diff --git a/router/src/lib.rs b/router/src/lib.rs
index 1b1e66d2..dfb68b49 100644
--- a/router/src/lib.rs
+++ b/router/src/lib.rs
@@ -1505,6 +1505,70 @@ impl Default for ModelsInfo {
     }
 }
 
+// balance the started json with closing braces and quotes
+fn complete_json(partial: &str) -> (String, bool, bool) {
+    let mut brace_count = 0;
+    let mut quote_open = false;
+    let mut escaped = false;
+    let mut last_char = '\0';
+
+    for c in partial.chars() {
+        match (escaped, quote_open, c) {
+            (true, _, _) => escaped = false,
+            (false, _, '\\') => escaped = true,
+            (false, _, '"') => quote_open = !quote_open,
+            (false, false, '{') => brace_count += 1,
+            (false, false, '}') if brace_count > 0 => brace_count -= 1,
+            _ => {}
+        }
+        if !c.is_whitespace() {
+            last_char = c;
+        }
+    }
+
+    let mut completed = partial.to_string();
+
+    if last_char == ',' {
+        if let Some(pos) = completed.rfind(',') {
+            completed.replace_range(pos..pos + 1, "");
+        }
+    }
+
+    if quote_open {
+        completed.push('"');
+    }
+
+    if brace_count > 0 {
+        completed.push_str(&"}".repeat(brace_count));
+    }
+
+    (completed, quote_open, brace_count > 0)
+}
+
+/// Result type that includes both the parsed value and a completion status
+#[derive(Debug)]
+pub struct ParseResult<T> {
+    pub value: T,
+    pub last_value_whole: bool,
+}
+
+/// Parse partial JSON into a generic serializable type T
+/// Returns the parsed value along with a flag indicating if completion was needed
+pub fn parse_partial_json<T>(partial: &str) -> Result<ParseResult<T>, String>
+where
+    T: for<'de> Deserialize<'de> + std::fmt::Debug,
+{
+    let (completed, needed_close_quote, _need_close_brace) = complete_json(partial);
+    let obj = serde_json::from_str::<T>(&completed);
+    match obj {
+        Ok(value) => Ok(ParseResult {
+            value,
+            last_value_whole: !needed_close_quote,
+        }),
+        Err(e) => Err(format!("Failed to parse JSON: {}", e)),
+    }
+}
+
 #[cfg(test)]
 mod tests {
     use super::*;
@@ -1779,3 +1843,214 @@ mod tests {
         );
     }
 }
+
+#[cfg(test)]
+mod tool_streaming_tests {
+    use super::*;
+
+    // Test json balancing and completion
+    #[test]
+    fn test_complete_json_basic_cases() {
+        // Already complete
+        let (completed, needed_close_quote, needed_close_brace) =
+            complete_json(r#"{"name":"test"}"#);
+        assert_eq!(completed, r#"{"name":"test"}"#);
+        assert_eq!(needed_close_quote, false);
+        assert_eq!(needed_close_brace, false);
+
+        // Missing brace
+        let (completed, needed_close_quote, needed_close_brace) =
+            complete_json(r#"{"name":"test""#);
+        assert_eq!(completed, r#"{"name":"test"}"#);
+        assert_eq!(needed_close_quote, false);
+        assert_eq!(needed_close_brace, true);
+
+        // Missing quote
+        let (completed, needed_close_quote, needed_close_brace) = complete_json(r#"{"name":"test"#);
+        assert_eq!(completed, r#"{"name":"test"}"#);
+        assert_eq!(needed_close_quote, true);
+        assert_eq!(needed_close_brace, true);
+    }
+
+    #[test]
+    fn test_complete_json_complex_cases() {
+        // Nested objects
+        let (completed, needed_close_quote, needed_close_brace) =
+            complete_json(r#"{"user":{"name":"test","age":30"#);
+        assert_eq!(completed, r#"{"user":{"name":"test","age":30}}"#);
+        assert_eq!(needed_close_quote, false);
+        assert_eq!(needed_close_brace, true);
+
+        // Trailing comma
+        let (completed, needed_close_quote, needed_close_brace) =
+            complete_json(r#"{"name":"test","#);
+        assert_eq!(completed, r#"{"name":"test"}"#);
+        assert_eq!(needed_close_quote, false);
+        assert_eq!(needed_close_brace, true);
+
+        // Escaped quotes
+        let (completed, needed_close_quote, needed_close_brace) =
+            complete_json(r#"{"message":"This is a \"quoted\" text"#);
+        assert_eq!(completed, r#"{"message":"This is a \"quoted\" text"}"#);
+        assert_eq!(needed_close_quote, true);
+        assert_eq!(needed_close_brace, true);
+    }
+
+    #[derive(Debug, Deserialize, Serialize, PartialEq)]
+    struct User {
+        name: String,
+        age: Option<u32>,
+    }
+
+    #[test]
+    fn test_parse_partial_json() {
