diff --git a/app/javascript/dashboard/components-next/captain/pageComponents/customTool/AuthConfig.vue b/app/javascript/dashboard/components-next/captain/pageComponents/customTool/AuthConfig.vue
new file mode 100644
index 000000000..4e6483319
--- /dev/null
+++ b/app/javascript/dashboard/components-next/captain/pageComponents/customTool/AuthConfig.vue
@@ -0,0 +1,73 @@
+<script setup>
+import { defineModel, watch } from 'vue';
+import { useI18n } from 'vue-i18n';
+import Input from 'dashboard/components-next/input/Input.vue';
+
+const props = defineProps({
+  authType: {
+    type: String,
+    required: true,
+    validator: value => ['none', 'bearer', 'basic', 'api_key'].includes(value),
+  },
+});
+
+const { t } = useI18n();
+
+const authConfig = defineModel('authConfig', {
+  type: Object,
+  default: () => ({}),
+});
+
+watch(
+  () => props.authType,
+  () => {
+    authConfig.value = {};
+  }
+);
+</script>
+
+<template>
+  <div class="flex flex-col gap-2">
+    <Input
+      v-if="authType === 'bearer'"
+      v-model="authConfig.token"
+      :label="t('CAPTAIN.CUSTOM_TOOLS.FORM.AUTH_CONFIG.BEARER_TOKEN')"
+      :placeholder="
+        t('CAPTAIN.CUSTOM_TOOLS.FORM.AUTH_CONFIG.BEARER_TOKEN_PLACEHOLDER')
+      "
+    />
+    <template v-else-if="authType === 'basic'">
+      <Input
+        v-model="authConfig.username"
+        :label="t('CAPTAIN.CUSTOM_TOOLS.FORM.AUTH_CONFIG.USERNAME')"
+        :placeholder="
+          t('CAPTAIN.CUSTOM_TOOLS.FORM.AUTH_CONFIG.USERNAME_PLACEHOLDER')
+        "
+      />
+      <Input
+        v-model="authConfig.password"
+        type="password"
+        :label="t('CAPTAIN.CUSTOM_TOOLS.FORM.AUTH_CONFIG.PASSWORD')"
+        :placeholder="
+          t('CAPTAIN.CUSTOM_TOOLS.FORM.AUTH_CONFIG.PASSWORD_PLACEHOLDER')
+        "
+      />
+    </template>
+    <template v-else-if="authType === 'api_key'">
+      <Input
+        v-model="authConfig.key"
+        :label="t('CAPTAIN.CUSTOM_TOOLS.FORM.AUTH_CONFIG.API_KEY')"
+        :placeholder="
+          t('CAPTAIN.CUSTOM_TOOLS.FORM.AUTH_CONFIG.API_KEY_PLACEHOLDER')
+        "
+      />
+      <Input
+        v-model="authConfig.value"
+        :label="t('CAPTAIN.CUSTOM_TOOLS.FORM.AUTH_CONFIG.API_VALUE')"
+        :placeholder="
+          t('CAPTAIN.CUSTOM_TOOLS.FORM.AUTH_CONFIG.API_VALUE_PLACEHOLDER')
+        "
+      />
+    </template>
+  </div>
+</template>
diff --git a/app/javascript/dashboard/components-next/captain/pageComponents/customTool/CreateCustomToolDialog.vue b/app/javascript/dashboard/components-next/captain/pageComponents/customTool/CreateCustomToolDialog.vue
new file mode 100644
index 000000000..891e36edf
--- /dev/null
+++ b/app/javascript/dashboard/components-next/captain/pageComponents/customTool/CreateCustomToolDialog.vue
@@ -0,0 +1,55 @@
+<script setup>
+import { ref } from 'vue';
+import { useStore } from 'dashboard/composables/store';
+import { useAlert } from 'dashboard/composables';
+import { useI18n } from 'vue-i18n';
+import { parseAPIErrorResponse } from 'dashboard/store/utils/api';
+
+import Dialog from 'dashboard/components-next/dialog/Dialog.vue';
