipdx0SficT651NnkR0ZSH3yQwh+mFMdLfgjABVi4YtMTtaL4s168593DaoaRLMqryavA==",
       "license": "MIT",
       "engines": {
-        "node": ">=12.0.0"
+        "node": ">=18.0.0"
       }
     },
     "node_modules/express": {
@@ -4935,6 +4947,15 @@
         "node": ">= 6"
       }
     },
+    "node_modules/pkce-challenge": {
+      "version": "4.1.0",
+      "resolved": "https://registry.npmjs.org/pkce-challenge/-/pkce-challenge-4.1.0.tgz",
+      "integrity": "sha512-ZBmhE1C9LcPoH9XZSdwiPtbPHZROwAnMy+kIFQVrnMCxY4Cudlz3gBOpzilgc0jOgRaiT3sIWfpMomW2ar2orQ==",
+      "license": "MIT",
+      "engines": {
+        "node": ">=16.20.0"
+      }
+    },
     "node_modules/postcss": {
       "version": "8.4.49",
       "resolved": "https://registry.npmjs.org/postcss/-/postcss-8.4.49.tgz",
@@ -6927,22 +6948,30 @@
       }
     },
     "node_modules/zod": {
-      "version": "3.23.8",
-      "resolved": "https://registry.npmjs.org/zod/-/zod-3.23.8.tgz",
-      "integrity": "sha512-XBx9AXhXktjUqnepgTiE5flcKIYWi/rme0Eaj+5Y0lftuGBq+jyRu/md4WnuxqgP1ubdpNCsYEYPxrzVHD8d6g==",
+      "version": "3.24.1",
+      "resolved": "https://registry.npmjs.org/zod/-/zod-3.24.1.tgz",
+      "integrity": "sha512-muH7gBL9sI1nciMZV67X5fTKKBLtwpZ5VBp1vsOQzj1MhrBZ4wlVCm3gedKZWLp0Oyel8sIGfeiz54Su+OVT+A==",
       "license": "MIT",
       "funding": {
         "url": "https://github.com/sponsors/colinhacks"
       }
     },
+    "node_modules/zod-to-json-schema": {
+      "version": "3.24.1",
+      "resolved": "https://registry.npmjs.org/zod-to-json-schema/-/zod-to-json-schema-3.24.1.tgz",
+      "integrity": "sha512-3h08nf3Vw3Wl3PK+q3ow/lIil81IT2Oa7YpQyUUDsEWbXveMesdfK1xBd2RhCkynwZndAxixji/7SYJJowr62w==",
+      "license": "ISC",
+      "peerDependencies": {
+        "zod": "^3.24.1"
+      }
+    },
     "server": {
       "name": "@modelcontextprotocol/inspector-server",
-      "version": "0.3.0",
+      "version": "0.4.0",
       "license": "MIT",
       "dependencies": {
-        "@modelcontextprotocol/sdk": "^1.0.3",
+        "@modelcontextprotocol/sdk": "^1.4.1",
         "cors": "^2.8.5",
-        "eventsource": "^2.0.2",
         "express": "^4.21.0",
         "ws": "^8.18.0",
         "zod": "^3.23.8"
@@ -6952,7 +6981,6 @@
       },
       "devDependencies": {
         "@types/cors": "^2.8.17",
-        "@types/eventsource": "^1.1.15",
         "@types/express": "^4.17.21",
         "@types/ws": "^8.5.12",
         "tsx": "^4.19.0",
diff --git a/package.json b/package.json
index c2625881c..cf06f708d 100644
--- a/package.json
+++ b/package.json
@@ -1,6 +1,6 @@
 {
   "name": "@modelcontextprotocol/inspector",
-  "version": "0.3.0",
+  "version": "0.4.0",
   "description": "Model Context Protocol inspector",
   "license": "MIT",
   "author": "Anthropic, PBC (https://anthropic.com)",
diff --git a/server/package.json b/server/package.json
index c79e7d2e0..eb711f56c 100644
--- a/server/package.json
+++ b/server/package.json
@@ -1,6 +1,6 @@
 {
   "name": "@modelcontextprotocol/inspector-server",
-  "version": "0.3.0",
+  "version": "0.4.0",
   "description": "Server-side application for the Model Context Protocol inspector",
   "license": "MIT",
   "author": "Anthropic, PBC (https://anthropic.com)",
@@ -20,16 +20,14 @@
   },
   "devDependencies": {
     "@types/cors": "^2.8.17",
-    "@types/eventsource": "^1.1.15",
     "@types/express": "^4.17.21",
     "@types/ws": "^8.5.12",
     "tsx": "^4.19.0",
     "typescript": "^5.6.2"
   },
   "dependencies": {
-    "@modelcontextprotocol/sdk": "^1.0.3",
+    "@modelcontextprotocol/sdk": "^1.4.1",
     "cors": "^2.8.5",
-    "eventsource": "^2.0.2",
     "express": "^4.21.0",
     "ws": "^8.18.0",
     "zod": "^3.23.8"
diff --git a/server/src/index.ts b/server/src/index.ts
index 96620090d..4d8ac4212 100644
--- a/server/src/index.ts
+++ b/server/src/index.ts
@@ -1,29 +1,29 @@
 #!/usr/bin/env node
 
 import cors from "cors";
-import EventSource from "eventsource";
 import { parseArgs } from "node:util";
 import { parse as shellParseArgs } from "shell-quote";
 
