diff --git a/src/core/prompts/sections/__tests__/tool-use.spec.ts b/src/core/prompts/sections/__tests__/tool-use.spec.ts
new file mode 100644
index 0000000000..d1b2f543bb
--- /dev/null
+++ b/src/core/prompts/sections/__tests__/tool-use.spec.ts
@@ -0,0 +1,98 @@
+import { describe, it, expect } from "vitest"
+import { getSharedToolUseSection } from "../tool-use"
+
+describe("getSharedToolUseSection", () => {
+	describe("base functionality", () => {
+		it("should return base tool use section when no apiProvider is provided", () => {
+			const result = getSharedToolUseSection()
+
+			expect(result).toContain("TOOL USE")
+			expect(result).toContain("Tool uses are formatted using XML-style tags")
+			expect(result).toContain("<actual_tool_name>")
+			expect(result).not.toContain("CRITICAL: Tool Use Requirements")
+			expect(result).not.toContain("MANDATORY")
+		})
+
+		it("should return base tool use section for non-local providers", () => {
+			const providers = ["anthropic", "openai", "openrouter", "bedrock"]
+
+			providers.forEach((provider) => {
+				const result = getSharedToolUseSection(provider)
+
+				expect(result).toContain("TOOL USE")
+				expect(result).toContain("Tool uses are formatted using XML-style tags")
+				expect(result).not.toContain("CRITICAL: Tool Use Requirements")
+				expect(result).not.toContain("MANDATORY")
+			})
+		})
+	})
+
+	describe("local model enhancements", () => {
+		it("should include enhanced instructions for ollama provider", () => {
+			const result = getSharedToolUseSection("ollama")
+
+			// Check base content is still there
+			expect(result).toContain("TOOL USE")
+			expect(result).toContain("Tool uses are formatted using XML-style tags")
+
+			// Check enhanced instructions
+			expect(result).toContain("CRITICAL: Tool Use Requirements for Your Response")
+			expect(result).toContain("MANDATORY")
+			expect(result).toContain("Every response MUST contain EXACTLY ONE tool use")
+			expect(result).toContain("DO NOT")
+			expect(result).toContain("Write explanations or text outside of the tool XML tags")
+			expect(result).toContain("Guess file locations or code content")
+			expect(result).toContain("ALWAYS")
+			expect(result).toContain("Start with codebase_search tool when exploring code")
+
+			// Check examples
+			expect(result).toContain("Example of a CORRECT response")
+			expect(result).toContain("<codebase_search>")
+			expect(result).toContain("<query>main function entry point</query>")
+			expect(result).toContain("</codebase_search>")
+
+			expect(result).toContain("Example of an INCORRECT response")
+			expect(result).toContain("I'll search for the main function")
+
+			// Check final reminder
+			expect(result).toContain("Remember: Your ENTIRE response should be the tool XML, nothing else")
+		})
+
+		it("should include enhanced instructions for lmstudio provider", () => {
+			const result = getSharedToolUseSection("lmstudio")
+
+			// Check base content is still there
+			expect(result).toContain("TOOL USE")
+			expect(result).toContain("Tool uses are formatted using XML-style tags")
+
+			// Check enhanced instructions (same as ollama)
+			expect(result).toContain("CRITICAL: Tool Use Requirements for Your Response")
+			expect(result).toContain("MANDATORY")
+			expect(result).toContain("Every response MUST contain EXACTLY ONE tool use")
+			expect(result).toContain("DO NOT")
+			expect(result).toContain("ALWAYS")
+			expect(result).toContain("Example of a CORRECT response")
+			expect(result).toContain("Example of an INCORRECT response")
+			expect(result).toContain("Remember: Your ENTIRE response should be the tool XML, nothing else")
+		})
+	})
+
+	describe("formatting and structure", () => {
+		it("should maintain proper formatting with line breaks", () => {
+			const result = getSharedToolUseSection("ollama")
+
+			// Check that there are proper line breaks between sections
+			expect(result).toMatch(/TOOL USE\n\n/)
+			expect(result).toMatch(/# Tool Use Formatting\n\n/)
+			expect(result).toMatch(/# CRITICAL: Tool Use Requirements/)
+		})
+
+		it("should have consistent XML examples", () => {
+			const result = getSharedToolUseSection("ollama")
+
+			// Check XML structure is properly formatted
+			expect(result).toMatch(/<actual_tool_name>\n<parameter1_name>value1<\/parameter1_name>/)
+			expect(result).toMatch(/<codebase_search>\n<query>/)
+		})
+	})
+})
diff --git a/src/core/prompts/sections/tool-use.ts b/src/core/prompts/sections/tool-use.ts
index 28d47d0985..9a2af41f9c 100644
--- a/src/core/prompts/sections/tool-use.ts
+++ b/src/core/prompts/sections/tool-use.ts
@@ -1,5 +1,8 @@
-export function getSharedToolUseSection(): string {
-	return `====
+export function getSharedToolUseSection(apiProvider?: string): string {
+	// Enhanced instructions for local models that may struggle with tool formatting
+	const isLocalModel = apiProvider === "ollama" || apiProvider === "lmstudio"
+
+	const baseSection = `====
 
