diff --git a/src/cmd/cli/command/mcp.go b/src/cmd/cli/command/mcp.go
index 76c63da14..7d43c487a 100644
--- a/src/cmd/cli/command/mcp.go
+++ b/src/cmd/cli/command/mcp.go
@@ -81,7 +81,6 @@ var mcpSetupCmd = &cobra.Command{
 		client, _ := cmd.Flags().GetString("client")
 
 		if client != "" {
-
 			// Aliases mapping
 			switch client {
 			case "code":
diff --git a/src/pkg/mcp/setup.go b/src/pkg/mcp/setup.go
index 04a866551..b1750eff5 100644
--- a/src/pkg/mcp/setup.go
+++ b/src/pkg/mcp/setup.go
@@ -259,9 +259,15 @@ func handleVSCodeConfig(configPath string) error {
 
 	// Check if the file exists
 	if data, err := os.ReadFile(configPath); err == nil {
-		// File exists, parse it
-		if err := json.Unmarshal(data, &existingData); err != nil {
-			return fmt.Errorf("failed to unmarshal existing vscode config %w", err)
+		// Check if file is empty or only contains whitespace
+		if len(strings.TrimSpace(string(data))) == 0 {
+			// File is empty, treat as new config
+			existingData = make(map[string]any)
+		} else {
+			// File is not empty, attempt to parse it
+			if err := json.Unmarshal(data, &existingData); err != nil {
+				return fmt.Errorf("failed to unmarshal existing vscode config: %w", err)
+			}
 		}
 
 		// Check if "servers" section exists
@@ -310,9 +316,15 @@ func handleStandardConfig(configPath string) error {
 
 	// Check if the file exists
 	if data, err := os.ReadFile(configPath); err == nil {
-		// Parse the JSON into a generic map to preserve all settings
-		if err := json.Unmarshal(data, &existingData); err != nil {
-			return fmt.Errorf("failed to unmarshal existing config: %w", err)
+		// Check if file is empty or only contains whitespace
+		if len(strings.TrimSpace(string(data))) == 0 {
+			// File is empty, treat as new config
+			existingData = make(map[string]any)
+		} else {
+			// Parse the JSON into a generic map to preserve all settings
+			if err := json.Unmarshal(data, &existingData); err != nil {
+				return fmt.Errorf("failed to unmarshal existing config: %w", err)
+			}
 		}
 
 		// Try to extract MCPServers from existing data
@@ -399,7 +411,7 @@ func SetupClient(clientStr string) error {
 		}
 	}
 
-	term.Infof("Restart %s for the changes to take effect.\n", client)
+	term.Infof("Ensure that %s is upgraded to the latest version and restarted so the changes can take effect.\n", client)
 
 	return nil
 }
diff --git a/src/pkg/mcp/setup_test.go b/src/pkg/mcp/setup_test.go
index d35382774..606b5c67a 100644
--- a/src/pkg/mcp/setup_test.go
+++ b/src/pkg/mcp/setup_test.go
@@ -444,6 +444,24 @@ func TestWriteConfig(t *testing.T) {
 			existingData:  `{"servers": "not an object}`,
 			expectedError: true,
 		},
+		{
+			name:         "vscode_config_new_file_empty",
+			fileExists:   true,
+			vscodeConfig: true,
+			existingData: "",
+			expectedData: `{
+  "servers": {
+    "defang": {
+      "args": [
+        "mcp",
+        "serve"
+      ],
+      "command": %s,
+      "type": "stdio"
+    }
+  }
+}`,
+		},
 		{
 			name:         "standard_config_new_file",
 			fileExists:   false,
@@ -593,6 +611,22 @@ func TestWriteConfig(t *testing.T) {
 			existingData:  `{"mcpServers": "not an object}`,
 			expectedError: true,
 		},
+		{
+			name:         "standard_config_new_file_empty",
+			fileExists:   true,
+			existingData: "",
+			expectedData: `{
+  "mcpServers": {
+    "defang": {
+      "command": %s,
+      "args": [
+        "mcp",
+        "serve"
+      ]
+    }
+  }
+}`,
+		},
 	}
 	for _, tt := range test {
 		t.Run(tt.name, func(t *testing.T) {