diff --git a/libs/langchain/langchain/agents/format_scratchpad/xml.py b/libs/langchain/langchain/agents/format_scratchpad/xml.py
index e1e94509ef3..3fb73637790 100644
--- a/libs/langchain/langchain/agents/format_scratchpad/xml.py
+++ b/libs/langchain/langchain/agents/format_scratchpad/xml.py
@@ -1,21 +1,52 @@
+from typing import Literal, Optional
+
 from langchain_core.agents import AgentAction
 
 
+def _escape(xml: str) -> str:
+    """Replace XML tags with custom safe delimiters."""
+    replacements = {
+        "<tool>": "[[tool]]",
+        "</tool>": "[[/tool]]",
+        "<tool_input>": "[[tool_input]]",
+        "</tool_input>": "[[/tool_input]]",
+        "<observation>": "[[observation]]",
+        "</observation>": "[[/observation]]",
+    }
+    for orig, repl in replacements.items():
+        xml = xml.replace(orig, repl)
+    return xml
+
+
 def format_xml(
     intermediate_steps: list[tuple[AgentAction, str]],
+    *,
+    escape_format: Optional[Literal["minimal"]] = "minimal",
 ) -> str:
     """Format the intermediate steps as XML.
 
     Args:
         intermediate_steps: The intermediate steps.
+        escape_format: The escaping format to use. Currently only 'minimal' is
+            supported, which replaces XML tags with custom delimiters to prevent
+            conflicts.
 
     Returns:
         The intermediate steps as XML.
     """
     log = ""
     for action, observation in intermediate_steps:
+        if escape_format == "minimal":
+            # Escape XML tags in tool names and inputs using custom delimiters
+            tool = _escape(action.tool)
+            tool_input = _escape(str(action.tool_input))
+            observation = _escape(str(observation))
+        else:
+            tool = action.tool
+            tool_input = str(action.tool_input)
+            observation = str(observation)
         log += (
-            f"<tool>{action.tool}</tool><tool_input>{action.tool_input}"
+            f"<tool>{tool}</tool><tool_input>{tool_input}"
             f"</tool_input><observation>{observation}</observation>"
         )
     return log
diff --git a/libs/langchain/langchain/agents/output_parsers/xml.py b/libs/langchain/langchain/agents/output_parsers/xml.py
index e8a7587b1cd..7d3e73c7ba9 100644
--- a/libs/langchain/langchain/agents/output_parsers/xml.py
+++ b/libs/langchain/langchain/agents/output_parsers/xml.py
@@ -1,47 +1,119 @@
-from typing import Union
+import re
+from typing import Literal, Optional, Union
 
 from langchain_core.agents import AgentAction, AgentFinish
+from pydantic import Field
 
 from langchain.agents import AgentOutputParser
 
 
+def _unescape(text: str) -> str:
+    """Convert custom tag delimiters back into XML tags."""
+    replacements = {
+        "[[tool]]": "<tool>",
+        "[[/tool]]": "</tool>",
+        "[[tool_input]]": "<tool_input>",
+        "[[/tool_input]]": "</tool_input>",
+        "[[observation]]": "<observation>",
+        "[[/observation]]": "</observation>",
+    }
+    for repl, orig in replacements.items():
+        text = text.replace(repl, orig)
+    return text
+
+
 class XMLAgentOutputParser(AgentOutputParser):
-    """Parses tool invocations and final answers in XML format.
+    """Parses tool invocations and final answers from XML-formatted agent output.
 
-    Expects output to be in one of two formats.
+    This parser extracts structured information from XML tags to determine whether
+    an agent should perform a tool action or provide a final answer. It includes
+    built-in escaping support to safely handle tool names and inputs
+    containing XML special characters.
 
