diff --git a/tests/tools/percyTokenLeak.test.ts b/tests/tools/percyTokenLeak.test.ts
new file mode 100644
index 00000000..cb365d75
--- /dev/null
+++ b/tests/tools/percyTokenLeak.test.ts
@@ -0,0 +1,104 @@
+import { describe, it, expect, vi, beforeEach, Mock } from "vitest";
+import { runPercyWeb } from "../../src/tools/sdk-utils/percy-web/handler";
+import { runPercyAutomateOnly } from "../../src/tools/sdk-utils/percy-automate/handler";
+import { runPercyScan } from "../../src/tools/run-percy-scan";
+import { storedPercyResults } from "../../src/lib/inmemory-store";
+import {
+  PercyIntegrationTypeEnum,
+  SDKSupportedLanguageEnum,
+  SDKSupportedBrowserAutomationFrameworkEnum,
+  SDKSupportedTestingFrameworkEnum,
+} from "../../src/tools/sdk-utils/common/types";
+
+vi.mock("../../src/lib/inmemory-store", () => ({
+  storedPercyResults: { get: vi.fn(), set: vi.fn() },
+}));
+vi.mock("../../src/tools/sdk-utils/percy-web/constants", async (importOriginal) => {
+  // Preserve real instruction strings (consumed by frameworks.ts at load
+  // time) and override only the two symbols runPercyScan reaches for.
+  const actual = await importOriginal<
+    typeof import("../../src/tools/sdk-utils/percy-web/constants")
+  >();
+  return {
+    ...actual,
+    getFrameworkTestCommand: vi.fn().mockReturnValue("npx percy exec -- jest"),
+    PERCY_FALLBACK_STEPS: ["Run percy scan with default settings"],
+  };
+});
+vi.mock("../../src/logger", () => ({
+  default: { error: vi.fn(), info: vi.fn(), debug: vi.fn() },
+}));
+
+const LEAKED_PERCY_TOKEN_RE =
+  /PERCY_TOKEN\s*=\s*["']?[A-Za-z0-9_-]{16,}["']?/;
+const TOKEN_PLACEHOLDER = "<your Percy project token>";
+
+// Walk strings/arrays/objects and concatenate every string so the guard
+// covers structured payloads (e.g. CallToolResult.content) too.
+function flattenContent(value: unknown): string {
+  if (typeof value === "string") return value;
+  if (Array.isArray(value)) return value.map(flattenContent).join("\n");
+  if (value && typeof value === "object") {
+    return Object.values(value as Record<string, unknown>)
+      .map(flattenContent)
+      .join("\n");
+  }
+  return "";
+}
+
+describe("PERCY_TOKEN leak — no Percy setup handler echoes a real token", () => {
+  beforeEach(() => vi.clearAllMocks());
+
+  it("runPercyWeb emits only the placeholder, never a high-entropy token literal", () => {
+    const result = runPercyWeb({
+      projectName: "test",
+      detectedLanguage: SDKSupportedLanguageEnum.nodejs,
+      detectedBrowserAutomationFramework:
+        SDKSupportedBrowserAutomationFrameworkEnum.selenium,
+      detectedTestingFramework: SDKSupportedTestingFrameworkEnum.jest,
+      integrationType: PercyIntegrationTypeEnum.WEB,
+    });
+    const text = flattenContent(result.steps);
+    expect(text).not.toMatch(LEAKED_PERCY_TOKEN_RE);
+    expect(text).toContain(TOKEN_PLACEHOLDER);
+  });
+
+  it("runPercyAutomateOnly emits only the placeholder, never a high-entropy token literal", () => {
+    const result = runPercyAutomateOnly({
+      projectName: "test",
+      detectedLanguage: SDKSupportedLanguageEnum.python,
+      detectedBrowserAutomationFramework:
+        SDKSupportedBrowserAutomationFrameworkEnum.selenium,
+      detectedTestingFramework: SDKSupportedTestingFrameworkEnum.pytest,
+      integrationType: PercyIntegrationTypeEnum.AUTOMATE,
+    });
+    const text = flattenContent(result.steps);
+    expect(text).not.toMatch(LEAKED_PERCY_TOKEN_RE);
+    expect(text).toContain(TOKEN_PLACEHOLDER);
+  });
+
+  it("runPercyScan emits only the placeholder, never a high-entropy token literal", async () => {
+    (storedPercyResults.get as Mock).mockReturnValue(null);
+    const result = await runPercyScan({
+      projectName: "test",
+      integrationType: PercyIntegrationTypeEnum.WEB,
+    });
+    const text = flattenContent(result.content);
+    expect(text).not.toMatch(LEAKED_PERCY_TOKEN_RE);
+    expect(text).toContain(TOKEN_PLACEHOLDER);
+  });
+
+  // Sanity-check the guard regex itself so a typo can't silently let leaks
+  // through. The placeholder must NOT trip the regex; a realistic token must.
+  it("LEAKED_PERCY_TOKEN_RE catches a real-looking token and ignores the placeholder", () => {
+    expect('export PERCY_TOKEN="abc123_xyz_secretvalue_456789"').toMatch(
+      LEAKED_PERCY_TOKEN_RE,
+    );
+    expect("PERCY_TOKEN=abcdef0123456789ABCDEF").toMatch(
+      LEAKED_PERCY_TOKEN_RE,
+    );
+    expect(`PERCY_TOKEN=${TOKEN_PLACEHOLDER}`).not.toMatch(
+      LEAKED_PERCY_TOKEN_RE,
+    );
+  });
+});