diff --git a/python/packages/autogen-core/pyproject.toml b/python/packages/autogen-core/pyproject.toml
index d4c2a3ec7..da9d71176 100644
--- a/python/packages/autogen-core/pyproject.toml
+++ b/python/packages/autogen-core/pyproject.toml
@@ -18,7 +18,7 @@ dependencies = [
     "pillow",
     "aiohttp",
     "typing-extensions",
-    "pydantic>=1.10,<3",
+    "pydantic<3.0.0,>=2.0.0",
     "grpcio~=1.62.0",
     "protobuf~=4.25.1",
     "tiktoken",
diff --git a/python/packages/autogen-core/src/autogen_core/base/_serialization.py b/python/packages/autogen-core/src/autogen_core/base/_serialization.py
index 44392d61e..41e7fdebe 100644
--- a/python/packages/autogen-core/src/autogen_core/base/_serialization.py
+++ b/python/packages/autogen-core/src/autogen_core/base/_serialization.py
@@ -1,9 +1,11 @@
 import json
-from dataclasses import asdict, dataclass
-from typing import Any, ClassVar, Dict, List, Protocol, TypeVar, cast, runtime_checkable
+from dataclasses import asdict, dataclass, fields
+from typing import Any, ClassVar, Dict, List, Protocol, TypeVar, cast, get_args, get_origin, runtime_checkable
 
 from pydantic import BaseModel
 
+from autogen_core.base._type_helpers import is_union
+
 T = TypeVar("T")
 
 
@@ -27,7 +29,7 @@ class IsDataclass(Protocol):
 
 
 def is_dataclass(cls: type[Any]) -> bool:
-    return isinstance(cls, IsDataclass)
+    return hasattr(cls, "__dataclass_fields__")
 
 
 def has_nested_dataclass(cls: type[IsDataclass]) -> bool:
@@ -35,9 +37,54 @@ def has_nested_dataclass(cls: type[IsDataclass]) -> bool:
     return any(is_dataclass(f.type) for f in cls.__dataclass_fields__.values())
 
 
+def contains_a_union(cls: type[IsDataclass]) -> bool:
+    return any(is_union(f.type) for f in cls.__dataclass_fields__.values())
+
+
 def has_nested_base_model(cls: type[IsDataclass]) -> bool:
-    # iterate fields and check if any of them are basebodels
-    return any(issubclass(f.type, BaseModel) for f in cls.__dataclass_fields__.values())
+    for f in fields(cls):
+        field_type = f.type
+        # Resolve forward references and other annotations
+        origin = get_origin(field_type)
+        args = get_args(field_type)
+
+        # If the field type is directly a subclass of BaseModel
+        if isinstance(field_type, type) and issubclass(field_type, BaseModel):
+            return True
+
+        # If the field type is a generic type like List[BaseModel], Tuple[BaseModel, ...], etc.
+        if origin is not None and args:
+            for arg in args:
+                # Recursively check the argument types
+                if isinstance(arg, type) and issubclass(arg, BaseModel):
+                    return True
+                elif get_origin(arg) is not None:
+                    # Handle nested generics like List[List[BaseModel]]
+                    if has_nested_base_model_in_type(arg):
+                        return True
+        # Handle Union types
+        elif args:
+            for arg in args:
+                if isinstance(arg, type) and issubclass(arg, BaseModel):
+                    return True
+                elif get_origin(arg) is not None:
+                    if has_nested_base_model_in_type(arg):
+                        return True
+    return False
+
+
+def has_nested_base_model_in_type(tp: Any) -> bool:
+    """Helper function to check if a type or its arguments is a BaseModel subclass."""
+    origin = get_origin(tp)
+    args = get_args(tp)
+
+    if isinstance(tp, type) and issubclass(tp, BaseModel):
+        return True
+    if origin is not None and args:
+        for arg in args:
+            if has_nested_base_model_in_type(arg):
+                return True
+    return False
 
 
 DataclassT = TypeVar("DataclassT", bound=IsDataclass)
@@ -45,8 +92,16 @@ DataclassT = TypeVar("DataclassT", bound=IsDataclass)
 JSON_DATA_CONTENT_TYPE = "application/json"
 
