diff --git a/src/cli.ts b/src/cli.ts
index 2713d77..d544497 100644
--- a/src/cli.ts
+++ b/src/cli.ts
@@ -17,10 +17,17 @@ import { StdioServerTransport } from "./server/stdio.js";
 import { ListResourcesResultSchema } from "./types.js";
 
 async function runClient(url_or_command: string, args: string[]) {
-  const client = new Client({
-    name: "mcp-typescript test client",
-    version: "0.1.0",
-  });
+  const client = new Client(
+    {
+      name: "mcp-typescript test client",
+      version: "0.1.0",
+    },
+    {
+      capabilities: {
+        sampling: {},
+      },
+    },
+  );
 
   let clientTransport;
 
@@ -63,10 +70,15 @@ async function runServer(port: number | null) {
       console.log("Got new SSE connection");
 
       const transport = new SSEServerTransport("/message", res);
-      const server = new Server({
-        name: "mcp-typescript test server",
-        version: "0.1.0",
-      });
+      const server = new Server(
+        {
+          name: "mcp-typescript test server",
+          version: "0.1.0",
+        },
+        {
+          capabilities: {},
+        },
+      );
 
       servers.push(server);
 
@@ -97,10 +109,20 @@ async function runServer(port: number | null) {
       console.log(`Server running on http://localhost:${port}/sse`);
     });
   } else {
-    const server = new Server({
-      name: "mcp-typescript test server",
-      version: "0.1.0",
-    });
+    const server = new Server(
+      {
+        name: "mcp-typescript test server",
+        version: "0.1.0",
+      },
+      {
+        capabilities: {
+          prompts: {},
+          resources: {},
+          tools: {},
+          logging: {},
+        },
+      },
+    );
 
