diff --git a/examples/servers/simple-auth/README.md b/examples/servers/simple-auth/README.md
index 5021dc3a9..2c21143c8 100644
--- a/examples/servers/simple-auth/README.md
+++ b/examples/servers/simple-auth/README.md
@@ -47,6 +47,10 @@ cd examples/servers/simple-auth
 
 # Start Resource Server on port 8001, connected to Authorization Server
 uv run mcp-simple-auth-rs --port=8001 --auth-server=http://localhost:9000  --transport=streamable-http
+
+# With RFC 8707 strict resource validation (recommended for production)
+uv run mcp-simple-auth-rs --port=8001 --auth-server=http://localhost:9000  --transport=streamable-http --oauth-strict
+
 ```
 
 
diff --git a/examples/servers/simple-auth/mcp_simple_auth/auth_server.py b/examples/servers/simple-auth/mcp_simple_auth/auth_server.py
index 892bd8541..2594f81d6 100644
--- a/examples/servers/simple-auth/mcp_simple_auth/auth_server.py
+++ b/examples/servers/simple-auth/mcp_simple_auth/auth_server.py
@@ -121,6 +121,7 @@ async def introspect_handler(request: Request) -> Response:
                 "exp": access_token.expires_at,
                 "iat": int(time.time()),
                 "token_type": "Bearer",
+                "aud": access_token.resource,  # RFC 8707 audience claim
             }
         )
 
diff --git a/examples/servers/simple-auth/mcp_simple_auth/github_oauth_provider.py b/examples/servers/simple-auth/mcp_simple_auth/github_oauth_provider.py
index bb45ae6c5..c64db96b7 100644
--- a/examples/servers/simple-auth/mcp_simple_auth/github_oauth_provider.py
+++ b/examples/servers/simple-auth/mcp_simple_auth/github_oauth_provider.py
@@ -65,7 +65,7 @@ def __init__(self, settings: GitHubOAuthSettings, github_callback_url: str):
         self.clients: dict[str, OAuthClientInformationFull] = {}
         self.auth_codes: dict[str, AuthorizationCode] = {}
         self.tokens: dict[str, AccessToken] = {}
-        self.state_mapping: dict[str, dict[str, str]] = {}
+        self.state_mapping: dict[str, dict[str, str | None]] = {}
         # Maps MCP tokens to GitHub tokens
         self.token_mapping: dict[str, str] = {}
 
@@ -87,6 +87,7 @@ async def authorize(self, client: OAuthClientInformationFull, params: Authorizat
             "code_challenge": params.code_challenge,
             "redirect_uri_provided_explicitly": str(params.redirect_uri_provided_explicitly),
             "client_id": client.client_id,
+            "resource": params.resource,  # RFC 8707
         }
 
         # Build GitHub authorization URL
@@ -110,6 +111,12 @@ async def handle_github_callback(self, code: str, state: str) -> str:
         code_challenge = state_data["code_challenge"]
         redirect_uri_provided_explicitly = state_data["redirect_uri_provided_explicitly"] == "True"
         client_id = state_data["client_id"]
+        resource = state_data.get("resource")  # RFC 8707
+
+        # These are required values from our own state mapping
+        assert redirect_uri is not None
+        assert code_challenge is not None
+        assert client_id is not None
 
         # Exchange code for token with GitHub
         async with create_mcp_http_client() as client:
@@ -144,6 +151,7 @@ async def handle_github_callback(self, code: str, state: str) -> str:
                 expires_at=time.time() + 300,
                 scopes=[self.settings.mcp_scope],
                 code_challenge=code_challenge,
+                resource=resource,  # RFC 8707
             )
             self.auth_codes[new_code] = auth_code
 
@@ -180,6 +188,7 @@ async def exchange_authorization_code(
             client_id=client.client_id,
             scopes=authorization_code.scopes,
             expires_at=int(time.time()) + 3600,
+            resource=authorization_code.resource,  # RFC 8707
         )
 
         # Find GitHub token for this client
diff --git a/examples/servers/simple-auth/mcp_simple_auth/server.py b/examples/servers/simple-auth/mcp_simple_auth/server.py
index 47174bcaf..898ee7837 100644
--- a/examples/servers/simple-auth/mcp_simple_auth/server.py
+++ b/examples/servers/simple-auth/mcp_simple_auth/server.py
@@ -43,6 +43,9 @@ class ResourceServerSettings(BaseSettings):
     # MCP settings
     mcp_scope: str = "user"
 
+    # RFC 8707 resource validation
+    oauth_strict: bool = False
+
     def __init__(self, **data):
         """Initialize settings with values from environment variables."""
