diff --git a/python/packages/azure-ai/agent_framework_azure_ai/_client.py b/python/packages/azure-ai/agent_framework_azure_ai/_client.py
index 8c0043808e..edc771af44 100644
--- a/python/packages/azure-ai/agent_framework_azure_ai/_client.py
+++ b/python/packages/azure-ai/agent_framework_azure_ai/_client.py
@@ -399,7 +399,7 @@ async def _prepare_options(
         **kwargs: Any,
     ) -> dict[str, Any]:
         """Take ChatOptions and create the specific options for Azure AI."""
-        prepared_messages, instructions = self._prepare_messages_for_azure_ai(messages)
+        prepared_messages, instructions = self._prepare_messages_for_azure_ai(messages, options, **kwargs)
         run_options = await super()._prepare_options(prepared_messages, options, **kwargs)
 
         # WORKAROUND: Azure AI Projects 'create responses' API has schema divergence from OpenAI's
@@ -487,17 +487,46 @@ def _get_current_conversation_id(self, options: Mapping[str, Any], **kwargs: Any
         """Get the current conversation ID from chat options or kwargs."""
         return options.get("conversation_id") or kwargs.get("conversation_id") or self.conversation_id
 
-    def _prepare_messages_for_azure_ai(self, messages: Sequence[ChatMessage]) -> tuple[list[ChatMessage], str | None]:
-        """Prepare input from messages and convert system/developer messages to instructions."""
+    def _prepare_messages_for_azure_ai(
+        self, messages: Sequence[ChatMessage], options: Mapping[str, Any], **kwargs: Any
+    ) -> tuple[list[ChatMessage], str | None]:
+        """Prepare input from messages and convert system/developer messages to instructions.
+
+        When using previous_response_id (response chaining), filters out old function results
+        and assistant messages since they're already in the server-side conversation history.
+        Only NEW user messages should be sent.
+        """
+        # Check if we're using previous_response_id (response chaining pattern)
+        conversation_id = self._get_current_conversation_id(options, **kwargs)
+        use_response_chaining = conversation_id is not None and conversation_id.startswith("resp_")
+
         result: list[ChatMessage] = []
         instructions_list: list[str] = []
         instructions: str | None = None
 
+        # When using response chaining, find the index of the last assistant message
+        # Messages after that are "new" and should be included
+        last_assistant_idx = -1
+        if use_response_chaining:
+            for i in range(len(messages) - 1, -1, -1):
+                if messages[i].role == "assistant":
+                    last_assistant_idx = i
+                    break
+
         # System/developer messages are turned into instructions, since there is no such message roles in Azure AI.
-        for message in messages:
+        for idx, message in enumerate(messages):
             if message.role in ["system", "developer"]:
                 for text_content in [content for content in message.contents if content.type == "text"]:
                     instructions_list.append(text_content.text)  # type: ignore[arg-type]
+            elif use_response_chaining:
+                # When using response chaining, only include messages after the last assistant message
+                # These are the "new" messages from the current turn
+                if idx > last_assistant_idx:
+                    # Also filter out function result messages
+                    has_function_result = any(content.type == "function_result" for content in message.contents)
+                    if not has_function_result:
+                        result.append(message)
+                # Skip all messages at or before the last assistant message (already in server history)
             else:
                 result.append(message)
 
diff --git a/python/packages/azure-ai/tests/test_azure_ai_client.py b/python/packages/azure-ai/tests/test_azure_ai_client.py
index 38ccfb5ad3..a6d07180f5 100644
--- a/python/packages/azure-ai/tests/test_azure_ai_client.py
+++ b/python/packages/azure-ai/tests/test_azure_ai_client.py
@@ -303,7 +303,7 @@ async def test_prepare_messages_for_azure_ai_with_system_messages(
         ChatMessage(role="assistant", contents=[Content.from_text(text="System response")]),
     ]
 
-    result_messages, instructions = client._prepare_messages_for_azure_ai(messages)  # type: ignore
+    result_messages, instructions = client._prepare_messages_for_azure_ai(messages, {})  # type: ignore
 
     assert len(result_messages) == 2
     assert result_messages[0].role == "user"
@@ -322,12 +322,89 @@ async def test_prepare_messages_for_azure_ai_no_system_messages(
         ChatMessage(role="assistant", contents=[Content.from_text(text="Hi there!")]),
     ]
 
