diff --git a/spring-ai-model/src/main/java/org/springframework/ai/tool/function/FunctionToolCallback.java b/spring-ai-model/src/main/java/org/springframework/ai/tool/function/FunctionToolCallback.java
index 091f9e2b8e4..92a038d49d2 100644
--- a/spring-ai-model/src/main/java/org/springframework/ai/tool/function/FunctionToolCallback.java
+++ b/spring-ai-model/src/main/java/org/springframework/ai/tool/function/FunctionToolCallback.java
@@ -31,6 +31,7 @@
 import org.springframework.ai.tool.definition.ToolDefinition;
 import org.springframework.ai.tool.execution.DefaultToolCallResultConverter;
 import org.springframework.ai.tool.execution.ToolCallResultConverter;
+import org.springframework.ai.tool.execution.ToolExecutionException;
 import org.springframework.ai.tool.metadata.ToolMetadata;
 import org.springframework.ai.tool.support.ToolUtils;
 import org.springframework.ai.util.json.JsonParser;
@@ -99,7 +100,15 @@ public String call(String toolInput, @Nullable ToolContext toolContext) {
 		logger.debug("Starting execution of tool: {}", this.toolDefinition.name());
 
 		I request = JsonParser.fromJson(toolInput, this.toolInputType);
-		O response = this.toolFunction.apply(request, toolContext);
+		O response;
+
+		try {
+			response = this.toolFunction.apply(request, toolContext);
+		}
+		catch (Exception e) {
+			logger.error("Error executing tool: {}", this.toolDefinition.name(), e);
+			throw new ToolExecutionException(this.toolDefinition, e);
+		}
 
 		logger.debug("Successful execution of tool: {}", this.toolDefinition.name());
 
diff --git a/spring-ai-model/src/test/java/org/springframework/ai/tool/function/FunctionToolCallbackTests.java b/spring-ai-model/src/test/java/org/springframework/ai/tool/function/FunctionToolCallbackTests.java
new file mode 100644
index 00000000000..3db68689e0e
--- /dev/null
+++ b/spring-ai-model/src/test/java/org/springframework/ai/tool/function/FunctionToolCallbackTests.java
@@ -0,0 +1,80 @@
+/*
+ * Copyright 2025-2025 the original author or authors.
+ *
+ * Licensed under the Apache License, Version 2.0 (the "License");
+ * you may not use this file except in compliance with the License.
+ * You may obtain a copy of the License at
+ *
+ *      https://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing, software
+ * distributed under the License is distributed on an "AS IS" BASIS,
+ * WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+ * See the License for the specific language governing permissions and
+ * limitations under the License.
+ */
+
+package org.springframework.ai.tool.function;
+
+import org.junit.jupiter.api.Test;
+import org.springframework.ai.tool.execution.ToolExecutionException;
+
+import static org.assertj.core.api.Assertions.assertThat;
+import static org.assertj.core.api.AssertionsForClassTypes.assertThatThrownBy;
+
+/**
+ * Unit tests for {@link FunctionToolCallback}.
+ *
+ * @author Marco Schäck
+ */
+class FunctionToolCallbackTests {
+
+	@Test
+	void whenToolFunctionExecutesSuccessfullyThenReturnExpectedValue() {
+		// Given
+		SquareRootTool squareRootTool = new SquareRootTool();
+		FunctionToolCallback<SquareRootTool.Input, SquareRootTool.Output> callback = FunctionToolCallback
+			.builder("squareRootTool", squareRootTool::calculate)
+			.inputType(SquareRootTool.Input.class)
+			.build();
+
+		// When
+		String result = callback.call("{\"number\":25}");
+
+		// Then
+		assertThat(result).isEqualTo("{\"result\":5.0}");
+	}
+
+	@Test
+	void whenToolFunctionThrowsExceptionThenWrapInToolExecutionException() {
+		// Given
+		SquareRootTool squareRootTool = new SquareRootTool();
+		FunctionToolCallback<SquareRootTool.Input, SquareRootTool.Output> callback = FunctionToolCallback
+			.builder("squareRootTool", squareRootTool::calculate)
+			.inputType(SquareRootTool.Input.class)
+			.build();
+
+		// When & Then
+		assertThatThrownBy(() -> callback.call("{\"number\":-9}")).isInstanceOf(ToolExecutionException.class)
+			.hasCause(new IllegalArgumentException("Cannot calculate square root of negative number: -9"))
+			.hasMessageContaining("Cannot calculate square root of negative number: -9");
+	}
+
+	static class SquareRootTool {
+
+		record Input(int number) {
+		}
+
+		record Output(double result) {
+		}
+
+		public Output calculate(Input input) {
+			if (input.number < 0) {
+				throw new IllegalArgumentException("Cannot calculate square root of negative number: " + input.number);
+			}
+			return new Output(Math.sqrt(input.number));
+		}
+
+	}
+
+}