diff --git a/pkg/vmcp/server/health_test.go b/pkg/vmcp/server/health_test.go
index 03660efc7..6b10c5d95 100644
--- a/pkg/vmcp/server/health_test.go
+++ b/pkg/vmcp/server/health_test.go
@@ -12,6 +12,7 @@ import (
 	"github.com/stretchr/testify/require"
 	"go.uber.org/mock/gomock"
 
+	"github.com/stacklok/toolhive/pkg/networking"
 	"github.com/stacklok/toolhive/pkg/vmcp"
 	"github.com/stacklok/toolhive/pkg/vmcp/aggregator"
 	"github.com/stacklok/toolhive/pkg/vmcp/mocks"
@@ -30,11 +31,15 @@ func createTestServer(t *testing.T) *server.Server {
 	mockBackendClient := mocks.NewMockBackendClient(ctrl)
 	rt := router.NewDefaultRouter()
 
+	// Find an available port for parallel test execution
+	port := networking.FindAvailable()
+	require.NotZero(t, port, "Failed to find available port")
+
 	srv := server.New(&server.Config{
 		Name:    "test-vmcp",
 		Version: "1.0.0",
 		Host:    "127.0.0.1",
-		Port:    0, // Random port for parallel tests
+		Port:    port,
 	}, rt, mockBackendClient)
 
 	// Register minimal capabilities
@@ -54,17 +59,28 @@ func createTestServer(t *testing.T) *server.Server {
 	require.NoError(t, err)
 
 	// Start server in background
-	ctx, cancel := context.WithCancel(context.Background())
-	go func() { _ = srv.Start(ctx) }()
+	ctx, cancel := context.WithCancel(t.Context())
+	t.Cleanup(cancel)
 
-	// Wait for server to start
-	time.Sleep(100 * time.Millisecond)
+	errCh := make(chan error, 1)
+	go func() {
+		if err := srv.Start(ctx); err != nil {
+			errCh <- err
+		}
+	}()
+
+	// Wait for server to be ready (with timeout)
+	select {
+	case <-srv.Ready():
+		// Server is ready to accept connections
+	case err := <-errCh:
+		t.Fatalf("Server failed to start: %v", err)
+	case <-time.After(5 * time.Second):
+		t.Fatalf("Server did not become ready within 5s (address: %s)", srv.Address())
+	}
 
-	// Cleanup
-	t.Cleanup(func() {
-		cancel()
-		time.Sleep(50 * time.Millisecond)
-	})
+	// Give the HTTP server a moment to start accepting connections
+	time.Sleep(10 * time.Millisecond)
 
 	return srv
 }
diff --git a/pkg/vmcp/server/server.go b/pkg/vmcp/server/server.go
index 190c72f0a..28dffcd0e 100644
--- a/pkg/vmcp/server/server.go
+++ b/pkg/vmcp/server/server.go
@@ -103,6 +103,11 @@ type Server struct {
 	// The mark3labs SDK calls our sessionIDAdapter, which delegates to this manager.
 	// The SDK does NOT manage sessions itself - it only provides the interface.
 	sessionManager *session.Manager
+
+	// Ready channel signals when the server is ready to accept connections.
+	// Closed once the listener is created and serving.
+	ready     chan struct{}
+	readyOnce sync.Once
 }
 
 // New creates a new Virtual MCP Server instance.
@@ -148,6 +153,7 @@ func New(
 		router:         rt,
 		backendClient:  backendClient,
 		sessionManager: sessionManager,
+		ready:          make(chan struct{}),
 	}
 }
 
@@ -262,6 +268,11 @@ func (s *Server) Start(ctx context.Context) error {
 		}
 	}()
 
+	// Signal that the server is ready (listener created and serving started)
+	s.readyOnce.Do(func() {
+		close(s.ready)
+	})
+
 	// Wait for either context cancellation or server error
 	select {
 	case <-ctx.Done():
@@ -600,3 +611,9 @@ func (*Server) handleHealth(w http.ResponseWriter, _ *http.Request) {
 func (s *Server) SessionManager() *session.Manager {
 	return s.sessionManager
 }
+
+// Ready returns a channel that is closed when the server is ready to accept connections.
+// This is useful for testing and synchronization.
+func (s *Server) Ready() <-chan struct{} {
+	return s.ready
+}