diff --git a/packages/app/e2e/regression/mcp-workspace-toggle.spec.ts b/packages/app/e2e/regression/mcp-workspace-toggle.spec.ts
index 0a6e867a81b..97a8bb1e10e 100644
--- a/packages/app/e2e/regression/mcp-workspace-toggle.spec.ts
+++ b/packages/app/e2e/regression/mcp-workspace-toggle.spec.ts
@@ -85,3 +85,94 @@ for (const shared of [true, false]) {
     expect(requests.every((request) => request.directory === workspace)).toBe(true)
   })
 }
+
+for (const surface of ["popover", "dialog"] as const) {
+  test(`shows connection failures from the MCP ${surface} and allows reconnecting`, async ({ page }, testInfo) => {
+    const error = "Streamable HTTP error: Error POSTing to endpoint: 404 Not Found"
+    const state = { fail: true, status: surface === "popover" ? "failed" : "disabled" }
+    const requests: { path: string; directory: string }[] = []
+    await page.addInitScript(() => {
+      localStorage.setItem("settings.v3", JSON.stringify({ general: { showStatus: true } }))
+    })
+    await mockOpenCodeServer(page, {
+      directory,
+      project: {
+        id: projectID,
+        worktree: directory,
+        vcs: "git",
+        name: "mcp-workspace",
+        time: { created: 1700000000000, updated: 1700000000000 },
+        sandboxes: [workspace],
+      },
+      provider: { all: [], connected: [], default: {} },
+      sessions: [{ id: sessionID, projectID, directory: workspace, title }],
+      pageMessages: () => ({ items: [] }),
+    })
+    await page.route("**/api/mcp**", async (route) => {
+      if (route.request().method() === "OPTIONS") return route.fallback()
+      const url = new URL(route.request().url())
+      const target = url.searchParams.get("location[directory]") ?? directory
+      requests.push({ path: url.pathname, directory: target })
+      if (url.pathname === "/api/mcp/figma-desktop/connect") {
+        state.status = state.fail ? "failed" : "connected"
+        // Connection failures are reported by the refreshed status, not the HTTP response.
+        return route.fulfill({ status: 204 })
+      }
+      return route.fulfill({
+        json: {
+          location: { directory: target },
+          data:
+            url.pathname === "/api/mcp/resource"
+              ? { resources: [], templates: [] }
+              : [
+                  {
+                    name: "figma-desktop",
+                    status: { status: target === workspace ? state.status : "connected", error },
+                  },
+                ],
+        },
+      })
+    })
+
+    await page.goto(`/server/${base64Encode(server)}/session/${sessionID}`)
+    await expectSessionTitle(page, title)
+    await expect(page.getByRole("textbox", { name: "Prompt", exact: true })).toBeEditable()
+    if (surface === "popover") await page.getByRole("button", { name: "Status", exact: true }).click()
+    if (surface === "dialog") await page.keyboard.press("ControlOrMeta+;")
+    const panel =
+      surface === "popover" ? page.getByRole("tabpanel") : page.getByRole("dialog", { name: "MCPs", exact: true })
+    const toggle = panel.getByRole("switch")
+    await expect(panel.getByText("figma-desktop", { exact: true })).toBeVisible()
+    await expect(toggle).not.toBeChecked()
+    await expect(toggle).toBeEnabled()
+    requests.length = 0
+
+    await panel.locator('[data-slot="switch-control"]').click()
+    const toast = page
+      .getByRole("listitem", { includeHidden: true })
+      .filter({ has: page.getByText("Request failed", { exact: true }) })
+    await expect(toast.getByText(`figma-desktop: ${error}`, { exact: true })).toBeVisible()
+    await expect(toggle).not.toBeChecked()
+    await expect(toggle).toBeEnabled()
+    expect(requests.filter((request) => request.path.endsWith("/connect"))).toEqual([
+      { path: "/api/mcp/figma-desktop/connect", directory: workspace },
+    ])
+    expect(requests.every((request) => request.directory === workspace)).toBe(true)
+    await expect(toast).toHaveCSS("opacity", "1")
+    await testInfo.attach("mcp-connection-error", { body: await page.screenshot(), contentType: "image/png" })
+
+    if (surface === "popover") await page.keyboard.press("Escape")
+    if (surface === "dialog") await panel.getByRole("button", { name: "Close", exact: true }).click()
+    await expect(panel).toBeHidden()
+    await toast.getByRole("button", { name: "Dismiss", exact: true }).click()
+    await expect(toast).toBeHidden()
+    state.fail = false
+    if (surface === "popover") await page.getByRole("button", { name: "Status", exact: true }).click()
+    if (surface === "dialog") await page.keyboard.press("ControlOrMeta+;")
+    await expect(toggle).toBeEnabled()
+    await panel.locator('[data-slot="switch-control"]').click()
+    await expect(toggle).toBeChecked()
+    await expect(toggle).toBeEnabled()
+    await expect(toast).toBeHidden()
+  })
+}
diff --git a/packages/app/src/providers/connect/mcp.ts b/packages/app/src/providers/connect/mcp.ts
index 5e0906f301c..f3f4a55ba47 100644
--- a/packages/app/src/providers/connect/mcp.ts
+++ b/packages/app/src/providers/connect/mcp.ts
@@ -40,6 +40,9 @@ export function useMcpToggle(directory?: Accessor<string | undefined>, onSuccess
       data.location.mcp.server.invalidate(ref)
       data.location.mcp.resource.invalidate(ref)
       await Promise.all([data.location.mcp.server.sync(ref), data.location.mcp.resource.sync(ref), onSuccess?.()])
+      // A successful HTTP response can still leave the MCP connection in a failed state.
+      const status = data.location.mcp.server.list(ref)?.find((item) => item.name === name)?.status
+      if (status?.status === "failed") throw new Error(`${name}: ${status.error}`)
     },
     onError: (error) =>
       showToast({