diff --git a/apps/sim/app/api/function/execute/route.ts b/apps/sim/app/api/function/execute/route.ts
index 96d1d6ed3..08dfae068 100644
--- a/apps/sim/app/api/function/execute/route.ts
+++ b/apps/sim/app/api/function/execute/route.ts
@@ -213,24 +213,81 @@ function createUserFriendlyErrorMessage(
 }
 
 /**
- * Resolves environment variables and tags in code
- * @param code - Code with variables
- * @param params - Parameters that may contain variable values
- * @param envVars - Environment variables from the workflow
- * @returns Resolved code
+ * Resolves workflow variables with <variable.name> syntax
  */
+function resolveWorkflowVariables(
+  code: string,
+  workflowVariables: Record<string, any>,
+  contextVariables: Record<string, any>
+): string {
+  let resolvedCode = code
 
-function resolveCodeVariables(
+  const variableMatches = resolvedCode.match(/<variable\.([^>]+)>/g) || []
+  for (const match of variableMatches) {
+    const variableName = match.slice('<variable.'.length, -1).trim()
+
+    // Find the variable by name (workflowVariables is indexed by ID, values are variable objects)
+    const foundVariable = Object.entries(workflowVariables).find(
+      ([_, variable]) => (variable.name || '').replace(/\s+/g, '') === variableName
+    )
+
+    if (foundVariable) {
+      const variable = foundVariable[1]
+      // Get the typed value - handle different variable types
+      let variableValue = variable.value
+
+      if (variable.value !== undefined && variable.value !== null) {
+        try {
+          // Handle 'string' type the same as 'plain' for backward compatibility
+          const type = variable.type === 'string' ? 'plain' : variable.type
+
+          // For plain text, use exactly what's entered without modifications
+          if (type === 'plain' && typeof variableValue === 'string') {
+            // Use as-is for plain text
+          } else if (type === 'number') {
+            variableValue = Number(variableValue)
+          } else if (type === 'boolean') {
+            variableValue = variableValue === 'true' || variableValue === true
+          } else if (type === 'json') {
+            try {
+              variableValue =
+                typeof variableValue === 'string' ? JSON.parse(variableValue) : variableValue
+            } catch {
+              // Keep original value if JSON parsing fails
+            }
+          }
+        } catch (error) {
+          // Fallback to original value on error
+          variableValue = variable.value
+        }
+      }
+
+      // Create a safe variable reference
+      const safeVarName = `__variable_${variableName.replace(/[^a-zA-Z0-9_]/g, '_')}`
+      contextVariables[safeVarName] = variableValue
+
+      // Replace the variable reference with the safe variable name
+      resolvedCode = resolvedCode.replace(new RegExp(escapeRegExp(match), 'g'), safeVarName)
+    } else {
+      // Variable not found - replace with empty string to avoid syntax errors
+      resolvedCode = resolvedCode.replace(new RegExp(escapeRegExp(match), 'g'), '')
+    }
+  }
+
+  return resolvedCode
+}
+
+/**
+ * Resolves environment variables with {{var_name}} syntax
+ */
+function resolveEnvironmentVariables(
   code: string,
   params: Record<string, any>,
-  envVars: Record<string, string> = {},
-  blockData: Record<string, any> = {},
-  blockNameMapping: Record<string, string> = {}
-): { resolvedCode: string; contextVariables: Record<string, any> } {
+  envVars: Record<string, string>,
+  contextVariables: Record<string, any>
+): string {
   let resolvedCode = code
-  const contextVariables: Record<string, any> = {}
 
-  // Resolve environment variables with {{var_name}} syntax
   const envVarMatches = resolvedCode.match(/\{\{([^}]+)\}\}/g) || []
   for (const match of envVarMatches) {
     const varName = match.slice(2, -2).trim()
@@ -245,7 +302,21 @@ function resolveCodeVariables(
     resolvedCode = resolvedCode.replace(new RegExp(escapeRegExp(match), 'g'), safeVarName)
   }
 
-  // Resolve tags with <tag_name> syntax (including nested paths like <block.response.data>)
+  return resolvedCode
+}
+
+/**
+ * Resolves tags with <tag_name> syntax (including nested paths like <block.response.data>)
+ */
+function resolveTagVariables(
+  code: string,
+  params: Record<string, any>,
+  blockData: Record<string, any>,
+  blockNameMapping: Record<string, string>,
+  contextVariables: Record<string, any>
+): string {
+  let resolvedCode = code
+
   const tagMatches = resolvedCode.match(/<([a-zA-Z_][a-zA-Z0-9_.]*[a-zA-Z0-9_])>/g) || []
 
   for (const match of tagMatches) {
@@ -300,6 +371,42 @@ function resolveCodeVariables(
     resolvedCode = resolvedCode.replace(new RegExp(escapeRegExp(match), 'g'), safeVarName)
   }
 
+  return resolvedCode
+}
+
+/**
+ * Resolves environment variables and tags in code
+ * @param code - Code with variables
+ * @param params - Parameters that may contain variable values
+ * @param envVars - Environment variables from the workflow
+ * @returns Resolved code
+ */
+function resolveCodeVariables(
+  code: string,
+  params: Record<string, any>,
+  envVars: Record<string, string> = {},
+  blockData: Record<string, any> = {},
+  blockNameMapping: Record<string, string> = {},
+  workflowVariables: Record<string, any> = {}
+): { resolvedCode: string; contextVariables: Record<string, any> } {
+  let resolvedCode = code
+  const contextVariables: Record<string, any> = {}
+
+  // Resolve workflow variables with <variable.name> syntax first
+  resolvedCode = resolveWorkflowVariables(resolvedCode, workflowVariables, contextVariables)
+
+  // Resolve environment variables with {{var_name}} syntax
+  resolvedCode = resolveEnvironmentVariables(resolvedCode, params, envVars, contextVariables)
+
+  // Resolve tags with <tag_name> syntax (including nested paths like <block.response.data>)
+  resolvedCode = resolveTagVariables(
+    resolvedCode,
+    params,
+    blockData,
+    blockNameMapping,
+    contextVariables
+  )
+
   return { resolvedCode, contextVariables }
 }
 
@@ -338,6 +445,7 @@ export async function POST(req: NextRequest) {
       envVars = {},
       blockData = {},
       blockNameMapping = {},
+      workflowVariables = {},
       workflowId,
       isCustomTool = false,
     } = body
@@ -360,7 +468,8 @@ export async function POST(req: NextRequest) {
       executionParams,
       envVars,
       blockData,
-      blockNameMapping
+      blockNameMapping,
+      workflowVariables
     )
     resolvedCode = codeResolution.resolvedCode
     const contextVariables = codeResolution.contextVariables
@@ -368,8 +477,8 @@ export async function POST(req: NextRequest) {
     const executionMethod = 'vm' // Default execution method
 
     logger.info(`[${requestId}] Using VM for code execution`, {
-      resolvedCode,
       hasEnvVars: Object.keys(envVars).length > 0,
+      hasWorkflowVariables: Object.keys(workflowVariables).length > 0,
     })
 
     // Create a secure context with console logging
diff --git a/apps/sim/app/api/providers/route.ts b/apps/sim/app/api/providers/route.ts
index 17d37a4f3..8aa62f7e7 100644
--- a/apps/sim/app/api/providers/route.ts
+++ b/apps/sim/app/api/providers/route.ts
@@ -39,6 +39,9 @@ export async function POST(request: NextRequest) {
       stream,
       messages,
       environmentVariables,
+      workflowVariables,
+      blockData,
+      blockNameMapping,
       reasoningEffort,
       verbosity,
     } = body
@@ -60,6 +63,7 @@ export async function POST(request: NextRequest) {
       messageCount: messages?.length || 0,
       hasEnvironmentVariables:
         !!environmentVariables && Object.keys(environmentVariables).length > 0,
+      hasWorkflowVariables: !!workflowVariables && Object.keys(workflowVariables).length > 0,
       reasoningEffort,
       verbosity,
     })
@@ -103,6 +107,9 @@ export async function POST(request: NextRequest) {
       stream,
       messages,
       environmentVariables,
+      workflowVariables,
+      blockData,
+      blockNameMapping,
       reasoningEffort,
       verbosity,
     })
diff --git a/apps/sim/app/workspace/[workspaceId]/w/[workflowId]/components/workflow-block/components/sub-block/components/tool-input/components/code-editor/code-editor.tsx b/apps/sim/app/workspace/[workspaceId]/w/[workflowId]/components/workflow-block/components/sub-block/components/tool-input/components/code-editor/code-editor.tsx
index 9ab634e66..1ea5279d5 100644
--- a/apps/sim/app/workspace/[workspaceId]/w/[workflowId]/components/workflow-block/components/sub-block/components/tool-input/components/code-editor/code-editor.tsx
+++ b/apps/sim/app/workspace/[workspaceId]/w/[workflowId]/components/workflow-block/components/sub-block/components/tool-input/components/code-editor/code-editor.tsx
@@ -18,6 +18,7 @@ interface CodeEditorProps {
   highlightVariables?: boolean
   onKeyDown?: (e: React.KeyboardEvent) => void
   disabled?: boolean
+  schemaParameters?: Array<{ name: string; type: string; description: string; required: boolean }>
 }
 
 export function CodeEditor({
@@ -30,6 +31,7 @@ export function CodeEditor({
   highlightVariables = true,
   onKeyDown,
   disabled = false,
+  schemaParameters = [],
 }: CodeEditorProps) {
   const [code, setCode] = useState(value)
   const [visualLineHeights, setVisualLineHeights] = useState<number[]>([])
@@ -120,25 +122,80 @@ export function CodeEditor({
     // First, get the default Prism highlighting
     let highlighted = highlight(code, languages[language], language)
 