+import CustomToolForm from './CustomToolForm.vue';
+
+const emit = defineEmits(['close']);
+const { t } = useI18n();
+const store = useStore();
+
+const dialogRef = ref(null);
+
+const i18nKey = 'CAPTAIN.CUSTOM_TOOLS.CREATE';
+
+const handleSubmit = async newTool => {
+  try {
+    await store.dispatch('captainCustomTools/create', newTool);
+    useAlert(t(`${i18nKey}.SUCCESS_MESSAGE`));
+    dialogRef.value.close();
+  } catch (error) {
+    const errorMessage =
+      parseAPIErrorResponse(error) || t(`${i18nKey}.ERROR_MESSAGE`);
+    useAlert(errorMessage);
+  }
+};
+
+const handleClose = () => {
+  emit('close');
+};
+
+const handleCancel = () => {
+  dialogRef.value.close();
+};
+
+defineExpose({ dialogRef });
+</script>
+
+<template>
+  <Dialog
+    ref="dialogRef"
+    width="2xl"
+    :title="$t(`${i18nKey}.TITLE`)"
+    :description="$t('CAPTAIN.CUSTOM_TOOLS.FORM_DESCRIPTION')"
+    :show-cancel-button="false"
+    :show-confirm-button="false"
+    @close="handleClose"
+  >
+    <CustomToolForm @submit="handleSubmit" @cancel="handleCancel" />
+    <template #footer />
+  </Dialog>
+</template>
diff --git a/app/javascript/dashboard/components-next/captain/pageComponents/customTool/CustomToolForm.vue b/app/javascript/dashboard/components-next/captain/pageComponents/customTool/CustomToolForm.vue
new file mode 100644
index 000000000..755360a81
--- /dev/null
+++ b/app/javascript/dashboard/components-next/captain/pageComponents/customTool/CustomToolForm.vue
@@ -0,0 +1,228 @@
+<script setup>
+import { reactive, computed, useTemplateRef } from 'vue';
+import { useI18n } from 'vue-i18n';
+import { useVuelidate } from '@vuelidate/core';
+import { required, url } from '@vuelidate/validators';
+import { useMapGetter } from 'dashboard/composables/store';
+
+import Input from 'dashboard/components-next/input/Input.vue';
+import Textarea from 'dashboard/components-next/textarea/Textarea.vue';
+import Button from 'dashboard/components-next/button/Button.vue';
+import ComboBox from 'dashboard/components-next/combobox/ComboBox.vue';
+import ParamRow from './ParamRow.vue';
+import AuthConfig from './AuthConfig.vue';
+
+const emit = defineEmits(['submit', 'cancel']);
+
+const { t } = useI18n();
+
+const formState = {
+  uiFlags: useMapGetter('captainCustomTools/getUIFlags'),
+};
+
+const initialState = {
+  title: '',
+  description: '',
+  endpoint_url: '',
+  http_method: 'GET',
+  request_template: '',
+  response_template: '',
+  auth_type: 'none',
+  auth_config: {},
+  param_schema: [],
+};
+
+const state = reactive({ ...initialState });
+
+const DEFAULT_PARAM = {
+  name: '',
+  type: 'string',
+  description: '',
+  required: false,
+};
+
+const validationRules = {
+  title: { required },
+  endpoint_url: { required, url },
+  http_method: { required },
+  auth_type: { required },
+};
+
+const httpMethodOptions = computed(() => [
+  { value: 'GET', label: 'GET' },
+  { value: 'POST', label: 'POST' },
+]);
+
+const authTypeOptions = computed(() => [
+  { value: 'none', label: t('CAPTAIN.CUSTOM_TOOLS.FORM.AUTH_TYPES.NONE') },
+  { value: 'bearer', label: t('CAPTAIN.CUSTOM_TOOLS.FORM.AUTH_TYPES.BEARER') },