     const transport = new StdioServerTransport();
     await server.connect(transport);
diff --git a/src/client/index.test.ts b/src/client/index.test.ts
index d93ca39..5610a62 100644
--- a/src/client/index.test.ts
+++ b/src/client/index.test.ts
@@ -3,11 +3,364 @@
 /* eslint-disable @typescript-eslint/no-unused-expressions */
 import { Client } from "./index.js";
 import { z } from "zod";
-import { RequestSchema, NotificationSchema, ResultSchema } from "../types.js";
+import {
+  RequestSchema,
+  NotificationSchema,
+  ResultSchema,
+  LATEST_PROTOCOL_VERSION,
+  SUPPORTED_PROTOCOL_VERSIONS,
+  InitializeRequestSchema,
+  ListResourcesRequestSchema,
+  ListToolsRequestSchema,
+  CreateMessageRequestSchema,
+  ListRootsRequestSchema,
+} from "../types.js";
+import { Transport } from "../shared/transport.js";
+import { Server } from "../server/index.js";
+import { InMemoryTransport } from "../inMemory.js";
+
+test("should initialize with matching protocol version", async () => {
+  const clientTransport: Transport = {
+    start: jest.fn().mockResolvedValue(undefined),
+    close: jest.fn().mockResolvedValue(undefined),
+    send: jest.fn().mockImplementation((message) => {
+      if (message.method === "initialize") {
+        clientTransport.onmessage?.({
+          jsonrpc: "2.0",
+          id: message.id,
+          result: {
+            protocolVersion: LATEST_PROTOCOL_VERSION,
+            capabilities: {},
+            serverInfo: {
+              name: "test",
+              version: "1.0",
+            },
+          },
+        });
+      }
+      return Promise.resolve();
+    }),
+  };
+
+  const client = new Client(
+    {
+      name: "test client",
+      version: "1.0",
+    },
+    {
+      capabilities: {
+        sampling: {},
+      },
+    },
+  );
+
+  await client.connect(clientTransport);
+
+  // Should have sent initialize with latest version
+  expect(clientTransport.send).toHaveBeenCalledWith(
+    expect.objectContaining({
+      method: "initialize",
+      params: expect.objectContaining({
+        protocolVersion: LATEST_PROTOCOL_VERSION,
+      }),
+    }),
+  );
+});
+
+test("should initialize with supported older protocol version", async () => {
+  const OLD_VERSION = SUPPORTED_PROTOCOL_VERSIONS[1];
+  const clientTransport: Transport = {
+    start: jest.fn().mockResolvedValue(undefined),
+    close: jest.fn().mockResolvedValue(undefined),
+    send: jest.fn().mockImplementation((message) => {
+      if (message.method === "initialize") {
+        clientTransport.onmessage?.({
+          jsonrpc: "2.0",
+          id: message.id,
+          result: {
+            protocolVersion: OLD_VERSION,
+            capabilities: {},
+            serverInfo: {
+              name: "test",
+              version: "1.0",
+            },
+          },
+        });
+      }
+      return Promise.resolve();
+    }),
+  };
+
+  const client = new Client(
+    {
+      name: "test client",
+      version: "1.0",
+    },
+    {
+      capabilities: {
+        sampling: {},
+      },
+    },
+  );
+
+  await client.connect(clientTransport);
+
+  // Connection should succeed with the older version
+  expect(client.getServerVersion()).toEqual({
+    name: "test",
+    version: "1.0",
+  });
+});
+
+test("should reject unsupported protocol version", async () => {
+  const clientTransport: Transport = {
+    start: jest.fn().mockResolvedValue(undefined),
+    close: jest.fn().mockResolvedValue(undefined),
+    send: jest.fn().mockImplementation((message) => {
+      if (message.method === "initialize") {
+        clientTransport.onmessage?.({
+          jsonrpc: "2.0",
+          id: message.id,
+          result: {
+            protocolVersion: "invalid-version",
+            capabilities: {},
+            serverInfo: {
+              name: "test",
+              version: "1.0",
+            },
+          },
+        });
+      }
+      return Promise.resolve();
+    }),
+  };
+
+  const client = new Client(
+    {
+      name: "test client",
+      version: "1.0",
+    },
+    {
+      capabilities: {
+        sampling: {},
+      },
+    },
+  );
+
+  await expect(client.connect(clientTransport)).rejects.toThrow(
+    "Server's protocol version is not supported: invalid-version",
+  );
+
+  expect(clientTransport.close).toHaveBeenCalled();
+});
+
+test("should respect server capabilities", async () => {
+  const server = new Server(
+    {
+      name: "test server",
+      version: "1.0",
+    },
+    {
+      capabilities: {
+        resources: {},
+        tools: {},
+      },
+    },
+  );
+
+  server.setRequestHandler(InitializeRequestSchema, (_request) => ({
+    protocolVersion: LATEST_PROTOCOL_VERSION,
+    capabilities: {
+      resources: {},
+      tools: {},
+    },
+    serverInfo: {
+      name: "test",
+      version: "1.0",
+    },
+  }));
+
+  server.setRequestHandler(ListResourcesRequestSchema, () => ({
+    resources: [],
+  }));
+
+  server.setRequestHandler(ListToolsRequestSchema, () => ({
+    tools: [],
+  }));
+
+  const [clientTransport, serverTransport] =
+    InMemoryTransport.createLinkedPair();
+
+  const client = new Client(
+    {
+      name: "test client",
+      version: "1.0",
+    },
+    {
+      capabilities: {
+        sampling: {},
+      },
+      enforceStrictCapabilities: true,
+    },
+  );
+
+  await Promise.all([
+    client.connect(clientTransport),
+    server.connect(serverTransport),
+  ]);
+
+  // Server supports resources and tools, but not prompts
+  expect(client.getServerCapabilities()).toEqual({
+    resources: {},
+    tools: {},
+  });
+
+  // These should work
+  await expect(client.listResources()).resolves.not.toThrow();
+  await expect(client.listTools()).resolves.not.toThrow();
+
+  // This should throw because prompts are not supported
+  await expect(client.listPrompts()).rejects.toThrow(
+    "Server does not support prompts",
+  );
+});
+
+test("should respect client notification capabilities", async () => {
+  const server = new Server(
+    {
+      name: "test server",
+      version: "1.0",
+    },
+    {
+      capabilities: {},
+    },
+  );
+
+  const client = new Client(
+    {
+      name: "test client",
+      version: "1.0",
+    },
+    {
+      capabilities: {
+        roots: {
+          listChanged: true,
+        },
+      },
+    },
+  );
+
+  const [clientTransport, serverTransport] =
+    InMemoryTransport.createLinkedPair();
+
+  await Promise.all([
+    client.connect(clientTransport),
+    server.connect(serverTransport),
+  ]);
+
+  // This should work because the client has the roots.listChanged capability
+  await expect(client.sendRootsListChanged()).resolves.not.toThrow();
+
+  // Create a new client without the roots.listChanged capability
+  const clientWithoutCapability = new Client(
+    {
+      name: "test client without capability",
+      version: "1.0",
+    },
+    {
+      capabilities: {},
+      enforceStrictCapabilities: true,
+    },
+  );
+
+  await clientWithoutCapability.connect(clientTransport);
+
+  // This should throw because the client doesn't have the roots.listChanged capability
+  await expect(clientWithoutCapability.sendRootsListChanged()).rejects.toThrow(
+    /^Client does not support/,
+  );
+});
+
+test("should respect server notification capabilities", async () => {
+  const server = new Server(
+    {
+      name: "test server",
+      version: "1.0",
+    },
+    {
+      capabilities: {
+        logging: {},
+        resources: {
+          listChanged: true,
+        },
+      },
+    },
+  );
+
+  const client = new Client(
+    {
+      name: "test client",
+      version: "1.0",
+    },
+    {
+      capabilities: {},
+    },
+  );
+
+  const [clientTransport, serverTransport] =
+    InMemoryTransport.createLinkedPair();
+
+  await Promise.all([
+    client.connect(clientTransport),
+    server.connect(serverTransport),
+  ]);
+
+  // These should work because the server has the corresponding capabilities
+  await expect(
+    server.sendLoggingMessage({ level: "info", data: "Test" }),
+  ).resolves.not.toThrow();
+  await expect(server.sendResourceListChanged()).resolves.not.toThrow();
+
+  // This should throw because the server doesn't have the tools capability
+  await expect(server.sendToolListChanged()).rejects.toThrow(
+    "Server does not support notifying of tool list changes",
+  );
+});
+
+test("should only allow setRequestHandler for declared capabilities", () => {
+  const client = new Client(
+    {
+      name: "test client",
+      version: "1.0",
+    },
+    {
+      capabilities: {
+        sampling: {},
+      },
+    },
+  );
+
+  // This should work because sampling is a declared capability
+  expect(() => {
+    client.setRequestHandler(CreateMessageRequestSchema, () => ({
+      model: "test-model",
+      role: "assistant",
+      content: {
+        type: "text",
+        text: "Test response",
+      },
+    }));
+  }).not.toThrow();
+
+  // This should throw because roots listing is not a declared capability
+  expect(() => {
+    client.setRequestHandler(ListRootsRequestSchema, () => ({}));
+  }).toThrow("Client does not support roots capability");
+});
 
 /*
-Test that custom request/notification/result schemas can be used with the Client class.
-*/
+  Test that custom request/notification/result schemas can be used with the Client class.
+  */
 test("should typecheck", () => {
   const GetWeatherRequestSchema = RequestSchema.extend({
     method: z.literal("weather/get"),
@@ -50,10 +403,17 @@ test("should typecheck", () => {
     WeatherRequest,
     WeatherNotification,
     WeatherResult
-  >({
-    name: "WeatherClient",
-    version: "1.0.0",
-  });
+  >(
+    {
+      name: "WeatherClient",
+      version: "1.0.0",
+    },
+    {
+      capabilities: {
+        sampling: {},
+      },
+    },
+  );
 