+        // Complete
+        let result = parse_partial_json::<User>(r#"{"name":"Alice","age":30}"#);
+        assert!(result.is_ok());
+        let parsed = result.unwrap();
+        assert_eq!(
+            parsed.value,
+            User {
+                name: "Alice".to_string(),
+                age: Some(30)
+            }
+        );
+        assert_eq!(parsed.last_value_whole, true);
+
+        // Incomplete
+        let result = parse_partial_json::<User>(r#"{"name":"Bob","age":25"#);
+        assert!(result.is_ok());
+        let parsed = result.unwrap();
+        assert_eq!(
+            parsed.value,
+            User {
+                name: "Bob".to_string(),
+                age: Some(25)
+            }
+        );
+        assert_eq!(parsed.last_value_whole, true);
+
+        // Invalid
+        let result = parse_partial_json::<User>(r#"{"name":invalid}"#);
+        assert!(result.is_err());
+    }
+
+    #[test]
+    fn test_nested_escaped_quotes() {
+        let json = r#"{"message":"This has \"nested\" quotes"#;
+        let (completed, needed_close_quote, needed_close_brace) = complete_json(json);
+        assert_eq!(completed, r#"{"message":"This has \"nested\" quotes"}"#);
+        assert_eq!(needed_close_quote, true);
+        assert_eq!(needed_close_brace, true);
+
+        let json = r#"{"message":"This has \"nested\" quotes""#;
+        let (completed, needed_close_quote, needed_close_brace) = complete_json(json);
+        assert_eq!(completed, r#"{"message":"This has \"nested\" quotes"}"#);
+        assert_eq!(needed_close_quote, false);
+        assert_eq!(needed_close_brace, true);
+    }
+
+    // Test incremental JSON parsing for a tool decision
+    #[derive(Debug, Deserialize, Serialize, PartialEq)]
+    struct ToolDecision {
+        function: Function,
+    }
+
+    #[derive(Debug, Deserialize, Serialize, PartialEq)]
+    struct Function {
+        #[serde(rename = "_name")]
+        name: String,
+    }
+
+    #[test]
+    fn test_streaming_no_tool_flow() {
+        let json_buffers = [
+            r#"{"function": {"_name": "no_tool""#,
+            r#"{ "content": "I am a helpful assistant""#,
+        ];
+
+        // Function decision
+        let result = parse_partial_json::<ToolDecision>(&json_buffers[0]);
+        println!("{:?}", result);
+        assert!(result.is_ok());
+        assert_eq!(result.unwrap().value.function.name, "no_tool");
+
+        // Content
+        let result = parse_partial_json::<serde_json::Value>(&json_buffers[1]);
+        assert!(result.is_ok());
+        assert_eq!(result.unwrap().value["content"], "I am a helpful assistant");
+    }
+
+    #[test]
+    fn test_streaming_no_tool_flow_with_commas() {
+        let json_buffers = [
+            r#"{"function": {"_name": "no_tool","#,
+            r#"{ "content": "I am a helpful assistant""#,
+        ];
+
+        // Function decision
+        let result = parse_partial_json::<ToolDecision>(&json_buffers[0]);
+        println!("{:?}", result);
+        assert!(result.is_ok());
+        assert_eq!(result.unwrap().value.function.name, "no_tool");
+
+        // Content
+        let result = parse_partial_json::<serde_json::Value>(&json_buffers[1]);
+        assert!(result.is_ok());
+        assert_eq!(result.unwrap().value["content"], "I am a helpful assistant");
+    }
+
+    #[test]
+    fn test_streaming_weather_function() {
+        // Test the incremental JSON parsing for the get_current_weather function
+        let json_buffers = [
+            r#"{"function": {"_name": "get_current_weather","#,
+            r#"{ "location": "San Francisco, CA", "format": "fahrenheit"}}"#,
+        ];
+
+        // Function name
+        let result = parse_partial_json::<ToolDecision>(&json_buffers[0]);
+        assert!(result.is_ok());
+        assert_eq!(result.unwrap().value.function.name, "get_current_weather");
+
+        // Function arguments
+        let result = parse_partial_json::<serde_json::Value>(&json_buffers[1]);
+        assert!(result.is_err());
+    }
+
+    #[test]
+    fn test_incremental_json_buffers() {
+        // Test individual incremental steps for get_current_weather
+        let steps = [
+            r#"{"function"#,
+            r#"{"function": {"_name""#,
+            r#"{"function": {"_name": "get_current_weather""#,
+            r#"{"function": {"_name": "get_current_weather","#,
+            r#"{ "location": "San"#,
+            r#"{ "location": "San Francisco, CA", "format": "f"#,