+  { value: 'basic', label: t('CAPTAIN.CUSTOM_TOOLS.FORM.AUTH_TYPES.BASIC') },
+  {
+    value: 'api_key',
+    label: t('CAPTAIN.CUSTOM_TOOLS.FORM.AUTH_TYPES.API_KEY'),
+  },
+]);
+
+const v$ = useVuelidate(validationRules, state);
+
+const isLoading = computed(() => formState.uiFlags.value.creatingItem);
+
+const getErrorMessage = (field, errorKey) => {
+  return v$.value[field].$error
+    ? t(`CAPTAIN.CUSTOM_TOOLS.FORM.${errorKey}.ERROR`)
+    : '';
+};
+
+const formErrors = computed(() => ({
+  title: getErrorMessage('title', 'TITLE'),
+  endpoint_url: getErrorMessage('endpoint_url', 'ENDPOINT_URL'),
+}));
+
+const paramsRef = useTemplateRef('paramsRef');
+
+const isParamsValid = () => {
+  if (!paramsRef.value || paramsRef.value.length === 0) {
+    return true;
+  }
+  return paramsRef.value.every(param => param.validate());
+};
+
+const removeParam = index => {
+  state.param_schema.splice(index, 1);
+};
+
+const addParam = () => {
+  state.param_schema.push({ ...DEFAULT_PARAM });
+};
+
+const handleCancel = () => emit('cancel');
+
+const handleSubmit = async () => {
+  const isFormValid = await v$.value.$validate();
+  if (!isFormValid || !isParamsValid()) {
+    return;
+  }
+
+  emit('submit', state);
+};
+</script>
+
+<template>
+  <form class="flex flex-col gap-4" @submit.prevent="handleSubmit">
+    <Input
+      v-model="state.title"
+      :label="t('CAPTAIN.CUSTOM_TOOLS.FORM.TITLE.LABEL')"
+      :placeholder="t('CAPTAIN.CUSTOM_TOOLS.FORM.TITLE.PLACEHOLDER')"
+      :message="formErrors.title"
+      :message-type="formErrors.title ? 'error' : 'info'"
+    />
+
+    <Textarea
+      v-model="state.description"
+      :label="t('CAPTAIN.CUSTOM_TOOLS.FORM.DESCRIPTION.LABEL')"
+      :placeholder="t('CAPTAIN.CUSTOM_TOOLS.FORM.DESCRIPTION.PLACEHOLDER')"
+      :rows="2"
+    />
+
+    <div class="flex gap-2">
+      <div class="flex flex-col gap-1 w-28">
+        <label class="mb-0.5 text-sm font-medium text-n-slate-12">
+          {{ t('CAPTAIN.CUSTOM_TOOLS.FORM.HTTP_METHOD.LABEL') }}
+        </label>
+        <ComboBox
+          v-model="state.http_method"
+          :options="httpMethodOptions"
+          class="[&>div>button]:bg-n-alpha-black2"
+        />
+      </div>
+      <Input
+        v-model="state.endpoint_url"
+        :label="t('CAPTAIN.CUSTOM_TOOLS.FORM.ENDPOINT_URL.LABEL')"
+        :placeholder="t('CAPTAIN.CUSTOM_TOOLS.FORM.ENDPOINT_URL.PLACEHOLDER')"
+        :message="formErrors.endpoint_url"
+        :message-type="formErrors.endpoint_url ? 'error' : 'info'"
+        class="flex-1"
+      />
+    </div>
+
+    <div class="flex flex-col gap-1">
+      <label class="mb-0.5 text-sm font-medium text-n-slate-12">
+        {{ t('CAPTAIN.CUSTOM_TOOLS.FORM.AUTH_TYPE.LABEL') }}
+      </label>
+      <ComboBox
+        v-model="state.auth_type"
+        :options="authTypeOptions"
+        class="[&>div>button]:bg-n-alpha-black2"
+      />
+    </div>
+
+    <AuthConfig
+      v-model:auth-config="state.auth_config"
+      :auth-type="state.auth_type"
+    />
+
+    <div class="flex flex-col gap-2">
+      <label class="text-sm font-medium text-n-slate-12">