   // Typecheck that only valid weather requests/notifications/results are allowed
   false &&
diff --git a/src/client/index.ts b/src/client/index.ts
index c3662b2..e0df322 100644
--- a/src/client/index.ts
+++ b/src/client/index.ts
@@ -1,8 +1,13 @@
-import { ProgressCallback, Protocol } from "../shared/protocol.js";
+import {
+  ProgressCallback,
+  Protocol,
+  ProtocolOptions,
+} from "../shared/protocol.js";
 import { Transport } from "../shared/transport.js";
 import {
   CallToolRequest,
   CallToolResultSchema,
+  ClientCapabilities,
   ClientNotification,
   ClientRequest,
   ClientResult,
@@ -32,9 +37,16 @@ import {
   ServerCapabilities,
   SubscribeRequest,
   SUPPORTED_PROTOCOL_VERSIONS,
-  UnsubscribeRequest
+  UnsubscribeRequest,
 } from "../types.js";
 
+export type ClientOptions = ProtocolOptions & {
+  /**
+   * Capabilities to advertise as being supported by this client.
+   */
+  capabilities: ClientCapabilities;
+};
+
 /**
  * An MCP client on top of a pluggable transport.
  *
@@ -71,45 +83,67 @@ export class Client<
 > {
   private _serverCapabilities?: ServerCapabilities;
   private _serverVersion?: Implementation;
+  private _capabilities: ClientCapabilities;
 
   /**
    * Initializes this client with the given name and version information.
    */
-  constructor(private _clientInfo: Implementation) {
-    super();
+  constructor(
+    private _clientInfo: Implementation,
+    options: ClientOptions,
+  ) {
+    super(options);
+    this._capabilities = options.capabilities;
+  }
+
+  protected assertCapability(
+    capability: keyof ServerCapabilities,
+    method: string,
+  ): void {
+    if (!this._serverCapabilities?.[capability]) {
+      throw new Error(
+        `Server does not support ${capability} (required for ${method})`,
+      );
+    }
   }
 
   override async connect(transport: Transport): Promise<void> {
     await super.connect(transport);
 
-    const result = await this.request(
-      {
-        method: "initialize",
-        params: {
-          protocolVersion: LATEST_PROTOCOL_VERSION,
-          capabilities: {},
-          clientInfo: this._clientInfo,
+    try {
+      const result = await this.request(
+        {
+          method: "initialize",
+          params: {
+            protocolVersion: LATEST_PROTOCOL_VERSION,
+            capabilities: this._capabilities,
+            clientInfo: this._clientInfo,
+          },
         },
-      },
-      InitializeResultSchema,
-    );
+        InitializeResultSchema,
+      );
 
-    if (result === undefined) {
-      throw new Error(`Server sent invalid initialize result: ${result}`);
-    }
+      if (result === undefined) {
+        throw new Error(`Server sent invalid initialize result: ${result}`);
+      }
 
-    if (!SUPPORTED_PROTOCOL_VERSIONS.includes(result.protocolVersion)) {
-      throw new Error(
-        `Server's protocol version is not supported: ${result.protocolVersion}`,
-      );
-    }
+      if (!SUPPORTED_PROTOCOL_VERSIONS.includes(result.protocolVersion)) {
+        throw new Error(
+          `Server's protocol version is not supported: ${result.protocolVersion}`,
+        );
+      }
 
-    this._serverCapabilities = result.capabilities;
-    this._serverVersion = result.serverInfo;
+      this._serverCapabilities = result.capabilities;
+      this._serverVersion = result.serverInfo;
 
-    await this.notification({
-      method: "notifications/initialized",
-    });
+      await this.notification({
+        method: "notifications/initialized",
+      });
+    } catch (error) {
+      // Disconnect if initialization fails.
+      void this.close();
+      throw error;
+    }
   }
 
   /**
@@ -126,6 +160,120 @@ export class Client<
     return this._serverVersion;
   }
 
+  protected assertCapabilityForMethod(method: RequestT["method"]): void {
+    switch (method as ClientRequest["method"]) {
+      case "logging/setLevel":
+        if (!this._serverCapabilities?.logging) {
+          throw new Error(
+            `Server does not support logging (required for ${method})`,
+          );
+        }
+        break;
+
+      case "prompts/get":
+      case "prompts/list":
+        if (!this._serverCapabilities?.prompts) {
+          throw new Error(
+            `Server does not support prompts (required for ${method})`,
+          );
+        }
+        break;
+
+      case "resources/list":
+      case "resources/templates/list":
+      case "resources/read":
+      case "resources/subscribe":
+      case "resources/unsubscribe":
+        if (!this._serverCapabilities?.resources) {
+          throw new Error(
+            `Server does not support resources (required for ${method})`,
+          );
+        }
+
+        if (
+          method === "resources/subscribe" &&
+          !this._serverCapabilities.resources.subscribe
+        ) {
+          throw new Error(
+            `Server does not support resource subscriptions (required for ${method})`,
+          );
+        }
+
+        break;
+
+      case "tools/call":
+      case "tools/list":
+        if (!this._serverCapabilities?.tools) {
+          throw new Error(
+            `Server does not support tools (required for ${method})`,
+          );
+        }
+        break;
+
+      case "completion/complete":
+        if (!this._serverCapabilities?.prompts) {
+          throw new Error(
+            `Server does not support prompts (required for ${method})`,
+          );
+        }
+        break;
+
+      case "initialize":
+        // No specific capability required for initialize
+        break;
+
+      case "ping":
+        // No specific capability required for ping
+        break;
+    }
+  }
+
+  protected assertNotificationCapability(
+    method: NotificationT["method"],
+  ): void {
+    switch (method as ClientNotification["method"]) {
+      case "notifications/roots/list_changed":
+        if (!this._capabilities.roots?.listChanged) {
+          throw new Error(
+            `Client does not support roots list changed notifications (required for ${method})`,
+          );
+        }
+        break;
+
+      case "notifications/initialized":
+        // No specific capability required for initialized
+        break;
+
+      case "notifications/progress":
+        // Progress notifications are always allowed
+        break;
+    }
+  }
+
+  protected assertRequestHandlerCapability(method: string): void {
+    switch (method) {
+      case "sampling/createMessage":
+        if (!this._capabilities.sampling) {
+          throw new Error(
+            `Client does not support sampling capability (required for ${method})`,
+          );
+        }
+        break;
+
+      case "roots/list":
+        if (!this._capabilities.roots) {
+          throw new Error(
+            `Client does not support roots capability (required for ${method})`,
+          );
+        }
+        break;
+
+      case "ping":
+        // No specific capability required for ping
+        break;
+    }
+  }
+
   async ping() {
     return this.request({ method: "ping" }, EmptyResultSchema);
   }
@@ -219,7 +367,9 @@ export class Client<
 
