diff --git a/.github/workflows/test-lint.yml b/.github/workflows/test-lint.yml
index 291874dce..e38942b2c 100644
--- a/.github/workflows/test-lint.yml
+++ b/.github/workflows/test-lint.yml
@@ -66,6 +66,11 @@ jobs:
         id: tests
         run: hatch test tests --cover
         continue-on-error: false
+
+      - name: Upload coverage reports to Codecov
+        uses: codecov/codecov-action@v5
+        with:
+          token: ${{ secrets.CODECOV_TOKEN }}
   lint:
     name: Lint
     runs-on: ubuntu-latest
diff --git a/src/strands/tools/loader.py b/src/strands/tools/loader.py
index 5935077db..31e8dc788 100644
--- a/src/strands/tools/loader.py
+++ b/src/strands/tools/loader.py
@@ -5,7 +5,10 @@
 import os
 import sys
 import warnings
+from importlib.machinery import ModuleSpec
 from pathlib import Path
+from posixpath import expanduser
+from types import ModuleType
 from typing import List, cast
 
 from ..types.tools import AgentTool
@@ -15,16 +18,151 @@
 logger = logging.getLogger(__name__)
 
 
+def load_tool_from_string(tool_string: str) -> List[AgentTool]:
+    """Load tools follows strands supported input string formats.
+
+    This function can load a tool based on a string in the following ways:
+    1. Local file path to a module based tool: `./path/to/module/tool.py`
+    2. Module import path
+      2.1. Path to a module based tool: `strands_tools.file_read`
+      2.2. Path to a module with multiple AgentTool instances (@tool decorated): `tests.fixtures.say_tool`
+      2.3. Path to a module and a specific function: `tests.fixtures.say_tool:say`
+    """
+    # Case 1: Local file path to a tool
+    # Ex: ./path/to/my_cool_tool.py
+    tool_path = expanduser(tool_string)
+    if os.path.exists(tool_path):
+        return load_tools_from_file_path(tool_path)
+
+    # Case 2: Module import path
+    # Ex: test.fixtures.say_tool:say (Load specific @tool decorated function)
+    # Ex: strands_tools.file_read (Load all @tool decorated functions, or module tool)
+    return load_tools_from_module_path(tool_string)
+
+
+def load_tools_from_file_path(tool_path: str) -> List[AgentTool]:
+    """Load module from specified path, and then load tools from that module.
+
+    This function attempts to load the passed in path as a python module, and if it succeeds,
+    then it tries to import strands tool(s) from that module.
+    """
+    abs_path = str(Path(tool_path).resolve())
+    logger.debug("tool_path=<%s> | loading python tool from path", abs_path)
+
+    # Load the module by spec
+
+    # Using this to determine the module name
+    # ./path/to/my_cool_tool.py -> my_cool_tool
+    module_name = os.path.basename(tool_path).split(".")[0]
+
+    # This function imports a module based on its path, and gives it the provided name
+
+    spec: ModuleSpec = cast(ModuleSpec, importlib.util.spec_from_file_location(module_name, abs_path))
+    if not spec:
+        raise ImportError(f"Could not create spec for {module_name}")
+    if not spec.loader:
+        raise ImportError(f"No loader available for {module_name}")
+
+    module = importlib.util.module_from_spec(spec)
+    # Load, or re-load, the module
+    sys.modules[module_name] = module
+    # Execute the module to run any top level code
+    spec.loader.exec_module(module)
+
+    return load_tools_from_module(module, module_name)
+
+
+def load_tools_from_module_path(module_tool_path: str) -> list[AgentTool]:
+    """Load strands tool from a module path.
+
+    Example module paths:
+    my.module.path
+    my.module.path:tool_name
+    """
+    if ":" in module_tool_path:
+        module_path, tool_func_name = module_tool_path.split(":")
+    else:
+        module_path, tool_func_name = (module_tool_path, None)
+
+    try:
+        module = importlib.import_module(module_path)
+    except ModuleNotFoundError as e:
+        raise AttributeError(f'Tool string: "{module_tool_path}" is not a valid tool string.') from e
+
+    # If a ':' is present in the string, then its a targeted function in a module
+    if tool_func_name:
+        if hasattr(module, tool_func_name):
+            target_tool = getattr(module, tool_func_name)
+            if isinstance(target_tool, DecoratedFunctionTool):
+                return [target_tool]
+
+        raise AttributeError(f"Tool {tool_func_name} not found in module {module_path}")
+
+    # Else, try to import all of the @tool decorated tools, or the module based tool
+    module_name = module_path.split(".")[-1]
+    return load_tools_from_module(module, module_name)
+
+
+def load_tools_from_module(module: ModuleType, module_name: str) -> list[AgentTool]:
+    """Load tools from a module.
+
+    First checks if the passed in module has instances of DecoratedToolFunction classes as atributes to the module.
+    If so, then it returns them as a list of tools. If not, then it attempts to load the module as a module based tool.
+    """
+    logger.debug("tool_name=<%s>, module=<%s> | loading tools from module", module_name, module_name)
+
+    # Try and see if any of the attributes in the module are function-based tools decorated with @tool
+    # This means that there may be more than one tool available in this module, so we load them all
+
+    function_tools: List[AgentTool] = []
+    # Function tools will appear as attributes in the module
+    for attr_name in dir(module):
+        attr = getattr(module, attr_name)
+        # Check if the module attribute is a DecoratedFunctiontool
+        if isinstance(attr, DecoratedFunctionTool):
+            logger.debug("tool_name=<%s>, module=<%s> | found function-based tool in module", attr_name, module_name)
+            function_tools.append(cast(AgentTool, attr))
+
+    if function_tools:
+        return function_tools
+
+    # Finally, if no DecoratedFunctionTools are found in the module, fall back
+    # to module based tools, and search for TOOL_SPEC + function
+    module_tool_name = module_name
+    tool_spec = getattr(module, "TOOL_SPEC", None)
+    if not tool_spec:
+        raise AttributeError(
+            f"The module {module_tool_name} is not a valid module for loading tools."
+            "This module must contain @tool decorated function(s), or must be a module based tool."
+        )
+
+    # If this is a module based tool, the module should have a function with the same name as the module itself
+    if not hasattr(module, module_tool_name):
+        raise AttributeError(f"Module-based tool {module_tool_name} missing function {module_tool_name}")
+
+    tool_func = getattr(module, module_tool_name)
+    if not callable(tool_func):
+        raise TypeError(f"Tool {module_tool_name} function is not callable")
+
+    return [PythonAgentTool(module_tool_name, tool_spec, tool_func)]
+
+
 class ToolLoader:
     """Handles loading of tools from different sources."""
 
