diff --git a/client/src/lib/hooks/__tests__/useConnection.test.tsx b/client/src/lib/hooks/__tests__/useConnection.test.tsx
index b4d6705b8..ccd929650 100644
--- a/client/src/lib/hooks/__tests__/useConnection.test.tsx
+++ b/client/src/lib/hooks/__tests__/useConnection.test.tsx
@@ -1,7 +1,10 @@
 import { renderHook, act } from "@testing-library/react";
 import { useConnection } from "../useConnection";
 import { z } from "zod";
-import { ClientRequest } from "@modelcontextprotocol/sdk/types.js";
+import {
+  ClientRequest,
+  JSONRPCMessage,
+} from "@modelcontextprotocol/sdk/types.js";
 import { DEFAULT_INSPECTOR_CONFIG, CLIENT_IDENTITY } from "../../constants";
 import {
   SSEClientTransportOptions,
@@ -42,10 +45,12 @@ const mockSSETransport: {
   start: jest.Mock;
   url: URL | undefined;
   options: SSEClientTransportOptions | undefined;
+  onmessage?: (message: JSONRPCMessage) => void;
 } = {
   start: jest.fn(),
   url: undefined,
   options: undefined,
+  onmessage: undefined,
 };
 
 const mockStreamableHTTPTransport: {
@@ -482,6 +487,129 @@ describe("useConnection", () => {
     });
   });
 
+  describe("Ref Resolution", () => {
+    beforeEach(() => {
+      jest.clearAllMocks();
+    });
+
+    test("resolves $ref references in requestedSchema properties before validation", async () => {
+      const mockProtocolOnMessage = jest.fn();
+
+      mockSSETransport.onmessage = mockProtocolOnMessage;
+
+      const { result } = renderHook(() => useConnection(defaultProps));
+
+      await act(async () => {
+        await result.current.connect();
+      });
+
+      const mockRequestWithRef: JSONRPCMessage = {
+        jsonrpc: "2.0",
+        id: 1,
+        method: "elicitation/create",
+        params: {
+          message: "Please provide your information",
+          requestedSchema: {
+            type: "object",
+            properties: {
+              source: {
+                type: "string",
+                minLength: 1,
+                title: "A Connectable Node",
+              },
+              target: {
+                $ref: "#/properties/source",
+              },
+            },
+          },
+        },
+      };
+
+      await act(async () => {
+        mockSSETransport.onmessage!(mockRequestWithRef);
+      });
+
+      expect(mockProtocolOnMessage).toHaveBeenCalledTimes(1);
+
+      const message = mockProtocolOnMessage.mock.calls[0][0];
+      expect(message.params.requestedSchema.properties.target).toEqual({
+        type: "string",
+        minLength: 1,
+        title: "A Connectable Node",
+      });
+    });
+
+    test("resolves $ref references to $defs in requestedSchema", async () => {
+      const mockProtocolOnMessage = jest.fn();
+
+      mockSSETransport.onmessage = mockProtocolOnMessage;
+
+      const { result } = renderHook(() => useConnection(defaultProps));
+
+      await act(async () => {
+        await result.current.connect();
+      });
+
+      const mockRequestWithDefs: JSONRPCMessage = {
+        jsonrpc: "2.0",
+        id: 1,
+        method: "elicitation/create",
+        params: {
+          message: "Please provide your information",
+          requestedSchema: {
+            type: "object",
+            properties: {
+              user: {
+                $ref: "#/$defs/UserInput",
+              },
+            },
+            $defs: {
+              UserInput: {
+                type: "object",
+                properties: {
+                  name: {
+                    type: "string",
+                    title: "Name",
+                  },
+                  age: {
+                    type: "integer",
+                    title: "Age",
+                    minimum: 0,
+                  },
+                },
+                required: ["name"],
+              },
+            },
+          },
+        },
+      };
+
+      await act(async () => {
+        mockSSETransport.onmessage!(mockRequestWithDefs);
+      });
+
+      expect(mockProtocolOnMessage).toHaveBeenCalledTimes(1);
+
+      const message = mockProtocolOnMessage.mock.calls[0][0];
+      // The $ref should be resolved to the actual UserInput definition
+      expect(message.params.requestedSchema.properties.user).toEqual({
+        type: "object",
+        properties: {
+          name: {
+            type: "string",
+            title: "Name",
+          },
+          age: {
+            type: "integer",
+            title: "Age",
+            minimum: 0,
+          },
+        },
+        required: ["name"],
+      });
+    });
+  });
+
   describe("URL Port Handling", () => {
     const SSEClientTransport = jest.requireMock(
       "@modelcontextprotocol/sdk/client/sse.js",
diff --git a/client/src/lib/hooks/useConnection.ts b/client/src/lib/hooks/useConnection.ts
index bd15e080a..e95cad97d 100644
--- a/client/src/lib/hooks/useConnection.ts
+++ b/client/src/lib/hooks/useConnection.ts
@@ -59,6 +59,7 @@ import { getMCPServerRequestTimeout } from "@/utils/configUtils";
 import { InspectorConfig } from "../configurationTypes";
 import { Transport } from "@modelcontextprotocol/sdk/shared/transport.js";
 import { CustomHeaders } from "../types/customHeaders";
+import { resolveRefsInMessage } from "@/utils/schemaUtils";
 
