diff --git a/docs/LIBRARY_USAGE.md b/docs/LIBRARY_USAGE.md
new file mode 100644
index 0000000..f3fbebd
--- /dev/null
+++ b/docs/LIBRARY_USAGE.md
@@ -0,0 +1,724 @@
+# Library Usage Guide - Multi-Tenant / Hosted Deployments
+
+This guide covers using n8n-mcp as a library dependency for building multi-tenant hosted services.
+
+## Overview
+
+n8n-mcp can be used as a Node.js library to build multi-tenant backends that provide MCP services to multiple users or instances. The package exports all necessary components for integration into your existing services.
+
+## Installation
+
+```bash
+npm install n8n-mcp
+```
+
+## Core Concepts
+
+### Library Mode vs CLI Mode
+
+- **CLI Mode** (default): Single-player usage via `npx n8n-mcp` or Docker
+- **Library Mode**: Multi-tenant usage by importing and using the `N8NMCPEngine` class
+
+### Instance Context
+
+The `InstanceContext` type allows you to pass per-request configuration to the MCP engine:
+
+```typescript
+interface InstanceContext {
+  // Instance-specific n8n API configuration
+  n8nApiUrl?: string;
+  n8nApiKey?: string;
+  n8nApiTimeout?: number;
+  n8nApiMaxRetries?: number;
+
+  // Instance identification
+  instanceId?: string;
+  sessionId?: string;
+
+  // Extensible metadata
+  metadata?: Record<string, any>;
+}
+```
+
+## Basic Example
+
+```typescript
+import express from 'express';
+import { N8NMCPEngine } from 'n8n-mcp';
+
+const app = express();
+const mcpEngine = new N8NMCPEngine({
+  sessionTimeout: 3600000, // 1 hour
+  logLevel: 'info'
+});
+
+// Handle MCP requests with per-user context
+app.post('/mcp', async (req, res) => {
+  const instanceContext = {
+    n8nApiUrl: req.user.n8nUrl,
+    n8nApiKey: req.user.n8nApiKey,
+    instanceId: req.user.id
+  };
+
+  await mcpEngine.processRequest(req, res, instanceContext);
+});
+
+app.listen(3000);
+```
+
+## Multi-Tenant Backend Example
+
+This example shows a complete multi-tenant implementation with user authentication and instance management:
+
+```typescript
+import express from 'express';
+import { N8NMCPEngine, InstanceContext, validateInstanceContext } from 'n8n-mcp';
+
+const app = express();
+const mcpEngine = new N8NMCPEngine({
+  sessionTimeout: 3600000, // 1 hour
+  logLevel: 'info'
+});
+
+// Start MCP engine
+await mcpEngine.start();
+
+// Authentication middleware
+const authenticate = async (req, res, next) => {
+  const token = req.headers.authorization?.replace('Bearer ', '');
+  if (!token) {
+    return res.status(401).json({ error: 'Unauthorized' });
+  }
+
+  // Verify token and attach user to request
+  req.user = await getUserFromToken(token);
+  next();
+};
+
+// Get instance configuration from database
+const getInstanceConfig = async (instanceId: string, userId: string) => {
+  // Your database logic here
+  const instance = await db.instances.findOne({
+    where: { id: instanceId, userId }
+  });
+
+  if (!instance) {
+    throw new Error('Instance not found');
+  }
+
+  return {
+    n8nApiUrl: instance.n8nUrl,
+    n8nApiKey: await decryptApiKey(instance.encryptedApiKey),
+    instanceId: instance.id
+  };
+};
+
+// MCP endpoint with per-instance context
+app.post('/api/instances/:instanceId/mcp', authenticate, async (req, res) => {
+  try {
+    // Get instance configuration
+    const instance = await getInstanceConfig(req.params.instanceId, req.user.id);
+
+    // Create instance context
+    const context: InstanceContext = {
+      n8nApiUrl: instance.n8nApiUrl,
+      n8nApiKey: instance.n8nApiKey,
+      instanceId: instance.instanceId,
+      metadata: {
+        userId: req.user.id,
+        userAgent: req.headers['user-agent'],
+        ip: req.ip
+      }
+    };
+
+    // Validate context before processing
+    const validation = validateInstanceContext(context);
+    if (!validation.valid) {
+      return res.status(400).json({
+        error: 'Invalid instance configuration',
+        details: validation.errors
+      });
+    }
+
+    // Process request with instance context
+    await mcpEngine.processRequest(req, res, context);
+
+  } catch (error) {
+    console.error('MCP request error:', error);
+    res.status(500).json({ error: 'Internal server error' });
+  }
+});
+
+// Health endpoint
+app.get('/health', async (req, res) => {
+  const health = await mcpEngine.healthCheck();
+  res.status(health.status === 'healthy' ? 200 : 503).json(health);
+});
+
+// Graceful shutdown
+process.on('SIGTERM', async () => {
+  await mcpEngine.shutdown();
+  process.exit(0);
+});
+
+app.listen(3000);
+```
+
+## API Reference
+
+### N8NMCPEngine
+
+#### Constructor
+
+```typescript
+new N8NMCPEngine(options?: {
+  sessionTimeout?: number;  // Session TTL in ms (default: 1800000 = 30min)
+  logLevel?: 'error' | 'warn' | 'info' | 'debug';  // Default: 'info'
+})
+```
+
+#### Methods
+
+##### `async processRequest(req, res, context?)`
+
+Process a single MCP request with optional instance context.