-    result_messages, instructions = client._prepare_messages_for_azure_ai(messages)  # type: ignore
+    result_messages, instructions = client._prepare_messages_for_azure_ai(messages, {})  # type: ignore
 
     assert len(result_messages) == 2
     assert instructions is None
 
 
+async def test_prepare_messages_filters_old_function_results_with_previous_response_id(
+    mock_project_client: MagicMock,
+) -> None:
+    """Test _prepare_messages_for_azure_ai filters old function results when using previous_response_id."""
+    client = create_test_azure_ai_client(mock_project_client)
+
+    # Simulate a multi-turn conversation with function calls
+    messages = [
+        # Turn 1 - user asks a question
+        ChatMessage(role="user", contents=[Content.from_text(text="Calculate 15% tip on $85")]),
+        # Turn 1 - assistant makes a function call
+        ChatMessage(
+            role="assistant",
+            contents=[
+                Content.from_function_call(
+                    call_id="call_123", name="calculate_tip", arguments='{"bill_amount": 85, "tip_percent": 15}'
+                )
+            ],
+        ),
+        # Turn 1 - function result
+        ChatMessage(
+            role="user",
+            contents=[Content.from_function_result(call_id="call_123", result="Tip: $12.75, Total: $97.75")],
+        ),
+        # Turn 1 - assistant responds with text
+        ChatMessage(role="assistant", contents=[Content.from_text(text="The tip is $12.75")]),
+        # Turn 2 - NEW user message
+        ChatMessage(role="user", contents=[Content.from_text(text="Now calculate 20% tip on $85")]),
+    ]
+
+    # Test WITH previous_response_id (should filter to only new user message)
+    options = {"conversation_id": "resp_turn1"}
+    result_messages, instructions = client._prepare_messages_for_azure_ai(messages, options)  # type: ignore
+
+    # Should only have the NEW user message from turn 2
+    assert len(result_messages) == 1
+    assert result_messages[0].role == "user"
+    assert any(c.type == "text" for c in result_messages[0].contents)
+    # Should not have function results
+    assert not any(c.type == "function_result" for c in result_messages[0].contents)
+    assert instructions is None
+
+
+async def test_prepare_messages_includes_all_without_previous_response_id(
+    mock_project_client: MagicMock,
+) -> None:
+    """Test _prepare_messages_for_azure_ai includes all messages without previous_response_id."""
+    client = create_test_azure_ai_client(mock_project_client)
+
+    # Same messages as previous test
+    messages = [
+        ChatMessage(role="user", contents=[Content.from_text(text="Calculate 15% tip on $85")]),
+        ChatMessage(
+            role="assistant",
+            contents=[
+                Content.from_function_call(
+                    call_id="call_123", name="calculate_tip", arguments='{"bill_amount": 85, "tip_percent": 15}'
+                )
+            ],
+        ),
+        ChatMessage(
+            role="user",
+            contents=[Content.from_function_result(call_id="call_123", result="Tip: $12.75, Total: $97.75")],
+        ),
+        ChatMessage(role="assistant", contents=[Content.from_text(text="The tip is $12.75")]),
+        ChatMessage(role="user", contents=[Content.from_text(text="Now calculate 20% tip on $85")]),
+    ]
+
+    # Test WITHOUT previous_response_id (should include all messages)
+    options: dict[str, Any] = {}
+    result_messages, instructions = client._prepare_messages_for_azure_ai(messages, options)  # type: ignore
+
+    # Should have all non-system messages (5 in this case)
+    assert len(result_messages) == 5
+    assert instructions is None
+
+
 def test_transform_input_for_azure_ai(mock_project_client: MagicMock) -> None:
     """Test _transform_input_for_azure_ai adds required fields for Azure AI schema.
 