-    // Then, highlight environment variables with {{var_name}} syntax in blue
-    if (highlighted.includes('{{')) {
-      highlighted = highlighted.replace(
-        /\{\{([^}]+)\}\}/g,
-        '<span class="text-blue-500">{{$1}}</span>'
-      )
+    // Collect all syntax highlights to apply in a single pass
+    type SyntaxHighlight = {
+      start: number
+      end: number
+      replacement: string
     }
+    const highlights: SyntaxHighlight[] = []
 
-    // Also highlight tags with <tag_name> syntax in blue
-    if (highlighted.includes('<') && !language.includes('html')) {
-      highlighted = highlighted.replace(/<([^>\s/]+)>/g, (match, group) => {
-        // Avoid replacing HTML tags in comments
-        if (match.startsWith('<!--') || match.includes('</')) {
-          return match
-        }
-        return `<span class="text-blue-500">&lt;${group}&gt;</span>`
+    // Find environment variables with {{var_name}} syntax
+    let match
+    const envVarRegex = /\{\{([^}]+)\}\}/g
+    while ((match = envVarRegex.exec(highlighted)) !== null) {
+      highlights.push({
+        start: match.index,
+        end: match.index + match[0].length,
+        replacement: `<span class="text-blue-500">${match[0]}</span>`,
       })
     }
 
+    // Find tags with <tag_name> syntax (not in HTML context)
+    if (!language.includes('html')) {
+      const tagRegex = /<([^>\s/]+)>/g
+      while ((match = tagRegex.exec(highlighted)) !== null) {
+        // Skip HTML comments and closing tags
+        if (!match[0].startsWith('<!--') && !match[0].includes('</')) {
+          const escaped = `&lt;${match[1]}&gt;`
+          highlights.push({
+            start: match.index,
+            end: match.index + match[0].length,
+            replacement: `<span class="text-blue-500">${escaped}</span>`,
+          })
+        }
+      }
+    }
+
+    // Find schema parameters as whole words
+    if (schemaParameters.length > 0) {
+      schemaParameters.forEach((param) => {
+        // Escape special regex characters in parameter name
+        const escapedName = param.name.replace(/[.*+?^${}()|[\]\\]/g, '\\$&')
+        const paramRegex = new RegExp(`\\b(${escapedName})\\b`, 'g')
+        while ((match = paramRegex.exec(highlighted)) !== null) {
+          // Check if this position is already inside an HTML tag
+          // by looking for unclosed < before this position
+          let insideTag = false
+          let pos = match.index - 1
+          while (pos >= 0) {
+            if (highlighted[pos] === '>') break
+            if (highlighted[pos] === '<') {
+              insideTag = true
+              break
+            }
+            pos--
+          }
+
+          if (!insideTag) {
+            highlights.push({
+              start: match.index,
+              end: match.index + match[0].length,
+              replacement: `<span class="text-green-600 font-medium">${match[0]}</span>`,
+            })
+          }
+        }
+      })
+    }
+
+    // Sort highlights by start position (reverse order to maintain positions)
+    highlights.sort((a, b) => b.start - a.start)
+
+    // Apply all highlights
+    highlights.forEach(({ start, end, replacement }) => {
+      highlighted = highlighted.slice(0, start) + replacement + highlighted.slice(end)
+    })
+
     return highlighted
   }
 
@@ -204,12 +261,17 @@ export function CodeEditor({
           disabled={disabled}
           style={{
             fontFamily: 'inherit',
-            minHeight: '46px',
+            minHeight: minHeight,
             lineHeight: '21px',
+            height: '100%',
           }}
-          className={cn('focus:outline-none', isCollapsed && 'pointer-events-none select-none')}
+          className={cn(
+            'h-full focus:outline-none',
+            isCollapsed && 'pointer-events-none select-none'
+          )}
           textareaClassName={cn(
             'focus:outline-none focus:ring-0 bg-transparent',
+            '!min-h-full !h-full resize-none !block',
             (isCollapsed || disabled) && 'pointer-events-none'
           )}
         />
diff --git a/apps/sim/app/workspace/[workspaceId]/w/[workflowId]/components/workflow-block/components/sub-block/components/tool-input/components/custom-tool-modal/custom-tool-modal.tsx b/apps/sim/app/workspace/[workspaceId]/w/[workflowId]/components/workflow-block/components/sub-block/components/tool-input/components/custom-tool-modal/custom-tool-modal.tsx
index b765930b5..c1b89c177 100644
--- a/apps/sim/app/workspace/[workspaceId]/w/[workflowId]/components/workflow-block/components/sub-block/components/tool-input/components/custom-tool-modal/custom-tool-modal.tsx
+++ b/apps/sim/app/workspace/[workspaceId]/w/[workflowId]/components/workflow-block/components/sub-block/components/tool-input/components/custom-tool-modal/custom-tool-modal.tsx
@@ -22,6 +22,7 @@ import {
 import { checkEnvVarTrigger, EnvVarDropdown } from '@/components/ui/env-var-dropdown'
 import { Label } from '@/components/ui/label'
 import { checkTagTrigger, TagDropdown } from '@/components/ui/tag-dropdown'
+import { Tooltip, TooltipContent, TooltipTrigger } from '@/components/ui/tooltip'
 import { createLogger } from '@/lib/logs/console/logger'
 import { cn } from '@/lib/utils'
 import { WandPromptBar } from '@/app/workspace/[workspaceId]/w/[workflowId]/components/wand-prompt-bar/wand-prompt-bar'
@@ -36,6 +37,7 @@ interface CustomToolModalProps {
   onOpenChange: (open: boolean) => void
   onSave: (tool: CustomTool) => void
   onDelete?: (toolId: string) => void
+  blockId: string
   initialValues?: {
     id?: string
     schema: any
@@ -61,6 +63,7 @@ export function CustomToolModal({
   onOpenChange,
   onSave,
   onDelete,
+  blockId,
   initialValues,
 }: CustomToolModalProps) {
   const [activeSection, setActiveSection] = useState<ToolSection>('schema')
@@ -237,12 +240,16 @@ try {
   // Environment variables and tags dropdown state
   const [showEnvVars, setShowEnvVars] = useState(false)
   const [showTags, setShowTags] = useState(false)
+  const [showSchemaParams, setShowSchemaParams] = useState(false)
   const [searchTerm, setSearchTerm] = useState('')
   const [cursorPosition, setCursorPosition] = useState(0)
   const codeEditorRef = useRef<HTMLDivElement>(null)
+  const schemaParamsDropdownRef = useRef<HTMLDivElement>(null)
   const [activeSourceBlockId, setActiveSourceBlockId] = useState<string | null>(null)
   // Add state for dropdown positioning
   const [dropdownPosition, setDropdownPosition] = useState({ top: 0, left: 0 })
+  // Schema params keyboard navigation
+  const [schemaParamSelectedIndex, setSchemaParamSelectedIndex] = useState(0)
 
   const addTool = useCustomToolsStore((state) => state.addTool)
   const updateTool = useCustomToolsStore((state) => state.updateTool)
@@ -270,6 +277,21 @@ try {
     }
   }, [open, initialValues])
 