+
+**Parameters:**
+- `req`: Express request object
+- `res`: Express response object
+- `context` (optional): InstanceContext with per-instance configuration
+
+**Example:**
+```typescript
+const context: InstanceContext = {
+  n8nApiUrl: 'https://instance1.n8n.cloud',
+  n8nApiKey: 'instance1-key',
+  instanceId: 'tenant-123'
+};
+
+await engine.processRequest(req, res, context);
+```
+
+##### `async healthCheck()`
+
+Get engine health status for monitoring.
+
+**Returns:** `EngineHealth`
+```typescript
+{
+  status: 'healthy' | 'unhealthy';
+  uptime: number;  // seconds
+  sessionActive: boolean;
+  memoryUsage: {
+    used: number;
+    total: number;
+    unit: string;
+  };
+  version: string;
+}
+```
+
+**Example:**
+```typescript
+app.get('/health', async (req, res) => {
+  const health = await engine.healthCheck();
+  res.status(health.status === 'healthy' ? 200 : 503).json(health);
+});
+```
+
+##### `getSessionInfo()`
+
+Get current session information for debugging.
+
+**Returns:**
+```typescript
+{
+  active: boolean;
+  sessionId?: string;
+  age?: number;  // milliseconds
+  sessions?: {
+    total: number;
+    active: number;
+    expired: number;
+    max: number;
+    sessionIds: string[];
+  };
+}
+```
+
+##### `async start()`
+
+Start the engine (for standalone mode). Not needed when using `processRequest()` directly.
+
+##### `async shutdown()`
+
+Graceful shutdown for service lifecycle management.
+
+**Example:**
+```typescript
+process.on('SIGTERM', async () => {
+  await engine.shutdown();
+  process.exit(0);
+});
+```
+
+### Types
+
+#### InstanceContext
+
+Configuration for a specific user instance:
+
+```typescript
+interface InstanceContext {
+  n8nApiUrl?: string;
+  n8nApiKey?: string;
+  n8nApiTimeout?: number;
+  n8nApiMaxRetries?: number;
+  instanceId?: string;
+  sessionId?: string;
+  metadata?: Record<string, any>;
+}
+```
+
+#### Validation Functions
+
+##### `validateInstanceContext(context: InstanceContext)`
+
+Validate and sanitize instance context.
+
+**Returns:**
+```typescript
+{
+  valid: boolean;
+  errors?: string[];
+}
+```
+
+**Example:**
+```typescript
+import { validateInstanceContext } from 'n8n-mcp';
+
+const validation = validateInstanceContext(context);
+if (!validation.valid) {
+  console.error('Invalid context:', validation.errors);
+}
+```
+
+##### `isInstanceContext(obj: any)`
+
+Type guard to check if an object is a valid InstanceContext.
+
+**Example:**
+```typescript
+import { isInstanceContext } from 'n8n-mcp';
+
+if (isInstanceContext(req.body.context)) {
+  // TypeScript knows this is InstanceContext
+  await engine.processRequest(req, res, req.body.context);
+}
+```
+
+## Session Management
+
+### Session Strategies
+
+The MCP engine supports flexible session ID formats:
+
+- **UUIDv4**: Internal n8n-mcp format (default)
+- **Instance-prefixed**: `instance-{userId}-{hash}-{uuid}` for multi-tenant isolation
+- **Custom formats**: Any non-empty string for mcp-remote and other proxies
+
+Session validation happens via transport lookup, not format validation. This ensures compatibility with all MCP clients.