     @staticmethod
     def load_python_tools(tool_path: str, tool_name: str) -> List[AgentTool]:
-        """Load a Python tool module and return all discovered function-based tools as a list.
+        """DEPRECATED: Load a Python tool module and return all discovered function-based tools as a list.
 
         This method always returns a list of AgentTool (possibly length 1). It is the
         canonical API for retrieving multiple tools from a single Python file.
         """
+        warnings.warn(
+            "ToolLoader.load_python_tool is deprecated and will be removed in Strands SDK 2.0. "
+            "Use the `load_tools_from_string` or `load_tools_from_module` methods instead.",
+            DeprecationWarning,
+            stacklevel=2,
+        )
         try:
             # Support module:function style (e.g. package.module:function)
             if not os.path.exists(tool_path) and ":" in tool_path:
@@ -108,7 +246,7 @@ def load_python_tool(tool_path: str, tool_name: str) -> AgentTool:
         """
         warnings.warn(
             "ToolLoader.load_python_tool is deprecated and will be removed in Strands SDK 2.0. "
-            "Use ToolLoader.load_python_tools(...) which always returns a list of AgentTool.",
+            "Use the `load_tools_from_string` or `load_tools_from_module` methods instead.",
             DeprecationWarning,
             stacklevel=2,
         )
@@ -127,7 +265,7 @@ def load_tool(cls, tool_path: str, tool_name: str) -> AgentTool:
         """
         warnings.warn(
             "ToolLoader.load_tool is deprecated and will be removed in Strands SDK 2.0. "
-            "Use ToolLoader.load_tools(...) which always returns a list of AgentTool.",
+            "Use the `load_tools_from_string` or `load_tools_from_module` methods instead.",
             DeprecationWarning,
             stacklevel=2,
         )
@@ -140,7 +278,7 @@ def load_tool(cls, tool_path: str, tool_name: str) -> AgentTool:
 
     @classmethod
     def load_tools(cls, tool_path: str, tool_name: str) -> list[AgentTool]:
-        """Load tools from a file based on its file extension.
+        """DEPRECATED: Load tools from a file based on its file extension.
 