 
-class DataclassJsonMessageSerializer(MessageSerializer[IsDataclass]):
-    def __init__(self, cls: type[IsDataclass]) -> None:
+class DataclassJsonMessageSerializer(MessageSerializer[DataclassT]):
+    def __init__(self, cls: type[DataclassT]) -> None:
+        if contains_a_union(cls):
+            raise ValueError("Dataclass has a union type, which is not supported. To use a union, use a Pydantic model")
+
+        if has_nested_dataclass(cls) or has_nested_base_model(cls):
+            raise ValueError(
+                "Dataclass has nested dataclasses or base models, which are not supported. To use nested types, use a Pydantic model"
+            )
+
         self.cls = cls
 
     @property
@@ -57,14 +112,11 @@ class DataclassJsonMessageSerializer(MessageSerializer[IsDataclass]):
     def type_name(self) -> str:
         return _type_name(self.cls)
 
-    def deserialize(self, payload: bytes) -> IsDataclass:
+    def deserialize(self, payload: bytes) -> DataclassT:
         message_str = payload.decode("utf-8")
         return self.cls(**json.loads(message_str))
 
-    def serialize(self, message: IsDataclass) -> bytes:
-        if has_nested_dataclass(type(message)) or has_nested_base_model(type(message)):
-            raise ValueError("Dataclass has nested dataclasses or base models, which are not supported")
-
+    def serialize(self, message: DataclassT) -> bytes:
         return json.dumps(asdict(message)).encode("utf-8")
 
 
diff --git a/python/packages/autogen-core/src/autogen_core/components/_type_helpers.py b/python/packages/autogen-core/src/autogen_core/base/_type_helpers.py
similarity index 100%
rename from python/packages/autogen-core/src/autogen_core/components/_type_helpers.py
rename to python/packages/autogen-core/src/autogen_core/base/_type_helpers.py
diff --git a/python/packages/autogen-core/src/autogen_core/components/_closure_agent.py b/python/packages/autogen-core/src/autogen_core/components/_closure_agent.py
index 68f14632c..f020919d4 100644
--- a/python/packages/autogen-core/src/autogen_core/components/_closure_agent.py
+++ b/python/packages/autogen-core/src/autogen_core/components/_closure_agent.py
@@ -9,8 +9,8 @@ from ..base._agent_instantiation import AgentInstantiationContext
 from ..base._agent_metadata import AgentMetadata
 from ..base._agent_runtime import AgentRuntime
 from ..base._serialization import JSON_DATA_CONTENT_TYPE, MESSAGE_TYPE_REGISTRY, try_get_known_serializers_for_type
+from ..base._type_helpers import get_types
 from ..base.exceptions import CantHandleException
-from ._type_helpers import get_types
 
 T = TypeVar("T")
 
diff --git a/python/packages/autogen-core/src/autogen_core/components/_image.py b/python/packages/autogen-core/src/autogen_core/components/_image.py
index bf01e5442..5d5e6146e 100644
--- a/python/packages/autogen-core/src/autogen_core/components/_image.py
+++ b/python/packages/autogen-core/src/autogen_core/components/_image.py
@@ -4,10 +4,13 @@ import base64
 import re
 from io import BytesIO
 from pathlib import Path
+from typing import Any
 
 import aiohttp
 from openai.types.chat import ChatCompletionContentPartImageParam
 from PIL import Image as PILImage
+from pydantic import BaseModel, GetCoreSchemaHandler, ValidationInfo
+from pydantic_core import core_schema
 from typing_extensions import Literal
 
 
@@ -39,6 +42,12 @@ class Image:
     def from_base64(cls, base64_str: str) -> Image:
         return cls(PILImage.open(BytesIO(base64.b64decode(base64_str))))
 
+    def to_base64(self) -> str:
+        buffered = BytesIO()
+        self.image.save(buffered, format="PNG")
+        content = buffered.getvalue()
+        return base64.b64encode(content).decode("utf-8")
+
     @classmethod
     def from_file(cls, file_path: Path) -> Image:
         return cls(PILImage.open(file_path))
@@ -49,14 +58,35 @@ class Image:
 
