diff --git a/src/strands/tools/decorator.py b/src/strands/tools/decorator.py
index 5ec324b68..ffac02ead 100644
--- a/src/strands/tools/decorator.py
+++ b/src/strands/tools/decorator.py
@@ -66,6 +66,98 @@ def my_tool(param1: str, param2: int = 42) -> dict:
 logger = logging.getLogger(__name__)
 
 
+def _resolve_json_schema_references(schema: dict[str, Any]) -> dict[str, Any]:
+    """Resolve all $ref references in a JSON schema by inlining definitions.
+
+    Some model providers (e.g., Bedrock via LiteLLM) don't support JSON Schema
+    $ref references. This function flattens the schema by replacing all $ref
+    occurrences with their actual definitions from the $defs section.
+
+    This is particularly important for Pydantic-generated schemas that use $defs
+    for enum types, as these would otherwise cause validation errors with certain
+    model providers.
+
+    Args:
+        schema: A JSON schema dict that may contain $ref references and a $defs section
+
+    Returns:
+        A new schema dict with all $ref references replaced by their definitions.
+        The $defs section is removed from the result.
+
+    Example:
+        Input schema with $ref:
+        {
+            "$defs": {"Color": {"type": "string", "enum": ["red", "blue"]}},
+            "properties": {"color": {"$ref": "#/$defs/Color"}}
+        }
+
+        Output schema with resolved reference:
+        {
+            "properties": {"color": {"type": "string", "enum": ["red", "blue"]}}
+        }
+    """
+    # Get definitions if they exist
+    defs = schema.get("$defs", {})
+    if not defs:
+        return schema
+
+    def resolve_node(node: Any) -> Any:
+        """Recursively process a schema node, replacing any $ref with actual definitions.
+
+        Args:
+            node: Any value from the schema (dict, list, or primitive)
+
+        Returns:
+            The node with all $ref references resolved
+        """
+        if not isinstance(node, dict):
+            return node
+
+        # If this node is a $ref, replace it with the referenced definition
+        if "$ref" in node:
+            # Extract the definition name from the reference (e.g., "#/$defs/Color" -> "Color")
+            ref_name = node["$ref"].split("/")[-1]
+            if ref_name in defs:
+                # Copy the referenced definition to avoid modifying the original
+                resolved = defs[ref_name].copy()
+                # Preserve any additional properties from the $ref node (e.g., "default", "description")
+                for key, value in node.items():
+                    if key != "$ref":
+                        resolved[key] = value
+                # Recursively resolve in case the definition itself contains references
+                return resolve_node(resolved)
+            # If reference not found, return as-is (shouldn't happen with valid schemas)
+            return node
+
+        # For dict nodes, recursively process all values
+        result: dict[str, Any] = {}
+        for key, value in node.items():
+            if isinstance(value, list):
+                # For arrays, resolve each item
+                result[key] = [resolve_node(item) for item in value]
+            elif isinstance(value, dict):
+                # For objects, check if this is a properties dict that needs special handling
+                if key == "properties" and isinstance(value, dict):
+                    # Ensure all property definitions are fully resolved
+                    result[key] = {
+                        prop_name: resolve_node(prop_schema)
+                        for prop_name, prop_schema in value.items()
+                    }
+                else:
+                    result[key] = resolve_node(value)
+            else:
+                # Primitive values are copied as-is
+                result[key] = value
+        return result
+
+    # Process the entire schema, excluding the $defs section from the result
+    result = {
+        key: resolve_node(value) for key, value in schema.items() if key != "$defs"
+    }
+
+    return result
+
+
 # Type for wrapped function
 T = TypeVar("T", bound=Callable[..., Any])
 
@@ -101,7 +193,8 @@ def __init__(self, func: Callable[..., Any]) -> None:
 
         # Get parameter descriptions from parsed docstring
         self.param_descriptions = {
-            param.arg_name: param.description or f"Parameter {param.arg_name}" for param in self.doc.params
+            param.arg_name: param.description or f"Parameter {param.arg_name}"
+            for param in self.doc.params
         }
 
         # Create a Pydantic model for validation
@@ -131,7 +224,10 @@ def _create_input_model(self) -> Type[BaseModel]:
             description = self.param_descriptions.get(name, f"Parameter {name}")
 
             # Create Field with description and default
-            field_definitions[name] = (param_type, Field(default=default, description=description))
+            field_definitions[name] = (
+                param_type,
+                Field(default=default, description=description),
+            )
 
         # Create model name based on function name
         model_name = f"{self.func.__name__.capitalize()}Tool"
@@ -173,8 +269,17 @@ def extract_metadata(self) -> ToolSpec:
         # Clean up Pydantic-specific schema elements
         self._clean_pydantic_schema(input_schema)
 