-import { SSEClientTransport } from "@modelcontextprotocol/sdk/client/sse.js";
+import {
+  SSEClientTransport,
+  SseError,
+} from "@modelcontextprotocol/sdk/client/sse.js";
 import {
   StdioClientTransport,
   getDefaultEnvironment,
 } from "@modelcontextprotocol/sdk/client/stdio.js";
 import { SSEServerTransport } from "@modelcontextprotocol/sdk/server/sse.js";
 import express from "express";
-import mcpProxy from "./mcpProxy.js";
 import { findActualExecutable } from "spawn-rx";
+import mcpProxy from "./mcpProxy.js";
+
+const SSE_HEADERS_PASSTHROUGH = ["authorization"];
 
 const defaultEnvironment = {
   ...getDefaultEnvironment(),
   ...(process.env.MCP_ENV_VARS ? JSON.parse(process.env.MCP_ENV_VARS) : {}),
 };
 
-// Polyfill EventSource for an SSE client in Node.js
-// eslint-disable-next-line @typescript-eslint/no-explicit-any
-(global as any).EventSource = EventSource;
-
 const { values } = parseArgs({
   args: process.argv.slice(2),
   options: {
@@ -37,7 +37,8 @@ app.use(cors());
 
 let webAppTransports: SSEServerTransport[] = [];
 
-const createTransport = async (query: express.Request["query"]) => {
+const createTransport = async (req: express.Request) => {
+  const query = req.query;
   console.log("Query parameters:", query);
 
   const transportType = query.transportType as string;
@@ -65,9 +66,26 @@ const createTransport = async (query: express.Request["query"]) => {
     return transport;
   } else if (transportType === "sse") {
     const url = query.url as string;
-    console.log(`SSE transport: url=${url}`);
+    const headers: HeadersInit = {};
+    for (const key of SSE_HEADERS_PASSTHROUGH) {
+      if (req.headers[key] === undefined) {
+        continue;
+      }
+
+      const value = req.headers[key];
+      headers[key] = Array.isArray(value) ? value[value.length - 1] : value;
+    }
 
-    const transport = new SSEClientTransport(new URL(url));
+    console.log(`SSE transport: url=${url}, headers=${Object.keys(headers)}`);
+
+    const transport = new SSEClientTransport(new URL(url), {
+      eventSourceInit: {
+        fetch: (url, init) => fetch(url, { ...init, headers }),
+      },
+      requestInit: {
+        headers,
+      },
+    });
     await transport.start();
 
     console.log("Connected to SSE transport");
@@ -82,7 +100,21 @@ app.get("/sse", async (req, res) => {
   try {
     console.log("New SSE connection");
 
-    const backingServerTransport = await createTransport(req.query);
+    let backingServerTransport;
+    try {
+      backingServerTransport = await createTransport(req);
+    } catch (error) {
+      if (error instanceof SseError && error.code === 401) {
+        console.error(
+          "Received 401 Unauthorized from MCP server:",
+          error.message,
+        );
+        res.status(401).json(error);
+        return;
+      }
+
+      throw error;
+    }
 
     console.log("Connected MCP client to backing server transport");
 
@@ -109,9 +141,6 @@ app.get("/sse", async (req, res) => {
     mcpProxy({
       transportToClient: webAppTransport,
       transportToServer: backingServerTransport,
-      onerror: (error) => {
-        console.error(error);
-      },
     });
 
     console.log("Set up MCP proxy");
diff --git a/server/src/mcpProxy.ts b/server/src/mcpProxy.ts
index 7932845f7..b93c0cdfd 100644
--- a/server/src/mcpProxy.ts
+++ b/server/src/mcpProxy.ts
@@ -1,23 +1,29 @@
 import { Transport } from "@modelcontextprotocol/sdk/shared/transport.js";
 
+function onClientError(error: Error) {
+  console.error("Error from inspector client:", error);
+}
+
+function onServerError(error: Error) {
+  console.error("Error from MCP server:", error);
+}
+
 export default function mcpProxy({
   transportToClient,
   transportToServer,
-  onerror,
 }: {
   transportToClient: Transport;
   transportToServer: Transport;
-  onerror: (error: Error) => void;
 }) {
   let transportToClientClosed = false;
   let transportToServerClosed = false;
 
   transportToClient.onmessage = (message) => {
-    transportToServer.send(message).catch(onerror);
+    transportToServer.send(message).catch(onServerError);
   };
 
   transportToServer.onmessage = (message) => {
-    transportToClient.send(message).catch(onerror);
+    transportToClient.send(message).catch(onClientError);
   };
 
   transportToClient.onclose = () => {
@@ -26,7 +32,7 @@ export default function mcpProxy({
     }
 
     transportToClientClosed = true;
-    transportToServer.close().catch(onerror);
+    transportToServer.close().catch(onServerError);
   };
 
   transportToServer.onclose = () => {
@@ -34,10 +40,9 @@ export default function mcpProxy({
       return;
     }
     transportToServerClosed = true;
-
-    transportToClient.close().catch(onerror);
+    transportToClient.close().catch(onClientError);
   };
 
-  transportToClient.onerror = onerror;
-  transportToServer.onerror = onerror;
+  transportToClient.onerror = onClientError;
+  transportToServer.onerror = onServerError;
 }