-    If the output signals that an action should be taken,
-    should be in the below format. This will result in an AgentAction
-    being returned.
+    Args:
+        escape_format: The escaping format to use when parsing XML content.
+            Supports 'minimal' which uses custom delimiters like [[tool]] to replace
+            XML tags within content, preventing parsing conflicts.
+            Use 'minimal' if using a corresponding encoding format that uses
+            the _escape function when formatting the output (e.g., with format_xml).
 
-    ```
-    <tool>search</tool>
-    <tool_input>what is 2 + 2</tool_input>
-    ```
+    Expected formats:
+        Tool invocation (returns AgentAction):
+            <tool>search</tool>
+            <tool_input>what is 2 + 2</tool_input>
 
-    If the output signals that a final answer should be given,
-    should be in the below format. This will result in an AgentFinish
-    being returned.
+        Final answer (returns AgentFinish):
+            <final_answer>The answer is 4</final_answer>
 
-    ```
-    <final_answer>Foo</final_answer>
-    ```
+    Note:
+        Minimal escaping allows tool names containing XML tags to be safely
+        represented. For example, a tool named "search<tool>nested</tool>" would be
+        escaped as "search[[tool]]nested[[/tool]]" in the XML and automatically
+        unescaped during parsing.
+
+    Raises:
+        ValueError: If the input doesn't match either expected XML format or
+            contains malformed XML structure.
+    """
+
+    escape_format: Optional[Literal["minimal"]] = Field(default="minimal")
+    """The format to use for escaping XML characters.
+
+    minimal - uses custom delimiters to replace XML tags within content,
+    preventing parsing conflicts. This is the only supported format currently.
+
+    None - no escaping is applied, which may lead to parsing conflicts.
     """
 
     def parse(self, text: str) -> Union[AgentAction, AgentFinish]:
-        if "</tool>" in text:
-            tool, tool_input = text.split("</tool>")
-            _tool = tool.split("<tool>")[1]
-            _tool_input = tool_input.split("<tool_input>")[1]
-            if "</tool_input>" in _tool_input:
-                _tool_input = _tool_input.split("</tool_input>")[0]
+        # Check for tool invocation first
+        tool_matches = re.findall(r"<tool>(.*?)</tool>", text, re.DOTALL)
+        if tool_matches:
+            if len(tool_matches) != 1:
+                msg = (
+                    f"Malformed tool invocation: expected exactly one <tool> block, "
+                    f"but found {len(tool_matches)}."
+                )
+                raise ValueError(msg)
+            _tool = tool_matches[0]
+
+            # Match optional tool input
+            input_matches = re.findall(
+                r"<tool_input>(.*?)</tool_input>", text, re.DOTALL
+            )
+            if len(input_matches) > 1:
+                msg = (
+                    f"Malformed tool invocation: expected at most one <tool_input> "
+                    f"block, but found {len(input_matches)}."
+                )
+                raise ValueError(msg)
+            _tool_input = input_matches[0] if input_matches else ""
+
+            # Unescape if minimal escape format is used
+            if self.escape_format == "minimal":
+                _tool = _unescape(_tool)
+                _tool_input = _unescape(_tool_input)
+
             return AgentAction(tool=_tool, tool_input=_tool_input, log=text)
-        if "<final_answer>" in text:
-            _, answer = text.split("<final_answer>")
-            if "</final_answer>" in answer:
-                answer = answer.split("</final_answer>")[0]
+        # Check for final answer
+        if "<final_answer>" in text and "</final_answer>" in text:
+            matches = re.findall(r"<final_answer>(.*?)</final_answer>", text, re.DOTALL)
+            if len(matches) != 1:
+                msg = (
+                    "Malformed output: expected exactly one "
+                    "<final_answer>...</final_answer> block."
+                )
+                raise ValueError(msg)
+            answer = matches[0]
+            # Unescape custom delimiters in final answer
+            if self.escape_format == "minimal":
+                answer = _unescape(answer)
             return AgentFinish(return_values={"output": answer}, log=text)
-        raise ValueError
+        msg = (
+            "Malformed output: expected either a tool invocation "
+            "or a final answer in XML format."
+        )
+        raise ValueError(msg)
 