     @property
     def data_uri(self) -> str:
-        buffered = BytesIO()
-        self.image.save(buffered, format="PNG")
-        content = buffered.getvalue()
-        return _convert_base64_to_data_uri(base64.b64encode(content).decode("utf-8"))
+        return _convert_base64_to_data_uri(self.to_base64())
 
     def to_openai_format(self, detail: Literal["auto", "low", "high"] = "auto") -> ChatCompletionContentPartImageParam:
         return {"type": "image_url", "image_url": {"url": self.data_uri, "detail": detail}}
 
+    @classmethod
+    def __get_pydantic_core_schema__(cls, source_type: Any, handler: GetCoreSchemaHandler) -> core_schema.CoreSchema:
+        # Custom validation
+        def validate(value: Any, validation_info: ValidationInfo) -> Image:
+            if isinstance(value, dict):
+                base_64 = value.get("data")
+                if base_64 is None:
+                    raise ValueError("Expected 'data' key in the dictionary")
+                return cls.from_base64(base_64)
+            elif isinstance(value, cls):
+                return value
+            else:
+                raise TypeError(f"Expected dict or {cls.__name__} instance, got {type(value)}")
+
+        # Custom serialization
+        def serialize(value: Image) -> dict[str, Any]:
+            return {"data": value.to_base64()}
+
+        return core_schema.with_info_after_validator_function(
+            validate,
+            core_schema.any_schema(),  # Accept any type; adjust if needed
+            serialization=core_schema.plain_serializer_function_ser_schema(serialize),
+        )
+
 
 def _convert_base64_to_data_uri(base64_image: str) -> str:
     def _get_mime_type_from_data_uri(base64_image: str) -> str:
diff --git a/python/packages/autogen-core/src/autogen_core/components/_routed_agent.py b/python/packages/autogen-core/src/autogen_core/components/_routed_agent.py
index e5f47a7f3..5d3e8149c 100644
--- a/python/packages/autogen-core/src/autogen_core/components/_routed_agent.py
+++ b/python/packages/autogen-core/src/autogen_core/components/_routed_agent.py
@@ -21,8 +21,8 @@ from typing import (
 from autogen_core.base import try_get_known_serializers_for_type
 
 from ..base import MESSAGE_TYPE_REGISTRY, BaseAgent, MessageContext
+from ..base._type_helpers import AnyType, get_types
 from ..base.exceptions import CantHandleException
-from ._type_helpers import AnyType, get_types
 
 logger = logging.getLogger("autogen_core")
 
diff --git a/python/packages/autogen-core/tests/test_serialization.py b/python/packages/autogen-core/tests/test_serialization.py
index 7ca3fa722..9029c905c 100644
--- a/python/packages/autogen-core/tests/test_serialization.py
+++ b/python/packages/autogen-core/tests/test_serialization.py
@@ -1,4 +1,5 @@
 from dataclasses import dataclass
+from typing import Union
 
 import pytest
 from autogen_core.base import (
@@ -7,6 +8,9 @@ from autogen_core.base import (
     Serialization,
     try_get_known_serializers_for_type,
 )
+from autogen_core.base._serialization import DataclassJsonMessageSerializer, PydanticJsonMessageSerializer
+from autogen_core.components import Image
+from PIL import Image as PILImage
 from pydantic import BaseModel
 
 
@@ -75,22 +79,33 @@ def test_dataclass() -> None:
 
 def test_nesting_dataclass_dataclass() -> None:
     serde = Serialization()
-    serde.add_serializer(try_get_known_serializers_for_type(NestingDataclassMessage))
-
-    message = NestingDataclassMessage(message="hello", nested=DataclassMessage(message="world"))
-    name = serde.type_name(message)
     with pytest.raises(ValueError):
-        _json = serde.serialize(message, type_name=name, data_content_type=JSON_DATA_CONTENT_TYPE)
+        serde.add_serializer(try_get_known_serializers_for_type(NestingDataclassMessage))
+
+
+@dataclass
+class DataclassNestedUnionSyntaxOldMessage:
+    message: Union[str, int]
+
+
+@dataclass
+class DataclassNestedUnionSyntaxNewMessage:
+    message: str | int
+
+
+@pytest.mark.parametrize("cls", [DataclassNestedUnionSyntaxOldMessage, DataclassNestedUnionSyntaxNewMessage])
+def test_nesting_union_old_syntax_dataclass(
+    cls: type[DataclassNestedUnionSyntaxOldMessage | DataclassNestedUnionSyntaxNewMessage],
+) -> None:
+    with pytest.raises(ValueError):
+        _serializer = DataclassJsonMessageSerializer(cls)
 