         super().__init__(**data)
@@ -57,8 +60,12 @@ def create_resource_server(settings: ResourceServerSettings) -> FastMCP:
     2. Validates tokens via Authorization Server introspection
     3. Serves MCP tools and resources
     """
-    # Create token verifier for introspection
-    token_verifier = IntrospectionTokenVerifier(settings.auth_server_introspection_endpoint)
+    # Create token verifier for introspection with RFC 8707 resource validation
+    token_verifier = IntrospectionTokenVerifier(
+        introspection_endpoint=settings.auth_server_introspection_endpoint,
+        server_url=str(settings.server_url),
+        validate_resource=settings.oauth_strict,  # Only validate when --oauth-strict is set
+    )
 
     # Create FastMCP server as a Resource Server
     app = FastMCP(
@@ -144,7 +151,12 @@ async def get_user_info() -> dict[str, Any]:
     type=click.Choice(["sse", "streamable-http"]),
     help="Transport protocol to use ('sse' or 'streamable-http')",
 )
-def main(port: int, auth_server: str, transport: Literal["sse", "streamable-http"]) -> int:
+@click.option(
+    "--oauth-strict",
+    is_flag=True,
+    help="Enable RFC 8707 resource validation",
+)
+def main(port: int, auth_server: str, transport: Literal["sse", "streamable-http"], oauth_strict: bool) -> int:
     """
     Run the MCP Resource Server.
 
@@ -171,6 +183,7 @@ def main(port: int, auth_server: str, transport: Literal["sse", "streamable-http
             auth_server_url=auth_server_url,
             auth_server_introspection_endpoint=f"{auth_server}/introspect",
             auth_server_github_user_endpoint=f"{auth_server}/github/user",
+            oauth_strict=oauth_strict,
         )
     except ValueError as e:
         logger.error(f"Configuration error: {e}")
diff --git a/examples/servers/simple-auth/mcp_simple_auth/token_verifier.py b/examples/servers/simple-auth/mcp_simple_auth/token_verifier.py
index ba71322fa..de3140238 100644
--- a/examples/servers/simple-auth/mcp_simple_auth/token_verifier.py
+++ b/examples/servers/simple-auth/mcp_simple_auth/token_verifier.py
@@ -3,6 +3,7 @@
 import logging
 
 from mcp.server.auth.provider import AccessToken, TokenVerifier
+from mcp.shared.auth_utils import check_resource_allowed, resource_url_from_server_url
 
 logger = logging.getLogger(__name__)
 
@@ -18,8 +19,16 @@ class IntrospectionTokenVerifier(TokenVerifier):
     - Comprehensive configuration options
     """
 
-    def __init__(self, introspection_endpoint: str):
+    def __init__(
+        self,
+        introspection_endpoint: str,
+        server_url: str,
+        validate_resource: bool = False,
+    ):
         self.introspection_endpoint = introspection_endpoint
+        self.server_url = server_url
+        self.validate_resource = validate_resource
+        self.resource_url = resource_url_from_server_url(server_url)
 
     async def verify_token(self, token: str) -> AccessToken | None:
         """Verify token via introspection endpoint."""