diff --git a/python/packages/azure-ai/tests/test_multi_turn_function_tools.py b/python/packages/azure-ai/tests/test_multi_turn_function_tools.py
new file mode 100644
index 0000000000..0173434f04
--- /dev/null
+++ b/python/packages/azure-ai/tests/test_multi_turn_function_tools.py
@@ -0,0 +1,223 @@
+# Copyright (c) Microsoft. All rights reserved.
+
+"""Test multi-turn conversations with function tools in Azure AI."""
+
+from typing import Annotated
+from unittest.mock import AsyncMock, MagicMock
+
+import pytest
+from agent_framework import tool
+from azure.ai.projects.models import PromptAgentDefinition
+from pydantic import Field
+
+from agent_framework_azure_ai import AzureAIProjectAgentProvider
+
+
+@tool(approval_mode="never_require")
+def calculate_tip(
+    bill_amount: Annotated[float, Field(description="Bill amount in dollars")],
+    tip_percent: Annotated[float, Field(description="Tip percentage")],
+) -> str:
+    """Calculate tip amount for a bill."""
+    tip = bill_amount * (tip_percent / 100)
+    return f"Tip: ${tip:.2f}, Total: ${bill_amount + tip:.2f}"
+
+
+@pytest.mark.asyncio
+async def test_multi_turn_function_tools_does_not_resubmit_old_results():
+    """Test that multi-turn conversations don't re-submit old function call results."""
+    # Setup mock project client
+    mock_project_client = AsyncMock()
+    mock_agents = AsyncMock()
+    mock_project_client.agents = mock_agents
+
+    # Mock agent creation
+    mock_agent_version = MagicMock()
+    mock_agent_version.id = "agent_id_123"
+    mock_agent_version.name = "tip-calculator"
+    mock_agent_version.version = "v1"
+    mock_agent_version.description = None
+    mock_agent_version.definition = PromptAgentDefinition(
+        model="gpt-4",
+        instructions="Use the calculate_tip tool to help with calculations.",
+        tools=[],
+    )
+    mock_agents.create_version = AsyncMock(return_value=mock_agent_version)
+
+    # Mock OpenAI client that tracks requests
+    requests_made = []
+
+    def mock_create_response(**kwargs):
+        """Mock response creation that tracks inputs."""
+        requests_made.append(kwargs)
+
+        # Simulate a response with function call on turn 1
+        if len(requests_made) == 1:
+            mock_response = MagicMock()
+            mock_response.id = "resp_turn1"
+            mock_response.created_at = 1234567890
+            mock_response.model = "gpt-4"
+            mock_response.usage = None
+            mock_response.metadata = {}
+
+            # Return a function call
+            mock_function_call = MagicMock()
+            mock_function_call.type = "function_call"
+            mock_function_call.id = "fc_call_123"
+            mock_function_call.call_id = "call_123"
+            mock_function_call.name = "calculate_tip"
+            mock_function_call.arguments = '{"bill_amount": 85, "tip_percent": 15}'
+
+            mock_response.output = [mock_function_call]
+            return mock_response
+        # Turn 2: Return a text response
+        mock_response = MagicMock()
+        mock_response.id = "resp_turn2"
+        mock_response.created_at = 1234567891
+        mock_response.model = "gpt-4"
+        mock_response.usage = None
+        mock_response.metadata = {}
+
+        mock_message = MagicMock()
+        mock_message.type = "message"
+        mock_text = MagicMock()
+        mock_text.type = "output_text"
+        mock_text.text = "The 20% tip is calculated."
+        mock_message.content = [mock_text]
+
+        mock_response.output = [mock_message]
+        return mock_response
+
+    mock_openai_client = MagicMock()
+    mock_openai_client.responses = MagicMock()
+    mock_openai_client.responses.create = AsyncMock(side_effect=mock_create_response)
+    mock_project_client.get_openai_client = MagicMock(return_value=mock_openai_client)
+
+    # Create provider and agent
+    provider = AzureAIProjectAgentProvider(project_client=mock_project_client, model="gpt-4")
+    agent = await provider.create_agent(
+        name="tip-calculator",
+        instructions="Use the calculate_tip tool to help with calculations.",
+        tools=[calculate_tip],
+    )
+
+    # Single thread for multi-turn (BUG TRIGGER)
+    thread = agent.get_new_thread()
+
+    # Turn 1: Should work fine
+    result1 = await agent.run("Calculate 15% tip on an $85 bill", thread=thread)
+    assert result1 is not None
+
+    # Check Turn 1 request - should have the user message
+    turn1_request = requests_made[0]
+    turn1_input = turn1_request["input"]
+    assert any(item.get("role") == "user" for item in turn1_input if isinstance(item, dict))
+
+    # Turn 2: Should NOT re-submit function call results from Turn 1