 interface UseConnectionOptions {
   transportType: "stdio" | "sse" | "streamable-http";
@@ -691,6 +692,14 @@ export function useConnection({
 
         await client.connect(transport as Transport);
 
+        const protocolOnMessage = transport.onmessage;
+        if (protocolOnMessage) {
+          transport.onmessage = (message) => {
+            const resolvedMessage = resolveRefsInMessage(message);
+            protocolOnMessage(resolvedMessage);
+          };
+        }
+
         setClientTransport(transport);
 
         capabilities = client.getServerCapabilities();
diff --git a/client/src/utils/schemaUtils.ts b/client/src/utils/schemaUtils.ts
index 365870216..42d77d439 100644
--- a/client/src/utils/schemaUtils.ts
+++ b/client/src/utils/schemaUtils.ts
@@ -1,7 +1,8 @@
 import type { JsonValue, JsonSchemaType, JsonObject } from "./jsonUtils";
 import Ajv from "ajv";
 import type { ValidateFunction } from "ajv";
-import type { Tool } from "@modelcontextprotocol/sdk/types.js";
+import type { Tool, JSONRPCMessage } from "@modelcontextprotocol/sdk/types.js";
+import { isJSONRPCRequest } from "@modelcontextprotocol/sdk/types.js";
 
 const ajv = new Ajv();
 
@@ -299,3 +300,41 @@ export function formatFieldLabel(key: string): string {
     .replace(/_/g, " ") // Replace underscores with spaces
     .replace(/^\w/, (c) => c.toUpperCase()); // Capitalize first letter
 }
+
+/**
+ * Resolves `$ref` references in a JSON-RPC "elicitation/create" message's `requestedSchema` field
+ * @param message The JSON-RPC message that may contain $ref references
+ * @returns A new message with resolved $ref references, or the original message if no resolution is needed
+ */
+export function resolveRefsInMessage(message: JSONRPCMessage): JSONRPCMessage {
+  if (!isJSONRPCRequest(message) || !message.params?.requestedSchema) {
+    return message;
+  }
+
+  const requestedSchema = message.params.requestedSchema as JsonSchemaType;
+
+  if (!requestedSchema?.properties) {
+    return message;
+  }
+
+  const resolvedMessage = {
+    ...message,
+    params: {
+      ...message.params,
+      requestedSchema: {
+        ...requestedSchema,
+        properties: Object.fromEntries(
+          Object.entries(requestedSchema.properties).map(
+            ([key, propSchema]) => {
+              const resolved = resolveRef(propSchema, requestedSchema);
+              const normalized = normalizeUnionType(resolved);
+              return [key, normalized];
+            },
+          ),
+        ),
+      },
+    },
+  };
+
+  return resolvedMessage;
+}