   async callTool(
     params: CallToolRequest["params"],
-    resultSchema: typeof CallToolResultSchema | typeof CompatibilityCallToolResultSchema = CallToolResultSchema,
+    resultSchema:
+      | typeof CallToolResultSchema
+      | typeof CompatibilityCallToolResultSchema = CallToolResultSchema,
     onprogress?: ProgressCallback,
   ) {
     return this.request(
diff --git a/src/inMemory.test.ts b/src/inMemory.test.ts
new file mode 100644
index 0000000..f7e9e97
--- /dev/null
+++ b/src/inMemory.test.ts
@@ -0,0 +1,94 @@
+import { InMemoryTransport } from "./inMemory.js";
+import { JSONRPCMessage } from "./types.js";
+
+describe("InMemoryTransport", () => {
+  let clientTransport: InMemoryTransport;
+  let serverTransport: InMemoryTransport;
+
+  beforeEach(() => {
+    [clientTransport, serverTransport] = InMemoryTransport.createLinkedPair();
+  });
+
+  test("should create linked pair", () => {
+    expect(clientTransport).toBeDefined();
+    expect(serverTransport).toBeDefined();
+  });
+
+  test("should start without error", async () => {
+    await expect(clientTransport.start()).resolves.not.toThrow();
+    await expect(serverTransport.start()).resolves.not.toThrow();
+  });
+
+  test("should send message from client to server", async () => {
+    const message: JSONRPCMessage = {
+      jsonrpc: "2.0",
+      method: "test",
+      id: 1,
+    };
+
+    let receivedMessage: JSONRPCMessage | undefined;
+    serverTransport.onmessage = (msg) => {
+      receivedMessage = msg;
+    };
+
+    await clientTransport.send(message);
+    expect(receivedMessage).toEqual(message);
+  });
+
+  test("should send message from server to client", async () => {
+    const message: JSONRPCMessage = {
+      jsonrpc: "2.0",
+      method: "test",
+      id: 1,
+    };
+
+    let receivedMessage: JSONRPCMessage | undefined;
+    clientTransport.onmessage = (msg) => {
+      receivedMessage = msg;
+    };
+
+    await serverTransport.send(message);
+    expect(receivedMessage).toEqual(message);
+  });
+
+  test("should handle close", async () => {
+    let clientClosed = false;
+    let serverClosed = false;
+
+    clientTransport.onclose = () => {
+      clientClosed = true;
+    };
+
+    serverTransport.onclose = () => {
+      serverClosed = true;
+    };
+
+    await clientTransport.close();
+    expect(clientClosed).toBe(true);
+    expect(serverClosed).toBe(true);
+  });
+
+  test("should throw error when sending after close", async () => {
+    await clientTransport.close();
+    await expect(
+      clientTransport.send({ jsonrpc: "2.0", method: "test", id: 1 }),
+    ).rejects.toThrow("Not connected");
+  });
+
+  test("should queue messages sent before start", async () => {
+    const message: JSONRPCMessage = {
+      jsonrpc: "2.0",
+      method: "test",
+      id: 1,
+    };
+
+    let receivedMessage: JSONRPCMessage | undefined;
+    serverTransport.onmessage = (msg) => {
+      receivedMessage = msg;
+    };
+
+    await clientTransport.send(message);
+    await serverTransport.start();
+    expect(receivedMessage).toEqual(message);
+  });
+});
diff --git a/src/inMemory.ts b/src/inMemory.ts
new file mode 100644
index 0000000..2763f38
--- /dev/null
+++ b/src/inMemory.ts
@@ -0,0 +1,54 @@
+import { Transport } from "./shared/transport.js";
+import { JSONRPCMessage } from "./types.js";
+
+/**
+ * In-memory transport for creating clients and servers that talk to each other within the same process.
+ */
+export class InMemoryTransport implements Transport {
+  private _otherTransport?: InMemoryTransport;
+  private _messageQueue: JSONRPCMessage[] = [];
+
+  onclose?: () => void;
+  onerror?: (error: Error) => void;
+  onmessage?: (message: JSONRPCMessage) => void;
+
+  /**
+   * Creates a pair of linked in-memory transports that can communicate with each other. One should be passed to a Client and one to a Server.
+   */
+  static createLinkedPair(): [InMemoryTransport, InMemoryTransport] {
+    const clientTransport = new InMemoryTransport();
+    const serverTransport = new InMemoryTransport();
+    clientTransport._otherTransport = serverTransport;
+    serverTransport._otherTransport = clientTransport;
+    return [clientTransport, serverTransport];
+  }
+
+  async start(): Promise<void> {
+    // Process any messages that were queued before start was called
+    while (this._messageQueue.length > 0) {
+      const message = this._messageQueue.shift();
+      if (message) {
+        this.onmessage?.(message);
+      }
+    }
+  }
+
+  async close(): Promise<void> {
+    const other = this._otherTransport;
+    this._otherTransport = undefined;
+    await other?.close();
+    this.onclose?.();
+  }
+
+  async send(message: JSONRPCMessage): Promise<void> {
+    if (!this._otherTransport) {
+      throw new Error("Not connected");
+    }
+
+    if (this._otherTransport.onmessage) {
+      this._otherTransport.onmessage(message);
+    } else {
+      this._otherTransport._messageQueue.push(message);
+    }
+  }
+}
diff --git a/src/server/index.test.ts b/src/server/index.test.ts
index be33c58..d30c670 100644
--- a/src/server/index.test.ts
+++ b/src/server/index.test.ts
@@ -3,11 +3,338 @@
 /* eslint-disable @typescript-eslint/no-unused-expressions */
 import { Server } from "./index.js";
 import { z } from "zod";
-import { RequestSchema, NotificationSchema, ResultSchema } from "../types.js";
+import {
+  RequestSchema,
+  NotificationSchema,
+  ResultSchema,
+  LATEST_PROTOCOL_VERSION,
+  SUPPORTED_PROTOCOL_VERSIONS,
+  CreateMessageRequestSchema,
+  ListPromptsRequestSchema,
+  ListResourcesRequestSchema,
+  ListToolsRequestSchema,
+  SetLevelRequestSchema,
+} from "../types.js";
+import { Transport } from "../shared/transport.js";
+import { InMemoryTransport } from "../inMemory.js";
+import { Client } from "../client/index.js";
+
+test("should accept latest protocol version", async () => {
+  let sendPromiseResolve: (value: unknown) => void;
+  const sendPromise = new Promise((resolve) => {
+    sendPromiseResolve = resolve;
+  });
+
+  const serverTransport: Transport = {
+    start: jest.fn().mockResolvedValue(undefined),
+    close: jest.fn().mockResolvedValue(undefined),
+    send: jest.fn().mockImplementation((message) => {
+      if (message.id === 1 && message.result) {
+        expect(message.result).toEqual({
+          protocolVersion: LATEST_PROTOCOL_VERSION,
+          capabilities: expect.any(Object),
+          serverInfo: {
+            name: "test server",
+            version: "1.0",
+          },
+        });
+        sendPromiseResolve(undefined);
+      }
+      return Promise.resolve();
+    }),
+  };
+
+  const server = new Server(
+    {
+      name: "test server",
+      version: "1.0",
+    },
+    {
+      capabilities: {
+        prompts: {},
+        resources: {},
+        tools: {},