+    result2 = await agent.run("Now calculate 20% tip on the same $85 bill", thread=thread)
+    assert result2 is not None
+
+    # Check Turn 2 request - should NOT have function_call_output from Turn 1
+    turn2_request = requests_made[-1]  # Last request made (after function execution)
+    turn2_input = turn2_request["input"]
+
+    # The key assertion: Turn 2 should only have NEW function outputs (from turn 2's function calls)
+    # If it has function outputs from turn 1, that's the bug we're fixing
+    # Since turn 2 likely also has a function call, we need to check that old outputs aren't there
+
+    # A more robust check: verify that turn 2's input doesn't contain the call_id from turn 1
+    turn1_call_id = "call_123"
+    has_old_function_output = any(
+        item.get("type") == "function_call_output" and item.get("call_id") == turn1_call_id
+        for item in turn2_input
+        if isinstance(item, dict)
+    )
+
+    assert not has_old_function_output, (
+        "Turn 2 should not re-submit function_call_output from Turn 1. "
+        "Found old function output with call_id from Turn 1."
+    )
+
+
+@pytest.mark.asyncio
+async def test_multi_turn_with_previous_response_id_filters_old_messages():
+    """Test that when using previous_response_id, old function results are filtered."""
+    # Setup mock project client
+    mock_project_client = AsyncMock()
+    mock_agents = AsyncMock()
+    mock_project_client.agents = mock_agents
+
+    # Mock agent creation
+    mock_agent_version = MagicMock()
+    mock_agent_version.id = "agent_id_123"
+    mock_agent_version.name = "test-agent"
+    mock_agent_version.version = "v1"
+    mock_agent_version.description = None
+    mock_agent_version.definition = PromptAgentDefinition(
+        model="gpt-4",
+        instructions="You are a helpful assistant.",
+        tools=[],
+    )
+    mock_agents.create_version = AsyncMock(return_value=mock_agent_version)
+
+    # Mock OpenAI client
+    requests_made = []
+
+    def mock_create_response(**kwargs):
+        """Mock response creation."""
+        requests_made.append(kwargs)
+        mock_response = MagicMock()
+        mock_response.id = f"resp_turn{len(requests_made)}"
+        mock_response.created_at = 1234567890 + len(requests_made)
+        mock_response.model = "gpt-4"
+        mock_response.usage = None
+        mock_response.metadata = {}
+        mock_message = MagicMock()
+        mock_message.type = "message"
+        mock_text = MagicMock()
+        mock_text.type = "output_text"
+        mock_text.text = f"Response {len(requests_made)}"
+        mock_message.content = [mock_text]
+        mock_response.output = [mock_message]
+        return mock_response
+
+    mock_openai_client = MagicMock()
+    mock_openai_client.responses = MagicMock()
+    mock_openai_client.responses.create = AsyncMock(side_effect=mock_create_response)
+    mock_project_client.get_openai_client = MagicMock(return_value=mock_openai_client)
+
+    # Create provider and agent
+    provider = AzureAIProjectAgentProvider(project_client=mock_project_client, model="gpt-4")
+    agent = await provider.create_agent(
+        name="test-agent",
+        instructions="You are a helpful assistant.",
+        tools=[calculate_tip],
+    )
+
+    # Create a thread starting with a service_thread_id (simulating a previous response)
+    # This avoids the message_store/service_thread_id conflict
+    thread = agent.get_new_thread()
+    # Simulate that turn 1 has already completed and returned resp_turn1
+    # We manually set the internal state to simulate this
+
+    # Use the internal property to bypass the setter validation
+    thread._service_thread_id = "resp_turn1"
+
+    # Turn 2: New user message
+    # This turn should only send the new user message, not any messages from turn 1
+    result2 = await agent.run("Now calculate 20% tip", thread=thread)
+    assert result2 is not None
+
+    # Check that turn 2 request has previous_response_id set
+    turn2_request = requests_made[0]
+    assert "previous_response_id" in turn2_request
+    assert turn2_request["previous_response_id"] == "resp_turn1"
+
+    # Check that turn 2 input doesn't contain old function results
+    # Since we're using service_thread_id, the messages are managed server-side
+    # and only the new user message should be in the request
+    turn2_input = turn2_request["input"]
+
+    # Turn 2 should only have the NEW user message
+    user_messages = [item for item in turn2_input if isinstance(item, dict) and item.get("role") == "user"]
+    assert len(user_messages) == 1, "Turn 2 should only have the NEW user message"