 TOOL USE
 
@@ -16,4 +19,33 @@ Tool uses are formatted using XML-style tags. The tool name itself becomes the X
 </actual_tool_name>
 
 Always use the actual tool name as the XML tag name for proper parsing and execution.`
+
+	if (isLocalModel) {
+		return (
+			baseSection +
+			`
+
+# CRITICAL: Tool Use Requirements for Your Response
+
+**MANDATORY**: Every response MUST contain EXACTLY ONE tool use in the XML format shown above.
+**DO NOT**: Write explanations or text outside of the tool XML tags.
+**DO NOT**: Guess file locations or code content - use the appropriate search tools first.
+**ALWAYS**: Start with codebase_search tool when exploring code for the first time.
+
+Example of a CORRECT response (using codebase_search):
+<codebase_search>
+<query>main function entry point</query>
+</codebase_search>
+
+Example of an INCORRECT response (this will fail):
+I'll search for the main function in your codebase.
+<codebase_search>
+<query>main function</query>
+</codebase_search>
+
+Remember: Your ENTIRE response should be the tool XML, nothing else.`
+		)
+	}
+
+	return baseSection
 }
diff --git a/src/core/prompts/system.ts b/src/core/prompts/system.ts
index 3cc327c815..f2eafa978b 100644
--- a/src/core/prompts/system.ts
+++ b/src/core/prompts/system.ts
@@ -62,6 +62,7 @@ async function generatePrompt(
 	settings?: SystemPromptSettings,
 	todoList?: TodoItem[],
 	modelId?: string,
+	apiProvider?: string,
 ): Promise<string> {
 	if (!context) {
 		throw new Error("Extension context is required for generating system prompt")
@@ -92,7 +93,7 @@ async function generatePrompt(
 
 ${markdownFormattingSection()}
 
-${getSharedToolUseSection()}
+${getSharedToolUseSection(apiProvider)}
 
 ${getToolDescriptionsForMode(
 	mode,
@@ -153,6 +154,7 @@ export const SYSTEM_PROMPT = async (
 	settings?: SystemPromptSettings,
 	todoList?: TodoItem[],
 	modelId?: string,
+	apiProvider?: string,
 ): Promise<string> => {
 	if (!context) {
 		throw new Error("Extension context is required for generating system prompt")
@@ -225,5 +227,6 @@ ${customInstructions}`
 		settings,
 		todoList,
 		modelId,
+		apiProvider,
 	)
 }
diff --git a/src/core/task/Task.ts b/src/core/task/Task.ts
index 851df91e6c..1b7989b3ab 100644
--- a/src/core/task/Task.ts
+++ b/src/core/task/Task.ts
@@ -2445,6 +2445,7 @@ export class Task extends EventEmitter<TaskEvents> implements TaskLike {
 				},
 				undefined, // todoList
 				this.api.getModel().id,
+				this.apiConfiguration.apiProvider,
 			)
 		})()
 	}
diff --git a/src/core/webview/generateSystemPrompt.ts b/src/core/webview/generateSystemPrompt.ts
index a639d8a960..0e64de4958 100644
--- a/src/core/webview/generateSystemPrompt.ts
+++ b/src/core/webview/generateSystemPrompt.ts
@@ -89,6 +89,9 @@ export const generateSystemPrompt = async (provider: ClineProvider, message: Web
 				.getConfiguration("roo-cline")
 				.get<boolean>("newTaskRequireTodos", false),
 		},
+		undefined, // todoList
+		undefined, // modelId
+		apiConfiguration?.apiProvider,
 	)
 
 	return systemPrompt