 
 def test_nesting_dataclass_pydantic() -> None:
     serde = Serialization()
-    serde.add_serializer(try_get_known_serializers_for_type(NestingPydanticDataclassMessage))
 
-    message = NestingPydanticDataclassMessage(message="hello", nested=PydanticMessage(message="world"))
-    name = serde.type_name(message)
     with pytest.raises(ValueError):
-        _json = serde.serialize(message, type_name=name, data_content_type=JSON_DATA_CONTENT_TYPE)
+        serde.add_serializer(try_get_known_serializers_for_type(NestingPydanticDataclassMessage))
 
 
 def test_invalid_type() -> None:
@@ -126,3 +141,22 @@ def test_custom_type() -> None:
     assert json == b'"hello"'
     deserialized = serde.deserialize(json, type_name="custom_str", data_content_type="str")
     assert deserialized == message
+
+
+def test_image_type() -> None:
+    pil_image = PILImage.new("RGB", (100, 100))
+
+    image = Image(pil_image)
+
+    class PydanticImageMessage(BaseModel):
+        image: Image
+
+    serializer = PydanticJsonMessageSerializer(PydanticImageMessage)
+
+    json = serializer.serialize(PydanticImageMessage(image=image))
+
+    deserialized = serializer.deserialize(json)
+
+    assert deserialized.image.image.size == (100, 100)
+    assert deserialized.image.image.mode == "RGB"
+    assert deserialized.image.image == image.image
diff --git a/python/packages/autogen-core/tests/test_types.py b/python/packages/autogen-core/tests/test_types.py
index 9037e3d3f..1dbc02c4f 100644
--- a/python/packages/autogen-core/tests/test_types.py
+++ b/python/packages/autogen-core/tests/test_types.py
@@ -1,9 +1,12 @@
+from dataclasses import dataclass
 from types import NoneType
-from typing import Any, Optional, Union
+from typing import Any, List, Optional, Union
 
 from autogen_core.base import MessageContext
+from autogen_core.base._serialization import has_nested_base_model
+from autogen_core.base._type_helpers import AnyType, get_types
 from autogen_core.components._routed_agent import message_handler
-from autogen_core.components._type_helpers import AnyType, get_types
+from pydantic import BaseModel
 
 
 def test_get_types() -> None:
@@ -38,3 +41,44 @@ class HandlerClass:
     @message_handler()
     async def handler(self, message: int, ctx: MessageContext) -> Any:
         return None
+
+
+def test_nested_data_model() -> None:
+    class MyBaseModel(BaseModel):
+        message: str
+
+    @dataclass
+    class NestedBaseModel:
+        nested: MyBaseModel
+
+    @dataclass
+    class NestedBaseModelList:
+        nested: List[MyBaseModel]
+
+    @dataclass
+    class NestedBaseModelList2:
+        nested: list[MyBaseModel]
+
+    @dataclass
+    class NestedBaseModelList3:
+        nested: list[list[MyBaseModel]]
+
+    @dataclass
+    class NestedBaseModelList4:
+        nested: list[list[list[list[list[list[MyBaseModel]]]]]]
+
+    @dataclass
+    class NestedBaseModelUnion:
+        nested: Union[MyBaseModel, str]
+
+    @dataclass
+    class NestedBaseModelUnion2:
+        nested: MyBaseModel | str
+
+    assert has_nested_base_model(NestedBaseModel)
+    assert has_nested_base_model(NestedBaseModelList)
+    assert has_nested_base_model(NestedBaseModelList2)
+    assert has_nested_base_model(NestedBaseModelList3)
+    assert has_nested_base_model(NestedBaseModelList4)
+    assert has_nested_base_model(NestedBaseModelUnion)
+    assert has_nested_base_model(NestedBaseModelUnion2)
diff --git a/python/packages/team-one/examples/example_reflexagents.py b/python/packages/team-one/examples/example_reflexagents.py
index 3346a0926..90a3db258 100644
--- a/python/packages/team-one/examples/example_reflexagents.py
+++ b/python/packages/team-one/examples/example_reflexagents.py
@@ -30,7 +30,7 @@ async def main() -> None:
 
