diff --git a/server.py b/server.py
index 6f97bc73..b648a466 100644
--- a/server.py
+++ b/server.py
@@ -16,7 +16,7 @@
     emit_lance_cocoindex_finish,
     emit_lance_cocoindex_start,
 )
-from java_codebase_rag.config import emit_legacy_env_hints_if_present, resolved_sbert_model_for_process_env
+from java_codebase_rag.config import emit_legacy_env_hints_if_present, resolved_sbert_model_for_process_env, resolve_operator_config
 from kuzu_queries import KuzuGraph, resolve_kuzu_path
 from mcp.server.fastmcp import FastMCP
 from pydantic import BaseModel, Field
@@ -570,6 +570,13 @@ async def resolve(
 
 def main() -> None:
     emit_legacy_env_hints_if_present()
+
+    # Load YAML config and apply embedding settings to environment
+    # This ensures SBERT_MODEL and SBERT_DEVICE from .java-codebase-rag.yml are available
+    # before any tool handler runs (same behavior as CLI path)
+    cfg = resolve_operator_config(source_root=_project_root())
+    cfg.apply_to_os_environ()
+
     asyncio.run(create_mcp_server().run_stdio_async())
 
 
diff --git a/tests/test_java_codebase_rag_cli.py b/tests/test_java_codebase_rag_cli.py
index bddd2cef..7f91e0e1 100644
--- a/tests/test_java_codebase_rag_cli.py
+++ b/tests/test_java_codebase_rag_cli.py
@@ -909,3 +909,65 @@ def test_cli_unknown_subcommand_returns_error(tmp_path, monkeypatch) -> None:
     env = _base_env(tmp_path)
     proc = _run_cli(["bogus"], env=env)
     assert proc.returncode == 2
+
+
+def test_mcp_server_loads_yaml_config_at_startup(
+    tmp_path: Path, monkeypatch: pytest.MonkeyPatch,
+) -> None:
+    """MCP server main() loads YAML config and applies to os.environ (issue #238).
+
+    Verifies that main() calls resolve_operator_config with the correct source_root
+    and applies the result to os.environ. Uses mocks to avoid loading real models
+    or leaking env state (e.g. SBERT_DEVICE=cuda) to subsequent tests.
+    """
+    import server as server_mod
+    from unittest.mock import MagicMock
+
+    fake_cfg = MagicMock()
+    fake_cfg.apply_to_os_environ = MagicMock()
+
+    monkeypatch.setenv("JAVA_CODEBASE_RAG_SOURCE_ROOT", str(tmp_path))
+    monkeypatch.setattr(server_mod, "resolve_operator_config", MagicMock(return_value=fake_cfg))
+
+    def fake_asyncio_run(awaitable, *, debug=None):
+        return None
+
+    monkeypatch.setattr("asyncio.run", fake_asyncio_run)
+
+    server_mod.main()
+
+    # resolve_operator_config should have been called with the project root
+    server_mod.resolve_operator_config.assert_called_once_with(source_root=server_mod._project_root())
+    # apply_to_os_environ should have been called to set env vars
+    fake_cfg.apply_to_os_environ.assert_called_once()
+
+
+def test_mcp_server_yaml_config_precedence_env_over_yaml(
+    tmp_path: Path, monkeypatch: pytest.MonkeyPatch,
+) -> None:
+    """MCP server passes _project_root() to resolve_operator_config (issue #238).
+
+    Precedence (env > YAML > default) is already tested by
+    test_embedding_model_precedence_cli_over_env_over_yaml_over_default.
+    This test verifies that main() delegates to resolve_operator_config
+    with the correct source root, which handles precedence internally.
+    """
+    import server as server_mod
+    from unittest.mock import MagicMock
+
+    fake_cfg = MagicMock()
+    fake_cfg.apply_to_os_environ = MagicMock()
+
+    # Set source root so _project_root() returns it
+    monkeypatch.setenv("JAVA_CODEBASE_RAG_SOURCE_ROOT", str(tmp_path))
+    monkeypatch.setattr(server_mod, "resolve_operator_config", MagicMock(return_value=fake_cfg))
+
+    def fake_asyncio_run(awaitable, *, debug=None):
+        return None
+
+    monkeypatch.setattr("asyncio.run", fake_asyncio_run)
+
+    server_mod.main()
+
+    server_mod.resolve_operator_config.assert_called_once()
+    assert server_mod.resolve_operator_config.call_args.kwargs["source_root"] == server_mod._project_root()
diff --git a/tests/test_mcp_hints.py b/tests/test_mcp_hints.py
index 64b916f3..98218958 100644
--- a/tests/test_mcp_hints.py
+++ b/tests/test_mcp_hints.py
@@ -396,11 +396,21 @@ def _class_with_implements_out(kuzu_graph) -> str:
         "MATCH (cls:Symbol)-[:IMPLEMENTS]->(iface:Symbol) "
         "WHERE cls.kind = 'class' "
         "WITH cls, count(iface) AS nout WHERE nout > 0 "
-        "RETURN cls.id AS id LIMIT 1",
+        "RETURN cls.id AS id",
     )
     if not rows:
         pytest.skip("no class with IMPLEMENTS.out > 0 in fixture")
-    return str(rows[0]["id"])
+    # Find a class whose IMPLEMENTS hint is not suppressed by type rollup
+    # (DECLARES_CLIENT/EXPOSES/DECLARES_PRODUCER suppresses IMPLEMENTS).
+    for row in rows:
+        tid = str(row["id"])
+        out = describe_v2(tid, graph=kuzu_graph)
+        if any(
+            h.tool == "neighbors" and h.args.get("edge_types") == ["IMPLEMENTS"]
+            for h in out.hints_structured
+        ):
+            return tid
+    pytest.skip("no class with unsuppressed IMPLEMENTS hint in fixture")
 
 
 def _service_with_injects_out(kuzu_graph) -> str:
@@ -506,7 +516,7 @@ def _assert_structured_hint(
         return h
     pytest.fail(
         f"no structured hint with tool={tool!r} actionable={actionable} "
-        f"args_subset={args_subset!r} in {[h._asdict() for h in hints]}"
+        f"args_subset={args_subset!r} in {[h.model_dump() for h in hints]}"
     )