diff --git a/eng/common/scripts/azsdk_tool_telemetry.ps1 b/eng/common/scripts/azsdk_tool_telemetry.ps1
new file mode 100644
index 000000000000..563278f448a3
--- /dev/null
+++ b/eng/common/scripts/azsdk_tool_telemetry.ps1
@@ -0,0 +1,191 @@
+$ErrorActionPreference = "SilentlyContinue"
+. (Join-Path $PSScriptRoot '..' 'scripts' 'Helpers' 'AzSdkTool-Helpers.ps1')
+
+$cliPath = Get-CommonInstallDirectory
+
+# check for azsdk.exe on Windows or azsdk on Linux/Mac in the install directory
+if ($IsWindows)
+{
+    $cliPath = Join-Path $cliPath "azsdk.exe"
+}
+else
+{
+    $cliPath = Join-Path $cliPath "azsdk"
+}
+
+if (-not (Test-Path $cliPath))
+{
+    Write-Success
+}
+
+# Skip telemetry if opted out
+if ($env:AZSDKTOOLS_COLLECT_TELEMETRY -eq "false")
+{
+    Write-Output '{"continue":true}'
+    exit 0
+}
+
+$toolsToIgnore = @( "run_in_terminal", "apply_patch")
+
+# Return success and exit
+function Write-Success
+{
+    Write-Output '{"continue":true}'
+    exit 0
+}
+
+# Read entire stdin at once - hooks send one complete JSON per invocation
+try
+{
+    $rawInput = [Console]::In.ReadToEnd()
+} catch
+{
+    Write-Success
+}
+# Return success and exit if no input
+if ([string]::IsNullOrWhiteSpace($rawInput))
+{
+    Write-Success
+}
+
+try
+{
+    $inputData = $rawInput | ConvertFrom-Json
+} catch {
+    Write-Success
+}
+
+$toolName = $inputData.toolName
+if (-not $toolName)
+{
+    $toolName = $inputData.tool_name
+}
+
+# Skip if no tool name found in either format
+if (-not $toolName)
+{
+    Write-Success
+}
+
+# Check if tool name is in ignore list
+if ($toolsToIgnore -contains $toolName)
+{
+    Write-Success
+}
+
+$sessionId = $inputData.sessionId
+if (-not $sessionId) {
+    $sessionId = $inputData.session_id
+}
+
+# Get tool input arguments
+$toolInput = $inputData.toolArgs
+if (-not $toolInput)
+{
+    $toolInput = $inputData.tool_input
+}
+
+$timestamp = (Get-Date).ToUniversalTime().ToString("yyyy-MM-ddTHH:mm:ssZ")
+
+# Helper to extract path from tool input (handles 'path', 'filePath', 'file_path')
+function Get-ToolInputPath
+{
+    if ($toolInput.path) { return $toolInput.path }
+    if ($toolInput.filePath) { return $toolInput.filePath }
+    if ($toolInput.file_path) { return $toolInput.file_path }
+    return $null
+}
+
+# === STEP 2: Determine what to track ===
+
+$shouldTrack = $false
+$eventType = $null
+$skillName = $null
+$clientType = $null
+
+# check if hook is triggered from vscode or copilot-cli. Azure sdk tools hook is not considering claude at this point.
+if ($inputData.PSObject.Properties['tool_use_id'] -and $inputData.tool_use_id -match ".*_vscode-.*")
+{
+    $clientType = "vscode"
+}
+else
+{
+    $clientType = "copilot-cli"
+}
+
+# Process skill invocations (looking for "azsdk" prefix in skill name)
+if ($toolName -eq "skill")
+{
+    $skillName = $toolInput.skill
+    if ($skillName -and $skillName.StartsWith("azsdk"))
+    {
+        $eventType = "skill_invocation"
+        $shouldTrack = $true
+    }
+}
+
+# Check for skill invocation (reading SKILL.md files)
+if ($toolName -eq "view" -or $toolName -eq "read_file")
+{
+    $pathToCheck = Get-ToolInputPath
+    if ($pathToCheck)
+    {
+        # replace backslashes and squeeze consecutive slashes
+        $pathNormalized = $pathToCheck -replace '\\', '/' -replace '/+', '/'
+        if ($pathNormalized -match "/skills/([^/]+)/SKILL\.md$")
+        {
+                $skillName = $Matches[1]
+                $eventType = "skill_invocation"
+                $shouldTrack = $true
+        }
+    }
+}
+
+# Find property from tool input or output
+function Get-Property
+{
+    param (
+        [object]$Object,
+        [string]$PropertyName
+    )
+
+    if ($Object -and $Object.PSObject.Properties[$PropertyName])
+    {
+        return $Object.PSObject.Properties[$PropertyName].Value
+    }
+    return $null
+}
+
+# Check for Azure SDK Tools MCP invocation
+# Skip mcp tool telemetry since it's already tracked by MCP server
+if ($toolName.StartsWith("mcp_azure-sdk") -or $toolName.StartsWith("azure-sdk-mcp"))
+{
+    Write-Success
+}
+
+# === STEP 3: Publish event ===
+
+if ($shouldTrack)
+{
+    # Build MCP command arguments
+    $cliArgs = @(
+        "ingest-telemetry",
+        "--timestamp", $timestamp,
+        "--client-type", $clientType
+    )
+
+    if ($eventType) { $cliArgs += "--event-type"; $cliArgs += $eventType }
+    if ($sessionId) { $cliArgs += "--session-id"; $cliArgs += $sessionId }
+    if ($skillName) { $cliArgs += "--skill-name"; $cliArgs += $skillName }
+    
+    # run azsdk cli to ingest telemetry (non-blocking)
+    try
+    {
+        Start-Process -FilePath $cliPath -ArgumentList $cliArgs -NoNewWindow
+    }
+    catch {
+        Write-Success
+    }
+}
+# Output success to stdout (required by hooks)
+Write-Success
\ No newline at end of file