     task_message = UserMessage(content="Test Message", source="User")
     runtime.start()
-    await runtime.publish_message(BroadcastMessage(task_message), topic_id=DefaultTopicId())
+    await runtime.publish_message(BroadcastMessage(content=task_message), topic_id=DefaultTopicId())
 
     await runtime.stop_when_idle()
 
diff --git a/python/packages/team-one/pyproject.toml b/python/packages/team-one/pyproject.toml
index d84884467..848f7bc22 100644
--- a/python/packages/team-one/pyproject.toml
+++ b/python/packages/team-one/pyproject.toml
@@ -33,6 +33,7 @@ dependencies = [
     "SpeechRecognition",
     "pathvalidate",
     "playwright",
+    "pydantic<3.0.0,>=2.0.0",
 ]
 
 [project.optional-dependencies]
diff --git a/python/packages/team-one/src/team_one/agents/reflex_agents.py b/python/packages/team-one/src/team_one/agents/reflex_agents.py
index a5eee1c1e..52439541e 100644
--- a/python/packages/team-one/src/team_one/agents/reflex_agents.py
+++ b/python/packages/team-one/src/team_one/agents/reflex_agents.py
@@ -24,4 +24,4 @@ class ReflexAgent(RoutedAgent):
         )
         topic_id = TopicId("default", self.id.key)
 
-        await self.publish_message(BroadcastMessage(response_message), topic_id=topic_id)
+        await self.publish_message(BroadcastMessage(content=response_message), topic_id=topic_id)
diff --git a/python/packages/team-one/src/team_one/messages.py b/python/packages/team-one/src/team_one/messages.py
index 4eee7bf34..b43a1a5e7 100644
--- a/python/packages/team-one/src/team_one/messages.py
+++ b/python/packages/team-one/src/team_one/messages.py
@@ -3,6 +3,7 @@ from typing import Any, Dict, List, Union
 
 from autogen_core.components import FunctionCall, Image
 from autogen_core.components.models import FunctionExecutionResult, LLMMessage
+from pydantic import BaseModel
 
 # Convenience type
 UserContent = Union[str, List[Union[str, Image]]]
@@ -11,8 +12,7 @@ FunctionExecutionContent = List[FunctionExecutionResult]
 SystemContent = str
 
 
-@dataclass
-class BroadcastMessage:
+class BroadcastMessage(BaseModel):
     content: LLMMessage
     request_halt: bool = False
 
diff --git a/python/uv.lock b/python/uv.lock
index a9ee125f3..ea0d59d01 100644
--- a/python/uv.lock
+++ b/python/uv.lock
@@ -350,7 +350,7 @@ requires-dist = [
     { name = "opentelemetry-api", specifier = "~=1.27.0" },
     { name = "pillow" },
     { name = "protobuf", specifier = "~=4.25.1" },
-    { name = "pydantic", specifier = ">=1.10,<3" },
+    { name = "pydantic", specifier = ">=2.0.0,<3.0.0" },
     { name = "tiktoken" },
     { name = "typing-extensions" },
 ]
@@ -4205,6 +4205,7 @@ dependencies = [
     { name = "pdfminer-six" },
     { name = "playwright" },
     { name = "puremagic" },
+    { name = "pydantic" },
     { name = "pydub" },
     { name = "python-pptx" },
     { name = "requests" },
@@ -4242,6 +4243,7 @@ requires-dist = [
     { name = "pdfminer-six" },
     { name = "playwright" },
     { name = "puremagic" },
+    { name = "pydantic", specifier = ">=2.0.0,<3.0.0" },
     { name = "pydub" },
     { name = "python-pptx" },
     { name = "requests" },