+            r#"{ "location": "San Francisco, CA", "format": "fahrenheit"}"#,
+        ];
+
+        // Early step should fail to parse
+        let result = parse_partial_json::<ToolDecision>(&steps[0]);
+        assert!(result.is_err());
+
+        // Middle step should parse name but be incomplete
+        let result = parse_partial_json::<ToolDecision>(&steps[2]);
+        assert!(result.is_ok());
+        let parsed = result.unwrap();
+        assert_eq!(parsed.value.function.name, "get_current_weather");
+        assert_eq!(parsed.last_value_whole, true);
+
+        // Last step should be complete and parse correctly
+        let result = parse_partial_json::<serde_json::Value>(&steps[6]);
+        assert!(result.is_ok());
+        let parsed = result.unwrap();
+        assert_eq!(
+            parsed.value.as_object().unwrap()["location"],
+            "San Francisco, CA"
+        );
+        assert_eq!(parsed.value.as_object().unwrap()["format"], "fahrenheit");
+        assert_eq!(parsed.last_value_whole, true);
+    }
+}
diff --git a/router/src/server.rs b/router/src/server.rs
index 99a87b7a..de0cf53d 100644
--- a/router/src/server.rs
+++ b/router/src/server.rs
@@ -13,6 +13,7 @@ use crate::sagemaker::{
 use crate::validation::ValidationError;
 use crate::vertex::vertex_compatibility;
 use crate::ChatTokenizeResponse;
+use crate::{parse_partial_json, ParseResult};
 use crate::{
     usage_stats, BestOfSequence, Details, ErrorResponse, FinishReason, FunctionName,
     GenerateParameters, GenerateRequest, GenerateResponse, GrammarType, HubModelInfo,
@@ -47,7 +48,6 @@ use http::header::AUTHORIZATION;
 use metrics_exporter_prometheus::{Matcher, PrometheusBuilder, PrometheusHandle};
 use pyo3::prelude::*;
 use pyo3::types::IntoPyDict;
-use serde_json::Map;
 use serde_json::Value;
 use std::convert::Infallible;
 use std::fs::File;
@@ -1114,75 +1114,6 @@ pub(crate) async fn completions(
     }
 }
 
-// balance the started json with closing braces and quotes
-fn complete_json(partial: &str) -> (String, bool) {
-    let mut brace_count = 0;
-    let mut quote_open = false;
-    let mut escaped = false;
-    let mut last_char = '\0';
-
-    for c in partial.chars() {
-        match (escaped, quote_open, c) {
-            (true, _, _) => escaped = false,
-            (false, _, '\\') => escaped = true,
-            (false, _, '"') => quote_open = !quote_open,
-            (false, false, '{') => brace_count += 1,
-            (false, false, '}') => brace_count -= 1,
-            _ => {}
-        }
-        if !c.is_whitespace() {
-            last_char = c;
-        }
-    }
-
-    let mut completed = partial.to_string();
-
-    if last_char == ',' {
-        if let Some(pos) = completed.rfind(',') {
-            completed.replace_range(pos..pos + 1, "");
-        }
-    }
-
-    if quote_open {
-        completed.push('"');
-    }
-    completed.push_str(&"}".repeat(brace_count.max(0)));
-
-    (completed, quote_open)
-}
-
-// Generic function that parses any partial structure into a Map
-fn parse_generic_structure(partial: &str) -> Result<(Map<String, Value>, bool), String> {
-    let (completed, quote_open) = complete_json(partial);
-    match serde_json::from_str::<Value>(&completed) {
-        Ok(Value::Object(obj)) => Ok((obj, quote_open)),
-        _ => Err("Failed to parse as object".to_string()),
-    }
-}
-
-// Parse partial JSON into a Map with a function object
-fn parse_partial_json(partial: &str) -> Result<Map<String, Value>, String> {
-    let (completed, was_quote_open) = complete_json(partial);
-    match serde_json::from_str::<Value>(&completed) {
-        Ok(Value::Object(obj)) => {
-            if let Some(Value::Object(function)) = obj.get("function") {
-                let name_is_only_key = function.len() == 1;
-                if was_quote_open && name_is_only_key {
-                    let mut function = function.clone();
-                    if let Some(Value::String(ref mut name)) = function.get_mut("_name") {
-                        name.clear();
-                    }
-                    return Err("Missing *name in function".to_string());
-                }
-                Ok(function.clone())
-            } else {
-                Err("Missing function object".to_string())
-            }
-        }
-        _ => Err("Failed to parse as object".to_string()),
-    }
-}
-
 /// Creates an event based on the token text and event type parameters.