+        {{ t('CAPTAIN.CUSTOM_TOOLS.FORM.PARAMETERS.LABEL') }}
+      </label>
+      <p class="text-xs text-n-slate-11 -mt-1">
+        {{ t('CAPTAIN.CUSTOM_TOOLS.FORM.PARAMETERS.HELP_TEXT') }}
+      </p>
+      <ul v-if="state.param_schema.length > 0" class="grid gap-2 list-none">
+        <ParamRow
+          v-for="(param, index) in state.param_schema"
+          :key="index"
+          ref="paramsRef"
+          v-model:name="param.name"
+          v-model:type="param.type"
+          v-model:description="param.description"
+          v-model:required="param.required"
+          @remove="removeParam(index)"
+        />
+      </ul>
+      <Button
+        type="button"
+        sm
+        ghost
+        blue
+        icon="i-lucide-plus"
+        :label="t('CAPTAIN.CUSTOM_TOOLS.FORM.ADD_PARAMETER')"
+        @click="addParam"
+      />
+    </div>
+
+    <Textarea
+      v-model="state.request_template"
+      :label="t('CAPTAIN.CUSTOM_TOOLS.FORM.REQUEST_TEMPLATE.LABEL')"
+      :placeholder="t('CAPTAIN.CUSTOM_TOOLS.FORM.REQUEST_TEMPLATE.PLACEHOLDER')"
+      :rows="4"
+    />
+
+    <Textarea
+      v-model="state.response_template"
+      :label="t('CAPTAIN.CUSTOM_TOOLS.FORM.RESPONSE_TEMPLATE.LABEL')"
+      :placeholder="
+        t('CAPTAIN.CUSTOM_TOOLS.FORM.RESPONSE_TEMPLATE.PLACEHOLDER')
+      "
+      :rows="4"
+    />
+
+    <div class="flex gap-3 justify-between items-center w-full">
+      <Button
+        type="button"
+        variant="faded"
+        color="slate"
+        :label="t('CAPTAIN.FORM.CANCEL')"
+        class="w-full bg-n-alpha-2 text-n-blue-text hover:bg-n-alpha-3"
+        @click="handleCancel"
+      />
+      <Button
+        type="submit"
+        :label="t('CAPTAIN.FORM.CREATE')"
+        class="w-full"
+        :is-loading="isLoading"
+        :disabled="isLoading"
+      />
+    </div>
+  </form>
+</template>
diff --git a/app/javascript/dashboard/components-next/captain/pageComponents/customTool/ParamRow.vue b/app/javascript/dashboard/components-next/captain/pageComponents/customTool/ParamRow.vue
new file mode 100644
index 000000000..5564635d0
--- /dev/null
+++ b/app/javascript/dashboard/components-next/captain/pageComponents/customTool/ParamRow.vue
@@ -0,0 +1,115 @@
+<script setup>
+import { computed, defineModel, ref, watch } from 'vue';
+import { useI18n } from 'vue-i18n';
+import Button from 'dashboard/components-next/button/Button.vue';
+import Input from 'dashboard/components-next/input/Input.vue';
+import ComboBox from 'dashboard/components-next/combobox/ComboBox.vue';
+import Checkbox from 'dashboard/components-next/checkbox/Checkbox.vue';
+
+const emit = defineEmits(['remove']);
+const { t } = useI18n();
+const showErrors = ref(false);
+
+const name = defineModel('name', {
+  type: String,
+  required: true,
+});
+
+const type = defineModel('type', {
+  type: String,
+  required: true,
+});
+
+const description = defineModel('description', {
+  type: String,
+  default: '',
+});
+
+const required = defineModel('required', {
+  type: Boolean,
+  default: false,
+});
+
+const paramTypeOptions = computed(() => [
