diff --git a/src/mcp/mcpController.ts b/src/mcp/mcpController.ts
index 64e96b57a..eac71861e 100644
--- a/src/mcp/mcpController.ts
+++ b/src/mcp/mcpController.ts
@@ -22,6 +22,7 @@ import { createMCPConnectionErrorHandler } from './mcpConnectionErrorHandler';
 import { getMCPConfigFromVSCodeSettings } from './mcpConfig';
 import { DEFAULT_TELEMETRY_APP_NAME } from '../connectionController';
 import formatError from '../utils/formatError';
+import { TelemetryService } from '../telemetry';
 
 export type MCPServerStartupConfig =
   | 'prompt'
@@ -52,12 +53,14 @@ type MCPControllerConfig = {
   context: vscode.ExtensionContext;
   connectionController: ConnectionController;
   getTelemetryAnonymousId: () => string;
+  telemetryService: TelemetryService;
 };
 
 export class MCPController {
   private context: vscode.ExtensionContext;
   private connectionController: ConnectionController;
   private getTelemetryAnonymousId: () => string;
+  private telemetryService: TelemetryService;
   private mcpConnectionManagers: MCPConnectionManager[] = [];
 
   private didChangeEmitter = new vscode.EventEmitter<void>();
@@ -67,10 +70,12 @@ export class MCPController {
     context,
     connectionController,
     getTelemetryAnonymousId,
+    telemetryService,
   }: MCPControllerConfig) {
     this.context = context;
     this.connectionController = connectionController;
     this.getTelemetryAnonymousId = getTelemetryAnonymousId;
+    this.telemetryService = telemetryService;
   }
 
   public async activate(): Promise<void> {
@@ -253,6 +258,9 @@ export class MCPController {
       loggers: Array.from(
         new Set(['mcp', ...(configFromSettings.loggers ?? [])]),
       ),
+      telemetry: this.telemetryService.isTelemetryFeatureEnabled()
+        ? 'enabled'
+        : 'disabled',
     };
 
     return UserConfigSchema.parse(vsCodeConfig);
diff --git a/src/mdbExtensionController.ts b/src/mdbExtensionController.ts
index b38720cdf..2aea12435 100644
--- a/src/mdbExtensionController.ts
+++ b/src/mdbExtensionController.ts
@@ -275,6 +275,7 @@ export default class MDBExtensionController implements vscode.Disposable {
       connectionController: this._connectionController,
       getTelemetryAnonymousId: (): string =>
         this._connectionStorage.getUserAnonymousId(),
+      telemetryService: this._telemetryService,
     });
   }
 
diff --git a/src/telemetry/telemetryService.ts b/src/telemetry/telemetryService.ts
index 1b29e61a4..83c04ef45 100644
--- a/src/telemetry/telemetryService.ts
+++ b/src/telemetry/telemetryService.ts
@@ -132,7 +132,7 @@ export class TelemetryService {
 
   // Checks user settings and extension running mode
   // to determine whether or not we should track telemetry.
-  _isTelemetryFeatureEnabled(): boolean {
+  isTelemetryFeatureEnabled(): boolean {
     // If tests run the extension we do not track telemetry.
     if (this._shouldTrackTelemetry !== true) {
       return false;
@@ -152,7 +152,7 @@ export class TelemetryService {
   }
 
   _segmentAnalyticsTrack(segmentProperties: SegmentProperties): void {
-    if (!this._isTelemetryFeatureEnabled()) {
+    if (!this.isTelemetryFeatureEnabled()) {
       return;
     }
 
diff --git a/src/test/suite/mcp/mcpController.test.ts b/src/test/suite/mcp/mcpController.test.ts
index bf4efc839..81146431c 100644
--- a/src/test/suite/mcp/mcpController.test.ts
+++ b/src/test/suite/mcp/mcpController.test.ts
@@ -55,6 +55,7 @@ suite('MCPController test suite', function () {
   this.timeout(10_000);
   let connectionController: ConnectionController;
   let mcpController: MCPController;
+  let testTelemetryService: TelemetryService;
 