+        # Flatten schema by resolving $ref references to their definitions
+        # This is required for compatibility with model providers that don't support
+        # JSON Schema $ref (e.g., Bedrock/Anthropic via LiteLLM)
+        input_schema = _resolve_json_schema_references(input_schema)
+
         # Create tool specification
-        tool_spec: ToolSpec = {"name": func_name, "description": description, "inputSchema": {"json": input_schema}}
+        tool_spec: ToolSpec = {
+            "name": func_name,
+            "description": description,
+            "inputSchema": {"json": input_schema},
+        }
 
         return tool_spec
 
@@ -206,7 +311,9 @@ def _clean_pydantic_schema(self, schema: dict[str, Any]) -> None:
                 if "anyOf" in prop_schema:
                     any_of = prop_schema["anyOf"]
                     # Handle Optional[Type] case (represented as anyOf[Type, null])
-                    if len(any_of) == 2 and any(item.get("type") == "null" for item in any_of):
+                    if len(any_of) == 2 and any(
+                        item.get("type") == "null" for item in any_of
+                    ):
                         # Find the non-null type
                         for item in any_of:
                             if item.get("type") != "null":
@@ -250,7 +357,9 @@ def validate_input(self, input_data: dict[str, Any]) -> dict[str, Any]:
         except Exception as e:
             # Re-raise with more detailed error message
             error_msg = str(e)
-            raise ValueError(f"Validation failed for input parameters: {error_msg}") from e
+            raise ValueError(
+                f"Validation failed for input parameters: {error_msg}"
+            ) from e
 
 
 P = ParamSpec("P")  # Captures all parameters
@@ -296,7 +405,9 @@ def __init__(
 
         functools.update_wrapper(wrapper=self, wrapped=self._tool_func)
 
-    def __get__(self, instance: Any, obj_type: Optional[Type] = None) -> "DecoratedFunctionTool[P, R]":
+    def __get__(
+        self, instance: Any, obj_type: Optional[Type] = None
+    ) -> "DecoratedFunctionTool[P, R]":
         """Descriptor protocol implementation for proper method binding.
 
         This method enables the decorated function to work correctly when used as a class method.
@@ -325,7 +436,9 @@ def my_tool():
         if instance is not None and not inspect.ismethod(self._tool_func):
             # Create a bound method
             tool_func = self._tool_func.__get__(instance, instance.__class__)
-            return DecoratedFunctionTool(self._tool_name, self._tool_spec, tool_func, self._metadata)
+            return DecoratedFunctionTool(
+                self._tool_name, self._tool_spec, tool_func, self._metadata
+            )
 
         return self
 
@@ -372,7 +485,9 @@ def tool_type(self) -> str:
         return "function"
 
     @override
-    async def stream(self, tool_use: ToolUse, invocation_state: dict[str, Any], **kwargs: Any) -> ToolGenerator:
+    async def stream(
+        self, tool_use: ToolUse, invocation_state: dict[str, Any], **kwargs: Any
+    ) -> ToolGenerator:
         """Stream the tool with a tool use specification.
 
         This method handles tool use streams from a Strands Agent. It validates the input,
@@ -403,7 +518,10 @@ async def stream(self, tool_use: ToolUse, invocation_state: dict[str, Any], **kw
             validated_input = self._metadata.validate_input(tool_input)
 
             # Pass along the agent if provided and expected by the function
-            if "agent" in invocation_state and "agent" in self._metadata.signature.parameters:
+            if (
+                "agent" in invocation_state
+                and "agent" in self._metadata.signature.parameters
+            ):
                 validated_input["agent"] = invocation_state.get("agent")
 
             # "Too few arguments" expected, hence the type ignore
@@ -468,6 +586,8 @@ def get_display_properties(self) -> dict[str, str]:
 # Handle @decorator
 @overload
 def tool(__func: Callable[P, R]) -> DecoratedFunctionTool[P, R]: ...
+
+
 # Handle @decorator()
 @overload
 def tool(
@@ -475,6 +595,8 @@ def tool(
     inputSchema: Optional[JSONSchema] = None,
     name: Optional[str] = None,
 ) -> Callable[[Callable[P, R]], DecoratedFunctionTool[P, R]]: ...
+
+
 # Suppressing the type error because we want callers to be able to use both `tool` and `tool()` at the
 # call site, but the actual implementation handles that and it's not representable via the type-system
 def tool(  # type: ignore
@@ -482,7 +604,9 @@ def tool(  # type: ignore
     description: Optional[str] = None,
     inputSchema: Optional[JSONSchema] = None,
     name: Optional[str] = None,
-) -> Union[DecoratedFunctionTool[P, R], Callable[[Callable[P, R]], DecoratedFunctionTool[P, R]]]:
+) -> Union[
+    DecoratedFunctionTool[P, R], Callable[[Callable[P, R]], DecoratedFunctionTool[P, R]]
+]:
     """Decorator that transforms a Python function into a Strands tool.
 
     This decorator seamlessly enables a function to be called both as a regular Python function and as a Strands tool.