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 0b0e5b4d5..a30b909f3 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
@@ -48,6 +48,7 @@
 import io.reactivex.rxjava3.core.Single;
 import io.reactivex.rxjava3.disposables.Disposable;
 import io.reactivex.rxjava3.functions.Function;
+import io.reactivex.rxjava3.schedulers.Schedulers;
 import java.util.ArrayList;
 import java.util.HashMap;
 import java.util.HashSet;
@@ -591,8 +592,9 @@ private static Maybe<Map<String, Object>> maybeInvokeAfterToolCall(
 
   private static Maybe<Map<String, Object>> callTool(
       BaseTool tool, Map<String, Object> args, ToolContext toolContext) {
-    return tool.runAsync(args, toolContext)
+    return Single.defer(() -> tool.runAsync(args, toolContext))
         .toMaybe()
+        .subscribeOn(Schedulers.io())
         .doOnError(t -> Span.current().recordException(t))
         .onErrorResumeNext(
             e ->
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 d5db4d4b3..3438b7fee 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
@@ -27,12 +27,18 @@
 import com.google.adk.agents.RunConfig.ToolExecutionMode;
 import com.google.adk.events.Event;
 import com.google.adk.testing.TestUtils;
+import com.google.adk.tools.BaseTool;
+import com.google.adk.tools.ToolContext;
 import com.google.common.collect.ImmutableList;
 import com.google.common.collect.ImmutableMap;
 import com.google.genai.types.Content;
 import com.google.genai.types.FunctionCall;
+import com.google.genai.types.FunctionDeclaration;
 import com.google.genai.types.FunctionResponse;
 import com.google.genai.types.Part;
+import io.reactivex.rxjava3.core.Single;
+import java.util.Map;
+import java.util.Optional;
 import org.junit.Test;
 import org.junit.runner.RunWith;
 import org.junit.runners.JUnit4;
@@ -389,4 +395,137 @@ public void getAskUserConfirmationFunctionCalls_eventWithConfirmationFunctionCal
     ImmutableList<FunctionCall> result = Functions.getAskUserConfirmationFunctionCalls(event);
     assertThat(result).containsExactly(confirmationCall1, confirmationCall2);
   }
+
+  /**
+   * A tool that blocks for a specified duration, simulating a slow I/O operation. Uses
+   * Single.fromCallable to ensure the sleep is deferred until subscription time.
+   */
+  private static class SlowTool extends BaseTool {
+    private final String toolName;
+    private final long sleepMillis;
+
+    SlowTool(String name, long sleepMillis) {
+      super(name, "A slow tool for testing parallel execution");
+      this.toolName = name;
+      this.sleepMillis = sleepMillis;
+    }
+
+    @Override
+    public Optional<FunctionDeclaration> declaration() {
+      return Optional.of(FunctionDeclaration.builder().name(toolName).build());
+    }
+
+    @Override
+    public Single<Map<String, Object>> runAsync(Map<String, Object> args, ToolContext toolContext) {
+      return Single.fromCallable(
+          () -> {
+            Thread.sleep(sleepMillis);
+            return ImmutableMap.<String, Object>of("tool", toolName, "status", "done");
+          });
+    }
+  }
+
+  @Test
+  public void handleFunctionCalls_parallelMode_shouldExecuteConcurrently() {
+    long sleepTime = 1000;
+    SlowTool slowTool1 = new SlowTool("slow_tool_1", sleepTime);
+    SlowTool slowTool2 = new SlowTool("slow_tool_2", sleepTime);
+
+    InvocationContext invocationContext =
+        createInvocationContext(
+            createRootAgent(),
+            RunConfig.builder().setToolExecutionMode(ToolExecutionMode.PARALLEL).build());
+
+    Event event =
+        createEvent("event").toBuilder()
+            .content(
+                Content.fromParts(
+                    Part.builder()
+                        .functionCall(
+                            FunctionCall.builder()
+                                .id("call_1")
+                                .name("slow_tool_1")
+                                .args(ImmutableMap.of())
+                                .build())
+                        .build(),
+                    Part.builder()
+                        .functionCall(
+                            FunctionCall.builder()
+                                .id("call_2")
+                                .name("slow_tool_2")
+                                .args(ImmutableMap.of())
+                                .build())
+                        .build()))
+            .build();
+
+    long startTime = System.currentTimeMillis();
+    Event result =
+        Functions.handleFunctionCalls(
+                invocationContext,
+                event,
+                ImmutableMap.of("slow_tool_1", slowTool1, "slow_tool_2", slowTool2))
+            .blockingGet();
+    long duration = System.currentTimeMillis() - startTime;
+
+    // If parallel, duration should be ~1000ms, not ~2000ms.
+    assertThat(duration).isAtLeast(sleepTime);
+    assertThat(duration).isLessThan((long) (1.5 * sleepTime));
+
+    // Verify results are returned in correct order (concatMapEager preserves order).
+    assertThat(result).isNotNull();
+    assertThat(result.content().get().parts().get()).hasSize(2);
+    assertThat(result.content().get().parts().get().get(0).functionResponse().get().name())
+        .hasValue("slow_tool_1");
+    assertThat(result.content().get().parts().get().get(1).functionResponse().get().name())
+        .hasValue("slow_tool_2");
+  }
+
+  @Test
+  public void handleFunctionCalls_sequentialMode_shouldExecuteSerially() {
+    long sleepTime = 1000;
+    SlowTool slowTool1 = new SlowTool("slow_tool_1", sleepTime);
+    SlowTool slowTool2 = new SlowTool("slow_tool_2", sleepTime);
+
+    InvocationContext invocationContext =
+        createInvocationContext(
+            createRootAgent(),
+            RunConfig.builder().setToolExecutionMode(ToolExecutionMode.SEQUENTIAL).build());
+
+    Event event =
+        createEvent("event").toBuilder()
+            .content(
+                Content.fromParts(
+                    Part.builder()
+                        .functionCall(
+                            FunctionCall.builder()
+                                .id("call_1")
+                                .name("slow_tool_1")
+                                .args(ImmutableMap.of())
+                                .build())
+                        .build(),
+                    Part.builder()
+                        .functionCall(
+                            FunctionCall.builder()
+                                .id("call_2")
+                                .name("slow_tool_2")
+                                .args(ImmutableMap.of())
+                                .build())
+                        .build()))
+            .build();
+
+    long startTime = System.currentTimeMillis();
+    Event result =
+        Functions.handleFunctionCalls(
+                invocationContext,
+                event,
+                ImmutableMap.of("slow_tool_1", slowTool1, "slow_tool_2", slowTool2))
+            .blockingGet();
+    long duration = System.currentTimeMillis() - startTime;
+
+    // Sequential: duration should be >= 2 * sleepTime.
+    assertThat(duration).isAtLeast(2 * sleepTime);
+
+    assertThat(result).isNotNull();
+    assertThat(result.content().get().parts().get()).hasSize(2);
+  }
 }