+
+### Multi-Tenant Configuration
+
+Set these environment variables for multi-tenant mode:
+
+```bash
+# Enable multi-tenant mode
+ENABLE_MULTI_TENANT=true
+
+# Session strategy: "instance" (default) or "shared"
+MULTI_TENANT_SESSION_STRATEGY=instance
+```
+
+**Session Strategies:**
+
+- **instance** (recommended): Each tenant gets isolated sessions
+  - Session ID: `instance-{instanceId}-{configHash}-{uuid}`
+  - Better isolation and security
+  - Easier debugging per tenant
+
+- **shared**: Multiple tenants share sessions with context switching
+  - More efficient for high tenant count
+  - Requires careful context management
+
+## Security Considerations
+
+### API Key Management
+
+Always encrypt API keys server-side:
+
+```typescript
+import { createCipheriv, createDecipheriv } from 'crypto';
+
+// Encrypt before storing
+const encryptApiKey = (apiKey: string) => {
+  const cipher = createCipheriv('aes-256-gcm', encryptionKey, iv);
+  return cipher.update(apiKey, 'utf8', 'hex') + cipher.final('hex');
+};
+
+// Decrypt before using
+const decryptApiKey = (encrypted: string) => {
+  const decipher = createDecipheriv('aes-256-gcm', encryptionKey, iv);
+  return decipher.update(encrypted, 'hex', 'utf8') + decipher.final('utf8');
+};
+
+// Use decrypted key in context
+const context: InstanceContext = {
+  n8nApiKey: await decryptApiKey(instance.encryptedApiKey),
+  // ...
+};
+```
+
+### Input Validation
+
+Always validate instance context before processing:
+
+```typescript
+import { validateInstanceContext } from 'n8n-mcp';
+
+const validation = validateInstanceContext(context);
+if (!validation.valid) {
+  throw new Error(`Invalid context: ${validation.errors?.join(', ')}`);
+}
+```
+
+### Rate Limiting
+
+Implement rate limiting per tenant:
+
+```typescript
+import rateLimit from 'express-rate-limit';
+
+const limiter = rateLimit({
+  windowMs: 15 * 60 * 1000, // 15 minutes
+  max: 100, // limit each IP to 100 requests per windowMs
+  keyGenerator: (req) => req.user?.id || req.ip
+});
+
+app.post('/api/instances/:instanceId/mcp', authenticate, limiter, async (req, res) => {
+  // ...
+});
+```
+
+## Error Handling
+
+Always wrap MCP requests in try-catch blocks:
+
+```typescript
+app.post('/api/instances/:instanceId/mcp', authenticate, async (req, res) => {
+  try {
+    const context = await getInstanceConfig(req.params.instanceId, req.user.id);
+    await mcpEngine.processRequest(req, res, context);
+  } catch (error) {
+    console.error('MCP error:', error);
+
+    // Don't leak internal errors to clients
+    if (error.message.includes('not found')) {
+      return res.status(404).json({ error: 'Instance not found' });
+    }
+
+    res.status(500).json({ error: 'Internal server error' });
+  }
+});
+```
+
+## Monitoring
+
+### Health Checks
+
+Set up periodic health checks:
+
+```typescript
+setInterval(async () => {
+  const health = await mcpEngine.healthCheck();
+
+  if (health.status === 'unhealthy') {
+    console.error('MCP engine unhealthy:', health);
+    // Alert your monitoring system
+  }
+
+  // Log metrics
+  console.log('MCP engine metrics:', {
+    uptime: health.uptime,
+    memory: health.memoryUsage,
+    sessionActive: health.sessionActive
+  });
+}, 60000); // Every minute
+```
+
+### Session Monitoring
+
+Track active sessions:
+
+```typescript
+app.get('/admin/sessions', authenticate, async (req, res) => {
+  if (!req.user.isAdmin) {
+    return res.status(403).json({ error: 'Forbidden' });
+  }
+
+  const sessionInfo = mcpEngine.getSessionInfo();
+  res.json(sessionInfo);
+});
+```
+
+## Testing
+
+### Unit Testing
+
+```typescript
+import { N8NMCPEngine, InstanceContext } from 'n8n-mcp';
+
+describe('MCP Engine', () => {
+  let engine: N8NMCPEngine;
+
+  beforeEach(() => {
+    engine = new N8NMCPEngine({ logLevel: 'error' });
+  });
+
+  afterEach(async () => {
+    await engine.shutdown();
+  });
+
+  it('should process request with context', async () => {
