diff --git a/src/server.ts b/src/server.ts
index fa4ac8df..f5025aaf 100644
--- a/src/server.ts
+++ b/src/server.ts
@@ -359,10 +359,6 @@ const runServer = async (options: ServerOptions = getOptions(), {
       log.info(`${options.name} closed!\n`);
       unsubscribeServerLogger?.();
       unsubscribeServerStats?.();
-
-      if (allowProcessExit) {
-        process.exit(0);
-      }
     }
   };
 
@@ -448,9 +444,14 @@ const runServer = async (options: ServerOptions = getOptions(), {
     await registerServerTools(updatedTools, server, options, session);
 
     if (enableSigint && !sigintHandler) {
-      sigintHandler = () => {
-        void stopServer();
+      sigintHandler = async () => {
+        await stopServer();
+
+        if (allowProcessExit) {
+          process.exit(0);
+        }
       };
+
       process.on('SIGINT', sigintHandler);
     }
 
diff --git a/tests/e2e/embedded.test.ts b/tests/e2e/embedded.test.ts
new file mode 100644
index 00000000..88909b33
--- /dev/null
+++ b/tests/e2e/embedded.test.ts
@@ -0,0 +1,84 @@
+/**
+ * Requires: npm run build prior to running Jest.
+ * E2E tests validating the behavior of the MCP server when embedded/wrapped in a host application.
+ */
+import { spawn } from 'node:child_process';
+import { resolve } from 'node:path';
+
+describe('Embedded Server', () => {
+  const distIndexPath = resolve(process.cwd(), 'dist/index.js');
+
+  it('should allow the host application to continue execution after server.stop() under default programmatic mode', async () => {
+    // Simulate an external app with an embedded MCP and attempt a post-stop operation
+    const hostAppScript = `
+      import { start } from '${distIndexPath}';
+      async function runHostApp() {
+        const server = await start(
+          { mode: 'programmatic', isHttp: true, http: { port: 8091 } }
+        );
+        console.log('HOST_APP:SERVER_RUNNING');
+        await server.stop();
+        console.log('HOST_APP:POST_STOP_COMPLETED');
+      }
+      runHostApp().catch((err) => {
+        console.error('HOST_APP:ERROR', err);
+        process.exit(1);
+      });
+    `;
+    const child = spawn('node', ['--input-type=module', '-e', hostAppScript]);
+    const stdout: any = [];
+    const stderr: any = [];
+
+    child.stdout.on('data', data => {
+      stdout.push(data.toString());
+    });
+    child.stderr.on('data', data => {
+      stderr.push(data.toString());
+    });
+    const exitCode = await new Promise<number | null>(res => {
+      child.on('close', res);
+    });
+
+    expect(exitCode).toBe(0);
+    expect(stdout.join('').includes('HOST_APP:SERVER_RUNNING')).toBe(true);
+    expect(stdout.join('').includes('HOST_APP:POST_STOP_COMPLETED')).toBe(true);
+  });
+
+  it('should allow the host application to continue execution after server.stop() when allowProcessExit is false', async () => {
+    // Simulates an external application explicitly configuring allowProcessExit: false
+    const hostAppScript = `
+      import { start } from '${distIndexPath}';
+      async function runHostApp() {
+        const server = await start(
+          { mode: 'programmatic', isHttp: true, http: { port: 8092 } },
+          { allowProcessExit: false }
+        );
+        console.log('HOST_APP:SERVER_RUNNING');
+        await server.stop();
+        console.log('HOST_APP:POST_STOP_COMPLETED');
+      }
+      runHostApp().catch((err) => {
+        console.error('HOST_APP:ERROR', err);
+        process.exit(1);
+      });
+    `;
+
+    const child = spawn('node', ['--input-type=module', '-e', hostAppScript]);
+    const stdout: any = [];
+    const stderr: any = [];
+
+    child.stdout.on('data', data => {
+      stdout.push(data.toString());
+    });
+    child.stderr.on('data', data => {
+      stderr.push(data.toString());
+    });
+    const exitCode = await new Promise<number | null>(res => {
+      child.on('close', res);
+    });
+
+    expect(exitCode).toBe(0);
+    expect(stdout.join('').includes('HOST_APP:SERVER_RUNNING')).toBe(true);
+    expect(stdout.join('').includes('HOST_APP:POST_STOP_COMPLETED')).toBe(true);
+  });
+});