diff --git a/src/mcplocal/src/discovery.ts b/src/mcplocal/src/discovery.ts
index 2eb99b1..89ee424 100644
--- a/src/mcplocal/src/discovery.ts
+++ b/src/mcplocal/src/discovery.ts
@@ -46,7 +46,13 @@ export async function refreshProjectUpstreams(
     servers = await mcpdClient.get<McpdServer[]>(path);
   }
 
-  return syncUpstreams(router, mcpdClient, servers);
+  // Downstream upstream-proxy calls go through `mcpdClient` too. In HTTP-mode
+  // mcplocal the pod has no credentials of its own, so the default token on
+  // `mcpdClient` is an empty string — every /api/v1/mcp/proxy call would 401.
+  // Bind a per-request client with the caller's bearer so each McpdUpstream
+  // forwards the same identity that passed project discovery.
+  const upstreamClient = authToken ? mcpdClient.withToken(authToken) : mcpdClient;
+  return syncUpstreams(router, upstreamClient, servers);
 }
 
 /**
diff --git a/src/mcplocal/src/http/mcpd-client.ts b/src/mcplocal/src/http/mcpd-client.ts
index b4541a3..53511e5 100644
--- a/src/mcplocal/src/http/mcpd-client.ts
+++ b/src/mcplocal/src/http/mcpd-client.ts
@@ -60,6 +60,16 @@ export class McpdClient {
     return new McpdClient(this.baseUrl, this.token, { ...this.extraHeaders }, timeoutMs);
   }
 
+  /**
+   * Create a new client with a different Bearer token. The HTTP-mode mcplocal
+   * pod has no credentials of its own — each incoming client request carries
+   * its McpToken, and this method is how we thread that token through to the
+   * McpdUpstream instances created during project discovery.
+   */
+  withToken(token: string): McpdClient {
+    return new McpdClient(this.baseUrl, token, { ...this.extraHeaders }, this.timeoutMs);
+  }
+
   async get<T>(path: string): Promise<T> {
     return this.request<T>('GET', path);
   }
diff --git a/src/mcplocal/tests/project-discovery.test.ts b/src/mcplocal/tests/project-discovery.test.ts
index a9b506c..0348d4a 100644
--- a/src/mcplocal/tests/project-discovery.test.ts
+++ b/src/mcplocal/tests/project-discovery.test.ts
@@ -13,6 +13,7 @@ function mockMcpdClient(servers: Array<{ id: string; name: string; transport: st
     forward: vi.fn(async () => ({ status: 200, body: servers })),
     withTimeout: vi.fn(() => client),
     withHeaders: vi.fn(() => client),
+    withToken: vi.fn(() => client),
   };
   return client;
 }