diff --git a/packages/api/src/mcp/MCPConnectionFactory.ts b/packages/api/src/mcp/MCPConnectionFactory.ts
index 2c63b81294..8b8fa17503 100644
--- a/packages/api/src/mcp/MCPConnectionFactory.ts
+++ b/packages/api/src/mcp/MCPConnectionFactory.ts
@@ -74,9 +74,23 @@ export class MCPConnectionFactory {
       oauthTokens,
     });
 
-    if (this.useOAuth) this.handleOAuthEvents(connection);
-    await this.attemptToConnect(connection);
-    return connection;
+    let cleanupOAuthHandlers: (() => void) | null = null;
+    if (this.useOAuth) {
+      cleanupOAuthHandlers = this.handleOAuthEvents(connection);
+    }
+
+    try {
+      await this.attemptToConnect(connection);
+      if (cleanupOAuthHandlers) {
+        cleanupOAuthHandlers();
+      }
+      return connection;
+    } catch (error) {
+      if (cleanupOAuthHandlers) {
+        cleanupOAuthHandlers();
+      }
+      throw error;
+    }
   }
 
   /** Retrieves existing OAuth tokens from storage or returns null */
@@ -133,8 +147,8 @@ export class MCPConnectionFactory {
   }
 
   /** Sets up OAuth event handlers for the connection */
-  protected handleOAuthEvents(connection: MCPConnection): void {
-    connection.on('oauthRequired', async (data) => {
+  protected handleOAuthEvents(connection: MCPConnection): () => void {
+    const oauthHandler = async (data: { serverUrl?: string }) => {
       logger.info(`${this.logPrefix} oauthRequired event received`);
 
       // If we just want to initiate OAuth and return, handle it differently
@@ -202,7 +216,23 @@ export class MCPConnectionFactory {
         logger.warn(`${this.logPrefix} OAuth failed, emitting oauthFailed event`);
         connection.emit('oauthFailed', new Error('OAuth authentication failed'));
       }
-    });
+    };
+
+    connection.on('oauthRequired', oauthHandler);
+
+    /** Handler reference for cleanup when connection state changes to disconnected */
+    const cleanupHandler = (state: string) => {
+      if (state === 'disconnected') {
+        connection.removeListener('oauthRequired', oauthHandler);
+        connection.removeListener('connectionChange', cleanupHandler);
+      }
+    };
+    connection.on('connectionChange', cleanupHandler);
+
+    return () => {
+      connection.removeListener('oauthRequired', oauthHandler);
+      connection.removeListener('connectionChange', cleanupHandler);
+    };
   }
 
   /** Attempts to establish connection with timeout handling */
diff --git a/packages/api/src/mcp/__tests__/MCPConnectionFactory.test.ts b/packages/api/src/mcp/__tests__/MCPConnectionFactory.test.ts
index c739b8ffce..e96d207f29 100644
--- a/packages/api/src/mcp/__tests__/MCPConnectionFactory.test.ts
+++ b/packages/api/src/mcp/__tests__/MCPConnectionFactory.test.ts
@@ -56,6 +56,9 @@ describe('MCPConnectionFactory', () => {
       isConnected: jest.fn(),
       setOAuthTokens: jest.fn(),
       on: jest.fn().mockReturnValue(mockConnectionInstance),
+      once: jest.fn().mockReturnValue(mockConnectionInstance),
+      off: jest.fn().mockReturnValue(mockConnectionInstance),
+      removeListener: jest.fn().mockReturnValue(mockConnectionInstance),
       emit: jest.fn(),
     } as unknown as jest.Mocked<MCPConnection>;