 /// `token_text` - The text to include (extract from StreamResponse.token.text or str)
 /// `model_id` - Model identifier string
@@ -1361,6 +1292,22 @@ pub(crate) async fn chat_completions(
             .as_secs()
     };
 
+    #[derive(serde::Serialize, serde::Deserialize, Debug)]
+    pub struct Function {
+        #[serde(rename = "_name")]
+        name: String,
+    }
+
+    #[derive(serde::Serialize, serde::Deserialize, Debug)]
+    pub struct ToolDecision {
+        function: Function,
+    }
+
+    #[derive(serde::Serialize, serde::Deserialize, Debug)]
+    pub struct NoToolDecision {
+        content: String,
+    }
+
     if stream {
         let (headers, response_stream) =
             generate_stream_internal(infer, compute_type, Json(generate_request), span).await;
@@ -1389,13 +1336,23 @@ pub(crate) async fn chat_completions(
 
                 // Phase 1: Function name discovery
                 if !name_found {
-                    if let Ok(function) = parse_partial_json(&json_buffer) {
+                    // NOTE: when tools are supplied `name_found` is false until the generated buffer contains
+                    // a partial JSON object with $.function._name value. This name determines the type
+                    // of events to emit. If the name is "no_tool", we'll emit the "content" field as a chat
+                    // completion event. Otherwise, we'll emit a tool call name event followed by a tool call
+                    // argument event. In both cases we'll buffer tokens to get the name and then reset the buffer
+                    // to collect the arguments.
+                    if let Ok(ParseResult {
+                        value: ToolDecision {
+                            function: Function { name },
+                        },
+                        last_value_whole,
+                    }) = parse_partial_json(&json_buffer)
+                    {
+                        if !last_value_whole {
+                            continue;
+                        }
                         name_found = true;
-
-                        let name = function
-                            .get("_name")
-                            .and_then(|n| n.as_str())
-                            .unwrap_or_default();
                         if name == "no_tool" {
                             no_tool_chosen = true;
                         } else {
@@ -1403,7 +1360,7 @@ pub(crate) async fn chat_completions(
                                 &token_text,
                                 &model_id,
                                 &system_fingerprint,
-                                Some(name),
+                                Some(name.as_str()),
                                 false,
                                 None,
                             ));
@@ -1437,38 +1394,40 @@ pub(crate) async fn chat_completions(
                 if using_tools {
                     if no_tool_chosen && !is_complete_json {
                         // Content-only flow
-                        if let Ok((function, quote_open)) = parse_generic_structure(&json_buffer) {
-                            if let Some(_content) = function.get("content").and_then(|c| c.as_str()) {
-                                let cleaned_token = if !first_quote_removed {
-                                    // trim start unil the first quote
-                                    first_quote_removed = true;
-                                    edited_token
-                                        .trim_start()
-                                        .strip_prefix('"')
-                                        .unwrap_or(&edited_token)
-                                        .to_string()
-                                } else if !quote_open {
-                                    should_break = true;
-                                    // trim end until the last quote
-                                    edited_token
-                                        .trim_end()
-                                        .strip_suffix('"')
-                                        .unwrap_or(&edited_token)
-                                        .to_string()
-                                } else {
-                                    edited_token.to_string()
-                                };
+                        if let Ok(ParseResult {
+                            value: _,
+                            last_value_whole,
+                        }) = parse_partial_json::<NoToolDecision>(&json_buffer)
+                        {
+                            let cleaned_token = if !first_quote_removed {
+                                // trim start unil the first quote
+                                first_quote_removed = true;
+                                edited_token
+                                    .trim_start()
+                                    .strip_prefix('"')
+                                    .unwrap_or(&edited_token)
+                                    .to_string()
+                            } else if last_value_whole {
+                                should_break = true;
+                                // trim end until the last quote
+                                edited_token
+                                    .trim_end()
+                                    .strip_suffix('"')
+                                    .unwrap_or(&edited_token)
+                                    .to_string()
+                            } else {
+                                edited_token.to_string()
+                            };
 
-                                if !cleaned_token.is_empty() {
-                                    events.push(create_event(
-                                        &cleaned_token,
-                                        &model_id,
-                                        &system_fingerprint,
-                                        None,
-                                        false,
-                                        None,
-                                    ));
-                                }
+                            if !cleaned_token.is_empty() {
+                                events.push(create_event(
+                                    &cleaned_token,
+                                    &model_id,
+                                    &system_fingerprint,
+                                    None,
+                                    false,
+                                    None,
+                                ));
                             }
                         }
                     } else {