+  // Close schema params dropdown on outside click
+  useEffect(() => {
+    const handleClickOutside = (event: MouseEvent) => {
+      if (
+        schemaParamsDropdownRef.current &&
+        !schemaParamsDropdownRef.current.contains(event.target as Node)
+      ) {
+        setShowSchemaParams(false)
+      }
+    }
+
+    document.addEventListener('mousedown', handleClickOutside)
+    return () => document.removeEventListener('mousedown', handleClickOutside)
+  }, [])
+
   const resetForm = () => {
     setJsonSchema('')
     setFunctionCode('')
@@ -309,6 +331,15 @@ try {
         return false
       }
 
+      // Validate that parameters object exists with correct structure
+      if (!parsed.function.parameters) {
+        return false
+      }
+
+      if (!parsed.function.parameters.type || parsed.function.parameters.properties === undefined) {
+        return false
+      }
+
       return true
     } catch (_error) {
       return false
@@ -320,6 +351,25 @@ try {
     return true // Allow empty code
   }
 
+  // Extract parameters from JSON schema for autocomplete
+  const schemaParameters = useMemo(() => {
+    try {
+      if (!jsonSchema) return []
+      const parsed = JSON.parse(jsonSchema)
+      const properties = parsed?.function?.parameters?.properties
+      if (!properties) return []
+
+      return Object.keys(properties).map((key) => ({
+        name: key,
+        type: properties[key].type || 'any',
+        description: properties[key].description || '',
+        required: parsed?.function?.parameters?.required?.includes(key) || false,
+      }))
+    } catch {
+      return []
+    }
+  }, [jsonSchema])
+
   // Memoize validation results to prevent unnecessary recalculations
   const isSchemaValid = useMemo(() => validateJsonSchema(jsonSchema), [jsonSchema])
   const isCodeValid = useMemo(() => validateFunctionCode(functionCode), [functionCode])
@@ -350,6 +400,34 @@ try {
         return
       }
 
+      // Validate parameters structure - must be present
+      if (!parsed.function.parameters) {
+        setSchemaError('Missing function.parameters object')
+        setActiveSection('schema')
+        return
+      }
+
+      if (!parsed.function.parameters.type) {
+        setSchemaError('Missing parameters.type field')
+        setActiveSection('schema')
+        return
+      }
+
+      if (parsed.function.parameters.properties === undefined) {
+        setSchemaError('Missing parameters.properties field')
+        setActiveSection('schema')
+        return
+      }
+
+      if (
+        typeof parsed.function.parameters.properties !== 'object' ||
+        parsed.function.parameters.properties === null
+      ) {
+        setSchemaError('parameters.properties must be an object')
+        setActiveSection('schema')
+        return
+      }
+
       // Check for duplicate tool name
       const toolName = parsed.function.name
       const customToolsStore = useCustomToolsStore.getState()
@@ -439,7 +517,52 @@ try {
     // Prevent updates during AI generation/streaming
     if (schemaGeneration.isLoading || schemaGeneration.isStreaming) return
     setJsonSchema(value)
-    if (schemaError) {
+
+    // Real-time validation - show error immediately when schema is invalid
+    if (value.trim()) {
+      try {
+        const parsed = JSON.parse(value)
+
+        if (!parsed.type || parsed.type !== 'function') {
+          setSchemaError('Missing "type": "function"')
+          return
+        }
+
+        if (!parsed.function || !parsed.function.name) {
+          setSchemaError('Missing function.name field')
+          return
+        }
+
+        if (!parsed.function.parameters) {
+          setSchemaError('Missing function.parameters object')
+          return
+        }
+
+        if (!parsed.function.parameters.type) {
+          setSchemaError('Missing parameters.type field')
+          return
+        }
+
+        if (parsed.function.parameters.properties === undefined) {
+          setSchemaError('Missing parameters.properties field')
+          return
+        }
+
+        if (
+          typeof parsed.function.parameters.properties !== 'object' ||
+          parsed.function.parameters.properties === null
+        ) {
+          setSchemaError('parameters.properties must be an object')
+          return
+        }
+
+        // Schema is valid, clear any existing error
+        setSchemaError(null)
+      } catch {
+        setSchemaError('Invalid JSON format')
+      }
+    } else {
+      // Clear error when schema is empty (will be caught during save)
       setSchemaError(null)
     }
   }
@@ -499,9 +622,40 @@ try {
       if (!tagTrigger.show) {
         setActiveSourceBlockId(null)
       }
+
+      // Show/hide schema parameters dropdown based on typing context
+      if (!codeGeneration.isStreaming && schemaParameters.length > 0) {
+        const schemaParamTrigger = checkSchemaParamTrigger(value, pos, schemaParameters)
+        if (schemaParamTrigger.show && !showSchemaParams) {
+          setShowSchemaParams(true)
+          setSchemaParamSelectedIndex(0)
+        } else if (!schemaParamTrigger.show && showSchemaParams) {
+          setShowSchemaParams(false)
+        }
+      }
     }
   }
 
+  // Function to check if we should show schema parameters dropdown
+  const checkSchemaParamTrigger = (text: string, cursorPos: number, parameters: any[]) => {
+    if (parameters.length === 0) return { show: false, searchTerm: '' }
+
+    // Look for partial parameter names after common patterns like 'const ', '= ', etc.
+    const beforeCursor = text.substring(0, cursorPos)
+    const words = beforeCursor.split(/[\s=();,{}[\]]+/)
+    const currentWord = words[words.length - 1] || ''
+
+    // Show dropdown if typing and current word could be a parameter
+    if (currentWord.length > 0 && /^[a-zA-Z_][\w]*$/.test(currentWord)) {
+      const matchingParams = parameters.filter((param) =>
+        param.name.toLowerCase().startsWith(currentWord.toLowerCase())
+      )
+      return { show: matchingParams.length > 0, searchTerm: currentWord, matches: matchingParams }
+    }
+
+    return { show: false, searchTerm: '' }
+  }
+
   // Handle environment variable selection
   const handleEnvVarSelect = (newValue: string) => {
     setFunctionCode(newValue)
@@ -515,6 +669,32 @@ try {
     setActiveSourceBlockId(null)
   }
 
+  // Handle schema parameter selection
+  const handleSchemaParamSelect = (paramName: string) => {
+    const textarea = codeEditorRef.current?.querySelector('textarea')
+    if (textarea) {
+      const pos = textarea.selectionStart
+      const beforeCursor = functionCode.substring(0, pos)
+      const afterCursor = functionCode.substring(pos)
+
+      // Find the start of the current word
+      const words = beforeCursor.split(/[\s=();,{}[\]]+/)
+      const currentWord = words[words.length - 1] || ''
+      const wordStart = beforeCursor.lastIndexOf(currentWord)
+
+      // Replace the current partial word with the selected parameter
+      const newValue = beforeCursor.substring(0, wordStart) + paramName + afterCursor
+      setFunctionCode(newValue)
+      setShowSchemaParams(false)
+
+      // Set cursor position after the inserted parameter
+      setTimeout(() => {
+        textarea.focus()
+        textarea.setSelectionRange(wordStart + paramName.length, wordStart + paramName.length)
+      }, 0)
+    }
+  }
+
   // Handle key press events
   const handleKeyDown = (e: React.KeyboardEvent) => {
     // Allow AI prompt interaction (e.g., Escape to close prompt bar)
@@ -535,10 +715,14 @@ try {
         e.stopPropagation()
         return
       }
-      // Close dropdowns only if AI prompt isn't active
-      if (!showEnvVars && !showTags) {
+      // Close dropdowns first, only close modal if no dropdowns are open
+      if (showEnvVars || showTags || showSchemaParams) {
         setShowEnvVars(false)
         setShowTags(false)
+        setShowSchemaParams(false)
+        e.preventDefault()
+        e.stopPropagation()
+        return
       }
     }
 