+  { value: 'string', label: t('CAPTAIN.CUSTOM_TOOLS.FORM.PARAM_TYPES.STRING') },
+  { value: 'number', label: t('CAPTAIN.CUSTOM_TOOLS.FORM.PARAM_TYPES.NUMBER') },
+  {
+    value: 'boolean',
+    label: t('CAPTAIN.CUSTOM_TOOLS.FORM.PARAM_TYPES.BOOLEAN'),
+  },
+  { value: 'array', label: t('CAPTAIN.CUSTOM_TOOLS.FORM.PARAM_TYPES.ARRAY') },
+  { value: 'object', label: t('CAPTAIN.CUSTOM_TOOLS.FORM.PARAM_TYPES.OBJECT') },
+]);
+
+const validationError = computed(() => {
+  if (!name.value || name.value.trim() === '') {
+    return 'PARAM_NAME_REQUIRED';
+  }
+  return null;
+});
+
+watch([name, type, description, required], () => {
+  showErrors.value = false;
+});
+
+const validate = () => {
+  showErrors.value = true;
+  return !validationError.value;
+};
+
+defineExpose({ validate });
+</script>
+
+<template>
+  <li class="list-none">
+    <div
+      class="flex items-start gap-2 p-3 rounded-lg border border-n-weak bg-n-alpha-2"
+      :class="{
+        'animate-wiggle border-n-ruby-9': showErrors && validationError,
+      }"
+    >
+      <div class="flex flex-col flex-1 gap-3">
+        <div class="flex gap-2">
+          <Input
+            v-model="name"
+            :placeholder="t('CAPTAIN.CUSTOM_TOOLS.FORM.PARAM_NAME.PLACEHOLDER')"
+            class="flex-1 [&>input]:h-8 [&>input]:py-1.5 [&>input]:outline-offset-0"
+          />
+          <ComboBox
+            v-model="type"
+            :options="paramTypeOptions"
+            :placeholder="t('CAPTAIN.CUSTOM_TOOLS.FORM.PARAM_TYPE.PLACEHOLDER')"
+            class="w-36 [&>div>button]:h-8 [&>div>button]:py-1.5"
+          />
+        </div>
+        <Input
+          v-model="description"
+          :placeholder="
+            t('CAPTAIN.CUSTOM_TOOLS.FORM.PARAM_DESCRIPTION.PLACEHOLDER')
+          "
+          class="[&>input]:h-8 [&>input]:py-1.5 [&>input]:outline-offset-0"
+        />
+        <label class="flex items-center gap-2 cursor-pointer">
+          <Checkbox v-model="required" />
+          <span class="text-sm text-n-slate-11">
+            {{ t('CAPTAIN.CUSTOM_TOOLS.FORM.PARAM_REQUIRED.LABEL') }}
+          </span>
+        </label>
+      </div>
+      <Button
+        sm
+        solid
+        slate
+        icon="i-lucide-trash"
+        class="flex-shrink-0 mt-0.5"
+        @click.stop="emit('remove')"
+      />
+    </div>
+    <span
+      v-if="showErrors && validationError"
+      class="block mt-1 text-sm text-n-ruby-11"
+    >
+      {{ t(`CAPTAIN.CUSTOM_TOOLS.FORM.ERRORS.${validationError}`) }}
+    </span>
+  </li>
+</template>
diff --git a/app/javascript/dashboard/i18n/locale/en/integrations.json b/app/javascript/dashboard/i18n/locale/en/integrations.json
index 8d098829f..b4d9873de 100644
--- a/app/javascript/dashboard/i18n/locale/en/integrations.json
+++ b/app/javascript/dashboard/i18n/locale/en/integrations.json
@@ -760,6 +760,87 @@
           "TITLE": "Custom Tools",
           "NOTE": "Custom tools allow your assistant to interact with external APIs and services. Create tools to fetch data, perform actions, or integrate with your existing systems to enhance your assistant's capabilities."
