diff --git a/core/src/main/java/com/google/adk/agents/RunConfig.java b/core/src/main/java/com/google/adk/agents/RunConfig.java
index 747454bed..001dfe870 100644
--- a/core/src/main/java/com/google/adk/agents/RunConfig.java
+++ b/core/src/main/java/com/google/adk/agents/RunConfig.java
@@ -41,17 +41,26 @@ public enum StreamingMode {
   /**
    * Execution mode when the model requests multiple tools.
    *
-   * <p>NONE: defaults to SEQUENTIAL.
+   * <p>NONE: defaults to PARALLEL.
    *
-   * <p>SEQUENTIAL: tools execute in request order on the caller thread.
+   * <p>SEQUENTIAL: tools execute strictly in request order on the caller thread; each tool must
+   * complete (including any asynchronous work) before the next one is subscribed to.
    *
-   * <p>PARALLEL: tools execute concurrently on worker threads. Tool implementations must be
-   * thread-safe.
+   * <p>PARALLEL: tools are subscribed to eagerly on the caller thread (i.e. all are kicked off
+   * up-front), but no worker threads are introduced. Tools that are truly asynchronous (e.g. they
+   * return a {@code Single} backed by I/O or another scheduler) will run concurrently; tools that
+   * block the subscribing thread (e.g. {@code Single.fromCallable} that performs blocking work)
+   * will still execute sequentially. This preserves the historical default behavior.
+   *
+   * <p>PARALLEL_SUBSCRIBE: like {@code PARALLEL}, but every tool is additionally subscribed on a
+   * worker thread, so blocking tools also run concurrently. Tool implementations must be
+   * thread-safe. The worker is the agent's executor when set, otherwise the RxJava IO scheduler.
    */
   public enum ToolExecutionMode {
     NONE,
     SEQUENTIAL,
-    PARALLEL
+    PARALLEL,
+    PARALLEL_SUBSCRIBE
   }
 
   public abstract @Nullable SpeechConfig speechConfig();
diff --git a/core/src/main/java/com/google/adk/flows/llmflows/Functions.java b/core/src/main/java/com/google/adk/flows/llmflows/Functions.java
index 19dfbc5dc..4aa20798d 100644
--- a/core/src/main/java/com/google/adk/flows/llmflows/Functions.java
+++ b/core/src/main/java/com/google/adk/flows/llmflows/Functions.java
@@ -236,23 +236,40 @@ public static Maybe<Event> handleFunctionCallsLive(
   }
 
   /**
-   * Sequential by default; only {@link ToolExecutionMode#PARALLEL} with multiple calls dispatches
-   * tools on workers (using {@code concatMapEager} to preserve input order).
+   * Builds the tool-execution {@link Observable} for the configured {@link ToolExecutionMode}.
+   *
+   * <ul>
+   *   <li>{@link ToolExecutionMode#SEQUENTIAL} (or a single call, where parallelism is moot) uses
+   *       {@code concatMapMaybe}: each tool is subscribed only after the previous one completes.
+   *   <li>{@link ToolExecutionMode#PARALLEL} (the default) uses {@code concatMapEager}: all tools
+   *       are subscribed eagerly on the caller thread. Async tools therefore run concurrently, but
+   *       tools that block the subscribing thread still execute sequentially. This matches the
+   *       historical behavior of the default mode.
+   *   <li>{@link ToolExecutionMode#PARALLEL_SUBSCRIBE} uses {@code concatMapEager} and additionally
+   *       subscribes each tool on a worker scheduler, so blocking tools also run concurrently.
+   *       {@code concatMapEager} preserves input order required by {@link
+   *       #mergeParallelFunctionResponseEvents}.
+   * </ul>
    */
   private static Observable<Event> buildToolExecutionObservable(
       InvocationContext invocationContext,
       List<FunctionCall> validFunctionCalls,
       Function<FunctionCall, Maybe<Event>> functionCallMapper) {
-    boolean parallel =
-        invocationContext.runConfig().toolExecutionMode() == ToolExecutionMode.PARALLEL
-            && validFunctionCalls.size() > 1;
-    if (!parallel) {
+    ToolExecutionMode mode = invocationContext.runConfig().toolExecutionMode();
+    boolean sequential = mode == ToolExecutionMode.SEQUENTIAL || validFunctionCalls.size() <= 1;
+    if (sequential) {
       return Observable.fromIterable(validFunctionCalls).concatMapMaybe(functionCallMapper);
     }
-    Scheduler scheduler = resolveToolExecutionScheduler(invocationContext);
+    if (mode == ToolExecutionMode.PARALLEL_SUBSCRIBE) {
+      Scheduler scheduler = resolveToolExecutionScheduler(invocationContext);
+      return Observable.fromIterable(validFunctionCalls)
+          .concatMapEager(
+              call -> functionCallMapper.apply(call).toObservable().subscribeOn(scheduler));
+    }
+    // PARALLEL (and NONE, which defaults to PARALLEL): eager subscribe on the caller thread,
+    // without offloading to a worker. Async tools run concurrently; blocking tools still block.
     return Observable.fromIterable(validFunctionCalls)
-        .concatMapEager(
-            call -> functionCallMapper.apply(call).toObservable().subscribeOn(scheduler));
+        .concatMapEager(call -> functionCallMapper.apply(call).toObservable());
   }
 
   /** Agent executor if set, otherwise the IO scheduler. */
diff --git a/core/src/test/java/com/google/adk/flows/llmflows/FunctionsTest.java b/core/src/test/java/com/google/adk/flows/llmflows/FunctionsTest.java
index 3ce31deb4..b2ffc4443 100644
--- a/core/src/test/java/com/google/adk/flows/llmflows/FunctionsTest.java
+++ b/core/src/test/java/com/google/adk/flows/llmflows/FunctionsTest.java
@@ -398,9 +398,10 @@ public void getAskUserConfirmationFunctionCalls_eventWithConfirmationFunctionCal
     assertThat(result).containsExactly(confirmationCall1, confirmationCall2);
   }
 