@@ -552,7 +736,37 @@ try {
       return
     }
 
-    // Let dropdowns handle their own keyboard events if visible
+    // Handle schema parameters dropdown keyboard navigation
+    if (showSchemaParams && schemaParameters.length > 0) {
+      switch (e.key) {
+        case 'ArrowDown':
+          e.preventDefault()
+          e.stopPropagation()
+          setSchemaParamSelectedIndex((prev) => Math.min(prev + 1, schemaParameters.length - 1))
+          break
+        case 'ArrowUp':
+          e.preventDefault()
+          e.stopPropagation()
+          setSchemaParamSelectedIndex((prev) => Math.max(prev - 1, 0))
+          break
+        case 'Enter':
+          e.preventDefault()
+          e.stopPropagation()
+          if (schemaParamSelectedIndex >= 0 && schemaParamSelectedIndex < schemaParameters.length) {
+            const selectedParam = schemaParameters[schemaParamSelectedIndex]
+            handleSchemaParamSelect(selectedParam.name)
+          }
+          break
+        case 'Escape':
+          e.preventDefault()
+          e.stopPropagation()
+          setShowSchemaParams(false)
+          break
+      }
+      return // Don't handle other dropdown events when schema params is active
+    }
+
+    // Let other dropdowns handle their own keyboard events if visible
     if (showEnvVars || showTags) {
       if (['ArrowDown', 'ArrowUp', 'Enter'].includes(e.key)) {
         e.preventDefault()
@@ -619,6 +833,16 @@ try {
         <DialogContent
           className='flex h-[80vh] flex-col gap-0 p-0 sm:max-w-[700px]'
           hideCloseButton
+          onKeyDown={(e) => {
+            // Intercept Escape key when dropdowns are open
+            if (e.key === 'Escape' && (showEnvVars || showTags || showSchemaParams)) {
+              e.preventDefault()
+              e.stopPropagation()
+              setShowEnvVars(false)
+              setShowTags(false)
+              setShowSchemaParams(false)
+            }
+          }}
         >
           <DialogHeader className='border-b px-6 py-4'>
             <div className='flex items-center justify-between'>
@@ -729,7 +953,7 @@ try {
                   </div>
                   {schemaError &&
                     !schemaGeneration.isStreaming && ( // Hide schema error while streaming
-                      <span className='ml-4 flex-shrink-0 text-red-600 text-sm'>{schemaError}</span>
+                      <div className='ml-4 break-words text-red-600 text-sm'>{schemaError}</div>
                     )}
                 </div>
                 <CodeEditor
@@ -799,9 +1023,25 @@ try {
                   </div>
                   {codeError &&
                     !codeGeneration.isStreaming && ( // Hide code error while streaming
-                      <span className='ml-4 flex-shrink-0 text-red-600 text-sm'>{codeError}</span>
+                      <div className='ml-4 break-words text-red-600 text-sm'>{codeError}</div>
                     )}
                 </div>
+                {schemaParameters.length > 0 && (
+                  <div className='mb-2 rounded-md bg-muted/50 p-2'>
+                    <p className='text-muted-foreground text-xs'>
+                      <span className='font-medium'>Available parameters:</span>{' '}
+                      {schemaParameters.map((param, index) => (
+                        <span key={param.name}>
+                          <code className='rounded bg-background px-1 py-0.5 text-foreground'>
+                            {param.name}
+                          </code>
+                          {index < schemaParameters.length - 1 && ', '}
+                        </span>
+                      ))}
+                      {'. '}Start typing a parameter name for autocomplete.
+                    </p>
+                  </div>
+                )}
                 <div ref={codeEditorRef} className='relative'>
                   <CodeEditor
                     value={functionCode}
@@ -819,6 +1059,7 @@ try {
                     highlightVariables={true}
                     disabled={codeGeneration.isLoading || codeGeneration.isStreaming} // Use disabled prop instead of readOnly
                     onKeyDown={handleKeyDown} // Pass keydown handler
+                    schemaParameters={schemaParameters} // Pass schema parameters for highlighting
                   />
 
                   {/* Environment variables dropdown */}
@@ -847,7 +1088,7 @@ try {
                     <TagDropdown
                       visible={showTags}
                       onSelect={handleTagSelect}
-                      blockId=''
+                      blockId={blockId}
                       activeSourceBlockId={activeSourceBlockId}
                       inputValue={functionCode}
                       cursorPosition={cursorPosition}
@@ -863,6 +1104,49 @@ try {
                       }}
                     />
                   )}
+
+                  {/* Schema parameters dropdown */}
+                  {showSchemaParams && schemaParameters.length > 0 && (
+                    <div
+                      ref={schemaParamsDropdownRef}
+                      className='absolute z-[9999] mt-1 w-64 overflow-visible rounded-md border bg-popover shadow-md'
+                      style={{
+                        top: `${dropdownPosition.top}px`,
+                        left: `${dropdownPosition.left}px`,
+                      }}
+                    >
+                      <div className='py-1'>
+                        <div className='px-2 pt-2.5 pb-0.5 font-medium text-muted-foreground text-xs'>
+                          Available Parameters
+                        </div>
+                        <div>
+                          {schemaParameters.map((param, index) => (
+                            <button
+                              key={param.name}
+                              onClick={() => handleSchemaParamSelect(param.name)}
+                              onMouseEnter={() => setSchemaParamSelectedIndex(index)}
+                              className={cn(
+                                'flex w-full items-center gap-2 px-3 py-1.5 text-left text-sm',
+                                'hover:bg-accent hover:text-accent-foreground',
+                                'focus:bg-accent focus:text-accent-foreground focus:outline-none',
+                                index === schemaParamSelectedIndex &&
+                                  'bg-accent text-accent-foreground'
+                              )}
+                            >
+                              <div
+                                className='flex h-5 w-5 items-center justify-center rounded'
+                                style={{ backgroundColor: '#2F8BFF' }}
+                              >
+                                <span className='h-3 w-3 font-bold text-white text-xs'>P</span>
+                              </div>
+                              <span className='flex-1 truncate'>{param.name}</span>
+                              <span className='text-muted-foreground text-xs'>{param.type}</span>
+                            </button>
+                          ))}
+                        </div>
+                      </div>
+                    </div>
+                  )}
                 </div>
                 <div className='h-6' />
               </div>
@@ -899,11 +1183,27 @@ try {
                   Cancel
                 </Button>
                 {activeSection === 'schema' ? (
-                  <Button onClick={() => setActiveSection('code')} disabled={!isSchemaValid}>
+                  <Button
+                    onClick={() => setActiveSection('code')}
+                    disabled={!isSchemaValid || !!schemaError}
+                  >
                     Next
                   </Button>
                 ) : (
-                  <Button onClick={handleSave}>{isEditing ? 'Update Tool' : 'Save Tool'}</Button>
+                  <Tooltip>
+                    <TooltipTrigger asChild>
+                      <span>
+                        <Button onClick={handleSave} disabled={!isSchemaValid}>
+                          {isEditing ? 'Update Tool' : 'Save Tool'}
+                        </Button>
+                      </span>
+                    </TooltipTrigger>
+                    {!isSchemaValid && (
+                      <TooltipContent side='top'>
+                        <p>Invalid JSON schema</p>
+                      </TooltipContent>
+                    )}
+                  </Tooltip>
                 )}
               </div>
             </div>
diff --git a/apps/sim/app/workspace/[workspaceId]/w/[workflowId]/components/workflow-block/components/sub-block/components/tool-input/tool-input.tsx b/apps/sim/app/workspace/[workspaceId]/w/[workflowId]/components/workflow-block/components/sub-block/components/tool-input/tool-input.tsx
index 42034514b..049de7944 100644
--- a/apps/sim/app/workspace/[workspaceId]/w/[workflowId]/components/workflow-block/components/sub-block/components/tool-input/tool-input.tsx
+++ b/apps/sim/app/workspace/[workspaceId]/w/[workflowId]/components/workflow-block/components/sub-block/components/tool-input/tool-input.tsx
@@ -1320,7 +1320,7 @@ export function ToolInput({
 
             // For custom tools, extract parameters from schema
             const customToolParams =
-              isCustomTool && tool.schema
+              isCustomTool && tool.schema && tool.schema.function?.parameters?.properties
                 ? Object.entries(tool.schema.function.parameters.properties || {}).map(
                     ([paramId, param]: [string, any]) => ({
                       id: paramId,
@@ -1824,6 +1824,7 @@ export function ToolInput({
         }}
         onSave={editingToolIndex !== null ? handleSaveCustomTool : handleAddCustomTool}
         onDelete={handleDeleteTool}
+        blockId={blockId}
         initialValues={
           editingToolIndex !== null && selectedTools[editingToolIndex]?.type === 'custom-tool'
             ? {
diff --git a/apps/sim/executor/handlers/agent/agent-handler.ts b/apps/sim/executor/handlers/agent/agent-handler.ts
index 1ac517c79..7386b78a5 100644
--- a/apps/sim/executor/handlers/agent/agent-handler.ts
+++ b/apps/sim/executor/handlers/agent/agent-handler.ts
@@ -23,6 +23,33 @@ const DEFAULT_FUNCTION_TIMEOUT = 5000
 const REQUEST_TIMEOUT = 120000
 const CUSTOM_TOOL_PREFIX = 'custom_'
 