         Args:
             tool_path: Path to the tool file.
@@ -154,6 +292,12 @@ def load_tools(cls, tool_path: str, tool_name: str) -> list[AgentTool]:
             ValueError: If the tool file has an unsupported extension.
             Exception: For other errors during tool loading.
         """
+        warnings.warn(
+            "ToolLoader.load_tools is deprecated and will be removed in Strands SDK 2.0. "
+            "Use the `load_tools_from_string` or `load_tools_from_module` methods instead.",
+            DeprecationWarning,
+            stacklevel=2,
+        )
         ext = Path(tool_path).suffix.lower()
         abs_path = str(Path(tool_path).resolve())
 
diff --git a/src/strands/tools/registry.py b/src/strands/tools/registry.py
index 0660337a2..3631c9dee 100644
--- a/src/strands/tools/registry.py
+++ b/src/strands/tools/registry.py
@@ -8,6 +8,7 @@
 import logging
 import os
 import sys
+import warnings
 from importlib import import_module, util
 from os.path import expanduser
 from pathlib import Path
@@ -18,6 +19,7 @@
 from strands.tools.decorator import DecoratedFunctionTool
 
 from ..types.tools import AgentTool, ToolSpec
+from .loader import load_tool_from_string, load_tools_from_module
 from .tools import PythonAgentTool, normalize_schema, normalize_tool_spec
 
 logger = logging.getLogger(__name__)
@@ -36,18 +38,23 @@ def __init__(self) -> None:
         self.tool_config: Optional[Dict[str, Any]] = None
 
     def process_tools(self, tools: List[Any]) -> List[str]:
-        """Process tools list that can contain tool names, paths, imported modules, or functions.
+        """Process tools list.
+
+        Process list of tools that can contain local file path string, module import path string,
+        imported modules, @tool decorated functions, or instances of AgentTool.
 
         Args:
             tools: List of tool specifications.
                 Can be:
+            1. Local file path to a module based tool: `./path/to/module/tool.py`
+            2. Module import path
+              2.1. Path to a module based tool: `strands_tools.file_read`
+              2.2. Path to a module with multiple AgentTool instances (@tool decorated): `tests.fixtures.say_tool`
+              2.3. Path to a module and a specific function: `tests.fixtures.say_tool:say`
+            3. A module for a module based tool
+            4. Instances of AgentTool (@tool decorated functions)
+            5. Dictionaries with name/path keys (deprecated)
 
-                - String tool names (e.g., "calculator")
-                - File paths (e.g., "/path/to/tool.py")
-                - Imported Python modules (e.g., a module object)
-                - Functions decorated with @tool
-                - Dictionaries with name/path keys
-                - Instance of an AgentTool
 
         Returns:
             List of tool names that were processed.
@@ -55,62 +62,76 @@ def process_tools(self, tools: List[Any]) -> List[str]:
         tool_names = []
 