+    const context: InstanceContext = {
+      n8nApiUrl: 'https://test.n8n.io',
+      n8nApiKey: 'test-key',
+      instanceId: 'test-instance'
+    };
+
+    const mockReq = createMockRequest();
+    const mockRes = createMockResponse();
+
+    await engine.processRequest(mockReq, mockRes, context);
+
+    expect(mockRes.status).toBe(200);
+  });
+});
+```
+
+### Integration Testing
+
+```typescript
+import request from 'supertest';
+import { createApp } from './app';
+
+describe('Multi-tenant MCP API', () => {
+  let app;
+  let authToken;
+
+  beforeAll(async () => {
+    app = await createApp();
+    authToken = await getTestAuthToken();
+  });
+
+  it('should handle MCP request for instance', async () => {
+    const response = await request(app)
+      .post('/api/instances/test-instance/mcp')
+      .set('Authorization', `Bearer ${authToken}`)
+      .send({
+        jsonrpc: '2.0',
+        method: 'initialize',
+        params: {
+          protocolVersion: '2024-11-05',
+          capabilities: {}
+        },
+        id: 1
+      });
+
+    expect(response.status).toBe(200);
+    expect(response.body.result).toBeDefined();
+  });
+});
+```
+
+## Deployment Considerations
+
+### Environment Variables
+
+```bash
+# Required for multi-tenant mode
+ENABLE_MULTI_TENANT=true
+MULTI_TENANT_SESSION_STRATEGY=instance
+
+# Optional: Logging
+LOG_LEVEL=info
+DISABLE_CONSOLE_OUTPUT=false
+
+# Optional: Session configuration
+SESSION_TIMEOUT=1800000  # 30 minutes in milliseconds
+MAX_SESSIONS=100
+
+# Optional: Performance
+NODE_ENV=production
+```
+
+### Docker Deployment
+
+```dockerfile
+FROM node:20-alpine
+
+WORKDIR /app
+
+COPY package*.json ./
+RUN npm ci --only=production
+
+COPY . .
+
+ENV NODE_ENV=production
+ENV ENABLE_MULTI_TENANT=true
+ENV LOG_LEVEL=info
+
+EXPOSE 3000
+
+CMD ["node", "dist/server.js"]
+```
+
+### Kubernetes Deployment
+
+```yaml
+apiVersion: apps/v1
+kind: Deployment
+metadata:
+  name: n8n-mcp-backend
+spec:
+  replicas: 3
+  selector:
+    matchLabels:
+      app: n8n-mcp-backend
+  template:
+    metadata:
+      labels:
+        app: n8n-mcp-backend
+    spec:
+      containers:
+      - name: backend
+        image: your-registry/n8n-mcp-backend:latest
+        ports:
+        - containerPort: 3000
+        env:
+        - name: ENABLE_MULTI_TENANT
+          value: "true"
+        - name: LOG_LEVEL
+          value: "info"
+        resources:
+          requests:
+            memory: "256Mi"
+            cpu: "250m"
+          limits:
+            memory: "512Mi"
+            cpu: "500m"
+        livenessProbe:
+          httpGet:
+            path: /health
+            port: 3000
+          initialDelaySeconds: 10
+          periodSeconds: 30
+        readinessProbe:
+          httpGet:
+            path: /health
+            port: 3000
+          initialDelaySeconds: 5
+          periodSeconds: 10
+```
+
+## Examples
+
+### Complete Multi-Tenant SaaS Example
+
+For a complete implementation example, see:
+- [n8n-mcp-backend](https://github.com/czlonkowski/n8n-mcp-backend) - Full hosted service implementation
+
+### Migration from Single-Player
+
+If you're migrating from single-player (CLI/Docker) to multi-tenant:
+
+1. **Keep backward compatibility** - Use environment fallback:
+```typescript
+const context: InstanceContext = {
+  n8nApiUrl: instanceUrl || process.env.N8N_API_URL,
+  n8nApiKey: instanceKey || process.env.N8N_API_KEY,
+  instanceId: instanceId || 'default'
+};
+```
+
+2. **Gradual rollout** - Start with a feature flag:
+```typescript
+const isMultiTenant = process.env.ENABLE_MULTI_TENANT === 'true';
+
+if (isMultiTenant) {
+  const context = await getInstanceConfig(req.params.instanceId);
+  await engine.processRequest(req, res, context);
+} else {
+  // Legacy single-player mode
+  await engine.processRequest(req, res);
+}
+```
+
+## Troubleshooting
+
+### Common Issues
+
+#### Module Resolution Errors