-  // Default ToolExecutionMode.NONE must execute tools sequentially.
+  // Default ToolExecutionMode.NONE behaves like PARALLEL: blocking tools still execute serially
+  // on the caller thread (no worker scheduler is used), preserving the historical default.
   @Test
-  public void handleFunctionCalls_defaultMode_blockingTools_runSequentially() {
+  public void handleFunctionCalls_defaultMode_blockingTools_runSerially() {
     long sleepMillis = 300L;
     int toolCount = 2;
     InvocationContext invocationContext =
@@ -435,29 +436,69 @@ public void handleFunctionCalls_defaultMode_blockingTools_runSequentially() {
     assertThat(durationMillis).isAtLeast((long) toolCount * sleepMillis);
   }
 
+  // PARALLEL mode does NOT introduce worker threads; blocking tools still run serially on the
+  // caller thread. PARALLEL_SUBSCRIBE is the mode that runs blocking tools concurrently.
   @Test
-  public void handleFunctionCalls_parallel_blockingTools_runConcurrently_twoTools() {
-    runParallelBlockingToolsTest(/* toolCount= */ 2);
+  public void handleFunctionCalls_parallel_blockingTools_runSerially() {
+    long sleepMillis = 300L;
+    int toolCount = 2;
+    InvocationContext invocationContext =
+        createInvocationContext(
+            createRootAgent(),
+            RunConfig.builder().setToolExecutionMode(ToolExecutionMode.PARALLEL).build());
+
+    Map<String, BaseTool> tools = new LinkedHashMap<>();
+    List<Part> callParts = new ArrayList<>();
+    for (int i = 1; i <= toolCount; i++) {
+      String toolName = "slow_tool_" + i;
+      tools.put(toolName, new SleepingTool(toolName, sleepMillis));
+      callParts.add(
+          Part.builder()
+              .functionCall(
+                  FunctionCall.builder()
+                      .id("call_" + i)
+                      .name(toolName)
+                      .args(ImmutableMap.of())
+                      .build())
+              .build());
+    }
+    Event event =
+        createEvent("event").toBuilder()
+            .content(Content.fromParts(callParts.toArray(new Part[0])))
+            .build();
+
+    long start = System.currentTimeMillis();
+    Event functionResponseEvent =
+        Functions.handleFunctionCalls(invocationContext, event, tools).blockingGet();
+    long durationMillis = System.currentTimeMillis() - start;
+
+    assertThat(functionResponseEvent).isNotNull();
+    assertThat(durationMillis).isAtLeast((long) toolCount * sleepMillis);
   }
 
   @Test
-  public void handleFunctionCalls_parallel_blockingTools_runConcurrently_threeTools() {
-    runParallelBlockingToolsTest(/* toolCount= */ 3);
+  public void handleFunctionCalls_parallelSubscribe_blockingTools_runConcurrently_twoTools() {
+    runParallelSubscribeBlockingToolsTest(/* toolCount= */ 2);
   }
 
   @Test
-  public void handleFunctionCalls_parallel_blockingTools_runConcurrently_fiveTools() {
-    runParallelBlockingToolsTest(/* toolCount= */ 5);
+  public void handleFunctionCalls_parallelSubscribe_blockingTools_runConcurrently_threeTools() {
+    runParallelSubscribeBlockingToolsTest(/* toolCount= */ 3);
+  }
+
+  @Test
+  public void handleFunctionCalls_parallelSubscribe_blockingTools_runConcurrently_fiveTools() {
+    runParallelSubscribeBlockingToolsTest(/* toolCount= */ 5);
   }
 
   /** Single-tool case bypasses the parallel scheduler path; must still return the correct event. */
   @Test
-  public void handleFunctionCalls_parallel_blockingTool_singleTool() {
+  public void handleFunctionCalls_parallelSubscribe_blockingTool_singleTool() {
     long sleepMillis = 200L;
     InvocationContext invocationContext =
         createInvocationContext(
             createRootAgent(),
-            RunConfig.builder().setToolExecutionMode(ToolExecutionMode.PARALLEL).build());
+            RunConfig.builder().setToolExecutionMode(ToolExecutionMode.PARALLEL_SUBSCRIBE).build());
     SleepingTool tool = new SleepingTool("slow_tool_1", sleepMillis);
     Event event =
         createEvent("event").toBuilder()
@@ -491,13 +532,16 @@ public void handleFunctionCalls_parallel_blockingTool_singleTool() {
                 .build());
   }
 
-  /** Asserts that {@code toolCount} blocking tools in PARALLEL mode run faster than sequential. */
-  private static void runParallelBlockingToolsTest(int toolCount) {
+  /**
+   * Asserts that {@code toolCount} blocking tools in PARALLEL_SUBSCRIBE mode run faster than
+   * sequential, since each tool is subscribed on a worker thread.
+   */
+  private static void runParallelSubscribeBlockingToolsTest(int toolCount) {
     long sleepMillis = 500L;
     InvocationContext invocationContext =
         createInvocationContext(
             createRootAgent(),
-            RunConfig.builder().setToolExecutionMode(ToolExecutionMode.PARALLEL).build());
+            RunConfig.builder().setToolExecutionMode(ToolExecutionMode.PARALLEL_SUBSCRIBE).build());
 
     Map<String, BaseTool> tools = new LinkedHashMap<>();
     List<Part> callParts = new ArrayList<>();