         def add_tool(tool: Any) -> None:
-            # Case 1: String file path
-            if isinstance(tool, str):
-                # Extract tool name from path
-                tool_name = os.path.basename(tool).split(".")[0]
-                self.load_tool_from_filepath(tool_name=tool_name, tool_path=tool)
-                tool_names.append(tool_name)
-
-            # Case 2: Dictionary with name and path
-            elif isinstance(tool, dict) and "name" in tool and "path" in tool:
-                self.load_tool_from_filepath(tool_name=tool["name"], tool_path=tool["path"])
-                tool_names.append(tool["name"])
-
-            # Case 3: Dictionary with path only
-            elif isinstance(tool, dict) and "path" in tool:
-                tool_name = os.path.basename(tool["path"]).split(".")[0]
-                self.load_tool_from_filepath(tool_name=tool_name, tool_path=tool["path"])
-                tool_names.append(tool_name)
-
-            # Case 4: Imported Python module
-            elif hasattr(tool, "__file__") and inspect.ismodule(tool):
-                # Get the module file path
-                module_path = tool.__file__
-                # Extract the tool name from the module name
-                tool_name = tool.__name__.split(".")[-1]
-
-                # Check for TOOL_SPEC in module to validate it's a Strands tool
-                if hasattr(tool, "TOOL_SPEC") and hasattr(tool, tool_name) and module_path:
-                    self.load_tool_from_filepath(tool_name=tool_name, tool_path=module_path)
-                    tool_names.append(tool_name)
+            try:
+                # String based tool
+                # Can be a file path, a module path, or a module path with a targeted function. Examples:
+                # './path/to/tool.py'
+                # 'my.module.tool'
+                # 'my.module.tool:tool_name'
+                if isinstance(tool, str):
+                    tools = load_tool_from_string(tool)
+                    for a_tool in tools:
+                        a_tool.mark_dynamic()
+                        self.register_tool(a_tool)
+                        tool_names.append(a_tool.tool_name)
+
+                # Dictionary with name and path
+                elif isinstance(tool, dict) and "name" in tool and "path" in tool:
+                    tools = load_tool_from_string(tool["path"])
+
+                    tool_found = False
+                    for a_tool in tools:
+                        if a_tool.tool_name == tool["name"]:
+                            a_tool.mark_dynamic()
+                            self.register_tool(a_tool)
+                            tool_names.append(a_tool.tool_name)
+                            tool_found = True
+
+                    if not tool_found:
+                        raise ValueError(f'Tool "{tool["name"]}" not found in "{tool["path"]}"')
+
+                # Dictionary with path only
+                elif isinstance(tool, dict) and "path" in tool:
+                    tools = load_tool_from_string(tool["path"])
+
+                    for a_tool in tools:
+                        a_tool.mark_dynamic()
+                        self.register_tool(a_tool)
+                        tool_names.append(a_tool.tool_name)
+
+                # Imported Python module
+                elif hasattr(tool, "__file__") and inspect.ismodule(tool):
+                    # Extract the tool name from the module name
+                    module_tool_name = tool.__name__.split(".")[-1]
+
+                    tools = load_tools_from_module(tool, module_tool_name)
+                    for a_tool in tools:
+                        self.register_tool(a_tool)
+                        tool_names.append(a_tool.tool_name)
+
+                # Case 5: AgentTools (which also covers @tool)
+                elif isinstance(tool, AgentTool):
+                    self.register_tool(tool)
+                    tool_names.append(tool.tool_name)
+
+                # Case 6: Nested iterable (list, tuple, etc.) - add each sub-tool
+                elif isinstance(tool, Iterable) and not isinstance(tool, (str, bytes, bytearray)):
+                    for t in tool:
+                        add_tool(t)
                 else:
-                    function_tools = self._scan_module_for_tools(tool)
-                    for function_tool in function_tools:
-                        self.register_tool(function_tool)
-                        tool_names.append(function_tool.tool_name)
-
-                    if not function_tools:
-                        logger.warning("tool_name=<%s>, module_path=<%s> | invalid agent tool", tool_name, module_path)
-
-            # Case 5: AgentTools (which also covers @tool)
-            elif isinstance(tool, AgentTool):
-                self.register_tool(tool)
-                tool_names.append(tool.tool_name)
-            # Case 6: Nested iterable (list, tuple, etc.) - add each sub-tool
-            elif isinstance(tool, Iterable) and not isinstance(tool, (str, bytes, bytearray)):
-                for t in tool:
-                    add_tool(t)
-            else:
-                logger.warning("tool=<%s> | unrecognized tool specification", tool)
+                    logger.warning("tool=<%s> | unrecognized tool specification", tool)
 
-        for a_tool in tools:
-            add_tool(a_tool)
+            except Exception as e:
+                exception_str = str(e)
+                logger.exception("tool_name=<%s> | failed to load tool", tool)
+                raise ValueError(f"Failed to load tool {tool}: {exception_str}") from e
 
+        for tool in tools:
+            add_tool(tool)
         return tool_names
 
     def load_tool_from_filepath(self, tool_name: str, tool_path: str) -> None:
-        """Load a tool from a file path.
+        """DEPRECATED: Load a tool from a file path.
 