+
+If you see `Cannot find module 'n8n-mcp'`:
+
+```bash
+# Clear node_modules and reinstall
+rm -rf node_modules package-lock.json
+npm install
+
+# Verify package has types field
+npm info n8n-mcp
+
+# Check TypeScript can resolve it
+npx tsc --noEmit
+```
+
+#### Session ID Validation Errors
+
+If you see `Invalid session ID format` errors:
+
+- Ensure you're using n8n-mcp v2.18.9 or later
+- Session IDs can be any non-empty string
+- No need to generate UUIDs - use your own format
+
+#### Memory Leaks
+
+If memory usage grows over time:
+
+```typescript
+// Ensure proper cleanup
+process.on('SIGTERM', async () => {
+  await engine.shutdown();
+  process.exit(0);
+});
+
+// Monitor session count
+const sessionInfo = engine.getSessionInfo();
+console.log('Active sessions:', sessionInfo.sessions?.active);
+```
+
+## Further Reading
+
+- [MCP Protocol Specification](https://modelcontextprotocol.io/docs)
+- [n8n API Documentation](https://docs.n8n.io/api/)
+- [Express.js Guide](https://expressjs.com/en/guide/routing.html)
+- [n8n-mcp Main README](../README.md)
+
+## Support
+
+- **Issues**: [GitHub Issues](https://github.com/czlonkowski/n8n-mcp/issues)
+- **Discussions**: [GitHub Discussions](https://github.com/czlonkowski/n8n-mcp/discussions)
+- **Security**: For security issues, see [SECURITY.md](../SECURITY.md)
diff --git a/package.json b/package.json
index b33915e..fb2c9e0 100644
--- a/package.json
+++ b/package.json
@@ -1,8 +1,16 @@
 {
   "name": "n8n-mcp",
-  "version": "2.18.8",
+  "version": "2.18.9",
   "description": "Integration between n8n workflow automation and Model Context Protocol (MCP)",
   "main": "dist/index.js",
+  "types": "dist/index.d.ts",
+  "exports": {
+    ".": {
+      "types": "./dist/index.d.ts",
+      "require": "./dist/index.js",
+      "import": "./dist/index.js"
+    }
+  },
   "bin": {
     "n8n-mcp": "./dist/mcp/index.js"
   },
diff --git a/src/http-server-single-session.ts b/src/http-server-single-session.ts
index 3c1a0d3..17716d1 100644
--- a/src/http-server-single-session.ts
+++ b/src/http-server-single-session.ts
@@ -188,11 +188,22 @@ export class SingleSessionHTTPServer {
   
   /**
    * Validate session ID format
+   *
+   * Accepts any non-empty string to support various MCP clients:
+   * - UUIDv4 (internal n8n-mcp format)
+   * - instance-{userId}-{hash}-{uuid} (multi-tenant format)
+   * - Custom formats from mcp-remote and other proxies
+   *
+   * Security: Session validation happens via lookup in this.transports,
+   * not format validation. This ensures compatibility with all MCP clients.
+   *
+   * @param sessionId - Session identifier from MCP client
+   * @returns true if valid, false otherwise
    */
   private isValidSessionId(sessionId: string): boolean {
-    // UUID v4 format validation
-    const uuidv4Regex = /^[0-9a-f]{8}-[0-9a-f]{4}-4[0-9a-f]{3}-[89ab][0-9a-f]{3}-[0-9a-f]{12}$/i;
-    return uuidv4Regex.test(sessionId);
+    // Accept any non-empty string as session ID
+    // This ensures compatibility with all MCP clients and proxies
+    return Boolean(sessionId && sessionId.length > 0);
   }
   
   /**
diff --git a/src/index.ts b/src/index.ts
index 572edc4..b5c1005 100644
--- a/src/index.ts
+++ b/src/index.ts
@@ -10,6 +10,22 @@ export { SingleSessionHTTPServer } from './http-server-single-session';
 export { ConsoleManager } from './utils/console-manager';
 export { N8NDocumentationMCPServer } from './mcp/server';
 
+// Type exports for multi-tenant and library usage
+export type {
+  InstanceContext
+} from './types/instance-context';
+export {
+  validateInstanceContext,
+  isInstanceContext
+} from './types/instance-context';
+
+// Re-export MCP SDK types for convenience
+export type {
+  Tool,
+  CallToolResult,
+  ListToolsResult
+} from '@modelcontextprotocol/sdk/types.js';
+
 // Default export for convenience
 import N8NMCPEngine from './mcp-engine';
 export default N8NMCPEngine;