diff --git a/CLAUDE.md b/CLAUDE.md
index 3d5b9785..f58aa3a5 100644
--- a/CLAUDE.md
+++ b/CLAUDE.md
@@ -262,6 +262,12 @@ When set, these flags append `developer_message` and/or the tool stacktrace to t
 | `ARCADE_DEBUG_EXPOSE_DEVELOPER_MESSAGE_IN_TOOL_ERROR_RESPONSES` | Appends `developer_message` to the error response `message` field |
 | `ARCADE_DEBUG_EXPOSE_STACKTRACE_IN_TOOL_ERROR_RESPONSES` | Appends the tool stacktrace to the error response `message` field |
 
+The stacktrace flag does not create a traceback if the tool error payload has no stacktrace. It
+appends an existing `stacktrace` value when present; otherwise it appends a debug note saying the
+stacktrace is unavailable. For example, unhandled exceptions and `ToolRuntimeError`/`FatalToolError`
+raised with a chained cause (`raise ... from exc`) have one, while directly raised
+`FatalToolError(...)` values usually do not.
+
 **Never enable in production.** The `message` field is returned verbatim to whoever called the tool — LLMs, transcripts, end-user UIs, and anything else downstream.
 
 ## Project Layout
diff --git a/libs/arcade-mcp-server/arcade_mcp_server/_debug_exposure.py b/libs/arcade-mcp-server/arcade_mcp_server/_debug_exposure.py
index b4939bac..d27704eb 100644
--- a/libs/arcade-mcp-server/arcade_mcp_server/_debug_exposure.py
+++ b/libs/arcade-mcp-server/arcade_mcp_server/_debug_exposure.py
@@ -77,8 +77,11 @@ def augment_error_message_for_debug(
     extras: list[str] = []
     if developer_message and _leak_enabled(_ENV_EXPOSE_DEVELOPER_MESSAGE):
         extras.append(f"developer_message: {developer_message}")
-    if stacktrace and _leak_enabled(_ENV_EXPOSE_STACKTRACE):
-        extras.append(f"stacktrace:\n{stacktrace}")
+    if _leak_enabled(_ENV_EXPOSE_STACKTRACE):
+        if stacktrace:
+            extras.append(f"stacktrace:\n{stacktrace}")
+        else:
+            extras.append("stacktrace: unavailable (tool error payload did not include one)")
     if not extras:
         return message
     return f"{message}\n\n[DEBUG] " + "\n\n[DEBUG] ".join(extras)
diff --git a/libs/arcade-mcp-server/pyproject.toml b/libs/arcade-mcp-server/pyproject.toml
index f74ce5ae..1bef8723 100644
--- a/libs/arcade-mcp-server/pyproject.toml
+++ b/libs/arcade-mcp-server/pyproject.toml
@@ -4,7 +4,7 @@ build-backend = "hatchling.build"
 
 [project]
 name = "arcade-mcp-server"
-version = "1.21.1"
+version = "1.21.2"
 description = "Model Context Protocol (MCP) server framework for Arcade.dev"
 readme = "README.md"
 authors = [{ name = "Arcade.dev" }]
diff --git a/libs/tests/arcade_mcp_server/test_debug_exposure.py b/libs/tests/arcade_mcp_server/test_debug_exposure.py
index bdb751b4..7937211e 100644
--- a/libs/tests/arcade_mcp_server/test_debug_exposure.py
+++ b/libs/tests/arcade_mcp_server/test_debug_exposure.py
@@ -93,6 +93,20 @@ def test_stacktrace_flag_enabled(monkeypatch):
     assert "secret internals" not in out
 
 
+def test_stacktrace_flag_enabled_but_stacktrace_missing(monkeypatch):
+    monkeypatch.setenv(_ENV_STACKTRACE, _LEAK_MAGIC)
+    out = augment_error_message_for_debug(
+        "public error",
+        developer_message="secret internals",
+        stacktrace=None,
+    )
+    assert "public error" in out
+    assert "[DEBUG] stacktrace: unavailable" in out
+    assert "tool error payload did not include one" in out
+    # Developer-message flag off → dev message must NOT leak.
+    assert "secret internals" not in out
+
+
 def test_both_flags_enabled(monkeypatch):
     monkeypatch.setenv(_ENV_DEV_MSG, _LEAK_MAGIC)
     monkeypatch.setenv(_ENV_STACKTRACE, _LEAK_MAGIC)
@@ -104,11 +118,12 @@ def test_both_flags_enabled(monkeypatch):
 
 
 def test_flag_enabled_but_no_content_to_leak(monkeypatch):
-    """Flag on but developer_message/stacktrace are None → message unchanged."""
+    """Developer flag on but developer_message None → only stacktrace absence is reported."""
     monkeypatch.setenv(_ENV_DEV_MSG, _LEAK_MAGIC)
     monkeypatch.setenv(_ENV_STACKTRACE, _LEAK_MAGIC)
     out = augment_error_message_for_debug("public error", None, None)
-    assert out == "public error"
+    assert "[DEBUG] developer_message:" not in out
+    assert "[DEBUG] stacktrace: unavailable" in out
 
 
 def test_activation_warning_emitted_once_per_process(monkeypatch, caplog):
diff --git a/libs/tests/arcade_mcp_server/test_debug_exposure_integration.py b/libs/tests/arcade_mcp_server/test_debug_exposure_integration.py
index 0e67976a..05e5a3cb 100644
--- a/libs/tests/arcade_mcp_server/test_debug_exposure_integration.py
+++ b/libs/tests/arcade_mcp_server/test_debug_exposure_integration.py
@@ -271,6 +271,22 @@ async def test_integration_stacktrace_flag_leaks_traceback_through_mcp(
     assert "unexpected crash for query='ping'" in text
 
 
+@pytest.mark.asyncio
+async def test_integration_stacktrace_flag_reports_missing_traceback(erroring_server, monkeypatch):
+    """Directly raised ToolRuntimeError values may not carry a stacktrace.
+
+    When the stacktrace flag is enabled, the MCP response should say that
+    explicitly instead of silently omitting the stacktrace debug section.
+    """
+    monkeypatch.setenv(_ENV_STACKTRACE, _LEAK_MAGIC)
+    result = await _call(erroring_server, "raises_fatal_tool_error")
+    text = result.content[0].text
+    assert "Failed to fetch results" in text
+    assert "[DEBUG] stacktrace: unavailable" in text
+    assert "tool error payload did not include one" in text
+    assert "HTTP 503" not in text
+
+
 @pytest.mark.asyncio
 async def test_integration_both_flags_leak_through_mcp(erroring_server, monkeypatch):
     """Both flags together on an unhandled exception: developer_message (from