         Args:
             tool_name: Name of the tool.
@@ -120,6 +141,13 @@ def load_tool_from_filepath(self, tool_name: str, tool_path: str) -> None:
             FileNotFoundError: If the tool file is not found.
             ValueError: If the tool cannot be loaded.
         """
+        warnings.warn(
+            "load_tool_from_filepath is deprecated and will be removed in Strands SDK 2.0. "
+            "`process_tools` automatically handles loading tools from a filepath.",
+            DeprecationWarning,
+            stacklevel=2,
+        )
+
         from .loader import ToolLoader
 
         try:
diff --git a/tests/fixtures/say_tool.py b/tests/fixtures/say_tool.py
new file mode 100644
index 000000000..4607b2501
--- /dev/null
+++ b/tests/fixtures/say_tool.py
@@ -0,0 +1,17 @@
+from strands import tool
+
+
+@tool
+def say(input: str) -> str:
+    """Say something."""
+    return f"Hello {input}!"
+
+
+@tool
+def dont_say(input: str) -> str:
+    """Dont say something."""
+    return "Didnt say anything!"
+
+
+def not_a_tool() -> str:
+    return "Not a tool!"
diff --git a/tests/fixtures/tool_with_spec_but_no_function.py b/tests/fixtures/tool_with_spec_but_no_function.py
new file mode 100644
index 000000000..75f8bf6f6
--- /dev/null
+++ b/tests/fixtures/tool_with_spec_but_no_function.py
@@ -0,0 +1 @@
+TOOL_SPEC = {"hello": "world!"}
diff --git a/tests/fixtures/tool_with_spec_but_non_callable_function.py b/tests/fixtures/tool_with_spec_but_non_callable_function.py
new file mode 100644
index 000000000..0ca2f092c
--- /dev/null
+++ b/tests/fixtures/tool_with_spec_but_non_callable_function.py
@@ -0,0 +1,3 @@
+TOOL_SPEC = {"hello": "world"}
+
+tool_with_spec_but_non_callable_function = "not a function!"
diff --git a/tests/strands/tools/test_loader.py b/tests/strands/tools/test_loader.py
index 6b86d00ee..13aca90c3 100644
--- a/tests/strands/tools/test_loader.py
+++ b/tests/strands/tools/test_loader.py
@@ -1,11 +1,12 @@
 import os
 import re
+import tempfile
 import textwrap
 
 import pytest
 
 from strands.tools.decorator import DecoratedFunctionTool
-from strands.tools.loader import ToolLoader
+from strands.tools.loader import ToolLoader, load_tools_from_file_path
 from strands.tools.tools import PythonAgentTool
 
 
@@ -310,3 +311,9 @@ def test_load_tool_path_returns_single_tool(tool_path):
 
     assert loaded_python_tool.tool_name == "alpha"
     assert loaded_tool.tool_name == "alpha"
+
+
+def test_load_tools_from_file_path_module_spec_missing():
+    with tempfile.NamedTemporaryFile() as f:
+        with pytest.raises(ImportError, match=f"Could not create spec for {os.path.basename(f.name)}"):
+            load_tools_from_file_path(f.name)
diff --git a/tests/strands/tools/test_registry.py b/tests/strands/tools/test_registry.py
index f0759ea07..ee0098adc 100644
--- a/tests/strands/tools/test_registry.py
+++ b/tests/strands/tools/test_registry.py
@@ -26,7 +26,10 @@ def test_process_tools_with_invalid_path():
     tool_registry = ToolRegistry()
     invalid_path = "not a filepath"
 
