diff --git a/core/src/main/java/com/google/adk/tools/Annotations.java b/core/src/main/java/com/google/adk/tools/Annotations.java
index 6aad15ea..d2f3fbf2 100644
--- a/core/src/main/java/com/google/adk/tools/Annotations.java
+++ b/core/src/main/java/com/google/adk/tools/Annotations.java
@@ -33,6 +33,8 @@ public final class Annotations {
     String name() default "";
 
     String description() default "";
+
+    boolean optional() default false;
   }
 
   private Annotations() {}
diff --git a/core/src/main/java/com/google/adk/tools/FunctionCallingUtils.java b/core/src/main/java/com/google/adk/tools/FunctionCallingUtils.java
index fa26530c..dec33afb 100644
--- a/core/src/main/java/com/google/adk/tools/FunctionCallingUtils.java
+++ b/core/src/main/java/com/google/adk/tools/FunctionCallingUtils.java
@@ -104,7 +104,10 @@ public static FunctionDeclaration buildFunctionDeclaration(
       if (ignoreParams.contains(paramName)) {
         continue;
       }
-      required.add(paramName);
+      Annotations.Schema schema = param.getAnnotation(Annotations.Schema.class);
+      if (schema == null || !schema.optional()) {
+        required.add(paramName);
+      }
       properties.put(paramName, buildSchemaFromParameter(param));
     }
     builder.parameters(
diff --git a/core/src/main/java/com/google/adk/tools/FunctionTool.java b/core/src/main/java/com/google/adk/tools/FunctionTool.java
index 73d22f8d..9ba28737 100644
--- a/core/src/main/java/com/google/adk/tools/FunctionTool.java
+++ b/core/src/main/java/com/google/adk/tools/FunctionTool.java
@@ -197,11 +197,17 @@ private Maybe<Map<String, Object>> call(Map<String, Object> args, ToolContext to
         arguments[i] = null;
         continue;
       }
+      Annotations.Schema schema = parameters[i].getAnnotation(Annotations.Schema.class);
       if (!args.containsKey(paramName)) {
-        throw new IllegalArgumentException(
-            String.format(
-                "The parameter '%s' was not found in the arguments provided by the model.",
-                paramName));
+        if (schema != null && schema.optional()) {
+          arguments[i] = null;
+          continue;
+        } else {
+          throw new IllegalArgumentException(
+              String.format(
+                  "The parameter '%s' was not found in the arguments provided by the model.",
+                  paramName));
+        }
       }
       Class<?> paramType = parameters[i].getType();
       Object argValue = args.get(paramName);
@@ -274,11 +280,17 @@ public Flowable<Map<String, Object>> callLive(
         }
         continue;
       }
+      Annotations.Schema schema = parameters[i].getAnnotation(Annotations.Schema.class);
       if (!args.containsKey(paramName)) {
-        throw new IllegalArgumentException(
-            String.format(
-                "The parameter '%s' was not found in the arguments provided by the model.",
-                paramName));
+        if (schema != null && schema.optional()) {
+          arguments[i] = null;
+          continue;
+        } else {
+          throw new IllegalArgumentException(
+              String.format(
+                  "The parameter '%s' was not found in the arguments provided by the model.",
+                  paramName));
+        }
       }
       Class<?> paramType = parameters[i].getType();
       Object argValue = args.get(paramName);
diff --git a/core/src/test/java/com/google/adk/tools/FunctionToolTest.java b/core/src/test/java/com/google/adk/tools/FunctionToolTest.java
index af9d7bf4..6576431a 100644
--- a/core/src/test/java/com/google/adk/tools/FunctionToolTest.java
+++ b/core/src/test/java/com/google/adk/tools/FunctionToolTest.java
@@ -472,6 +472,50 @@ public void create_withRecursiveParam_avoidsInfiniteRecursion() {
     assertThat(tool.declaration().get().parameters()).hasValue(expectedParameters);
   }
 
+  @Test
+  public void create_withOptionalParameter_excludesFromRequired() {
+    FunctionTool tool = FunctionTool.create(Functions.class, "functionWithOptionalParam");
+
+    assertThat(tool).isNotNull();
+    assertThat(tool.declaration().get().parameters())
+        .hasValue(
+            Schema.builder()
+                .type("OBJECT")
+                .properties(
+                    ImmutableMap.of(
+                        "requiredParam",
+                        Schema.builder().type("STRING").description("A required parameter").build(),
+                        "optionalParam",
+                        Schema.builder()
+                            .type("INTEGER")
+                            .description("An optional parameter")
+                            .build()))
+                .required(ImmutableList.of("requiredParam"))
+                .build());
+  }
+
+  @Test
+  public void call_withOptionalParameter_missingValue() throws Exception {
+    FunctionTool tool = FunctionTool.create(Functions.class, "functionWithOptionalParam");
+
+    Map<String, Object> result =
+        tool.runAsync(ImmutableMap.of("requiredParam", "test"), null).blockingGet();
+
+    assertThat(result)
+        .containsExactly(
+            "requiredParam", "test", "optionalParam", "null_value", "wasOptionalProvided", false);
+  }
+
+  @Test
+  public void call_withOptionalParameter_missingRequired_returnsError() {
+    FunctionTool tool = FunctionTool.create(Functions.class, "functionWithOptionalParam");
+
+    Map<String, Object> result =
+        tool.runAsync(ImmutableMap.of("optionalParam", "test"), null).blockingGet();
+
+    assertThat(result).containsExactly("status", "error", "message", "An internal error occurred.");
+  }
+
   @Test
   public void create_withMaybeMapReturnType() {
     FunctionTool tool = FunctionTool.create(Functions.class, "returnsMaybeMap");
@@ -719,6 +763,25 @@ public static ImmutableMap<String, Object> recursiveParam(Node param) {
       return ImmutableMap.of("param", param);
     }
 
+    public static ImmutableMap<String, Object> functionWithOptionalParam(
+        @Annotations.Schema(name = "requiredParam", description = "A required parameter")
+            String requiredParam,
+        @Annotations.Schema(
+                name = "optionalParam",
+                description = "An optional parameter",
+                optional = true)
+            Integer optionalParam) {
+      ImmutableMap.Builder<String, Object> builder = ImmutableMap.builder();
+      builder.put("requiredParam", requiredParam);
+      if (optionalParam != null) {
+        builder.put("optionalParam", optionalParam);
+      } else {
+        builder.put("optionalParam", "null_value");
+      }
+      builder.put("wasOptionalProvided", optionalParam != null);
+      return builder.buildOrThrow();
+    }
+
     public ImmutableMap<String, Object> nonStaticReturnAllSupportedParametersAsMap(
         String stringParam,
         boolean primitiveBoolParam,