+/**
+ * Helper function to collect runtime block outputs and name mappings
+ * for tag resolution in custom tools and prompts
+ */
+function collectBlockData(context: ExecutionContext): {
+  blockData: Record<string, any>
+  blockNameMapping: Record<string, string>
+} {
+  const blockData: Record<string, any> = {}
+  const blockNameMapping: Record<string, string> = {}
+
+  for (const [id, state] of context.blockStates.entries()) {
+    if (state.output !== undefined) {
+      blockData[id] = state.output
+      const workflowBlock = context.workflow?.blocks?.find((b) => b.id === id)
+      if (workflowBlock?.metadata?.name) {
+        // Map both the display name and normalized form
+        blockNameMapping[workflowBlock.metadata.name] = id
+        const normalized = workflowBlock.metadata.name.replace(/\s+/g, '').toLowerCase()
+        blockNameMapping[normalized] = id
+      }
+    }
+  }
+
+  return { blockData, blockNameMapping }
+}
+
 /**
  * Handler for Agent blocks that process LLM requests with optional tools.
  */
@@ -172,6 +199,9 @@ export class AgentBlockHandler implements BlockHandler {
         // Merge user-provided parameters with LLM-generated parameters
         const mergedParams = mergeToolParameters(userProvidedParams, callParams)
 
+        // Collect block outputs for tag resolution
+        const { blockData, blockNameMapping } = collectBlockData(context)
+
         const result = await executeTool(
           'function_execute',
           {
@@ -179,6 +209,9 @@ export class AgentBlockHandler implements BlockHandler {
             ...mergedParams,
             timeout: tool.timeout ?? DEFAULT_FUNCTION_TIMEOUT,
             envVars: context.environmentVariables || {},
+            workflowVariables: context.workflowVariables || {},
+            blockData,
+            blockNameMapping,
             isCustomTool: true,
             _context: { workflowId: context.workflowId },
           },
@@ -352,6 +385,9 @@ export class AgentBlockHandler implements BlockHandler {
 
     const validMessages = this.validateMessages(messages)
 
+    // Collect block outputs for runtime resolution
+    const { blockData, blockNameMapping } = collectBlockData(context)
+
     return {
       provider: providerId,
       model,
@@ -368,6 +404,9 @@ export class AgentBlockHandler implements BlockHandler {
       stream: streaming,
       messages,
       environmentVariables: context.environmentVariables || {},
+      workflowVariables: context.workflowVariables || {},
+      blockData,
+      blockNameMapping,
       reasoningEffort: inputs.reasoningEffort,
       verbosity: inputs.verbosity,
     }
@@ -457,6 +496,9 @@ export class AgentBlockHandler implements BlockHandler {
 
     const finalApiKey = this.getApiKey(providerId, model, providerRequest.apiKey)
 
+    // Collect block outputs for runtime resolution
+    const { blockData, blockNameMapping } = collectBlockData(context)
+
     const response = await executeProviderRequest(providerId, {
       model,
       systemPrompt: 'systemPrompt' in providerRequest ? providerRequest.systemPrompt : undefined,
@@ -472,6 +514,9 @@ export class AgentBlockHandler implements BlockHandler {
       stream: providerRequest.stream,
       messages: 'messages' in providerRequest ? providerRequest.messages : undefined,
       environmentVariables: context.environmentVariables || {},
+      workflowVariables: context.workflowVariables || {},
+      blockData,
+      blockNameMapping,
     })
 
     this.logExecutionSuccess(providerId, model, context, block, providerStartTime, response)
diff --git a/apps/sim/executor/handlers/function/function-handler.test.ts b/apps/sim/executor/handlers/function/function-handler.test.ts
index c2deba29e..91b912398 100644
--- a/apps/sim/executor/handlers/function/function-handler.test.ts
+++ b/apps/sim/executor/handlers/function/function-handler.test.ts
@@ -77,6 +77,7 @@ describe('FunctionBlockHandler', () => {
       code: inputs.code,
       timeout: inputs.timeout,
       envVars: {},
+      workflowVariables: {},
       blockData: {},
       blockNameMapping: {},
       _context: { workflowId: mockContext.workflowId },
@@ -108,6 +109,7 @@ describe('FunctionBlockHandler', () => {
       code: expectedCode,
       timeout: inputs.timeout,
       envVars: {},
+      workflowVariables: {},
       blockData: {},
       blockNameMapping: {},
       _context: { workflowId: mockContext.workflowId },
@@ -132,6 +134,7 @@ describe('FunctionBlockHandler', () => {
       code: inputs.code,
       timeout: 5000, // Default timeout
       envVars: {},
+      workflowVariables: {},
       blockData: {},
       blockNameMapping: {},
       _context: { workflowId: mockContext.workflowId },
diff --git a/apps/sim/executor/handlers/function/function-handler.ts b/apps/sim/executor/handlers/function/function-handler.ts
index 95c0fe4ca..cb3e15936 100644
--- a/apps/sim/executor/handlers/function/function-handler.ts
+++ b/apps/sim/executor/handlers/function/function-handler.ts
@@ -6,6 +6,33 @@ import { executeTool } from '@/tools'
 
 const logger = createLogger('FunctionBlockHandler')
 
+/**
+ * Helper function to collect runtime block outputs and name mappings
+ * for tag resolution in function execution
+ */
+function collectBlockData(context: ExecutionContext): {
+  blockData: Record<string, any>
+  blockNameMapping: Record<string, string>
+} {
+  const blockData: Record<string, any> = {}
+  const blockNameMapping: Record<string, string> = {}
+
+  for (const [id, state] of context.blockStates.entries()) {
+    if (state.output !== undefined) {
+      blockData[id] = state.output
+      const workflowBlock = context.workflow?.blocks?.find((b) => b.id === id)
+      if (workflowBlock?.metadata?.name) {
+        // Map both the display name and normalized form
+        blockNameMapping[workflowBlock.metadata.name] = id
+        const normalized = workflowBlock.metadata.name.replace(/\s+/g, '').toLowerCase()
+        blockNameMapping[normalized] = id
+      }
+    }
+  }
+
+  return { blockData, blockNameMapping }
+}
+
 /**
  * Handler for Function blocks that execute custom code.
  */
@@ -24,20 +51,7 @@ export class FunctionBlockHandler implements BlockHandler {
       : inputs.code
 
     // Extract block data for variable resolution
-    const blockData: Record<string, any> = {}
-    const blockNameMapping: Record<string, string> = {}
-
-    for (const [blockId, blockState] of context.blockStates.entries()) {
-      if (blockState.output) {
-        blockData[blockId] = blockState.output
-
-        // Try to find the block name from the workflow
-        const workflowBlock = context.workflow?.blocks?.find((b) => b.id === blockId)
-        if (workflowBlock?.metadata?.name) {
-          blockNameMapping[workflowBlock.metadata.name] = blockId
-        }
-      }
-    }
+    const { blockData, blockNameMapping } = collectBlockData(context)
 
     // Directly use the function_execute tool which calls the API route
     const result = await executeTool(
@@ -46,6 +60,7 @@ export class FunctionBlockHandler implements BlockHandler {
         code: codeContent,
         timeout: inputs.timeout || 5000,
         envVars: context.environmentVariables || {},
+        workflowVariables: context.workflowVariables || {},
         blockData: blockData, // Pass block data for variable resolution
         blockNameMapping: blockNameMapping, // Pass block name to ID mapping
         _context: { workflowId: context.workflowId },
diff --git a/apps/sim/executor/handlers/loop/loop-handler.ts b/apps/sim/executor/handlers/loop/loop-handler.ts
index cbaf09f8b..47f42c0a3 100644
--- a/apps/sim/executor/handlers/loop/loop-handler.ts
+++ b/apps/sim/executor/handlers/loop/loop-handler.ts
@@ -222,9 +222,10 @@ export class LoopBlockHandler implements BlockHandler {
           }
         }
 
-        // If we have a resolver, use it to resolve any block references in the expression
+        // If we have a resolver, use it to resolve any variable references first, then block references
         if (this.resolver) {
-          const resolved = this.resolver.resolveBlockReferences(forEachItems, context, block)
+          const resolvedVars = this.resolver.resolveVariableReferences(forEachItems, block)
+          const resolved = this.resolver.resolveBlockReferences(resolvedVars, context, block)
 