@@ -54,12 +63,43 @@ async def verify_token(self, token: str) -> AccessToken | None:
                 if not data.get("active", False):
                     return None
 
+                # RFC 8707 resource validation (only when --oauth-strict is set)
+                if self.validate_resource and not self._validate_resource(data):
+                    logger.warning(f"Token resource validation failed. Expected: {self.resource_url}")
+                    return None
+
                 return AccessToken(
                     token=token,
                     client_id=data.get("client_id", "unknown"),
                     scopes=data.get("scope", "").split() if data.get("scope") else [],
                     expires_at=data.get("exp"),
+                    resource=data.get("aud"),  # Include resource in token
                 )
             except Exception as e:
                 logger.warning(f"Token introspection failed: {e}")
                 return None
+
+    def _validate_resource(self, token_data: dict) -> bool:
+        """Validate token was issued for this resource server."""
+        if not self.server_url or not self.resource_url:
+            return False  # Fail if strict validation requested but URLs missing
+
+        # Check 'aud' claim first (standard JWT audience)
+        aud = token_data.get("aud")
+        if isinstance(aud, list):
+            for audience in aud:
+                if self._is_valid_resource(audience):
+                    return True
+            return False
+        elif aud:
+            return self._is_valid_resource(aud)
+
+        # No resource binding - invalid per RFC 8707
+        return False
+
+    def _is_valid_resource(self, resource: str) -> bool:
+        """Check if resource matches this server using hierarchical matching."""
+        if not self.resource_url:
+            return False
+
+        return check_resource_allowed(requested_resource=self.resource_url, configured_resource=resource)
diff --git a/src/mcp/client/auth.py b/src/mcp/client/auth.py
index 50ce74aa4..c174385ea 100644
--- a/src/mcp/client/auth.py
+++ b/src/mcp/client/auth.py
@@ -27,6 +27,7 @@
     OAuthToken,
     ProtectedResourceMetadata,
 )
+from mcp.shared.auth_utils import check_resource_allowed, resource_url_from_server_url
 from mcp.types import LATEST_PROTOCOL_VERSION
 
 logger = logging.getLogger(__name__)
@@ -134,6 +135,21 @@ def clear_tokens(self) -> None:
         self.current_tokens = None
         self.token_expiry_time = None
 
+    def get_resource_url(self) -> str:
+        """Get resource URL for RFC 8707.
+
+        Uses PRM resource if it's a valid parent, otherwise uses canonical server URL.
+        """
+        resource = resource_url_from_server_url(self.server_url)
+
+        # If PRM provides a resource that's a valid parent, use it
+        if self.protected_resource_metadata and self.protected_resource_metadata.resource:
+            prm_resource = str(self.protected_resource_metadata.resource)
+            if check_resource_allowed(requested_resource=resource, configured_resource=prm_resource):
+                resource = prm_resource
+
+        return resource
+
 
 class OAuthClientProvider(httpx.Auth):
     """
@@ -256,6 +272,7 @@ async def _perform_authorization(self) -> tuple[str, str]:
             "state": state,
             "code_challenge": pkce_params.code_challenge,
             "code_challenge_method": "S256",
+            "resource": self.context.get_resource_url(),  # RFC 8707
         }
 
         if self.context.client_metadata.scope:
@@ -293,6 +310,7 @@ async def _exchange_token(self, auth_code: str, code_verifier: str) -> httpx.Req
             "redirect_uri": str(self.context.client_metadata.redirect_uris[0]),
             "client_id": self.context.client_info.client_id,
             "code_verifier": code_verifier,
+            "resource": self.context.get_resource_url(),  # RFC 8707
