diff --git a/.changeset/mcp-server-instructions.md b/.changeset/mcp-server-instructions.md
new file mode 100644
index 00000000000..0115766b945
--- /dev/null
+++ b/.changeset/mcp-server-instructions.md
@@ -0,0 +1,22 @@
+---
+"@effect/ai": patch
+---
+
+Add optional `instructions` to `McpServer` layer options.
+
+When provided, the string is returned in the `InitializeResult.instructions`
+field per the [MCP specification](https://modelcontextprotocol.io/specification/2025-06-18/basic/lifecycle#initialization).
+Clients can use it to improve the LLM's understanding of the server (for
+example, by injecting it into the system prompt).
+
+```ts
+McpServer.layerHttp({
+  name: "Demo Server",
+  version: "1.0.0",
+  path: "/mcp",
+  instructions: "Always greet the user with a friendly hello."
+})
+```
+
+The option is supported on `layer`, `layerStdio`, `layerHttp`, and
+`layerHttpRouter`. It is omitted from the response when not set.
diff --git a/packages/ai/ai/src/McpServer.ts b/packages/ai/ai/src/McpServer.ts
index b91cebe37f4..1ba6d1e95a6 100644
--- a/packages/ai/ai/src/McpServer.ts
+++ b/packages/ai/ai/src/McpServer.ts
@@ -320,9 +320,11 @@ const SUPPORTED_PROTOCOL_VERSIONS = [
 export const run: (options: {
   readonly name: string
   readonly version: string
+  readonly instructions?: string | undefined
 }) => Effect.Effect<never, never, McpServer | RpcServer.Protocol> = Effect.fnUntraced(function*(options: {
   readonly name: string
   readonly version: string
+  readonly instructions?: string | undefined
 }) {
   const protocol = yield* RpcServer.Protocol
   const handlers = yield* Layer.build(layerHandlers(options))
@@ -468,6 +470,7 @@ export const run: (options: {
 export const layer = (options: {
   readonly name: string
   readonly version: string
+  readonly instructions?: string | undefined
 }): Layer.Layer<McpServer | McpServerClient, never, RpcServer.Protocol> =>
   Layer.scopedDiscard(Effect.forkScoped(run(options))).pipe(
     Layer.provideMerge(McpServer.layer)
@@ -535,6 +538,14 @@ export const layerStdio = <EIn, RIn, EOut, ROut>(options: {
   readonly version: string
   readonly stdin: Stream<Uint8Array, EIn, RIn>
   readonly stdout: Sink<unknown, Uint8Array | string, unknown, EOut, ROut>
+  /**
+   * Optional instructions describing how to use the server and its features.
+   *
+   * When set, this string is returned in the `InitializeResult.instructions`
+   * field per the MCP specification. Clients can use it to improve the LLM's
+   * understanding of the server (e.g. by injecting it into the system prompt).
+   */
+  readonly instructions?: string | undefined
 }): Layer.Layer<McpServer | McpServerClient, never, RIn | ROut> =>
   layer(options).pipe(
     Layer.provide(
@@ -612,6 +623,14 @@ export const layerHttp = <I = HttpRouter.Default>(options: {
   readonly version: string
   readonly path: HttpRouter.PathInput
   readonly routerTag?: HttpRouter.HttpRouter.TagClass<I, string, any, any>
+  /**
+   * Optional instructions describing how to use the server and its features.
+   *
+   * When set, this string is returned in the `InitializeResult.instructions`
+   * field per the MCP specification. Clients can use it to improve the LLM's
+   * understanding of the server (e.g. by injecting it into the system prompt).
+   */
+  readonly instructions?: string | undefined
 }): Layer.Layer<McpServer | McpServerClient> =>
   layer(options).pipe(
     Layer.provide(RpcServer.layerProtocolHttp(options)),
@@ -630,11 +649,20 @@ export const layerHttpRouter = (options: {
   readonly name: string
   readonly version: string
   readonly path: HttpRouter.PathInput
+  /**
+   * Optional instructions describing how to use the server and its features.
+   *
+   * When set, this string is returned in the `InitializeResult.instructions`
+   * field per the MCP specification. Clients can use it to improve the LLM's
+   * understanding of the server (e.g. by injecting it into the system prompt).
