diff --git a/packages/playwright-core/src/tools/dashboard/dashboardApp.ts b/packages/playwright-core/src/tools/dashboard/dashboardApp.ts
index 5faa603223775..08bb90c4c6782 100644
--- a/packages/playwright-core/src/tools/dashboard/dashboardApp.ts
+++ b/packages/playwright-core/src/tools/dashboard/dashboardApp.ts
@@ -397,6 +397,9 @@ async function runKillClient(): Promise<void> {
 
 async function runAnnotateClient(options: DashboardOptions): Promise<void> {
   selfDestructOnParentGone();
+  // stdin is a pipe from the process that started this client. It emits 'close' only after it
+  // has been read to the end, so read it. Unref it, so that it does not keep the process alive.
+  process.stdin.resume().unref();
 
   const socketPath = dashboardSocketPath();
   const tryConnect = () => new Promise<net.Socket | undefined>(resolve => {
diff --git a/packages/playwright-core/src/tools/utils/mcp/server.ts b/packages/playwright-core/src/tools/utils/mcp/server.ts
index 8be86c12065e3..28317f27d4739 100644
--- a/packages/playwright-core/src/tools/utils/mcp/server.ts
+++ b/packages/playwright-core/src/tools/utils/mcp/server.ts
@@ -188,9 +188,8 @@ function addServerListener(server: ServerType, event: 'close' | 'initialized', l
 export async function start(serverBackendFactory: ServerBackendFactory, options: { host?: string; port?: number, allowedHosts?: string[], socketPath?: string } = {}) {
   if (options.port === undefined) {
     const transport = new StdioServerTransport();
-    // The SDK's StdioServerTransport doesn't detect peer disconnect — it never listens for stdin
-    // end-of-stream. Wire it up so callTool requests can be cancelled when the client goes away.
-    process.stdin.on('end', () => void transport.close());
+    // Do not close the transport on stdin end. The exit watchdog closes the browsers on stdin
+    // close, and closing a browser that is already closing force-kills it.
     await connect(serverBackendFactory, transport, Promise.resolve(), false);
     return;
   }
diff --git a/tests/mcp/launch.spec.ts b/tests/mcp/launch.spec.ts
index 0b4e9599dbeeb..1678f43cb556e 100644
--- a/tests/mcp/launch.spec.ts
+++ b/tests/mcp/launch.spec.ts
@@ -317,3 +317,23 @@ exit 1
     error: expect.not.stringContaining(`Browser is already in use`),
   });
 });
+
+test('should gracefully close the browser once on stdin end', {
+  annotation: { type: 'issue', description: 'https://github.com/microsoft/playwright/issues/43098' }
+}, async ({ startClient, server }, testInfo) => {
+  const { client, stderr } = await startClient({
+    args: [`--user-data-dir=${testInfo.outputPath('user-data-dir')}`],
+    env: { DEBUG: 'pw:browser' },
+  });
+  await client.callTool({
+    name: 'browser_navigate',
+    arguments: { url: server.HELLO_WORLD },
+  });
+
+  await client.close();
+
+  await expect.poll(() => stderr()).toContain('<gracefully close end>');
+  expect(stderr()).toContain('<gracefully close start>');
+  expect(stderr()).not.toContain('<forcefully close>');
+  expect(stderr()).not.toContain('<will force kill>');
+});