+        logging: {},
+      },
+    },
+  );
+
+  await server.connect(serverTransport);
+
+  // Simulate initialize request with latest version
+  serverTransport.onmessage?.({
+    jsonrpc: "2.0",
+    id: 1,
+    method: "initialize",
+    params: {
+      protocolVersion: LATEST_PROTOCOL_VERSION,
+      capabilities: {},
+      clientInfo: {
+        name: "test client",
+        version: "1.0",
+      },
+    },
+  });
+
+  await expect(sendPromise).resolves.toBeUndefined();
+});
+
+test("should accept supported older protocol version", async () => {
+  const OLD_VERSION = SUPPORTED_PROTOCOL_VERSIONS[1];
+  let sendPromiseResolve: (value: unknown) => void;
+  const sendPromise = new Promise((resolve) => {
+    sendPromiseResolve = resolve;
+  });
+
+  const serverTransport: Transport = {
+    start: jest.fn().mockResolvedValue(undefined),
+    close: jest.fn().mockResolvedValue(undefined),
+    send: jest.fn().mockImplementation((message) => {
+      if (message.id === 1 && message.result) {
+        expect(message.result).toEqual({
+          protocolVersion: OLD_VERSION,
+          capabilities: expect.any(Object),
+          serverInfo: {
+            name: "test server",
+            version: "1.0",
+          },
+        });
+        sendPromiseResolve(undefined);
+      }
+      return Promise.resolve();
+    }),
+  };
+
+  const server = new Server(
+    {
+      name: "test server",
+      version: "1.0",
+    },
+    {
+      capabilities: {
+        prompts: {},
+        resources: {},
+        tools: {},
+        logging: {},
+      },
+    },
+  );
+
+  await server.connect(serverTransport);
+
+  // Simulate initialize request with older version
+  serverTransport.onmessage?.({
+    jsonrpc: "2.0",
+    id: 1,
+    method: "initialize",
+    params: {
+      protocolVersion: OLD_VERSION,
+      capabilities: {},
+      clientInfo: {
+        name: "test client",
+        version: "1.0",
+      },
+    },
+  });
+
+  await expect(sendPromise).resolves.toBeUndefined();
+});
+
+test("should handle unsupported protocol version", async () => {
+  let sendPromiseResolve: (value: unknown) => void;
+  const sendPromise = new Promise((resolve) => {
+    sendPromiseResolve = resolve;
+  });
+
+  const serverTransport: Transport = {
+    start: jest.fn().mockResolvedValue(undefined),
+    close: jest.fn().mockResolvedValue(undefined),
+    send: jest.fn().mockImplementation((message) => {
+      if (message.id === 1 && message.result) {
+        expect(message.result).toEqual({
+          protocolVersion: LATEST_PROTOCOL_VERSION,
+          capabilities: expect.any(Object),
+          serverInfo: {
+            name: "test server",
+            version: "1.0",
+          },
+        });
+        sendPromiseResolve(undefined);
+      }
+      return Promise.resolve();
+    }),
+  };
+
+  const server = new Server(
+    {
+      name: "test server",
+      version: "1.0",
+    },
+    {
+      capabilities: {
+        prompts: {},
+        resources: {},
+        tools: {},
+        logging: {},
+      },
+    },
+  );
+
+  await server.connect(serverTransport);
+
+  // Simulate initialize request with unsupported version
+  serverTransport.onmessage?.({
+    jsonrpc: "2.0",
+    id: 1,
+    method: "initialize",
+    params: {
+      protocolVersion: "invalid-version",
+      capabilities: {},
+      clientInfo: {
+        name: "test client",
+        version: "1.0",
+      },
+    },
+  });
+
+  await expect(sendPromise).resolves.toBeUndefined();
+});
+
+test("should respect client capabilities", async () => {
+  const server = new Server(
+    {
+      name: "test server",
+      version: "1.0",
+    },
+    {
+      capabilities: {
+        prompts: {},
+        resources: {},
+        tools: {},
+        logging: {},
+      },
+      enforceStrictCapabilities: true,
+    },
+  );
+
+  const client = new Client(
+    {
+      name: "test client",
+      version: "1.0",
+    },
+    {
+      capabilities: {
+        sampling: {},
+      },
+    },
+  );
+
+  // Implement request handler for sampling/createMessage
+  client.setRequestHandler(CreateMessageRequestSchema, async (request) => {
+    // Mock implementation of createMessage
+    return {
+      model: "test-model",
+      role: "assistant",
+      content: {
+        type: "text",
+        text: "This is a test response",
+      },
+    };
+  });
+
+  const [clientTransport, serverTransport] =
+    InMemoryTransport.createLinkedPair();
+
+  await Promise.all([
+    client.connect(clientTransport),
+    server.connect(serverTransport),
+  ]);
+
+  expect(server.getClientCapabilities()).toEqual({ sampling: {} });
+
+  // This should work because sampling is supported by the client
+  await expect(
+    server.createMessage({
+      messages: [],
+      maxTokens: 10,
+    }),
+  ).resolves.not.toThrow();
+
+  // This should still throw because roots are not supported by the client
+  await expect(server.listRoots()).rejects.toThrow(/^Client does not support/);
+});
+
+test("should respect server notification capabilities", async () => {
+  const server = new Server(
+    {
+      name: "test server",
+      version: "1.0",
+    },
+    {
+      capabilities: {
+        logging: {},
+      },
+      enforceStrictCapabilities: true,
+    },
+  );
+
+  const [clientTransport, serverTransport] =
+    InMemoryTransport.createLinkedPair();
+
+  await server.connect(serverTransport);
+
+  // This should work because logging is supported by the server
+  await expect(
+    server.sendLoggingMessage({
+      level: "info",
+      data: "Test log message",
+    }),
+  ).resolves.not.toThrow();
+
+  // This should throw because resource notificaitons are not supported by the server
+  await expect(
+    server.sendResourceUpdated({ uri: "test://resource" }),
+  ).rejects.toThrow(/^Server does not support/);
+});
+
+test("should only allow setRequestHandler for declared capabilities", () => {
+  const server = new Server(
+    {
+      name: "test server",
+      version: "1.0",
+    },
+    {
+      capabilities: {
+        prompts: {},
+        resources: {},
+      },
+    },
+  );
+
+  // These should work because the capabilities are declared
+  expect(() => {
+    server.setRequestHandler(ListPromptsRequestSchema, () => ({ prompts: [] }));
+  }).not.toThrow();
+
+  expect(() => {
+    server.setRequestHandler(ListResourcesRequestSchema, () => ({
+      resources: [],
+    }));
+  }).not.toThrow();
+
+  // These should throw because the capabilities are not declared
+  expect(() => {
+    server.setRequestHandler(ListToolsRequestSchema, () => ({ tools: [] }));
+  }).toThrow(/^Server does not support tools/);
+
+  expect(() => {
+    server.setRequestHandler(SetLevelRequestSchema, () => ({}));
+  }).toThrow(/^Server does not support logging/);
+});
 