           // Try to parse the resolved value
           try {
diff --git a/apps/sim/executor/handlers/parallel/parallel-handler.ts b/apps/sim/executor/handlers/parallel/parallel-handler.ts
index 20527576f..b82643c43 100644
--- a/apps/sim/executor/handlers/parallel/parallel-handler.ts
+++ b/apps/sim/executor/handlers/parallel/parallel-handler.ts
@@ -413,9 +413,10 @@ export class ParallelBlockHandler implements BlockHandler {
           }
         }
 
-        // If we have a resolver, use it to resolve any block references in the expression
+        // If we have a resolver, use it to resolve any variable references first, then block references
         if (this.resolver) {
-          const resolved = this.resolver.resolveBlockReferences(distribution, context, block)
+          const resolvedVars = this.resolver.resolveVariableReferences(distribution, block)
+          const resolved = this.resolver.resolveBlockReferences(resolvedVars, context, block)
 
           // Try to parse the resolved value
           try {
diff --git a/apps/sim/executor/index.ts b/apps/sim/executor/index.ts
index a8c784381..c2777d354 100644
--- a/apps/sim/executor/index.ts
+++ b/apps/sim/executor/index.ts
@@ -119,23 +119,12 @@ export class Executor {
       if (options.contextExtensions) {
         this.contextExtensions = options.contextExtensions
         this.isChildExecution = options.contextExtensions.isChildExecution || false
-
-        if (this.contextExtensions.stream) {
-          logger.info('Executor initialized with streaming enabled', {
-            hasSelectedOutputIds: Array.isArray(this.contextExtensions.selectedOutputIds),
-            selectedOutputCount: Array.isArray(this.contextExtensions.selectedOutputIds)
-              ? this.contextExtensions.selectedOutputIds.length
-              : 0,
-            selectedOutputIds: this.contextExtensions.selectedOutputIds || [],
-          })
-        }
       }
     } else {
       this.actualWorkflow = workflowParam
 
       if (workflowInput) {
         this.workflowInput = workflowInput
-        logger.info('[Executor] Using workflow input:', JSON.stringify(this.workflowInput, null, 2))
       } else {
         this.workflowInput = {}
       }
@@ -400,8 +389,7 @@ export class Executor {
                     try {
                       reader.releaseLock()
                     } catch (releaseError: any) {
-                      // Reader might already be released
-                      logger.debug('Reader already released:', releaseError)
+                      // Reader might already be released - this is expected and safe to ignore
                     }
                   }
                 }
@@ -641,15 +629,12 @@ export class Executor {
    * @throws Error if workflow validation fails
    */
   private validateWorkflow(startBlockId?: string): void {
-    let validationBlock: SerializedBlock | undefined
-
     if (startBlockId) {
       // If starting from a specific block (webhook trigger or schedule trigger), validate that block exists
       const startBlock = this.actualWorkflow.blocks.find((block) => block.id === startBlockId)
       if (!startBlock || !startBlock.enabled) {
         throw new Error(`Start block ${startBlockId} not found or disabled`)
       }
-      validationBlock = startBlock
       // Trigger blocks (webhook and schedule) can have incoming connections, so no need to check that
     } else {
       // Default validation for starter block
@@ -659,7 +644,6 @@ export class Executor {
       if (!starterBlock || !starterBlock.enabled) {
         throw new Error('Workflow must have an enabled starter block')
       }
-      validationBlock = starterBlock
 
       const incomingToStarter = this.actualWorkflow.connections.filter(
         (conn) => conn.target === starterBlock.id
@@ -741,6 +725,7 @@ export class Executor {
         duration: 0, // Initialize with zero, will be updated throughout execution
       },
       environmentVariables: this.environmentVariables,
+      workflowVariables: this.workflowVariables,
       decisions: {
         router: new Map(),
         condition: new Map(),
@@ -808,11 +793,6 @@ export class Executor {
                   ? this.workflowInput.input[field.name] // Try to get from input.field
                   : this.workflowInput?.[field.name] // Fallback to direct field access
 
-              logger.info(
-                `[Executor] Processing input field ${field.name} (${field.type}):`,
-                inputValue !== undefined ? JSON.stringify(inputValue) : 'undefined'
-              )
-
               if (inputValue === undefined || inputValue === null) {
                 if (Object.hasOwn(field, 'value')) {
                   inputValue = (field as any).value
@@ -873,8 +853,6 @@ export class Executor {
             blockOutput.files = this.workflowInput.files
           }
 
-          logger.info(`[Executor] Starting block output:`, JSON.stringify(blockOutput, null, 2))
-
           context.blockStates.set(initBlock.id, {
             output: blockOutput,
             executed: true,
@@ -967,11 +945,6 @@ export class Executor {
           }
         }
 
-        logger.info(
-          '[Executor] Fallback starting block output:',
-          JSON.stringify(blockOutput, null, 2)
-        )
-
         context.blockStates.set(initBlock.id, {
           output: blockOutput,
           executed: true,
@@ -1342,7 +1315,7 @@ export class Executor {
       const results: (NormalizedBlockOutput | StreamingExecution)[] = []
       const errors: Error[] = []
 
-      settledResults.forEach((result, index) => {
+      settledResults.forEach((result) => {
         if (result.status === 'fulfilled') {
           results.push(result.value)
         } else {
@@ -1443,7 +1416,6 @@ export class Executor {
     }
 
     const addConsole = useConsoleStore.getState().addConsole
-    const { setActiveBlocks } = useExecutionStore.getState()
 
     try {
       if (block.enabled === false) {
diff --git a/apps/sim/executor/types.ts b/apps/sim/executor/types.ts
index 39de19826..5d88410f9 100644
--- a/apps/sim/executor/types.ts
+++ b/apps/sim/executor/types.ts
@@ -107,6 +107,7 @@ export interface ExecutionContext {
   blockLogs: BlockLog[] // Chronological log of block executions
   metadata: ExecutionMetadata // Timing metadata for the execution
   environmentVariables: Record<string, string> // Environment variables available during execution
+  workflowVariables?: Record<string, any> // Workflow variables available during execution
 
   // Routing decisions for path determination
   decisions: {
diff --git a/apps/sim/providers/anthropic/index.ts b/apps/sim/providers/anthropic/index.ts
index 22c365bd5..80eb1344d 100644
--- a/apps/sim/providers/anthropic/index.ts
+++ b/apps/sim/providers/anthropic/index.ts
@@ -4,7 +4,7 @@ import type { StreamingExecution } from '@/executor/types'
 import { executeTool } from '@/tools'
 import { getProviderDefaultModel, getProviderModels } from '../models'
 import type { ProviderConfig, ProviderRequest, ProviderResponse, TimeSegment } from '../types'
-import { prepareToolsWithUsageControl, trackForcedToolUsage } from '../utils'
+import { prepareToolExecution, prepareToolsWithUsageControl, trackForcedToolUsage } from '../utils'
 
 const logger = createLogger('AnthropicProvider')
 
@@ -456,28 +456,11 @@ ${fieldDescriptions}
                 // Execute the tool
                 const toolCallStartTime = Date.now()
 
-                // Only merge actual tool parameters for logging
-                const toolParams = {
-                  ...tool.params,
-                  ...toolArgs,
-                }
-
-                // Add system parameters for execution
-                const executionParams = {
-                  ...toolParams,
-                  ...(request.workflowId
-                    ? {
-                        _context: {
-                          workflowId: request.workflowId,
-                          ...(request.chatId ? { chatId: request.chatId } : {}),
-                          ...(request.userId ? { userId: request.userId } : {}),
-                        },
-                      }
-                    : {}),
-                  ...(request.environmentVariables
-                    ? { envVars: request.environmentVariables }
-                    : {}),
-                }
+                const { toolParams, executionParams } = prepareToolExecution(
+                  tool,
+                  toolArgs,
+                  request
+                )
 
                 // Use general tool system for requests
                 const result = await executeTool(toolName, executionParams, true)
@@ -827,26 +810,7 @@ ${fieldDescriptions}
               // Execute the tool
               const toolCallStartTime = Date.now()
 
-              // Only merge actual tool parameters for logging
-              const toolParams = {
-                ...tool.params,
-                ...toolArgs,
-              }
-
-              // Add system parameters for execution
-              const executionParams = {
-                ...toolParams,
-                ...(request.workflowId
-                  ? {
-                      _context: {
-                        workflowId: request.workflowId,
-                        ...(request.chatId ? { chatId: request.chatId } : {}),
-                        ...(request.userId ? { userId: request.userId } : {}),
-                      },
-                    }
-                  : {}),
-                ...(request.environmentVariables ? { envVars: request.environmentVariables } : {}),
-              }
+              const { toolParams, executionParams } = prepareToolExecution(tool, toolArgs, request)
 
