diff --git a/CHANGELOG.md b/CHANGELOG.md
index d82f3ae1..b773b546 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -1,3 +1,4 @@
+- Fixed MCP connection to localhost being routed through an active HTTP_PROXY/HTTPS_PROXY; NO_PROXY is now automatically extended with localhost and 127.0.0.1 when a proxy is configured
 - Fixed terminal scrollbar disappearing when Claude shows a choice/confirmation prompt (https://github.com/nbclaudecodegui/NetbeansClaudeCodeGui/issues/22)
 - Fixed Cancel button sending Ctrl+C instead of Esc, making it impossible to exit /usage and similar screens
 - Fixed Default profile settings not saving in Tools → Options → Profiles (https://github.com/nbclaudecodegui/NetbeansClaudeCodeGui/issues/31)
diff --git a/pom.xml b/pom.xml
index 49db55d5..b64609c2 100644
--- a/pom.xml
+++ b/pom.xml
@@ -6,7 +6,7 @@
 
     <groupId>io.github.nbclaudecodegui</groupId>
     <artifactId>netbeans-claude-code-gui</artifactId>
-    <version>0.20.8-SNAPSHOT</version>
+    <version>0.20.9-SNAPSHOT</version>
     <packaging>nbm</packaging>
     <name>Netbeans Claude Code GUI</name>
     <description>NetBeans plugin that provides a GUI for Claude Code CLI — run claude code sessions directly inside the IDE.</description>
diff --git a/src/main/java/io/github/nbclaudecodegui/process/ClaudeProcess.java b/src/main/java/io/github/nbclaudecodegui/process/ClaudeProcess.java
index 1977f2cc..f422fcca 100644
--- a/src/main/java/io/github/nbclaudecodegui/process/ClaudeProcess.java
+++ b/src/main/java/io/github/nbclaudecodegui/process/ClaudeProcess.java
@@ -136,7 +136,10 @@ public PtyProcess start(String workingDir, ClaudeProfile profile, String extraCl
                 + ", apiKeyHelper=" + (apiKeyHelper ? "SET" : "NOT SET")
                 + ", ANTHROPIC_AUTH_TOKEN=" + (!env.getOrDefault("ANTHROPIC_AUTH_TOKEN", "").isBlank() ? "SET" : "NOT SET")
                 + ", ANTHROPIC_BASE_URL=" + env.getOrDefault("ANTHROPIC_BASE_URL", "(not set)")
-                + ", CLAUDE_CONFIG_DIR=" + env.getOrDefault("CLAUDE_CONFIG_DIR", "(inherited)"));
+                + ", CLAUDE_CONFIG_DIR=" + env.getOrDefault("CLAUDE_CONFIG_DIR", "(inherited)")
+                + ", HTTP_PROXY="  + env.getOrDefault("HTTP_PROXY",  env.getOrDefault("http_proxy",  "(not set)"))
+                + ", HTTPS_PROXY=" + env.getOrDefault("HTTPS_PROXY", env.getOrDefault("https_proxy", "(not set)"))
+                + ", NO_PROXY="    + env.getOrDefault("NO_PROXY",    env.getOrDefault("no_proxy",    "(not set)")));
 
         List<String> cmd = new ArrayList<>();
         cmd.add(executable);
@@ -587,9 +590,36 @@ static Map<String, String> buildEnv(ClaudeProfile profile, java.nio.file.Path pr
             env.putAll(profile.toEnvVars());
         }
 
+        // Ensure localhost is excluded from proxy to protect MCP SSE server
+        ensureLocalhostInNoProxy(env);
+
         return env;
     }
 
