diff --git a/src/google/adk/tools/mcp_tool/mcp_session_manager.py b/src/google/adk/tools/mcp_tool/mcp_session_manager.py
index c9c4c2ae66..18e90d7141 100644
--- a/src/google/adk/tools/mcp_tool/mcp_session_manager.py
+++ b/src/google/adk/tools/mcp_tool/mcp_session_manager.py
@@ -363,6 +363,25 @@ async def create_session(
         logger.debug('Created new session: %s', session_key)
         return session
 
+      except asyncio.CancelledError as e:
+        # CancelledError can occur when the MCP server returns an HTTP error
+        # (e.g., 401, 403). The MCP SDK uses anyio cancel scopes internally,
+        # which raise CancelledError. Since CancelledError is a BaseException
+        # (not Exception) in Python 3.8+, it must be caught explicitly.
+        logger.warning(
+            'MCP session creation cancelled (likely due to HTTP error): %s', e
+        )
+        try:
+          await exit_stack.aclose()
+        except Exception as exit_stack_error:
+          logger.warning(
+              'Error during cancelled session cleanup: %s', exit_stack_error
+          )
+        raise ConnectionError(
+            f'MCP session creation cancelled (server may have returned HTTP'
+            f' error): {e}'
+        ) from e
+
       except Exception as e:
         # If session creation fails, clean up the exit stack
         if exit_stack:
diff --git a/tests/unittests/tools/mcp_tool/test_mcp_session_manager.py b/tests/unittests/tools/mcp_tool/test_mcp_session_manager.py
index 74eabe9d4d..862df0af1f 100644
--- a/tests/unittests/tools/mcp_tool/test_mcp_session_manager.py
+++ b/tests/unittests/tools/mcp_tool/test_mcp_session_manager.py
@@ -290,6 +290,42 @@ async def test_create_session_timeout(
     # Verify cleanup was called
     mock_exit_stack.aclose.assert_called_once()
 
+  @pytest.mark.asyncio
+  @patch("google.adk.tools.mcp_tool.mcp_session_manager.stdio_client")
+  @patch("google.adk.tools.mcp_tool.mcp_session_manager.AsyncExitStack")
+  async def test_create_session_cancelled_error(
+      self, mock_exit_stack_class, mock_stdio
+  ):
+    """Test session creation when CancelledError is raised (e.g., HTTP 403).
+
+    When an MCP server returns an HTTP error (e.g., 401, 403), the MCP SDK
+    uses anyio cancel scopes internally, which raise CancelledError. This
+    test verifies that CancelledError is caught and converted to a
+    ConnectionError with proper cleanup.
+    """
+    manager = MCPSessionManager(self.mock_stdio_connection_params)
+
+    mock_exit_stack = MockAsyncExitStack()
+
+    mock_exit_stack_class.return_value = mock_exit_stack
+    mock_stdio.return_value = AsyncMock()
+
+    # Simulate CancelledError during session creation (e.g., HTTP 403)
+    mock_exit_stack.enter_async_context.side_effect = asyncio.CancelledError(
+        "Cancelled by cancel scope"
+    )
+
+    # Expect ConnectionError due to CancelledError
+    with pytest.raises(
+        ConnectionError, match="MCP session creation cancelled"
+    ):
+      await manager.create_session()
+
+    # Verify session was not added to pool
+    assert not manager._sessions
+    # Verify cleanup was called
+    mock_exit_stack.aclose.assert_called_once()
+
   @pytest.mark.asyncio
   async def test_close_success(self):
     """Test successful cleanup of all sessions."""