 /*
-Test that custom request/notification/result schemas can be used with the Server class.
-*/
+  Test that custom request/notification/result schemas can be used with the Server class.
+  */
 test("should typecheck", () => {
   const GetWeatherRequestSchema = RequestSchema.extend({
     method: z.literal("weather/get"),
@@ -50,10 +377,20 @@ test("should typecheck", () => {
     WeatherRequest,
     WeatherNotification,
     WeatherResult
-  >({
-    name: "WeatherServer",
-    version: "1.0.0",
-  });
+  >(
+    {
+      name: "WeatherServer",
+      version: "1.0.0",
+    },
+    {
+      capabilities: {
+        prompts: {},
+        resources: {},
+        tools: {},
+        logging: {},
+      },
+    },
+  );
 
   // Typecheck that only valid weather requests/notifications/results are allowed
   weatherServer.setRequestHandler(GetWeatherRequestSchema, (request) => {
diff --git a/src/server/index.ts b/src/server/index.ts
index 8cf2a91..ecb525b 100644
--- a/src/server/index.ts
+++ b/src/server/index.ts
@@ -1,4 +1,8 @@
-import { ProgressCallback, Protocol } from "../shared/protocol.js";
+import {
+  ProgressCallback,
+  Protocol,
+  ProtocolOptions,
+} from "../shared/protocol.js";
 import {
   ClientCapabilities,
   CreateMessageRequest,
@@ -10,11 +14,8 @@ import {
   InitializeRequestSchema,
   InitializeResult,
   LATEST_PROTOCOL_VERSION,
-  ListPromptsRequestSchema,
-  ListResourcesRequestSchema,
   ListRootsRequest,
   ListRootsResultSchema,
-  ListToolsRequestSchema,
   LoggingMessageNotification,
   Notification,
   Request,
@@ -24,10 +25,16 @@ import {
   ServerNotification,
   ServerRequest,
   ServerResult,
-  SetLevelRequestSchema,
-  SUPPORTED_PROTOCOL_VERSIONS
+  SUPPORTED_PROTOCOL_VERSIONS,
 } from "../types.js";
 
+export type ServerOptions = ProtocolOptions & {
+  /**
+   * Capabilities to advertise as being supported by this server.
+   */
+  capabilities: ServerCapabilities;
+};
+
 /**
  * An MCP server on top of a pluggable transport.
  *
@@ -64,6 +71,7 @@ export class Server<
 > {
   private _clientCapabilities?: ClientCapabilities;
   private _clientVersion?: Implementation;
+  private _capabilities: ServerCapabilities;
 
   /**
    * Callback for when initialization has fully completed (i.e., the client has sent an `initialized` notification).
@@ -73,8 +81,12 @@ export class Server<
   /**
    * Initializes this server with the given name and version information.
    */
-  constructor(private _serverInfo: Implementation) {
-    super();
+  constructor(
+    private _serverInfo: Implementation,
+    options: ServerOptions,
+  ) {
+    super(options);
+    this._capabilities = options.capabilities;
 
     this.setRequestHandler(InitializeRequestSchema, (request) =>
       this._oninitialize(request),
@@ -84,6 +96,126 @@ export class Server<
     );
   }
 
