diff --git a/adr_kit/cli.py b/adr_kit/cli.py
index f40d9bd..097d9d7 100644
--- a/adr_kit/cli.py
+++ b/adr_kit/cli.py
@@ -831,29 +831,34 @@ def _setup_claude_impl() -> None:
 
     # Create Claude Code config
     claude_config = {
-        "servers": {
+        "mcpServers": {
             "adr-kit": {
                 "command": adr_kit_command,
                 "args": ["mcp-server"],
-                "description": "AI-first Architectural Decision Records management",
-                "tools": [
-                    "adr_init",
-                    "adr_query_related",
-                    "adr_create",
-                    "adr_approve",
-                    "adr_supersede",
-                    "adr_validate",
-                    "adr_index",
-                    "adr_export_lint_config",
-                    "adr_render_site",
-                ],
             }
         }
     }
 
-    claude_config_file = Path(".claude-mcp-config.json")
+    claude_config_file = Path(".mcp.json")
+
+    # Load existing config if present to avoid clobbering other entries
+    existing_config = {}
+    if claude_config_file.exists():
+        try:
+            with open(claude_config_file) as f:
+                existing_config = json.load(f)
+        except json.JSONDecodeError:
+            # Treat invalid JSON as empty config
+            pass
+
+    # Merge configs: preserve existing keys, update mcpServers
+    if "mcpServers" in existing_config:
+        existing_config["mcpServers"].update(claude_config["mcpServers"])
+    else:
+        existing_config.update(claude_config)
+
     with open(claude_config_file, "w") as f:
-        json.dump(claude_config, f, indent=2)
+        json.dump(existing_config, f, indent=2)
 
     console.print(f"✅ Created {claude_config_file}")
 
diff --git a/adr_kit/core/validate.py b/adr_kit/core/validate.py
index a8a5747..7f42487 100644
--- a/adr_kit/core/validate.py
+++ b/adr_kit/core/validate.py
@@ -86,13 +86,13 @@ def __init__(
 
     def _get_default_schema_path(self) -> Path:
         """Get path to the bundled ADR schema."""
-        # Assume schema is in the schemas/ directory relative to project root
-        # __file__ = .../adr-kit/adr_kit/core/validate.py
-        # current_dir = .../adr-kit/adr_kit/core
-        # project_root = .../adr-kit
+        # Schema lives inside the package at adr_kit/schemas/adr.schema.json
+        # This resolves correctly after pip install (site-packages/adr_kit/schemas/)
+        # __file__ = .../adr_kit/core/validate.py
+        # current_dir = .../adr_kit/core
+        # package_root = .../adr_kit
         current_dir = Path(__file__).parent
-        project_root = current_dir.parent.parent
-        return project_root / "schemas" / "adr.schema.json"
+        return current_dir.parent / "schemas" / "adr.schema.json"
 
     def _load_schema(self) -> dict[str, Any]:
         """Load and parse the JSON schema."""
diff --git a/schemas/adr.schema.json b/adr_kit/schemas/adr.schema.json
similarity index 100%
rename from schemas/adr.schema.json
rename to adr_kit/schemas/adr.schema.json
diff --git a/pyproject.toml b/pyproject.toml
index ac247b2..02ad8af 100644
--- a/pyproject.toml
+++ b/pyproject.toml
@@ -64,6 +64,9 @@ where = ["."]
 include = ["adr_kit*"]
 exclude = ["tests*", "scripts*", ".agent*"]
 
+[tool.setuptools.package-data]
+adr_kit = ["schemas/*"]
+
 [tool.black]
 line-length = 88
 target-version = ['py310']
diff --git a/tests/integration/test_setup_commands.py b/tests/integration/test_setup_commands.py
new file mode 100644
index 0000000..74fa306
--- /dev/null
+++ b/tests/integration/test_setup_commands.py
@@ -0,0 +1,47 @@
+"""Integration tests for setup-claude config output and schema packaging fix."""
+
+import json
+from pathlib import Path
+
+from typer.testing import CliRunner
+
+from adr_kit.cli import app
+
+runner = CliRunner()
+
+
+def test_setup_claude_creates_mcp_json(tmp_path):
+    with runner.isolated_filesystem(temp_dir=tmp_path):
+        result = runner.invoke(app, ["setup-claude"])
+        assert Path(".mcp.json").exists(), ".mcp.json must be created by setup-claude"
+        assert not Path(
+            ".claude-mcp-config.json"
+        ).exists(), ".claude-mcp-config.json must not be created (wrong filename)"
+
+
+def test_setup_claude_uses_mcp_servers_key(tmp_path):
+    with runner.isolated_filesystem(temp_dir=tmp_path):
+        runner.invoke(app, ["setup-claude"])
+        config = json.loads(Path(".mcp.json").read_text())
+        assert "mcpServers" in config, "top-level key must be 'mcpServers'"
+        assert "servers" not in config, "'servers' key must not be present"
+
+
+def test_setup_claude_no_stale_tools_array(tmp_path):
+    with runner.isolated_filesystem(temp_dir=tmp_path):
+        runner.invoke(app, ["setup-claude"])
+        config = json.loads(Path(".mcp.json").read_text())
+        server = config["mcpServers"]["adr-kit"]
+        assert "tools" not in server, "stale tools array must be removed from config"
+        assert "description" not in server, "description field must be removed"
+
+
+def test_schema_file_bundled_in_package():
+    from adr_kit.core.validate import ADRValidator
+
+    validator = ADRValidator.__new__(ADRValidator)
+    schema_path = validator._get_default_schema_path()
+    assert schema_path.exists(), (
+        f"Schema must exist at {schema_path} — "
+        "schemas/adr.schema.json must be bundled inside adr_kit/schemas/"
+    )
diff --git a/tests/unit/test_adr_schema.py b/tests/unit/test_adr_schema.py
index 4ab7bc3..aa24cf6 100644
--- a/tests/unit/test_adr_schema.py
+++ b/tests/unit/test_adr_schema.py
@@ -6,7 +6,7 @@
 import jsonschema
 import pytest
 
-SCHEMA_PATH = Path(__file__).parents[2] / "schemas" / "adr.schema.json"
+SCHEMA_PATH = Path(__file__).parents[2] / "adr_kit" / "schemas" / "adr.schema.json"
 SCHEMA = json.loads(SCHEMA_PATH.read_text())