+    private static void ensureLocalhostInNoProxy(Map<String, String> env) {
+        // Normalize lowercase no_proxy → NO_PROXY (Linux systems may use either)
+        if (!env.containsKey("NO_PROXY") && env.containsKey("no_proxy")) {
+            env.put("NO_PROXY", env.get("no_proxy"));
+        }
+
+        String httpProxy  = env.getOrDefault("HTTP_PROXY",  env.getOrDefault("http_proxy",  ""));
+        String httpsProxy = env.getOrDefault("HTTPS_PROXY", env.getOrDefault("https_proxy", ""));
+        if (httpProxy.isBlank() && httpsProxy.isBlank()) return; // no proxy active, nothing to do
+
+        String noProxy = env.getOrDefault("NO_PROXY", "");
+        List<String> required = List.of("localhost", "127.0.0.1");
+        List<String> missing = required.stream()
+                .filter(h -> !noProxy.contains(h))
+                .collect(java.util.stream.Collectors.toList());
+        if (missing.isEmpty()) return;
+
+        String updated = noProxy.isBlank()
+                ? String.join(",", missing)
+                : noProxy + "," + String.join(",", missing);
+        env.put("NO_PROXY", updated);
+        LOG.fine("Auto-added to NO_PROXY: " + missing + " → NO_PROXY=" + updated);
+    }
+
     /**
      * Builds a minimal {@code settings.local.json} from scratch for the given port.
      * Used as a fallback when the existing file cannot be parsed.
diff --git a/src/test/java/io/github/nbclaudecodegui/process/ClaudeProcessProfileTest.java b/src/test/java/io/github/nbclaudecodegui/process/ClaudeProcessProfileTest.java
index 1b506b61..72d36126 100644
--- a/src/test/java/io/github/nbclaudecodegui/process/ClaudeProcessProfileTest.java
+++ b/src/test/java/io/github/nbclaudecodegui/process/ClaudeProcessProfileTest.java
@@ -127,6 +127,49 @@ void buildEnv_systemManagedProxy_noProxyVarsAdded() {
         }
     }
 
+    // -------------------------------------------------------------------------
+    // NO_PROXY auto-injection
+    // -------------------------------------------------------------------------
+
+    @Test
+    void buildEnv_customProxy_noProxyBlank_injectsLocalhost() {
+        ClaudeProfile p = ClaudeProfile.createNamed("CustomProxyNoNP");
+        p.setProxyMode(ProxyMode.CUSTOM);
+        p.setHttpProxy("http://proxy:3128");
+        p.setHttpsProxy("");
+        p.setNoProxy("");
+        Map<String, String> env = ClaudeProcess.buildEnv(p, PROFILES_DIR);
+        String noProxy = env.getOrDefault("NO_PROXY", "");
+        assertTrue(noProxy.contains("localhost"), "NO_PROXY should contain localhost, was: " + noProxy);
+        assertTrue(noProxy.contains("127.0.0.1"), "NO_PROXY should contain 127.0.0.1, was: " + noProxy);
+    }
+
+    @Test
+    void buildEnv_customProxy_noProxyHasLocalhost_notDuplicated() {
+        ClaudeProfile p = ClaudeProfile.createNamed("CustomProxyHasNP");
+        p.setProxyMode(ProxyMode.CUSTOM);
+        p.setHttpProxy("http://proxy:3128");
+        p.setHttpsProxy("");
+        p.setNoProxy("localhost,127.0.0.1");
+        Map<String, String> env = ClaudeProcess.buildEnv(p, PROFILES_DIR);
+        String noProxy = env.getOrDefault("NO_PROXY", "");
+        // Should not contain duplicates
+        int localhostCount = noProxy.split("localhost", -1).length - 1;
+        assertEquals(1, localhostCount, "localhost should appear exactly once in NO_PROXY: " + noProxy);
+    }
+
+    @Test
+    void buildEnv_noProxyActive_noLocalhostInjected() {
+        ClaudeProfile p = ClaudeProfile.createNamed("CustomNoProxyActive");
+        p.setProxyMode(ProxyMode.NO_PROXY);
+        Map<String, String> env = ClaudeProcess.buildEnv(p, PROFILES_DIR);
+        // NO_PROXY should be empty (explicitly cleared by NO_PROXY mode)
+        // and since no proxy is set, ensureLocalhostInNoProxy should not add anything
+        String noProxy = env.getOrDefault("NO_PROXY", "");
+        assertFalse(noProxy.contains("localhost"),
+                "With no proxy active, localhost should not be injected: " + noProxy);
+    }
+
     // -------------------------------------------------------------------------
     // Extra env vars
     // -------------------------------------------------------------------------