diff --git a/tests/unit/telemetry.test.ts b/tests/unit/telemetry.test.ts
new file mode 100644
index 00000000..525aa59f
--- /dev/null
+++ b/tests/unit/telemetry.test.ts
@@ -0,0 +1,200 @@
+import { ApiClient } from "../../src/common/atlas/apiClient.js";
+import { Session } from "../../src/session.js";
+import { Telemetry } from "../../src/telemetry/telemetry.js";
+import { BaseEvent, TelemetryResult } from "../../src/telemetry/types.js";
+import { EventCache } from "../../src/telemetry/eventCache.js";
+import { config } from "../../src/config.js";
+
+// Mock the ApiClient to avoid real API calls
+jest.mock("../../src/common/atlas/apiClient.js");
+const MockApiClient = ApiClient as jest.MockedClass<typeof ApiClient>;
+
+// Mock EventCache to control and verify caching behavior
+jest.mock("../../src/telemetry/eventCache.js");
+const MockEventCache = EventCache as jest.MockedClass<typeof EventCache>;
+
+describe("Telemetry", () => {
+    let mockApiClient: jest.Mocked<ApiClient>;
+    let mockEventCache: jest.Mocked<EventCache>;
+    let session: Session;
+    let telemetry: Telemetry;
+
+    // Helper function to create properly typed test events
+    function createTestEvent(options?: {
+        source?: string;
+        result?: TelemetryResult;
+        component?: string;
+        category?: string;
+        command?: string;
+        duration_ms?: number;
+    }): BaseEvent {
+        return {
+            timestamp: new Date().toISOString(),
+            source: options?.source || "mdbmcp",
+            properties: {
+                component: options?.component || "test-component",
+                duration_ms: options?.duration_ms || 100,
+                result: options?.result || "success",
+                category: options?.category || "test",
+                command: options?.command || "test-command",
+            },
+        };
+    }
+
+    // Helper function to verify mock calls to reduce duplication
+    function verifyMockCalls({
+        sendEventsCalls = 0,
+        clearEventsCalls = 0,
+        appendEventsCalls = 0,
+        sendEventsCalledWith = undefined,
+        appendEventsCalledWith = undefined,
+    } = {}) {
+        const { calls: sendEvents } = mockApiClient.sendEvents.mock;
+        const { calls: clearEvents } = mockEventCache.clearEvents.mock;
+        const { calls: appendEvents } = mockEventCache.appendEvents.mock;
+
+        expect(sendEvents.length).toBe(sendEventsCalls);
+        expect(clearEvents.length).toBe(clearEventsCalls);
+        expect(appendEvents.length).toBe(appendEventsCalls);
+
+        if (sendEventsCalledWith) {
+            expect(sendEvents[0]?.[0]).toEqual(sendEventsCalledWith);
+        }
+
+        if (appendEventsCalledWith) {
+            expect(appendEvents[0]?.[0]).toEqual(appendEventsCalledWith);
+        }
+    }
+
+    beforeEach(() => {
+        // Reset mocks before each test
+        jest.clearAllMocks();
+
+        // Setup mocked API client
+        mockApiClient = new MockApiClient() as jest.Mocked<ApiClient>;
+        mockApiClient.sendEvents = jest.fn().mockResolvedValue(undefined);
+        mockApiClient.hasCredentials = jest.fn().mockReturnValue(true);
+
+        // Setup mocked EventCache
+        mockEventCache = new MockEventCache() as jest.Mocked<EventCache>;
+        mockEventCache.getEvents = jest.fn().mockReturnValue([]);
+        mockEventCache.clearEvents = jest.fn().mockResolvedValue(undefined);
+        mockEventCache.appendEvents = jest.fn().mockResolvedValue(undefined);
+        MockEventCache.getInstance = jest.fn().mockReturnValue(mockEventCache);
+
+        // Create a simplified session with our mocked API client
+        session = {
+            apiClient: mockApiClient,
+            sessionId: "test-session-id",
+            agentRunner: { name: "test-agent", version: "1.0.0" } as const,
+            close: jest.fn().mockResolvedValue(undefined),
+            setAgentRunner: jest.fn().mockResolvedValue(undefined),
+        } as unknown as Session;
+
+        // Create the telemetry instance with mocked dependencies
+        telemetry = new Telemetry(session, mockEventCache);
+
+        config.telemetry = "enabled";
+    });
+
+    describe("when telemetry is enabled", () => {
+        it("should send events successfully", async () => {
+            const testEvent = createTestEvent();
+
+            await telemetry.emitEvents([testEvent]);
+
+            verifyMockCalls({
+                sendEventsCalls: 1,
+                clearEventsCalls: 1,
+                sendEventsCalledWith: [testEvent],
+            });
+        });
+
+        it("should cache events when sending fails", async () => {
+            mockApiClient.sendEvents.mockRejectedValueOnce(new Error("API error"));
+
+            const testEvent = createTestEvent();
+
+            await telemetry.emitEvents([testEvent]);
+
+            verifyMockCalls({
+                sendEventsCalls: 1,
+                appendEventsCalls: 1,
+                appendEventsCalledWith: [testEvent],
+            });
+        });
+
+        it("should include cached events when sending", async () => {
+            const cachedEvent = createTestEvent({
+                command: "cached-command",
+                component: "cached-component",
+            });
+
+            const newEvent = createTestEvent({
+                command: "new-command",
+                component: "new-component",
+            });
+
+            // Set up mock to return cached events
+            mockEventCache.getEvents.mockReturnValueOnce([cachedEvent]);
+
+            await telemetry.emitEvents([newEvent]);
+
+            verifyMockCalls({
+                sendEventsCalls: 1,
+                clearEventsCalls: 1,
+                sendEventsCalledWith: [cachedEvent, newEvent],
+            });
+        });
+    });
+
+    describe("when telemetry is disabled", () => {
+        beforeEach(() => {
+            config.telemetry = "disabled";
+        });
+
+        it("should not send events", async () => {
+            const testEvent = createTestEvent();
+
+            await telemetry.emitEvents([testEvent]);
+
+            verifyMockCalls();
+        });
+    });
+
+    it("should correctly add common properties to events", () => {
+        const commonProps = telemetry.getCommonProperties();
+
+        // Use explicit type assertion
+        const expectedProps: Record<string, string> = {
+            mcp_client_version: "1.0.0",
+            mcp_client_name: "test-agent",
+            session_id: "test-session-id",
+            config_atlas_auth: "true",
+            config_connection_string: expect.any(String) as unknown as string,
+        };
+
+        expect(commonProps).toMatchObject(expectedProps);
+    });
+
+    describe("when DO_NOT_TRACK environment variable is set", () => {
+        let originalEnv: string | undefined;
+
+        beforeEach(() => {
+            originalEnv = process.env.DO_NOT_TRACK;
+            process.env.DO_NOT_TRACK = "1";
+        });
+
+        afterEach(() => {
+            process.env.DO_NOT_TRACK = originalEnv;
+        });
+
+        it("should not send events", async () => {
+            const testEvent = createTestEvent();
+
+            await telemetry.emitEvents([testEvent]);
+
+            verifyMockCalls();
+        });
+    });
+});