         }
 
         if self.context.client_info.client_secret:
@@ -343,6 +361,7 @@ async def _refresh_token(self) -> httpx.Request:
             "grant_type": "refresh_token",
             "refresh_token": self.context.current_tokens.refresh_token,
             "client_id": self.context.client_info.client_id,
+            "resource": self.context.get_resource_url(),  # RFC 8707
         }
 
         if self.context.client_info.client_secret:
diff --git a/src/mcp/server/auth/handlers/authorize.py b/src/mcp/server/auth/handlers/authorize.py
index 8d5e2622f..3ce4c34bc 100644
--- a/src/mcp/server/auth/handlers/authorize.py
+++ b/src/mcp/server/auth/handlers/authorize.py
@@ -35,6 +35,10 @@ class AuthorizationRequest(BaseModel):
         None,
         description="Optional scope; if specified, should be " "a space-separated list of scope strings",
     )
+    resource: str | None = Field(
+        None,
+        description="RFC 8707 resource indicator - the MCP server this token will be used with",
+    )
 
 
 class AuthorizationErrorResponse(BaseModel):
@@ -197,6 +201,7 @@ async def error_response(
                 code_challenge=auth_request.code_challenge,
                 redirect_uri=redirect_uri,
                 redirect_uri_provided_explicitly=auth_request.redirect_uri is not None,
+                resource=auth_request.resource,  # RFC 8707
             )
 
             try:
diff --git a/src/mcp/server/auth/handlers/token.py b/src/mcp/server/auth/handlers/token.py
index 450ee406c..552417169 100644
--- a/src/mcp/server/auth/handlers/token.py
+++ b/src/mcp/server/auth/handlers/token.py
@@ -24,6 +24,8 @@ class AuthorizationCodeRequest(BaseModel):
     client_secret: str | None = None
     # See https://datatracker.ietf.org/doc/html/rfc7636#section-4.5
     code_verifier: str = Field(..., description="PKCE code verifier")
+    # RFC 8707 resource indicator
+    resource: str | None = Field(None, description="Resource indicator for the token")
 
 
 class RefreshTokenRequest(BaseModel):
@@ -34,6 +36,8 @@ class RefreshTokenRequest(BaseModel):
     client_id: str
     # we use the client_secret param, per https://datatracker.ietf.org/doc/html/rfc6749#section-2.3.1
     client_secret: str | None = None
+    # RFC 8707 resource indicator
+    resource: str | None = Field(None, description="Resource indicator for the token")
 
 
 class TokenRequest(
diff --git a/src/mcp/server/auth/provider.py b/src/mcp/server/auth/provider.py
index acdd55bc2..b84db89a2 100644
--- a/src/mcp/server/auth/provider.py
+++ b/src/mcp/server/auth/provider.py
@@ -13,6 +13,7 @@ class AuthorizationParams(BaseModel):
     code_challenge: str
     redirect_uri: AnyUrl
     redirect_uri_provided_explicitly: bool
+    resource: str | None = None  # RFC 8707 resource indicator
 
 
 class AuthorizationCode(BaseModel):
@@ -23,6 +24,7 @@ class AuthorizationCode(BaseModel):
     code_challenge: str
     redirect_uri: AnyUrl
     redirect_uri_provided_explicitly: bool
+    resource: str | None = None  # RFC 8707 resource indicator
 
 
 class RefreshToken(BaseModel):
@@ -37,6 +39,7 @@ class AccessToken(BaseModel):
     client_id: str
     scopes: list[str]
     expires_at: int | None = None
+    resource: str | None = None  # RFC 8707 resource indicator
 
 
 RegistrationErrorCode = Literal[
diff --git a/src/mcp/shared/auth_utils.py b/src/mcp/shared/auth_utils.py
new file mode 100644
index 000000000..6d6300c9c
--- /dev/null
+++ b/src/mcp/shared/auth_utils.py
@@ -0,0 +1,69 @@
+"""Utilities for OAuth 2.0 Resource Indicators (RFC 8707)."""
+
+from urllib.parse import urlparse, urlsplit, urlunsplit
+
+from pydantic import AnyUrl, HttpUrl
+
+
+def resource_url_from_server_url(url: str | HttpUrl | AnyUrl) -> str:
+    """Convert server URL to canonical resource URL per RFC 8707.
+
+    RFC 8707 section 2 states that resource URIs "MUST NOT include a fragment component".
