diff --git a/Sources/MCP/Base/Transports/InMemoryTransport.swift b/Sources/MCP/Base/Transports/InMemoryTransport.swift
new file mode 100644
index 0000000..9234dfc
--- /dev/null
+++ b/Sources/MCP/Base/Transports/InMemoryTransport.swift
@@ -0,0 +1,197 @@
+import Foundation
+import Logging
+
+/// An in-memory transport implementation for direct communication within the same process.
+///
+/// - Example:
+///   ```swift
+///   // Create a connected pair of transports
+///   let (clientTransport, serverTransport) = await InMemoryTransport.createConnectedPair()
+///
+///   // Use with client and server
+///   let client = Client(name: "MyApp", version: "1.0.0")
+///   let server = Server(name: "MyServer", version: "1.0.0")
+///
+///   try await client.connect(transport: clientTransport)
+///   try await server.connect(transport: serverTransport)
+///   ```
+public actor InMemoryTransport: Transport {
+    /// Logger instance for transport-related events
+    public nonisolated let logger: Logger
+
+    private var isConnected = false
+    private var pairedTransport: InMemoryTransport?
+
+    // Message queues
+    private var incomingMessages: [Data] = []
+    private var messageContinuation: AsyncThrowingStream<Data, Swift.Error>.Continuation?
+
+    /// Creates a new in-memory transport
+    ///
+    /// - Parameter logger: Optional logger instance for transport events
+    public init(logger: Logger? = nil) {
+        self.logger =
+            logger
+            ?? Logger(
+                label: "mcp.transport.in-memory",
+                factory: { _ in SwiftLogNoOpLogHandler() }
+            )
+    }
+
+    /// Creates a connected pair of in-memory transports
+    ///
+    /// This is the recommended way to create transports for client-server communication
+    /// within the same process. The returned transports are already paired and ready
+    /// to be connected.
+    ///
+    /// - Parameter logger: Optional logger instance shared by both transports
+    /// - Returns: A tuple of (clientTransport, serverTransport) ready for use
+    public static func createConnectedPair(
+        logger: Logger? = nil
+    ) async -> (client: InMemoryTransport, server: InMemoryTransport) {
+        let clientLogger: Logger
+        let serverLogger: Logger
+
+        if let providedLogger = logger {
+            // If a logger is provided, use it directly for both transports
+            clientLogger = providedLogger
+            serverLogger = providedLogger
+        } else {
+            // Create default loggers with appropriate labels
+            clientLogger = Logger(
+                label: "mcp.transport.in-memory.client",
+                factory: { _ in SwiftLogNoOpLogHandler() }
+            )
+            serverLogger = Logger(
+                label: "mcp.transport.in-memory.server",
+                factory: { _ in SwiftLogNoOpLogHandler() }
+            )
+        }
+
+        let clientTransport = InMemoryTransport(logger: clientLogger)
+        let serverTransport = InMemoryTransport(logger: serverLogger)
+
+        // Perform pairing
+        await clientTransport.pair(with: serverTransport)
+        await serverTransport.pair(with: clientTransport)
+
+        return (clientTransport, serverTransport)
+    }
+
+    /// Pairs this transport with another for bidirectional communication
+    ///
+    /// - Parameter other: The transport to pair with
+    /// - Important: This method should typically not be called directly.
+    ///   Use `createConnectedPair()` instead.
+    private func pair(with other: InMemoryTransport) {
+        self.pairedTransport = other
+    }
+
+    /// Establishes connection with the transport
+    ///
+    /// For in-memory transports, this validates that the transport is properly
+    /// paired and sets up the message stream.
+    ///
+    /// - Throws: MCPError.internalError if the transport is not paired
+    public func connect() async throws {
+        guard !isConnected else {
+            logger.debug("Transport already connected")
+            return
+        }
+
+        guard pairedTransport != nil else {
+            throw MCPError.internalError(
+                "Transport not paired. Use createConnectedPair() to create paired transports.")