               // Use general tool system for requests
               const result = await executeTool(toolName, executionParams, true)
diff --git a/apps/sim/providers/azure-openai/index.ts b/apps/sim/providers/azure-openai/index.ts
index decfe446a..419c86dca 100644
--- a/apps/sim/providers/azure-openai/index.ts
+++ b/apps/sim/providers/azure-openai/index.ts
@@ -9,7 +9,11 @@ import type {
   ProviderResponse,
   TimeSegment,
 } from '@/providers/types'
-import { prepareToolsWithUsageControl, trackForcedToolUsage } from '@/providers/utils'
+import {
+  prepareToolExecution,
+  prepareToolsWithUsageControl,
+  trackForcedToolUsage,
+} from '@/providers/utils'
 import { executeTool } from '@/tools'
 
 const logger = createLogger('AzureOpenAIProvider')
@@ -383,25 +387,7 @@ export const azureOpenAIProvider: ProviderConfig = {
             // Execute the tool
             const toolCallStartTime = Date.now()
 
-            // Only merge actual tool parameters for logging
-            const toolParams = {
-              ...tool.params,
-              ...toolArgs,
-            }
-
-            // Add system parameters for execution
-            const executionParams = {
-              ...toolParams,
-              ...(request.workflowId
-                ? {
-                    _context: {
-                      workflowId: request.workflowId,
-                      ...(request.chatId ? { chatId: request.chatId } : {}),
-                    },
-                  }
-                : {}),
-              ...(request.environmentVariables ? { envVars: request.environmentVariables } : {}),
-            }
+            const { toolParams, executionParams } = prepareToolExecution(tool, toolArgs, request)
 
             const result = await executeTool(toolName, executionParams, true)
             const toolCallEndTime = Date.now()
diff --git a/apps/sim/providers/cerebras/index.ts b/apps/sim/providers/cerebras/index.ts
index 380aae627..f332a6e1d 100644
--- a/apps/sim/providers/cerebras/index.ts
+++ b/apps/sim/providers/cerebras/index.ts
@@ -8,6 +8,7 @@ import type {
   ProviderResponse,
   TimeSegment,
 } from '@/providers/types'
+import { prepareToolExecution } from '@/providers/utils'
 import { executeTool } from '@/tools'
 
 const logger = createLogger('CerebrasProvider')
@@ -287,25 +288,7 @@ export const cerebrasProvider: ProviderConfig = {
               // Execute the tool
               const toolCallStartTime = Date.now()
 
-              // Only merge actual tool parameters for logging
-              const toolParams = {
-                ...tool.params,
-                ...toolArgs,
-              }
-
-              // Add system parameters for execution
-              const executionParams = {
-                ...toolParams,
-                ...(request.workflowId
-                  ? {
-                      _context: {
-                        workflowId: request.workflowId,
-                        ...(request.chatId ? { chatId: request.chatId } : {}),
-                      },
-                    }
-                  : {}),
-                ...(request.environmentVariables ? { envVars: request.environmentVariables } : {}),
-              }
+              const { toolParams, executionParams } = prepareToolExecution(tool, toolArgs, request)
 
               const result = await executeTool(toolName, executionParams, true)
               const toolCallEndTime = Date.now()
diff --git a/apps/sim/providers/deepseek/index.ts b/apps/sim/providers/deepseek/index.ts
index ad9ea1500..1fc9f2af3 100644
--- a/apps/sim/providers/deepseek/index.ts
+++ b/apps/sim/providers/deepseek/index.ts
@@ -8,7 +8,11 @@ import type {
   ProviderResponse,
   TimeSegment,
 } from '@/providers/types'
-import { prepareToolsWithUsageControl, trackForcedToolUsage } from '@/providers/utils'
+import {
+  prepareToolExecution,
+  prepareToolsWithUsageControl,
+  trackForcedToolUsage,
+} from '@/providers/utils'
 import { executeTool } from '@/tools'
 
 const logger = createLogger('DeepseekProvider')
@@ -289,25 +293,7 @@ export const deepseekProvider: ProviderConfig = {
               // Execute the tool
               const toolCallStartTime = Date.now()
 
-              // Only merge actual tool parameters for logging
-              const toolParams = {
-                ...tool.params,
-                ...toolArgs,
-              }
-
-              // Add system parameters for execution
-              const executionParams = {
-                ...toolParams,
-                ...(request.workflowId
-                  ? {
-                      _context: {
-                        workflowId: request.workflowId,
-                        ...(request.chatId ? { chatId: request.chatId } : {}),
-                      },
-                    }
-                  : {}),
-                ...(request.environmentVariables ? { envVars: request.environmentVariables } : {}),
-              }
+              const { toolParams, executionParams } = prepareToolExecution(tool, toolArgs, request)
 
               const result = await executeTool(toolName, executionParams, true)
               const toolCallEndTime = Date.now()
diff --git a/apps/sim/providers/groq/index.ts b/apps/sim/providers/groq/index.ts
index a4f65d434..a986f5da2 100644
--- a/apps/sim/providers/groq/index.ts
+++ b/apps/sim/providers/groq/index.ts
@@ -8,6 +8,7 @@ import type {
   ProviderResponse,
   TimeSegment,
 } from '@/providers/types'
+import { prepareToolExecution } from '@/providers/utils'
 import { executeTool } from '@/tools'
 
 const logger = createLogger('GroqProvider')
@@ -258,25 +259,7 @@ export const groqProvider: ProviderConfig = {
               // Execute the tool
               const toolCallStartTime = Date.now()
 
-              // Only merge actual tool parameters for logging
-              const toolParams = {
-                ...tool.params,
-                ...toolArgs,
-              }
-
-              // Add system parameters for execution
-              const executionParams = {
-                ...toolParams,
-                ...(request.workflowId
-                  ? {
-                      _context: {
-                        workflowId: request.workflowId,
-                        ...(request.chatId ? { chatId: request.chatId } : {}),
-                      },
-                    }
-                  : {}),
-                ...(request.environmentVariables ? { envVars: request.environmentVariables } : {}),
-              }
+              const { toolParams, executionParams } = prepareToolExecution(tool, toolArgs, request)
 
               const result = await executeTool(toolName, executionParams, true)
               const toolCallEndTime = Date.now()
diff --git a/apps/sim/providers/types.ts b/apps/sim/providers/types.ts
index 2120cce85..852e43e90 100644
--- a/apps/sim/providers/types.ts
+++ b/apps/sim/providers/types.ts
@@ -152,6 +152,9 @@ export interface ProviderRequest {
   stream?: boolean
   streamToolCalls?: boolean // Whether to stream tool call responses back to user (default: false)
   environmentVariables?: Record<string, string> // Environment variables for tool execution
+  workflowVariables?: Record<string, any> // Workflow variables for <variable.name> resolution
+  blockData?: Record<string, any> // Runtime block outputs for <block.field> resolution in custom tools
+  blockNameMapping?: Record<string, string> // Mapping of block names to IDs for resolution
   isCopilotRequest?: boolean // Flag to indicate this request is from the copilot system
   // Azure OpenAI specific parameters
   azureEndpoint?: string
diff --git a/apps/sim/providers/utils.ts b/apps/sim/providers/utils.ts
index d4b6e3918..9b4a244e1 100644
--- a/apps/sim/providers/utils.ts
+++ b/apps/sim/providers/utils.ts
@@ -237,8 +237,6 @@ export function generateStructuredOutputInstructions(responseFormat: any): strin
     })
     .join('\n')
 
-  logger.info(`Generated structured output instructions for ${responseFormat.fields.length} fields`)
-
   return `
 Please provide your response in the following JSON format:
 {
@@ -323,10 +321,6 @@ export function getCustomTools(): ProviderToolConfig[] {
   // Get custom tools from the store
   const customTools = useCustomToolsStore.getState().getAllTools()
 
