diff --git a/src/mcplocal/src/discovery.ts b/src/mcplocal/src/discovery.ts
index 2cf8970..50279b3 100644
--- a/src/mcplocal/src/discovery.ts
+++ b/src/mcplocal/src/discovery.ts
@@ -1,5 +1,5 @@
 import type { McpdClient } from './http/mcpd-client.js';
-import { DISCOVERY_TIMEOUT_MS } from './http/mcpd-client.js';
+import { DISCOVERY_TIMEOUT_MS, TOOLCALL_TIMEOUT_MS } from './http/mcpd-client.js';
 import type { McpRouter } from './router.js';
 import { McpdUpstream } from './upstream/mcpd.js';
 
@@ -152,6 +152,10 @@ function syncUpstreams(router: McpRouter, mcpdClient: McpdClient, servers: McpdS
   // unreachable upstream cannot stall session init for the full tool-call window.
   const discoveryClient = mcpdClient.withTimeout(DISCOVERY_TIMEOUT_MS);
 
+  // Everything else an upstream receives is a proxied tools/call, which can
+  // legitimately run past the 30s default (browser solvers, PDF extraction).
+  const toolClient = mcpdClient.withTimeout(TOOLCALL_TIMEOUT_MS);
+
   // Remove stale upstreams
   const currentNames = new Set(router.getUpstreamNames());
   const serverNames = new Set(servers.map((s) => s.name));
@@ -164,7 +168,7 @@ function syncUpstreams(router: McpRouter, mcpdClient: McpdClient, servers: McpdS
   // Add/update upstreams for each server
   for (const server of servers) {
     if (!currentNames.has(server.name)) {
-      const upstream = new McpdUpstream(server.id, server.name, mcpdClient, server.description, discoveryClient);
+      const upstream = new McpdUpstream(server.id, server.name, toolClient, server.description, discoveryClient);
       router.addUpstream(upstream);
     }
     registered.push(server.name);
diff --git a/src/mcplocal/src/http/mcpd-client.ts b/src/mcplocal/src/http/mcpd-client.ts
index 8e755e4..1734076 100644
--- a/src/mcplocal/src/http/mcpd-client.ts
+++ b/src/mcplocal/src/http/mcpd-client.ts
@@ -62,6 +62,17 @@ export const LONG_RUNNING_TIMEOUT_MS = Number(process.env['MCPLOCAL_LONG_TIMEOUT
  */
 export const DISCOVERY_TIMEOUT_MS = Number(process.env['MCPLOCAL_DISCOVERY_TIMEOUT_MS']) || 8_000;
 
+/**
+ * Budget for proxied tools/call. The 30s DEFAULT_TIMEOUT_MS is a guaranteed
+ * failure for tools that legitimately run long — web_url_read through a
+ * browser solver, a large PDF extraction, a slow retail site — all of which
+ * died as `mcpd proxy error: mcpd did not respond within 30000ms` while mcpd
+ * was still working. Distinct from LONG_RUNNING_TIMEOUT_MS (chat/inference,
+ * minutes) and DISCOVERY_TIMEOUT_MS (list calls, must stay short so a dead
+ * upstream cannot stall session init). Override via `MCPLOCAL_TOOLCALL_TIMEOUT_MS`.
+ */
+export const TOOLCALL_TIMEOUT_MS = Number(process.env['MCPLOCAL_TOOLCALL_TIMEOUT_MS']) || 120_000;
+
 export class McpdClient {
   private readonly baseUrl: string;
   private readonly token: string;
diff --git a/src/mcplocal/src/http/project-mcp-endpoint.ts b/src/mcplocal/src/http/project-mcp-endpoint.ts
index 274b6b7..a66645f 100644
--- a/src/mcplocal/src/http/project-mcp-endpoint.ts
+++ b/src/mcplocal/src/http/project-mcp-endpoint.ts
@@ -176,9 +176,13 @@ export function registerProjectMcpEndpoint(app: FastifyInstance, mcpdClient: Mcp
     chain.push(createAgentsPlugin());
     router.setPlugin(composePlugins(chain));
 
-    // Fetch project instructions and set on router
+    // Fetch project instructions and set on router. Must ride the CALLER's
+    // token (requestClient) like every other downstream call here: in HTTP
+    // mode mcpdClient's own token is empty, mcpd answers 401, and the catch
+    // below swallowed it — every session initialized with no instructions
+    // while nothing looked broken (#113).
     try {
-      const instructions = await mcpdClient.get<{ prompt: string; servers: Array<{ name: string; description: string }> }>(
+      const instructions = await requestClient.get<{ prompt: string; servers: Array<{ name: string; description: string }> }>(
         `/api/v1/projects/${encodeURIComponent(projectName)}/instructions`,
       );
       const parts: string[] = [];