diff --git a/src/logging.rs b/src/logging.rs
index ba544d2..13fb044 100644
--- a/src/logging.rs
+++ b/src/logging.rs
@@ -181,34 +181,43 @@ pub fn detect_network_from_url(rpc_url: &str) -> &'static str {
 /// 
 /// # Arguments
 /// * `level` - Optional log level filter (defaults to "info")
+/// * `use_stderr` - If true, logs to stderr instead of stdout. This is required for stdio transport mode.
 /// 
 /// # Examples
 /// ```
 /// use solana_mcp_server::logging::init_logging;
 /// 
-/// // Initialize with default level (info)
-/// init_logging(None);
+/// // Initialize with default level (info) for web/websocket mode
+/// init_logging(None, false);
 /// 
-/// // Initialize with debug level
-/// init_logging(Some("debug"));
+/// // Initialize for stdio mode (logs to stderr)
+/// init_logging(Some("debug"), true);
 /// ```
-pub fn init_logging(level: Option<&str>) -> Result<(), Box<dyn std::error::Error + Send + Sync>> {
+pub fn init_logging(level: Option<&str>, use_stderr: bool) -> Result<(), Box<dyn std::error::Error + Send + Sync>> {
     let filter = EnvFilter::try_from_default_env()
         .or_else(|_| EnvFilter::try_new(level.unwrap_or("info")))?;
 
-    tracing_subscriber::registry()
-        .with(filter)
-        .with(
-            fmt::layer()
-                .json()
-                .with_current_span(false)
-                .with_thread_ids(true)
-                .with_thread_names(true)
-                .with_target(true)
-                .with_line_number(true)
-                .with_file(true)
-        )
-        .try_init()?;
+    let fmt_layer = fmt::layer()
+        .json()
+        .with_current_span(false)
+        .with_thread_ids(true)
+        .with_thread_names(true)
+        .with_target(true)
+        .with_line_number(true)
+        .with_file(true);
+
+    let subscriber = tracing_subscriber::registry()
+        .with(filter);
+
+    if use_stderr {
+        subscriber
+            .with(fmt_layer.with_writer(std::io::stderr))
+            .try_init()?;
+    } else {
+        subscriber
+            .with(fmt_layer)
+            .try_init()?;
+    }
 
     info!("Structured logging initialized");
     Ok(())
@@ -639,7 +648,7 @@ mod tests {
 
     fn init_test_logging() {
         INIT.call_once(|| {
-            let _ = init_logging(Some("debug"));
+            let _ = init_logging(Some("debug"), false);
         });
     }
 
diff --git a/src/main.rs b/src/main.rs
index 5a75603..937c801 100644
--- a/src/main.rs
+++ b/src/main.rs
@@ -32,24 +32,33 @@ enum Commands {
 
 #[tokio::main]
 async fn main() -> Result<()> {
-    // Initialize structured logging
-    if let Err(e) = init_logging(Some("info")) {
-        eprintln!("Failed to initialize logging: {e}");
-        std::process::exit(1);
-    }
-
     let cli = Cli::parse();
     
     match cli.command.unwrap_or(Commands::Stdio) {
         Commands::Stdio => {
+            // For stdio mode, logging MUST go to stderr to avoid corrupting the JSON-RPC protocol on stdout
+            if let Err(e) = init_logging(Some("info"), true) {
+                eprintln!("Failed to initialize logging: {e}");
+                std::process::exit(1);
+            }
             tracing::info!("Starting Solana MCP server in stdio mode...");
             start_server().await
         }
         Commands::Web { port } => {
+            // For web mode, logging can go to stdout since it doesn't interfere with HTTP protocol
+            if let Err(e) = init_logging(Some("info"), false) {
+                eprintln!("Failed to initialize logging: {e}");
+                std::process::exit(1);
+            }
             tracing::info!("Starting Solana MCP server in web service mode on port {}...", port);
             start_web_service(port).await
         }
         Commands::Websocket { port } => {
+            // For WebSocket mode, logging can go to stdout since it doesn't interfere with WebSocket protocol
+            if let Err(e) = init_logging(Some("info"), false) {
+                eprintln!("Failed to initialize logging: {e}");
+                std::process::exit(1);
+            }
             tracing::info!("Starting Solana MCP server in WebSocket mode on port {}...", port);
             start_websocket_service(port).await
         }
diff --git a/tests/error_handling.rs b/tests/error_handling.rs
index cecca82..3e0c02b 100644
--- a/tests/error_handling.rs
+++ b/tests/error_handling.rs
@@ -8,7 +8,7 @@ use uuid::Uuid;
 #[tokio::test]
 async fn test_error_handling_integration() {
     // Initialize logging for test
-    let _ = init_logging(Some("debug"));
+    let _ = init_logging(Some("debug"), false);
     
     // Initialize prometheus metrics for test
     let _ = solana_mcp_server::init_prometheus_metrics();