     def get_format_instructions(self) -> str:
         raise NotImplementedError
diff --git a/libs/langchain/tests/unit_tests/agents/format_scratchpad/test_xml.py b/libs/langchain/tests/unit_tests/agents/format_scratchpad/test_xml.py
index 322b6874bef..3fdaa791a9b 100644
--- a/libs/langchain/tests/unit_tests/agents/format_scratchpad/test_xml.py
+++ b/libs/langchain/tests/unit_tests/agents/format_scratchpad/test_xml.py
@@ -39,3 +39,42 @@ Observation2</observation>"""
 def test_empty_list_agent_actions() -> None:
     result = format_xml([])
     assert result == ""
+
+
+def test_xml_escaping_minimal() -> None:
+    """Test that XML tags in tool names are escaped with minimal format."""
+    # Arrange
+    agent_action = AgentAction(
+        tool="search<tool>nested</tool>", tool_input="query<input>test</input>", log=""
+    )
+    observation = "Found <observation>result</observation>"
+    intermediate_steps = [(agent_action, observation)]
+
+    # Act
+    result = format_xml(intermediate_steps, escape_format="minimal")
+
+    # Assert - XML tags should be replaced with custom delimiters
+    expected_result = (
+        "<tool>search[[tool]]nested[[/tool]]</tool>"
+        "<tool_input>query<input>test</input></tool_input>"
+        "<observation>Found [[observation]]result[[/observation]]</observation>"
+    )
+    assert result == expected_result
+
+
+def test_no_escaping() -> None:
+    """Test that escaping can be disabled."""
+    # Arrange
+    agent_action = AgentAction(tool="Tool1", tool_input="Input1", log="")
+    observation = "Observation1"
+    intermediate_steps = [(agent_action, observation)]
+
+    # Act
+    result = format_xml(intermediate_steps, escape_format=None)
+
+    # Assert
+    expected_result = (
+        "<tool>Tool1</tool><tool_input>Input1</tool_input>"
+        "<observation>Observation1</observation>"
+    )
+    assert result == expected_result
diff --git a/libs/langchain/tests/unit_tests/agents/output_parsers/test_xml.py b/libs/langchain/tests/unit_tests/agents/output_parsers/test_xml.py
index 1b271e24700..74fff2fa869 100644
--- a/libs/langchain/tests/unit_tests/agents/output_parsers/test_xml.py
+++ b/libs/langchain/tests/unit_tests/agents/output_parsers/test_xml.py
@@ -32,3 +32,38 @@ def test_finish() -> None:
     output = parser.invoke(_input)
     expected_output = AgentFinish(return_values={"output": "bar"}, log=_input)
     assert output == expected_output
+
+
+def test_malformed_xml_with_nested_tags() -> None:
+    """Test handling of tool names with XML tags via format_xml minimal escaping."""
+    from langchain.agents.format_scratchpad.xml import format_xml
+
+    # Create an AgentAction with XML tags in the tool name
+    action = AgentAction(tool="search<tool>nested</tool>", tool_input="query", log="")
+
+    # The format_xml function should escape the XML tags using custom delimiters
+    formatted_xml = format_xml([(action, "observation")])
+
+    # Extract just the tool part for parsing
+    tool_part = formatted_xml.split("<observation>")[0]  # Remove observation part
+
+    # Now test that the parser can handle the escaped XML
+    parser = XMLAgentOutputParser(escape_format="minimal")
+    output = parser.invoke(tool_part)
+
+    # The parser should unescape and extract the original tool name
+    expected_output = AgentAction(
+        tool="search<tool>nested</tool>", tool_input="query", log=tool_part
+    )
+    assert output == expected_output
+
+
+def test_no_escaping() -> None:
+    """Test parser with escaping disabled."""
+    parser = XMLAgentOutputParser(escape_format=None)
+
+    # Test with regular tool name (no XML tags)
+    _input = """<tool>search</tool><tool_input>foo</tool_input>"""
+    output = parser.invoke(_input)
+    expected_output = AgentAction(tool="search", tool_input="foo", log=_input)
+    assert output == expected_output