diff --git a/CHANGELOG.md b/CHANGELOG.md
index 2ec09c493..46be71bb8 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -10,7 +10,8 @@ and this project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0
 ### Added
 
 - Added support for passing in a `ToolsSchem` in lieu of a list of provider-
-  specific dicts when initializing `OpenAIRealtimeLLMService`.
+  specific dicts when initializing `OpenAIRealtimeLLMService` or when updating
+  it using `LLMUpdateSettingsFrame`.
 
 - Added `TransportParams.audio_out_silence_secs`, which specifies how many
   seconds of silence to output when an `EndFrame` reaches the output
diff --git a/examples/foundational/19-openai-realtime.py b/examples/foundational/19-openai-realtime.py
index b5edc0ff2..31af47bf9 100644
--- a/examples/foundational/19-openai-realtime.py
+++ b/examples/foundational/19-openai-realtime.py
@@ -14,8 +14,14 @@ from loguru import logger
 
 from pipecat.adapters.schemas.function_schema import FunctionSchema
 from pipecat.adapters.schemas.tools_schema import ToolsSchema
+from pipecat.adapters.services.open_ai_realtime_adapter import OpenAIRealtimeLLMAdapter
 from pipecat.audio.vad.silero import SileroVADAnalyzer
-from pipecat.frames.frames import LLMRunFrame, LLMSetToolsFrame, TranscriptionMessage
+from pipecat.frames.frames import (
+    LLMRunFrame,
+    LLMSetToolsFrame,
+    LLMUpdateSettingsFrame,
+    TranscriptionMessage,
+)
 from pipecat.observers.loggers.transcription_log_observer import TranscriptionLogObserver
 from pipecat.pipeline.pipeline import Pipeline
 from pipecat.pipeline.runner import PipelineRunner
@@ -148,6 +154,8 @@ async def run_bot(transport: BaseTransport, runner_args: RunnerArguments):
                 noise_reduction=InputAudioNoiseReduction(type="near_field"),
             )
         ),
+        # In this example we provide tools through the context, but you could
+        # alternatively provide them here.
         # tools=tools,
         instructions="""You are a helpful and friendly AI.
 
@@ -223,6 +231,10 @@ Remember, your responses should be short. Just one or two sentences, usually. Re
             standard_tools=[weather_function, restaurant_function, get_news_function]
         )
         await task.queue_frames([LLMSetToolsFrame(tools=new_tools)])
+        # Alternative pattern, useful if you're changing other session properties too
+        # await task.queue_frames(
+        #     [LLMUpdateSettingsFrame(settings=SessionProperties(tools=new_tools).model_dump())]
+        # )
 
     @transport.event_handler("on_client_disconnected")
     async def on_client_disconnected(transport, client):
diff --git a/src/pipecat/services/openai/realtime/events.py b/src/pipecat/services/openai/realtime/events.py
index 42b5561d6..e1a69b43c 100644
--- a/src/pipecat/services/openai/realtime/events.py
+++ b/src/pipecat/services/openai/realtime/events.py
@@ -198,9 +198,9 @@ class SessionProperties(BaseModel):
     output_modalities: Optional[List[Literal["text", "audio"]]] = None
     instructions: Optional[str] = None
     audio: Optional[AudioConfiguration] = None
-    # Tools can only be ToolsSchema when provided by user in
-    # OpenAIRealtimeLLMService constructor. We'll never serialize/deserialize
-    # ToolsSchema.
+    # Tools can only be ToolsSchema when provided by the user, in either the
+    # OpenAIRealtimeLLMService constructor or through LLMUpdateSettingsFrame.
+    # We'll never serialize/deserialize ToolsSchema when talking to the server.
     tools: Optional[ToolsSchema | List[Dict]] = None
     tool_choice: Optional[Literal["auto", "none", "required"]] = None
     max_output_tokens: Optional[Union[int, Literal["inf"]]] = None
diff --git a/src/pipecat/services/openai/realtime/llm.py b/src/pipecat/services/openai/realtime/llm.py
index 77e326eb8..0129a94f9 100644
--- a/src/pipecat/services/openai/realtime/llm.py
+++ b/src/pipecat/services/openai/realtime/llm.py
@@ -156,16 +156,6 @@ class OpenAIRealtimeLLMService(LLMService):
         self._session_properties: events.SessionProperties = (
             session_properties or events.SessionProperties()
         )
-        # If needed, map session_properties.tools from ToolsSchema to list of
-        # dicts, which remote server expects
-        if self._session_properties.tools and isinstance(
-            self._session_properties.tools, ToolsSchema
-        ):
-            adapter = self.get_llm_adapter()
-            self._session_properties.tools = adapter.from_standard_tools(
-                self._session_properties.tools
-            )
-
         self._audio_input_paused = start_audio_paused
         self._websocket = None
         self._receive_task = None
@@ -492,9 +482,9 @@ class OpenAIRealtimeLLMService(LLMService):
 
     async def _update_settings(self):
         settings = self._session_properties
+        adapter: OpenAIRealtimeLLMAdapter = self.get_llm_adapter()
 
         if self._context:
-            adapter: OpenAIRealtimeLLMAdapter = self.get_llm_adapter()
             llm_invocation_params = adapter.get_llm_invocation_params(self._context)
 
             # tools given in the context override the tools in the session properties
@@ -506,6 +496,12 @@ class OpenAIRealtimeLLMService(LLMService):
             if llm_invocation_params["system_instruction"]:
                 settings.instructions = llm_invocation_params["system_instruction"]
 
+        # If needed, map settings.tools from ToolsSchema to list of dicts,
+        # which remote server expects. It would only be a ToolsSchema if that's
+        # how it was provided in the constructor or via LLMUpdateSettingsFrame.
+        if settings.tools and isinstance(settings.tools, ToolsSchema):
+            settings.tools = adapter.from_standard_tools(settings.tools)
+
         await self.send_client_event(events.SessionUpdateEvent(session=settings))
 
     #