+    Returns absolute URI with lowercase scheme/host for canonical form.
+
+    Args:
+        url: Server URL to convert
+
+    Returns:
+        Canonical resource URL string
+    """
+    # Convert to string if needed
+    url_str = str(url)
+
+    # Parse the URL and remove fragment, create canonical form
+    parsed = urlsplit(url_str)
+    canonical = urlunsplit(parsed._replace(scheme=parsed.scheme.lower(), netloc=parsed.netloc.lower(), fragment=""))
+
+    return canonical
+
+
+def check_resource_allowed(requested_resource: str, configured_resource: str) -> bool:
+    """Check if a requested resource URL matches a configured resource URL.
+
+    A requested resource matches if it has the same scheme, domain, port,
+    and its path starts with the configured resource's path. This allows
+    hierarchical matching where a token for a parent resource can be used
+    for child resources.
+
+    Args:
+        requested_resource: The resource URL being requested
+        configured_resource: The resource URL that has been configured
+
+    Returns:
+        True if the requested resource matches the configured resource
+    """
+    # Parse both URLs
+    requested = urlparse(requested_resource)
+    configured = urlparse(configured_resource)
+
+    # Compare scheme, host, and port (origin)
+    if requested.scheme.lower() != configured.scheme.lower() or requested.netloc.lower() != configured.netloc.lower():
+        return False
+
+    # Handle cases like requested=/foo and configured=/foo/
+    requested_path = requested.path
+    configured_path = configured.path
+
+    # If requested path is shorter, it cannot be a child
+    if len(requested_path) < len(configured_path):
+        return False
+
+    # Check if the requested path starts with the configured path
+    # Ensure both paths end with / for proper comparison
+    # This ensures that paths like "/api123" don't incorrectly match "/api"
+    if not requested_path.endswith("/"):
+        requested_path += "/"
+    if not configured_path.endswith("/"):
+        configured_path += "/"
+
+    return requested_path.startswith(configured_path)
diff --git a/tests/shared/test_auth_utils.py b/tests/shared/test_auth_utils.py
new file mode 100644
index 000000000..5b12dc677
--- /dev/null
+++ b/tests/shared/test_auth_utils.py
@@ -0,0 +1,112 @@
+"""Tests for OAuth 2.0 Resource Indicators utilities."""
+
+from mcp.shared.auth_utils import check_resource_allowed, resource_url_from_server_url
+
+
+class TestResourceUrlFromServerUrl:
+    """Tests for resource_url_from_server_url function."""
+
+    def test_removes_fragment(self):
+        """Fragment should be removed per RFC 8707."""
+        assert resource_url_from_server_url("https://example.com/path#fragment") == "https://example.com/path"
+        assert resource_url_from_server_url("https://example.com/#fragment") == "https://example.com/"
+
+    def test_preserves_path(self):
+        """Path should be preserved."""
+        assert (
+            resource_url_from_server_url("https://example.com/path/to/resource")
+            == "https://example.com/path/to/resource"
+        )
+        assert resource_url_from_server_url("https://example.com/") == "https://example.com/"
+        assert resource_url_from_server_url("https://example.com") == "https://example.com"
+
+    def test_preserves_query(self):
+        """Query parameters should be preserved."""
+        assert resource_url_from_server_url("https://example.com/path?foo=bar") == "https://example.com/path?foo=bar"
+        assert resource_url_from_server_url("https://example.com/?key=value") == "https://example.com/?key=value"
+
+    def test_preserves_port(self):
+        """Non-default ports should be preserved."""
+        assert resource_url_from_server_url("https://example.com:8443/path") == "https://example.com:8443/path"
+        assert resource_url_from_server_url("http://example.com:8080/") == "http://example.com:8080/"
+
+    def test_lowercase_scheme_and_host(self):
+        """Scheme and host should be lowercase for canonical form."""