+   */
+  readonly instructions?: string | undefined
 }): Layer.Layer<
   McpServer | McpServerClient,
   never,
   HttpLayerRouter.HttpRouter
 > =>
+
   layer(options).pipe(
     Layer.provide(RpcServer.layerProtocolHttpRouter(options)),
     Layer.provide(RpcSerialization.layerJsonRpc())
@@ -1249,13 +1277,15 @@ const compileUriTemplate = (
   } as const
 }
 
-const layerHandlers = (serverInfo: {
+const layerHandlers = (options: {
   readonly name: string
   readonly version: string
+  readonly instructions?: string | undefined
 }) =>
   ClientRpcs.toLayer(
     Effect.gen(function*() {
       const server = yield* McpServer
+      const serverInfo = { name: options.name, version: options.version }
 
       return {
         // Requests
@@ -1290,7 +1320,8 @@ const layerHandlers = (serverInfo: {
                 requestedVersion
               )
               ? requestedVersion
-              : LATEST_PROTOCOL_VERSION
+              : LATEST_PROTOCOL_VERSION,
+            ...(options.instructions !== undefined ? { instructions: options.instructions } : {})
           })
         },
         "completion/complete": server.completion,
diff --git a/packages/ai/ai/test/McpServer.test.ts b/packages/ai/ai/test/McpServer.test.ts
new file mode 100644
index 00000000000..e614522e627
--- /dev/null
+++ b/packages/ai/ai/test/McpServer.test.ts
@@ -0,0 +1,76 @@
+import { assert, describe, it } from "@effect/vitest"
+import { Effect, Layer, Mailbox, Sink } from "effect"
+import * as McpServer from "../src/McpServer.js"
+
+const encoder = new TextEncoder()
+const decoder = new TextDecoder()
+
+const initializeRequest = {
+  jsonrpc: "2.0",
+  id: 1,
+  method: "initialize",
+  params: {
+    protocolVersion: "2025-06-18",
+    capabilities: {},
+    clientInfo: { name: "test-client", version: "0.0.0" }
+  }
+}
+
+const initializeResultFor = (
+  options: { readonly instructions?: string | undefined }
+): Effect.Effect<any> =>
+  Effect.gen(function*() {
+    const stdinMailbox = yield* Mailbox.make<Uint8Array>()
+    const stdoutMailbox = yield* Mailbox.make<Uint8Array | string>()
+
+    const stdin = Mailbox.toStream(stdinMailbox)
+    const stdout = Sink.forEach((chunk: Uint8Array | string) => stdoutMailbox.offer(chunk))
+
+    const ServerLayer = McpServer.layerStdio({
+      name: "test-server",
+      version: "1.0.0",
+      stdin,
+      stdout,
+      ...(options.instructions !== undefined ? { instructions: options.instructions } : {})
+    })
+
+    yield* Effect.forkScoped(Layer.launch(ServerLayer))
+
+    yield* stdinMailbox.offer(encoder.encode(JSON.stringify(initializeRequest) + "\n"))
+
+    let response: any
+    while (response === undefined) {
+      const chunk = yield* stdoutMailbox.take
+      const text = typeof chunk === "string" ? chunk : decoder.decode(chunk)
+      for (const line of text.split("\n")) {
+        if (line.trim() === "") continue
+        const parsed = JSON.parse(line)
+        if (parsed.id === 1) {
+          response = parsed
+          break
+        }
+      }
+    }
+
+    return response
+  }).pipe(Effect.scoped) as Effect.Effect<any>
+
+describe("McpServer", () => {
+  describe("instructions", () => {
+    it.effect("returns instructions in InitializeResult when set", () =>
+      Effect.gen(function*() {
+        const response = yield* initializeResultFor({ instructions: "be helpful" })
+        assert.strictEqual(response.result.instructions, "be helpful")
+        assert.deepStrictEqual(response.result.serverInfo, {
+          name: "test-server",
+          version: "1.0.0"
+        })
+      }))
+
+    it.effect("omits instructions in InitializeResult when not set", () =>
+      Effect.gen(function*() {
+        const response = yield* initializeResultFor({})
+        assert.isFalse("instructions" in response.result)
+      }))
+  })
+})