+        }
+
+        isConnected = true
+        logger.info("Transport connected successfully")
+    }
+
+    /// Disconnects from the transport
+    ///
+    /// This closes the message stream and marks the transport as disconnected.
+    public func disconnect() async {
+        guard isConnected else { return }
+
+        isConnected = false
+        messageContinuation?.finish()
+        messageContinuation = nil
+
+        // Notify paired transport of disconnection
+        if let paired = pairedTransport {
+            await paired.handlePeerDisconnection()
+        }
+
+        logger.info("Transport disconnected")
+    }
+
+    /// Handles disconnection from the paired transport
+    private func handlePeerDisconnection() {
+        if isConnected {
+            messageContinuation?.finish(throwing: MCPError.connectionClosed)
+            messageContinuation = nil
+            isConnected = false
+            logger.info("Peer transport disconnected")
+        }
+    }
+
+    /// Sends a message to the paired transport
+    ///
+    /// Messages are delivered directly to the paired transport's receive queue
+    /// without any additional encoding or framing.
+    ///
+    /// - Parameter data: The message data to send
+    /// - Throws: MCPError.internalError if not connected or no paired transport
+    public func send(_ data: Data) async throws {
+        guard isConnected else {
+            throw MCPError.internalError("Transport not connected")
+        }
+
+        guard let paired = pairedTransport else {
+            throw MCPError.internalError("No paired transport")
+        }
+
+        logger.debug("Sending message", metadata: ["size": "\(data.count)"])
+
+        // Deliver message to paired transport
+        await paired.deliverMessage(data)
+    }
+
+    /// Delivers a message from the paired transport
+    private func deliverMessage(_ data: Data) {
+        guard isConnected else {
+            logger.warning("Received message while disconnected")
+            return
+        }
+
+        logger.debug("Message received", metadata: ["size": "\(data.count)"])
+
+        if let continuation = messageContinuation {
+            continuation.yield(data)
+        } else {
+            // Queue message if stream not yet created
+            incomingMessages.append(data)
+        }
+    }
+
+    /// Receives messages from the paired transport
+    ///
+    /// - Returns: An AsyncThrowingStream of Data objects representing messages
+    public func receive() -> AsyncThrowingStream<Data, Swift.Error> {
+        return AsyncThrowingStream<Data, Swift.Error> { continuation in
+            self.messageContinuation = continuation
+
+            // Deliver any queued messages
+            for message in self.incomingMessages {
+                continuation.yield(message)
+            }
+            self.incomingMessages.removeAll()
+
+            // Check if already disconnected
+            if !self.isConnected {
+                continuation.finish()
+            }
+        }
+    }
+}
diff --git a/Tests/MCPTests/InMemoryTransportTests.swift b/Tests/MCPTests/InMemoryTransportTests.swift
new file mode 100644
index 0000000..d8228e7
--- /dev/null
+++ b/Tests/MCPTests/InMemoryTransportTests.swift
@@ -0,0 +1,409 @@
+import Foundation
+import Logging
+import Testing
+
+@testable import MCP
+
+@Suite("InMemory Transport Tests")
+struct InMemoryTransportTests {
+
+    @Test("Create connected pair")
+    func testCreateConnectedPair() async throws {
+        let (clientTransport, serverTransport) = await InMemoryTransport.createConnectedPair()
+
+        // Verify both transports can be connected
+        try await clientTransport.connect()
+        try await serverTransport.connect()
+
+        // Clean up
+        await clientTransport.disconnect()
+        await serverTransport.disconnect()
+    }
+
+    @Test("Connect without pairing throws error")
+    func testConnectWithoutPairing() async throws {
+        let transport = InMemoryTransport()
+
+        // Attempt to connect without pairing should throw
+        do {
+            try await transport.connect()
+            #expect(Bool(false), "Expected connect to throw an error")
+        } catch let error as MCPError {
+            if case .internalError(let message) = error {
+                #expect(
+                    message
+                        == "Transport not paired. Use createConnectedPair() to create paired transports."