-    with pytest.raises(ValueError, match=f"Failed to load tool {invalid_path.split('.')[0]}: Tool file not found:.*"):
+    with pytest.raises(
+        ValueError,
+        match=f'Failed to load tool {invalid_path}: Tool string: "{invalid_path}" is not a valid tool string',
+    ):
         tool_registry.process_tools([invalid_path])
 
 
@@ -164,3 +167,96 @@ def test_register_tool_duplicate_name_with_hot_reload():
 
     # Verify the second tool replaced the first
     assert tool_registry.registry["hot_reload_tool"] == tool_2
+
+
+def test_register_strands_tools_from_module():
+    tool_registry = ToolRegistry()
+    tool_registry.process_tools(["tests.fixtures.say_tool"])
+
+    assert len(tool_registry.registry) == 2
+    assert "say" in tool_registry.registry
+    assert "dont_say" in tool_registry.registry
+
+
+def test_register_strands_tools_specific_tool_from_module():
+    tool_registry = ToolRegistry()
+    tool_registry.process_tools(["tests.fixtures.say_tool:say"])
+
+    assert len(tool_registry.registry) == 1
+    assert "say" in tool_registry.registry
+    assert "dont_say" not in tool_registry.registry
+
+
+def test_register_strands_tools_specific_tool_from_module_tool_missing():
+    tool_registry = ToolRegistry()
+
+    with pytest.raises(ValueError, match="Failed to load tool tests.fixtures.say_tool:nay: "):
+        tool_registry.process_tools(["tests.fixtures.say_tool:nay"])
+
+
+def test_register_strands_tools_specific_tool_from_module_not_a_tool():
+    tool_registry = ToolRegistry()
+
+    with pytest.raises(ValueError, match="Failed to load tool tests.fixtures.say_tool:not_a_tool: "):
+        tool_registry.process_tools(["tests.fixtures.say_tool:not_a_tool"])
+
+
+def test_register_strands_tools_with_dict():
+    tool_registry = ToolRegistry()
+    tool_registry.process_tools([{"path": "tests.fixtures.say_tool"}])
+
+    assert len(tool_registry.registry) == 2
+    assert "say" in tool_registry.registry
+    assert "dont_say" in tool_registry.registry
+
+
+def test_register_strands_tools_specific_tool_with_dict():
+    tool_registry = ToolRegistry()
+    tool_registry.process_tools([{"path": "tests.fixtures.say_tool", "name": "say"}])
+
+    assert len(tool_registry.registry) == 1
+    assert "say" in tool_registry.registry
+
+
+def test_register_strands_tools_specific_tool_with_dict_not_found():
+    tool_registry = ToolRegistry()
+
+    with pytest.raises(
+        ValueError,
+        match="Failed to load tool {'path': 'tests.fixtures.say_tool'"
+        ", 'name': 'nay'}: Tool \"nay\" not found in \"tests.fixtures.say_tool\"",
+    ):
+        tool_registry.process_tools([{"path": "tests.fixtures.say_tool", "name": "nay"}])
+
+
+def test_register_strands_tools_module_no_spec():
+    tool_registry = ToolRegistry()
+
+    with pytest.raises(
+        ValueError,
+        match="Failed to load tool tests.fixtures.mocked_model_provider: "
+        "The module mocked_model_provider is not a valid module",
+    ):
+        tool_registry.process_tools(["tests.fixtures.mocked_model_provider"])
+
+
+def test_register_strands_tools_module_no_function():
+    tool_registry = ToolRegistry()
+
+    with pytest.raises(
+        ValueError,
+        match="Failed to load tool tests.fixtures.tool_with_spec_but_no_function: "
+        "Module-based tool tool_with_spec_but_no_function missing function tool_with_spec_but_no_function",
+    ):
+        tool_registry.process_tools(["tests.fixtures.tool_with_spec_but_no_function"])
+
+
+def test_register_strands_tools_module_non_callable_function():
+    tool_registry = ToolRegistry()
+
+    with pytest.raises(
+        ValueError,
+        match="Failed to load tool tests.fixtures.tool_with_spec_but_non_callable_function:"
+        " Tool tool_with_spec_but_non_callable_function function is not callable",
+    ):
+        tool_registry.process_tools(["tests.fixtures.tool_with_spec_but_non_callable_function"])