+  protected assertCapabilityForMethod(method: RequestT["method"]): void {
+    switch (method as ServerRequest["method"]) {
+      case "sampling/createMessage":
+        if (!this._clientCapabilities?.sampling) {
+          throw new Error(
+            `Client does not support sampling (required for ${method})`,
+          );
+        }
+        break;
+
+      case "roots/list":
+        if (!this._clientCapabilities?.roots) {
+          throw new Error(
+            `Client does not support listing roots (required for ${method})`,
+          );
+        }
+        break;
+
+      case "ping":
+        // No specific capability required for ping
+        break;
+    }
+  }
+
+  protected assertNotificationCapability(
+    method: (ServerNotification | NotificationT)["method"],
+  ): void {
+    switch (method as ServerNotification["method"]) {
+      case "notifications/message":
+        if (!this._capabilities.logging) {
+          throw new Error(
+            `Server does not support logging (required for ${method})`,
+          );
+        }
+        break;
+
+      case "notifications/resources/updated":
+      case "notifications/resources/list_changed":
+        if (!this._capabilities.resources) {
+          throw new Error(
+            `Server does not support notifying about resources (required for ${method})`,
+          );
+        }
+        break;
+
+      case "notifications/tools/list_changed":
+        if (!this._capabilities.tools) {
+          throw new Error(
+            `Server does not support notifying of tool list changes (required for ${method})`,
+          );
+        }
+        break;
+
+      case "notifications/prompts/list_changed":
+        if (!this._capabilities.prompts) {
+          throw new Error(
+            `Server does not support notifying of prompt list changes (required for ${method})`,
+          );
+        }
+        break;
+
+      case "notifications/progress":
+        // Progress notifications are always allowed
+        break;
+    }
+  }
+
+  protected assertRequestHandlerCapability(method: string): void {
+    switch (method) {
+      case "sampling/createMessage":
+        if (!this._capabilities.sampling) {
+          throw new Error(
+            `Server does not support sampling (required for ${method})`,
+          );
+        }
+        break;
+
+      case "logging/setLevel":
+        if (!this._capabilities.logging) {
+          throw new Error(
+            `Server does not support logging (required for ${method})`,
+          );
+        }
+        break;
+
+      case "prompts/get":
+      case "prompts/list":
+        if (!this._capabilities.prompts) {
+          throw new Error(
+            `Server does not support prompts (required for ${method})`,
+          );
+        }
+        break;
+
+      case "resources/list":
+      case "resources/templates/list":
+      case "resources/read":
+        if (!this._capabilities.resources) {
+          throw new Error(
+            `Server does not support resources (required for ${method})`,
+          );
+        }
+        break;
+
+      case "tools/call":
+      case "tools/list":
+        if (!this._capabilities.tools) {
+          throw new Error(
+            `Server does not support tools (required for ${method})`,
+          );
+        }
+        break;
+
+      case "ping":
+      case "initialize":
+        // No specific capability required for these methods
+        break;
+    }
+  }
+
   private async _oninitialize(
     request: InitializeRequest,
   ): Promise<InitializeResult> {
@@ -93,7 +225,9 @@ export class Server<
     this._clientVersion = request.params.clientInfo;
 
     return {
-      protocolVersion: SUPPORTED_PROTOCOL_VERSIONS.includes(requestedVersion) ? requestedVersion : LATEST_PROTOCOL_VERSION,
+      protocolVersion: SUPPORTED_PROTOCOL_VERSIONS.includes(requestedVersion)
+        ? requestedVersion
+        : LATEST_PROTOCOL_VERSION,
       capabilities: this.getCapabilities(),
       serverInfo: this._serverInfo,
     };
@@ -114,28 +248,7 @@ export class Server<
   }
 
   private getCapabilities(): ServerCapabilities {
-    return {
-      prompts: this._requestHandlers.has(
-        ListPromptsRequestSchema.shape.method.value as string,
-      )
-        ? {}
-        : undefined,
-      resources: this._requestHandlers.has(
-        ListResourcesRequestSchema.shape.method.value as string,
-      )
-        ? {}
-        : undefined,
-      tools: this._requestHandlers.has(
-        ListToolsRequestSchema.shape.method.value as string,
-      )
-        ? {}
-        : undefined,
-      logging: this._requestHandlers.has(
-        SetLevelRequestSchema.shape.method.value as string,
-      )
-        ? {}
-        : undefined,
-    };
+    return this._capabilities;
   }
 
   async ping() {
diff --git a/src/shared/protocol.ts b/src/shared/protocol.ts
index 22d2503..85610a9 100644
--- a/src/shared/protocol.ts
+++ b/src/shared/protocol.ts
@@ -21,11 +21,25 @@ import { Transport } from "./transport.js";
  */
 export type ProgressCallback = (progress: Progress) => void;
 
+/**
+ * Additional initialization options.
+ */
+export type ProtocolOptions = {
+  /**
+   * Whether to restrict emitted requests to only those that the remote side has indicated that they can handle, through their advertised capabilities.
+   *
+   * Note that this DOES NOT affect checking of _local_ side capabilities, as it is considered a logic error to mis-specify those.
+   *
+   * Currently this defaults to false, for backwards compatibility with SDK versions that did not advertise capabilities correctly. In future, this will default to true.
+   */
+  enforceStrictCapabilities?: boolean;
+};
+
 /**
  * Implements MCP protocol framing on top of a pluggable transport, including
  * features like request/response linking, notifications, and progress.
  */
-export class Protocol<
+export abstract class Protocol<
   SendRequestT extends Request,
   SendNotificationT extends Notification,
   SendResultT extends Result,
@@ -70,7 +84,7 @@ export class Protocol<
    */
   fallbackNotificationHandler?: (notification: Notification) => Promise<void>;
 
-  constructor() {
+  constructor(private _options?: ProtocolOptions) {
     this.setNotificationHandler(ProgressNotificationSchema, (notification) => {
       this._onprogress(notification as unknown as ProgressNotification);
     });
@@ -245,6 +259,31 @@ export class Protocol<
     await this._transport?.close();
   }
 