-  if (customTools.length > 0) {
-    logger.info(`Found ${customTools.length} custom tools`)
-  }
-
   // Transform each custom tool into a provider tool config
   return customTools.map(transformCustomTool)
 }
@@ -912,7 +906,15 @@ export function supportsToolUsageControl(provider: string): boolean {
 export function prepareToolExecution(
   tool: { params?: Record<string, any> },
   llmArgs: Record<string, any>,
-  request: { workflowId?: string; chatId?: string; environmentVariables?: Record<string, any> }
+  request: {
+    workflowId?: string
+    chatId?: string
+    userId?: string
+    environmentVariables?: Record<string, any>
+    workflowVariables?: Record<string, any>
+    blockData?: Record<string, any>
+    blockNameMapping?: Record<string, string>
+  }
 ): {
   toolParams: Record<string, any>
   executionParams: Record<string, any>
@@ -931,10 +933,14 @@ export function prepareToolExecution(
           _context: {
             workflowId: request.workflowId,
             ...(request.chatId ? { chatId: request.chatId } : {}),
+            ...(request.userId ? { userId: request.userId } : {}),
           },
         }
       : {}),
     ...(request.environmentVariables ? { envVars: request.environmentVariables } : {}),
+    ...(request.workflowVariables ? { workflowVariables: request.workflowVariables } : {}),
+    ...(request.blockData ? { blockData: request.blockData } : {}),
+    ...(request.blockNameMapping ? { blockNameMapping: request.blockNameMapping } : {}),
   }
 
   return { toolParams, executionParams }
diff --git a/apps/sim/providers/xai/index.ts b/apps/sim/providers/xai/index.ts
index 814d208cc..a8d5c3a3f 100644
--- a/apps/sim/providers/xai/index.ts
+++ b/apps/sim/providers/xai/index.ts
@@ -8,7 +8,11 @@ import type {
   ProviderResponse,
   TimeSegment,
 } from '@/providers/types'
-import { prepareToolsWithUsageControl, trackForcedToolUsage } from '@/providers/utils'
+import {
+  prepareToolExecution,
+  prepareToolsWithUsageControl,
+  trackForcedToolUsage,
+} from '@/providers/utils'
 import { executeTool } from '@/tools'
 
 const logger = createLogger('XAIProvider')
@@ -325,25 +329,7 @@ export const xAIProvider: ProviderConfig = {
 
               const toolCallStartTime = Date.now()
 
-              // Only merge actual tool parameters for logging
-              const toolParams = {
-                ...tool.params,
-                ...toolArgs,
-              }
-
-              // Add system parameters for execution
-              const executionParams = {
-                ...toolParams,
-                ...(request.workflowId
-                  ? {
-                      _context: {
-                        workflowId: request.workflowId,
-                        ...(request.chatId ? { chatId: request.chatId } : {}),
-                      },
-                    }
-                  : {}),
-                ...(request.environmentVariables ? { envVars: request.environmentVariables } : {}),
-              }
+              const { toolParams, executionParams } = prepareToolExecution(tool, toolArgs, request)
 
               const result = await executeTool(toolName, executionParams, true)
               const toolCallEndTime = Date.now()
diff --git a/apps/sim/tools/function/execute.test.ts b/apps/sim/tools/function/execute.test.ts
index bf5713540..bc2d41ed0 100644
--- a/apps/sim/tools/function/execute.test.ts
+++ b/apps/sim/tools/function/execute.test.ts
@@ -50,6 +50,7 @@ describe('Function Execute Tool', () => {
       expect(body).toEqual({
         code: 'return 42',
         envVars: {},
+        workflowVariables: {},
         blockData: {},
         blockNameMapping: {},
         isCustomTool: false,
@@ -75,6 +76,7 @@ describe('Function Execute Tool', () => {
         code: 'const x = 40;\nconst y = 2;\nreturn x + y;',
         timeout: 10000,
         envVars: {},
+        workflowVariables: {},
         blockData: {},
         blockNameMapping: {},
         isCustomTool: false,
@@ -91,6 +93,7 @@ describe('Function Execute Tool', () => {
         code: 'return 42',
         timeout: 10000,
         envVars: {},
+        workflowVariables: {},
         blockData: {},
         blockNameMapping: {},
         isCustomTool: false,
diff --git a/apps/sim/tools/function/execute.ts b/apps/sim/tools/function/execute.ts
index 5ae6cf586..09735293f 100644
--- a/apps/sim/tools/function/execute.ts
+++ b/apps/sim/tools/function/execute.ts
@@ -45,6 +45,13 @@ export const functionExecuteTool: ToolConfig<CodeExecutionInput, CodeExecutionOu
       description: 'Mapping of block names to block IDs',
       default: {},
     },
+    workflowVariables: {
+      type: 'object',
+      required: false,
+      visibility: 'user-only',
+      description: 'Workflow variables for <variable.name> resolution',
+      default: {},
+    },
   },
 
   request: {
@@ -62,6 +69,7 @@ export const functionExecuteTool: ToolConfig<CodeExecutionInput, CodeExecutionOu
         code: codeContent,
         timeout: params.timeout || DEFAULT_TIMEOUT,
         envVars: params.envVars || {},
+        workflowVariables: params.workflowVariables || {},
         blockData: params.blockData || {},
         blockNameMapping: params.blockNameMapping || {},
         workflowId: params._context?.workflowId,
diff --git a/apps/sim/tools/function/types.ts b/apps/sim/tools/function/types.ts
index 70d3ef625..4ecf8c6e3 100644
--- a/apps/sim/tools/function/types.ts
+++ b/apps/sim/tools/function/types.ts
@@ -5,6 +5,7 @@ export interface CodeExecutionInput {
   timeout?: number
   memoryLimit?: number
   envVars?: Record<string, string>
+  workflowVariables?: Record<string, any>
   blockData?: Record<string, any>
   blockNameMapping?: Record<string, string>
   _context?: {
diff --git a/apps/sim/tools/index.ts b/apps/sim/tools/index.ts
index d053ebadf..f268539dd 100644
--- a/apps/sim/tools/index.ts
+++ b/apps/sim/tools/index.ts
@@ -40,16 +40,11 @@ async function processFileOutputs(
       return result
     }
 
-    logger.info(`File processing for tool ${tool.id}: checking outputs`, Object.keys(result.output))
     const processedOutput = await FileToolProcessor.processToolOutputs(
       result.output,
       tool,
       executionContext
     )
-    logger.info(
-      `File processing for tool ${tool.id}: processed outputs`,
-      Object.keys(processedOutput)
-    )
 
     return {
       ...result,
@@ -536,7 +531,14 @@ function validateClientSideParams(
   }
 
   // Internal parameters that should be excluded from validation
-  const internalParamSet = new Set(['_context', 'workflowId', 'envVars'])
+  const internalParamSet = new Set([
+    '_context',
+    'workflowId',
+    'envVars',
+    'workflowVariables',
+    'blockData',
+    'blockNameMapping',
+  ])
 
   // Check required parameters
   if (schema.required) {
diff --git a/apps/sim/tools/utils.test.ts b/apps/sim/tools/utils.test.ts
index 9b11fadd9..8fc1a9a04 100644
--- a/apps/sim/tools/utils.test.ts
+++ b/apps/sim/tools/utils.test.ts
@@ -658,6 +658,9 @@ describe('createCustomToolRequestBody', () => {
         BASE_URL: 'https://example.com',
       },
       workflowId: undefined,
+      workflowVariables: {},
+      blockData: {},
+      blockNameMapping: {},
       isCustomTool: true,
     })
   })
@@ -682,6 +685,9 @@ describe('createCustomToolRequestBody', () => {
       schema: { type: 'object', properties: {} },
       envVars: {},
       workflowId: 'test-workflow-123',
+      workflowVariables: {},
+      blockData: {},
+      blockNameMapping: {},
       isCustomTool: true,
     })
   })
diff --git a/apps/sim/tools/utils.ts b/apps/sim/tools/utils.ts
index 5aa7fdc7d..3daaf53a0 100644
--- a/apps/sim/tools/utils.ts
+++ b/apps/sim/tools/utils.ts
@@ -242,12 +242,22 @@ export function createCustomToolRequestBody(
     // 3. Empty object (fallback)
     const envVars = params.envVars || (isClient ? getClientEnvVars(getStore) : {})
 
+    // Get workflow variables from params (passed from execution context)
+    const workflowVariables = params.workflowVariables || {}
+
+    // Get block data and mapping from params (passed from execution context)
+    const blockData = params.blockData || {}
+    const blockNameMapping = params.blockNameMapping || {}
+
     // Include everything needed for execution
     return {
       code: customTool.code,
       params: params, // These will be available in the VM context
       schema: customTool.schema.function.parameters, // For validation
       envVars: envVars, // Environment variables
+      workflowVariables: workflowVariables, // Workflow variables for <variable.name> resolution
+      blockData: blockData, // Runtime block outputs for <block.field> resolution
+      blockNameMapping: blockNameMapping, // Block name to ID mapping
       workflowId: workflowId, // Pass workflowId for server-side context
       isCustomTool: true, // Flag to indicate this is a custom tool execution
     }