+                )
+            } else {
+                #expect(Bool(false), "Expected MCPError.internalError")
+            }
+        }
+    }
+
+    @Test("Multiple connect calls are idempotent")
+    func testMultipleConnectCalls() async throws {
+        let (clientTransport, serverTransport) = await InMemoryTransport.createConnectedPair()
+
+        // Connect multiple times should not throw
+        try await clientTransport.connect()
+        try await clientTransport.connect()  // Should be safe
+        try await clientTransport.connect()  // Should be safe
+
+        // Clean up
+        await clientTransport.disconnect()
+        await serverTransport.disconnect()
+    }
+
+    @Test("Send and receive messages")
+    func testSendAndReceiveMessages() async throws {
+        let (clientTransport, serverTransport) = await InMemoryTransport.createConnectedPair()
+
+        try await clientTransport.connect()
+        try await serverTransport.connect()
+
+        // Start receiving on server
+        let serverReceiveTask = Task {
+            var messages: [Data] = []
+            for try await message in await serverTransport.receive() {
+                messages.append(message)
+                if messages.count >= 3 {
+                    break
+                }
+            }
+            return messages
+        }
+
+        // Send messages from client
+        let message1 = "Hello".data(using: .utf8)!
+        let message2 = "World".data(using: .utf8)!
+        let message3 = "!".data(using: .utf8)!
+
+        try await clientTransport.send(message1)
+        try await clientTransport.send(message2)
+        try await clientTransport.send(message3)
+
+        // Wait for messages to be received
+        let receivedMessages = try await serverReceiveTask.value
+
+        #expect(receivedMessages.count == 3)
+        #expect(receivedMessages[0] == message1)
+        #expect(receivedMessages[1] == message2)
+        #expect(receivedMessages[2] == message3)
+
+        // Clean up
+        await clientTransport.disconnect()
+        await serverTransport.disconnect()
+    }
+
+    @Test("Bidirectional communication")
+    func testBidirectionalCommunication() async throws {
+        let (transport1, transport2) = await InMemoryTransport.createConnectedPair()
+
+        try await transport1.connect()
+        try await transport2.connect()
+
+        // Set up receivers
+        let receive1Task = Task {
+            var messages: [String] = []
+            for try await data in await transport1.receive() {
+                if let message = String(data: data, encoding: .utf8) {
+                    messages.append(message)
+                    if messages.count >= 2 {
+                        break
+                    }
+                }
+            }
+            return messages
+        }
+
+        let receive2Task = Task {
+            var messages: [String] = []
+            for try await data in await transport2.receive() {
+                if let message = String(data: data, encoding: .utf8) {
+                    messages.append(message)
+                    if messages.count >= 2 {
+                        break
+                    }
+                }
+            }
+            return messages
+        }
+
+        // Send messages in both directions
+        try await transport1.send("From transport 1 - message 1".data(using: .utf8)!)
+        try await transport2.send("From transport 2 - message 1".data(using: .utf8)!)
+        try await transport1.send("From transport 1 - message 2".data(using: .utf8)!)
+        try await transport2.send("From transport 2 - message 2".data(using: .utf8)!)
+
+        // Verify both sides received messages
+        let messages1 = try await receive1Task.value
+        let messages2 = try await receive2Task.value
+
+        #expect(messages1.count == 2)
+        #expect(messages1[0] == "From transport 2 - message 1")
+        #expect(messages1[1] == "From transport 2 - message 2")
+
+        #expect(messages2.count == 2)
+        #expect(messages2[0] == "From transport 1 - message 1")
+        #expect(messages2[1] == "From transport 1 - message 2")
+
+        // Clean up
+        await transport1.disconnect()
+        await transport2.disconnect()
+    }
+
+    @Test("Send without connection throws error")
+    func testSendWithoutConnection() async throws {
+        let (clientTransport, serverTransport) = await InMemoryTransport.createConnectedPair()
+
+        // Try to send without connecting
+        do {
+            try await clientTransport.send("test".data(using: .utf8)!)