+  /**
+   * A method to check if a capability is supported by the remote side, for the given method to be called.
+   *
+   * This should be implemented by subclasses.
+   */
+  protected abstract assertCapabilityForMethod(
+    method: SendRequestT["method"],
+  ): void;
+
+  /**
+   * A method to check if a notification is supported by the local side, for the given method to be sent.
+   *
+   * This should be implemented by subclasses.
+   */
+  protected abstract assertNotificationCapability(
+    method: SendNotificationT["method"],
+  ): void;
+
+  /**
+   * A method to check if a request handler is supported by the local side, for the given method to be handled.
+   *
+   * This should be implemented by subclasses.
+   */
+  protected abstract assertRequestHandlerCapability(method: string): void;
+
   /**
    * Sends a request and wait for a response, with optional progress notifications in the meantime (if supported by the server).
    *
@@ -261,6 +300,10 @@ export class Protocol<
         return;
       }
 
+      if (this._options?.enforceStrictCapabilities === true) {
+        this.assertCapabilityForMethod(request.method);
+      }
+
       const messageId = this._requestMessageId++;
       const jsonrpcRequest: JSONRPCRequest = {
         ...request,
@@ -301,6 +344,8 @@ export class Protocol<
       throw new Error("Not connected");
     }
 
+    this.assertNotificationCapability(notification.method);
+
     const jsonrpcNotification: JSONRPCNotification = {
       ...notification,
       jsonrpc: "2.0",
@@ -322,7 +367,9 @@ export class Protocol<
     requestSchema: T,
     handler: (request: z.infer<T>) => SendResultT | Promise<SendResultT>,
   ): void {
-    this._requestHandlers.set(requestSchema.shape.method.value, (request) =>
+    const method = requestSchema.shape.method.value;
+    this.assertRequestHandlerCapability(method);
+    this._requestHandlers.set(method, (request) =>
       Promise.resolve(handler(requestSchema.parse(request))),
     );
   }
diff --git a/src/types.ts b/src/types.ts
index 0ba6fa2..a0d2d80 100644
--- a/src/types.ts
+++ b/src/types.ts
@@ -1,7 +1,10 @@
 import { z } from "zod";
 
 export const LATEST_PROTOCOL_VERSION = "2024-11-05";
-export const SUPPORTED_PROTOCOL_VERSIONS = [LATEST_PROTOCOL_VERSION, "2024-10-07"];
+export const SUPPORTED_PROTOCOL_VERSIONS = [
+  LATEST_PROTOCOL_VERSION,
+  "2024-10-07",
+];
 
 /* JSON-RPC types */
 export const JSONRPC_VERSION = "2.0";
@@ -179,7 +182,7 @@ export const ClientCapabilitiesSchema = z
       z
         .object({
           /**
-           * Whether the client supports notifications for changes to the roots list.
+           * Whether the client supports issuing notifications for changes to the roots list.
            */
           listChanged: z.optional(z.boolean()),
         })
@@ -223,7 +226,7 @@ export const ServerCapabilitiesSchema = z
       z
         .object({
           /**
-           * Whether this server supports notifications for changes to the prompt list.
+           * Whether this server supports issuing notifications for changes to the prompt list.
            */
           listChanged: z.optional(z.boolean()),
         })
@@ -236,11 +239,12 @@ export const ServerCapabilitiesSchema = z
       z
         .object({
           /**
-           * Whether this server supports subscribing to resource updates.
+           * Whether this server supports clients subscribing to resource updates.
            */
           subscribe: z.optional(z.boolean()),
+
           /**
-           * Whether this server supports notifications for changes to the resource list.
+           * Whether this server supports issuing notifications for changes to the resource list.
            */
           listChanged: z.optional(z.boolean()),
         })
@@ -253,7 +257,7 @@ export const ServerCapabilitiesSchema = z
       z
         .object({
           /**
-           * Whether this server supports notifications for changes to the tool list.
+           * Whether this server supports issuing notifications for changes to the tool list.
            */
           listChanged: z.optional(z.boolean()),
         })
@@ -725,9 +729,11 @@ export const CallToolResultSchema = ResultSchema.extend({
 /**
  * CallToolResultSchema extended with backwards compatibility to protocol version 2024-10-07.
  */
-export const CompatibilityCallToolResultSchema = CallToolResultSchema.or(ResultSchema.extend({
-  toolResult: z.unknown(),
-}));
+export const CompatibilityCallToolResultSchema = CallToolResultSchema.or(
+  ResultSchema.extend({
+    toolResult: z.unknown(),
+  }),
+);
 
 /**
  * Used by the client to invoke a tool provided by the server.
@@ -802,12 +808,14 @@ export const LoggingMessageNotificationSchema = NotificationSchema.extend({
 /**
  * Hints to use for model selection.
  */
-export const ModelHintSchema = z.object({
-  /**
-   * A hint for a model name.
-   */
-  name: z.string().optional(),
-}).passthrough();
+export const ModelHintSchema = z
+  .object({
+    /**
+     * A hint for a model name.
+     */
+    name: z.string().optional(),
+  })
+  .passthrough();
 
 /**
  * The server's preferences for model selection, requested of the client during sampling.
@@ -886,7 +894,9 @@ export const CreateMessageResultSchema = ResultSchema.extend({
   /**
    * The reason why sampling stopped.
    */
-  stopReason: z.optional(z.enum(["endTurn", "stopSequence", "maxTokens"]).or(z.string())),
+  stopReason: z.optional(
+    z.enum(["endTurn", "stopSequence", "maxTokens"]).or(z.string()),
+  ),
   role: z.enum(["user", "assistant"]),
   content: z.discriminatedUnion("type", [
     TextContentSchema,
@@ -1156,7 +1166,9 @@ export type Tool = z.infer<typeof ToolSchema>;
 export type ListToolsRequest = z.infer<typeof ListToolsRequestSchema>;
 export type ListToolsResult = z.infer<typeof ListToolsResultSchema>;
 export type CallToolResult = z.infer<typeof CallToolResultSchema>;
-export type CompatibilityCallToolResult = z.infer<typeof CompatibilityCallToolResultSchema>;
+export type CompatibilityCallToolResult = z.infer<
+  typeof CompatibilityCallToolResultSchema
+>;
 export type CallToolRequest = z.infer<typeof CallToolRequestSchema>;
 export type ToolListChangedNotification = z.infer<
   typeof ToolListChangedNotificationSchema