+        assert resource_url_from_server_url("HTTPS://EXAMPLE.COM/path") == "https://example.com/path"
+        assert resource_url_from_server_url("Http://Example.Com:8080/") == "http://example.com:8080/"
+
+    def test_handles_pydantic_urls(self):
+        """Should handle Pydantic URL types."""
+        from pydantic import HttpUrl
+
+        url = HttpUrl("https://example.com/path")
+        assert resource_url_from_server_url(url) == "https://example.com/path"
+
+
+class TestCheckResourceAllowed:
+    """Tests for check_resource_allowed function."""
+
+    def test_identical_urls(self):
+        """Identical URLs should match."""
+        assert check_resource_allowed("https://example.com/path", "https://example.com/path") is True
+        assert check_resource_allowed("https://example.com/", "https://example.com/") is True
+        assert check_resource_allowed("https://example.com", "https://example.com") is True
+
+    def test_different_schemes(self):
+        """Different schemes should not match."""
+        assert check_resource_allowed("https://example.com/path", "http://example.com/path") is False
+        assert check_resource_allowed("http://example.com/", "https://example.com/") is False
+
+    def test_different_domains(self):
+        """Different domains should not match."""
+        assert check_resource_allowed("https://example.com/path", "https://example.org/path") is False
+        assert check_resource_allowed("https://sub.example.com/", "https://example.com/") is False
+
+    def test_different_ports(self):
+        """Different ports should not match."""
+        assert check_resource_allowed("https://example.com:8443/path", "https://example.com/path") is False
+        assert check_resource_allowed("https://example.com:8080/", "https://example.com:8443/") is False
+
+    def test_hierarchical_matching(self):
+        """Child paths should match parent paths."""
+        # Parent resource allows child resources
+        assert check_resource_allowed("https://example.com/api/v1/users", "https://example.com/api") is True
+        assert check_resource_allowed("https://example.com/api/v1", "https://example.com/api") is True
+        assert check_resource_allowed("https://example.com/mcp/server", "https://example.com/mcp") is True
+
+        # Exact match
+        assert check_resource_allowed("https://example.com/api", "https://example.com/api") is True
+
+        # Parent cannot use child's token
+        assert check_resource_allowed("https://example.com/api", "https://example.com/api/v1") is False
+        assert check_resource_allowed("https://example.com/", "https://example.com/api") is False
+
+    def test_path_boundary_matching(self):
+        """Path matching should respect boundaries."""
+        # Should not match partial path segments
+        assert check_resource_allowed("https://example.com/apiextra", "https://example.com/api") is False
+        assert check_resource_allowed("https://example.com/api123", "https://example.com/api") is False
+
+        # Should match with trailing slash
+        assert check_resource_allowed("https://example.com/api/", "https://example.com/api") is True
+        assert check_resource_allowed("https://example.com/api/v1", "https://example.com/api/") is True
+
+    def test_trailing_slash_handling(self):
+        """Trailing slashes should be handled correctly."""
+        # With and without trailing slashes
+        assert check_resource_allowed("https://example.com/api/", "https://example.com/api") is True
+        assert check_resource_allowed("https://example.com/api", "https://example.com/api/") is False
+        assert check_resource_allowed("https://example.com/api/v1", "https://example.com/api") is True
+        assert check_resource_allowed("https://example.com/api/v1", "https://example.com/api/") is True
+
+    def test_case_insensitive_origin(self):
+        """Origin comparison should be case-insensitive."""
+        assert check_resource_allowed("https://EXAMPLE.COM/path", "https://example.com/path") is True
+        assert check_resource_allowed("HTTPS://example.com/path", "https://example.com/path") is True
+        assert check_resource_allowed("https://Example.Com:8080/api", "https://example.com:8080/api") is True
+
+    def test_empty_paths(self):
+        """Empty paths should be handled correctly."""
+        assert check_resource_allowed("https://example.com", "https://example.com") is True
+        assert check_resource_allowed("https://example.com/", "https://example.com") is True
+        assert check_resource_allowed("https://example.com/api", "https://example.com") is True