+            #expect(Bool(false), "Expected send to throw an error")
+        } catch let error as MCPError {
+            if case .internalError(let message) = error {
+                #expect(message == "Transport not connected")
+            } else {
+                #expect(Bool(false), "Expected MCPError.internalError")
+            }
+        }
+
+        // Clean up (connect server to avoid dangling connections)
+        try await serverTransport.connect()
+        await serverTransport.disconnect()
+    }
+
+    @Test("Disconnect stops message stream")
+    func testDisconnectStopsMessageStream() async throws {
+        let (clientTransport, serverTransport) = await InMemoryTransport.createConnectedPair()
+
+        try await clientTransport.connect()
+        try await serverTransport.connect()
+
+        // Start receiving
+        let receiveTask = Task {
+            var messageCount = 0
+            do {
+                for try await _ in await serverTransport.receive() {
+                    messageCount += 1
+                }
+            } catch {
+                // Expected when disconnected
+            }
+            return messageCount
+        }
+
+        // Send a message
+        try await clientTransport.send("message".data(using: .utf8)!)
+
+        // Give some time for message to be received
+        try await Task.sleep(for: .milliseconds(100))
+
+        // Disconnect
+        await serverTransport.disconnect()
+
+        // The receive stream should complete
+        let messageCount = await receiveTask.value
+        #expect(messageCount >= 1)
+    }
+
+    @Test("Peer disconnection handling")
+    func testPeerDisconnectionHandling() async throws {
+        let (clientTransport, serverTransport) = await InMemoryTransport.createConnectedPair()
+
+        try await clientTransport.connect()
+        try await serverTransport.connect()
+
+        // Start receiving on server
+        let receiveTask = Task { () -> Swift.Error? in
+            do {
+                for try await _ in await serverTransport.receive() {
+                    // Keep receiving
+                }
+                return nil
+            } catch {
+                return error
+            }
+        }
+
+        // Give a moment for the receive stream to be set up
+        try await Task.sleep(for: .milliseconds(10))
+
+        // Disconnect client (peer)
+        await clientTransport.disconnect()
+        
+        receiveTask.cancel()
+    }
+
+    @Test("Multiple disconnects are safe")
+    func testMultipleDisconnects() async throws {
+        let (clientTransport, serverTransport) = await InMemoryTransport.createConnectedPair()
+
+        try await clientTransport.connect()
+        try await serverTransport.connect()
+
+        // Multiple disconnects should be safe
+        await clientTransport.disconnect()
+        await clientTransport.disconnect()
+        await clientTransport.disconnect()
+
+        // Clean up server
+        await serverTransport.disconnect()
+    }
+
+    @Test("Message queueing before stream creation")
+    func testMessageQueueingBeforeStreamCreation() async throws {
+        let (clientTransport, serverTransport) = await InMemoryTransport.createConnectedPair()
+
+        try await clientTransport.connect()
+        try await serverTransport.connect()
+
+        // Send messages before receive stream is created
+        try await clientTransport.send("message1".data(using: .utf8)!)
+        try await clientTransport.send("message2".data(using: .utf8)!)
+        try await clientTransport.send("message3".data(using: .utf8)!)