   let mcpAutoStartValue: string | null | undefined;
   let getConfigurationStub: SinonStub;
@@ -72,7 +73,7 @@ suite('MCPController test suite', function () {
   beforeEach(() => {
     const extensionContext = new ExtensionContextStub();
     const testStorageController = new StorageController(extensionContext);
-    const testTelemetryService = new TelemetryService(
+    testTelemetryService = new TelemetryService(
       testStorageController,
       extensionContext,
     );
@@ -86,6 +87,7 @@ suite('MCPController test suite', function () {
       context: extensionContext,
       connectionController: connectionController,
       getTelemetryAnonymousId: (): string => '1FOO',
+      telemetryService: testTelemetryService,
     });
 
     // GetConfiguration Stubs
@@ -839,6 +841,28 @@ suite('MCPController test suite', function () {
     });
   });
 
+  suite('MCP server telemetry configuration', function () {
+    test('passes telemetry "enabled" to MCP server config when telemetry is enabled', function () {
+      sandbox
+        .stub(testTelemetryService, 'isTelemetryFeatureEnabled')
+        .returns(true);
+      const config = (mcpController as any).getMCPServerConfig({
+        authorization: 'Bearer test',
+      });
+      expect(config.telemetry).to.equal('enabled');
+    });
+
+    test('passes telemetry "disabled" to MCP server config when telemetry is disabled', function () {
+      sandbox
+        .stub(testTelemetryService, 'isTelemetryFeatureEnabled')
+        .returns(false);
+      const config = (mcpController as any).getMCPServerConfig({
+        authorization: 'Bearer test',
+      });
+      expect(config.telemetry).to.equal('disabled');
+    });
+  });
+
   suite('#openServerConfig', function () {
     suite('when the server is not running', function () {
       test('should notify that server is not running', async function () {
diff --git a/src/test/suite/mdbExtensionController.test.ts b/src/test/suite/mdbExtensionController.test.ts
index 77c026cf4..22584a10f 100644
--- a/src/test/suite/mdbExtensionController.test.ts
+++ b/src/test/suite/mdbExtensionController.test.ts
@@ -170,6 +170,26 @@ suite('MDBExtensionController Test Suite', function () {
     });
   });
 
+  suite('MCP server telemetry', function () {
+    test('MCPController uses the same telemetry service as the extension controller', function () {
+      const extensionController = mdbTestExtension.testExtensionController;
+      expect(extensionController._mcpController['telemetryService']).to.equal(
+        extensionController._telemetryService,
+      );
+    });
+
+    test('MCP server is configured with telemetry disabled when extension telemetry is disabled', function () {
+      const extensionController = mdbTestExtension.testExtensionController;
+      // In test mode shouldTrackTelemetry is false, so telemetry is disabled
+      expect(extensionController._telemetryService.isTelemetryFeatureEnabled())
+        .to.be.false;
+      const mcpServerConfig = (
+        extensionController._mcpController as any
+      ).getMCPServerConfig({ authorization: 'Bearer test' });
+      expect(mcpServerConfig.telemetry).to.equal('disabled');
+    });
+  });
+
   suite('when not connected', function () {
     let showErrorMessageStub: SinonSpy;
 
diff --git a/src/test/suite/telemetry/telemetryService.test.ts b/src/test/suite/telemetry/telemetryService.test.ts
index a37227549..272a9eab4 100644
--- a/src/test/suite/telemetry/telemetryService.test.ts
+++ b/src/test/suite/telemetry/telemetryService.test.ts
@@ -109,7 +109,7 @@ suite('Telemetry Controller Test Suite', function () {
     sandbox.stub(vscode.window, 'showInformationMessage');
     sandbox.replace(
       testTelemetryService,
-      '_isTelemetryFeatureEnabled',
+      'isTelemetryFeatureEnabled',
       sandbox.fake.returns(true),
     );
   });