diff --git a/packages/toolbox-core/src/toolbox_core/protocol.py b/packages/toolbox-core/src/toolbox_core/protocol.py
index e522d792..a47ff86c 100644
--- a/packages/toolbox-core/src/toolbox_core/protocol.py
+++ b/packages/toolbox-core/src/toolbox_core/protocol.py
@@ -81,6 +81,12 @@ class ParameterSchema(BaseModel):
     authSources: Optional[list[str]] = None
     items: Optional["ParameterSchema"] = None
     additionalProperties: Optional[Union[bool, AdditionalPropertiesSchema]] = None
+    default: Optional[Any] = None
+
+    @property
+    def has_default(self) -> bool:
+        """Returns True if `default` was explicitly provided in schema input."""
+        return "default" in self.model_fields_set
 
     def __get_type(self) -> Type:
         base_type: Type
@@ -103,11 +109,17 @@ def __get_type(self) -> Type:
         return base_type
 
     def to_param(self) -> Parameter:
+        default_value = Parameter.empty
+        if self.has_default:
+            default_value = self.default
+        elif not self.required:
+            default_value = None
+
         return Parameter(
             self.name,
             Parameter.POSITIONAL_OR_KEYWORD,
             annotation=self.__get_type(),
-            default=Parameter.empty if self.required else None,
+            default=default_value,
         )
 
 
diff --git a/packages/toolbox-core/src/toolbox_core/tool.py b/packages/toolbox-core/src/toolbox_core/tool.py
index 0c72c39b..128e57cd 100644
--- a/packages/toolbox-core/src/toolbox_core/tool.py
+++ b/packages/toolbox-core/src/toolbox_core/tool.py
@@ -13,9 +13,8 @@
 # limitations under the License.
 
 import copy
-import itertools
 from collections import OrderedDict
-from inspect import Signature
+from inspect import Parameter, Signature
 from types import MappingProxyType
 from typing import Any, Awaitable, Callable, Mapping, Optional, Sequence, Union
 from warnings import warn
@@ -86,13 +85,17 @@ def __init__(
         self.__params = params
         self.__pydantic_model = params_to_pydantic_model(name, self.__params)
 
-        # Separate parameters into required (no default) and optional (with
-        # default) to prevent the "non-default argument follows default
+        # Separate parameters into those without a default and those with a
+        # default to prevent the "non-default argument follows default
         # argument" error when creating the function signature.
-        required_params = (p for p in self.__params if p.required)
-        optional_params = (p for p in self.__params if not p.required)
-        ordered_params = itertools.chain(required_params, optional_params)
-        inspect_type_params = [param.to_param() for param in ordered_params]
+        inspect_type_params = [param.to_param() for param in self.__params]
+        params_no_default = [
+            p for p in inspect_type_params if p.default is Parameter.empty
+        ]
+        params_with_default = [
+            p for p in inspect_type_params if p.default is not Parameter.empty
+        ]
+        inspect_type_params = params_no_default + params_with_default
 
         # the following properties are set to help anyone that might inspect it determine usage
         self.__name__ = name
diff --git a/packages/toolbox-core/src/toolbox_core/utils.py b/packages/toolbox-core/src/toolbox_core/utils.py
index 08a87a45..d68f585a 100644
--- a/packages/toolbox-core/src/toolbox_core/utils.py
+++ b/packages/toolbox-core/src/toolbox_core/utils.py
@@ -111,10 +111,12 @@ def params_to_pydantic_model(
     field_definitions = {}
     for field in params:
 
-        # Determine the default value based on the 'required' flag.
+        # Determine the default value based on the 'required' flag and the 'default' field.
         # '...' (Ellipsis) signifies a required field in Pydantic.
-        # 'None' makes the field optional with a default value of None.
+        # If a default value is provided in the schema, it should be used.
         default_value = ... if field.required else None
+        if field.has_default:
+            default_value = field.default
 
         field_definitions[field.name] = cast(
             Any,
diff --git a/packages/toolbox-core/tests/test_protocol.py b/packages/toolbox-core/tests/test_protocol.py
index 8dd60e3f..fe6320cd 100644
--- a/packages/toolbox-core/tests/test_protocol.py
+++ b/packages/toolbox-core/tests/test_protocol.py
@@ -289,3 +289,55 @@ def test_parameter_schema_map_unsupported_value_type_error():
     expected_error_msg = f"Unsupported schema type: {unsupported_type}"
     with pytest.raises(ValueError, match=expected_error_msg):
         schema._ParameterSchema__get_type()
+
+
+def test_parameter_schema_with_default():
+    """Tests ParameterSchema with a default value provided."""
+    schema = ParameterSchema(
+        name="limit",
+        type="integer",
+        description="Limit results",
+        required=False,
+        default=10,
+    )
+    expected_type = Optional[int]
+
+    assert schema._ParameterSchema__get_type() == expected_type
+
+    param = schema.to_param()
+    assert isinstance(param, Parameter)
+    assert param.name == "limit"
+    assert param.annotation == expected_type
+    assert param.default == 10
+
+
+def test_parameter_schema_required_with_default():
+    """Tests ParameterSchema with default value, ignoring required=True implies it is optional in python signature."""
+    # Although illogical in some schemas, if default is present, it should be used as default.
+    schema = ParameterSchema(
+        name="retry_count",
+        type="integer",
+        description="Retries",
+        required=True,
+        default=3,
+    )
+
+    # get_type still respects required=True for type hint
+    assert schema._ParameterSchema__get_type() == int
+
+    param = schema.to_param()
+    assert param.default == 3
+
+
+def test_parameter_schema_required_with_explicit_none_default():
+    """Tests explicit default=None is treated as a provided default."""
+    schema = ParameterSchema(
+        name="opt_in",
+        type="boolean",
+        description="Optional flag",
+        required=True,
+        default=None,
+    )
+
+    param = schema.to_param()
+    assert param.default is None
diff --git a/packages/toolbox-core/tests/test_utils.py b/packages/toolbox-core/tests/test_utils.py
index b3ddd7c3..5c9dd29d 100644
--- a/packages/toolbox-core/tests/test_utils.py
+++ b/packages/toolbox-core/tests/test_utils.py
@@ -35,6 +35,8 @@ def create_param_mock(name: str, description: str, annotation: Type) -> Mock:
     param_mock.name = name
     param_mock.description = description
     param_mock.required = True
+    param_mock.default = None
+    param_mock.has_default = False
 
     mock_param_info = Mock()
     mock_param_info.annotation = annotation
@@ -422,6 +424,24 @@ def test_params_to_pydantic_model_with_params():
         Model(name="Bob", age="thirty", is_active=True)
 
 
+def test_params_to_pydantic_model_uses_explicit_default_none():
+    """Test that explicit default=None is honored for required schema fields."""
+    tool_name = "MyToolWithExplicitNoneDefault"
+    params = [
+        ParameterSchema(
+            name="message",
+            type="string",
+            description="Message value",
+            required=True,
+            default=None,
+        )
+    ]
+    Model = params_to_pydantic_model(tool_name, params)
+
+    assert "message" in Model.model_fields
+    assert Model.model_fields["message"].default is None
+
+
 @pytest.mark.asyncio
 async def test_resolve_value_plain_value():
     """Test resolving a plain, non-callable value."""