+
+        // Now create receive stream
+        let messages = await serverTransport.receive()
+        var receivedMessages: [String] = []
+
+        for try await data in messages {
+            if let message = String(data: data, encoding: .utf8) {
+                receivedMessages.append(message)
+                if receivedMessages.count >= 3 {
+                    break
+                }
+            }
+        }
+
+        #expect(receivedMessages.count == 3)
+        #expect(receivedMessages[0] == "message1")
+        #expect(receivedMessages[1] == "message2")
+        #expect(receivedMessages[2] == "message3")
+
+        // Clean up
+        await clientTransport.disconnect()
+        await serverTransport.disconnect()
+    }
+
+    @Test("Receive after disconnect returns completed stream")
+    func testReceiveAfterDisconnect() async throws {
+        let (clientTransport, serverTransport) = await InMemoryTransport.createConnectedPair()
+
+        try await clientTransport.connect()
+        try await serverTransport.connect()
+
+        // Disconnect before receiving
+        await serverTransport.disconnect()
+
+        // Create receive stream after disconnect
+        let messages = await serverTransport.receive()
+        var messageCount = 0
+
+        for try await _ in messages {
+            messageCount += 1
+        }
+
+        // Stream should complete immediately
+        #expect(messageCount == 0)
+
+        // Clean up
+        await clientTransport.disconnect()
+    }
+
+    @Test("Large message handling")
+    func testLargeMessageHandling() async throws {
+        let (clientTransport, serverTransport) = await InMemoryTransport.createConnectedPair()
+
+        try await clientTransport.connect()
+        try await serverTransport.connect()
+
+        // Create a large message (1MB)
+        let largeData = Data(repeating: 0xFF, count: 1024 * 1024)
+
+        // Start receiving
+        let receiveTask = Task {
+            for try await data in await serverTransport.receive() {
+                return data
+            }
+            return Data()
+        }
+
+        // Send large message
+        try await clientTransport.send(largeData)
+
+        // Verify it was received correctly
+        let receivedData = try await receiveTask.value
+        #expect(receivedData == largeData)
+
+        // Clean up
+        await clientTransport.disconnect()
+        await serverTransport.disconnect()
+    }
+
+    @Test("Concurrent send operations")
+    func testConcurrentSendOperations() async throws {
+        let (clientTransport, serverTransport) = await InMemoryTransport.createConnectedPair()
+
+        try await clientTransport.connect()
+        try await serverTransport.connect()
+
+        // Start receiving
+        let receiveTask = Task {
+            var messages: [String] = []
+            for try await data in await serverTransport.receive() {
+                if let message = String(data: data, encoding: .utf8) {
+                    messages.append(message)
+                    if messages.count >= 10 {
+                        break
+                    }
+                }
+            }
+            return messages
+        }
+
+        // Send messages concurrently
+        await withTaskGroup(of: Void.self) { group in
+            for i in 0..<10 {
+                group.addTask {
+                    try? await clientTransport.send("Message \(i)".data(using: .utf8)!)
+                }
+            }
+        }
+
+        // Verify all messages were received
+        let receivedMessages = try await receiveTask.value
+        #expect(receivedMessages.count == 10)
+
+        // Check that all messages are present (order may vary due to concurrency)
+        let expectedMessages = Set((0..<10).map { "Message \($0)" })
+        let actualMessages = Set(receivedMessages)
+        #expect(actualMessages == expectedMessages)
+
+        // Clean up
+        await clientTransport.disconnect()
+        await serverTransport.disconnect()
+    }
+
+    @Test("Custom logger usage")
+    func testCustomLoggerUsage() async throws {
+        // Create a custom logger (in real tests, you might use a test logger that captures output)
+        let logger = Logger(label: "test.in-memory.transport")
+
+        let (clientTransport, serverTransport) = await InMemoryTransport.createConnectedPair(
+            logger: logger)
+
+        // Verify loggers are set correctly - when a custom logger is provided, it's used for both
+        #expect(clientTransport.logger.label == "test.in-memory.transport")
+        #expect(serverTransport.logger.label == "test.in-memory.transport")
+
+        // Test basic operations with custom logger
+        try await clientTransport.connect()
+        try await serverTransport.connect()
+
+        try await clientTransport.send("test".data(using: .utf8)!)
+
+        await clientTransport.disconnect()
+        await serverTransport.disconnect()
+    }
+}