         }
+      },
+      "FORM_DESCRIPTION": "Configure your custom tool to connect with external APIs",
+      "CREATE": {
+        "TITLE": "Create Custom Tool",
+        "SUCCESS_MESSAGE": "Custom tool created successfully",
+        "ERROR_MESSAGE": "Failed to create custom tool"
+      },
+      "FORM": {
+        "TITLE": {
+          "LABEL": "Tool Name",
+          "PLACEHOLDER": "Order Lookup",
+          "ERROR": "Tool name is required"
+        },
+        "DESCRIPTION": {
+          "LABEL": "Description",
+          "PLACEHOLDER": "Looks up order details by order ID"
+        },
+        "HTTP_METHOD": {
+          "LABEL": "Method"
+        },
+        "ENDPOINT_URL": {
+          "LABEL": "Endpoint URL",
+          "PLACEHOLDER": "https://api.example.com/orders/{{ order_id }}",
+          "ERROR": "Valid URL is required"
+        },
+        "AUTH_TYPE": {
+          "LABEL": "Authentication Type"
+        },
+        "AUTH_TYPES": {
+          "NONE": "None",
+          "BEARER": "Bearer Token",
+          "BASIC": "Basic Auth",
+          "API_KEY": "API Key"
+        },
+        "AUTH_CONFIG": {
+          "BEARER_TOKEN": "Bearer Token",
+          "BEARER_TOKEN_PLACEHOLDER": "Enter your bearer token",
+          "USERNAME": "Username",
+          "USERNAME_PLACEHOLDER": "Enter username",
+          "PASSWORD": "Password",
+          "PASSWORD_PLACEHOLDER": "Enter password",
+          "API_KEY": "Header Name",
+          "API_KEY_PLACEHOLDER": "X-API-Key",
+          "API_VALUE": "Header Value",
+          "API_VALUE_PLACEHOLDER": "Enter API key value"
+        },
+        "PARAMETERS": {
+          "LABEL": "Parameters",
+          "HELP_TEXT": "Define the parameters that will be extracted from user queries"
+        },
+        "ADD_PARAMETER": "Add Parameter",
+        "PARAM_NAME": {
+          "PLACEHOLDER": "Parameter name (e.g., order_id)"
+        },
+        "PARAM_TYPE": {
+          "PLACEHOLDER": "Type"
+        },
+        "PARAM_TYPES": {
+          "STRING": "String",
+          "NUMBER": "Number",
+          "BOOLEAN": "Boolean",
+          "ARRAY": "Array",
+          "OBJECT": "Object"
+        },
+        "PARAM_DESCRIPTION": {
+          "PLACEHOLDER": "Description of the parameter"
+        },
+        "PARAM_REQUIRED": {
+          "LABEL": "Required"
+        },
+        "REQUEST_TEMPLATE": {
+          "LABEL": "Request Body Template (Optional)",
+          "PLACEHOLDER": "{\n  \"order_id\": \"{{ order_id }}\"\n}"
+        },
+        "RESPONSE_TEMPLATE": {
+          "LABEL": "Response Template (Optional)",
+          "PLACEHOLDER": "Order {{ order_id }} status: {{ status }}"
+        },
+        "ERRORS": {
+          "PARAM_NAME_REQUIRED": "Parameter name is required"
+        }
       }
     },
     "RESPONSES": {
diff --git a/app/javascript/dashboard/routes/dashboard/captain/tools/Index.vue b/app/javascript/dashboard/routes/dashboard/captain/tools/Index.vue
index 86e887630..50b7d1204 100644
--- a/app/javascript/dashboard/routes/dashboard/captain/tools/Index.vue
+++ b/app/javascript/dashboard/routes/dashboard/captain/tools/Index.vue
@@ -1,11 +1,12 @@
 <script setup>
-import { computed, onMounted } from 'vue';
+import { computed, onMounted, ref } from 'vue';
 import { useMapGetter, useStore } from 'dashboard/composables/store';
 import { FEATURE_FLAGS } from 'dashboard/featureFlags';
 
 import PageLayout from 'dashboard/components-next/captain/PageLayout.vue';
 import CaptainPaywall from 'dashboard/components-next/captain/pageComponents/Paywall.vue';
 import CustomToolsPageEmptyState from 'dashboard/components-next/captain/pageComponents/emptyStates/CustomToolsPageEmptyState.vue';
+import CreateCustomToolDialog from 'dashboard/components-next/captain/pageComponents/customTool/CreateCustomToolDialog.vue';
 
 const store = useStore();
 
@@ -14,12 +15,18 @@ const customTools = useMapGetter('captainCustomTools/getRecords');
 const isFetching = computed(() => uiFlags.value.fetchingList);
 const customToolsMeta = useMapGetter('captainCustomTools/getMeta');
 
+const createDialogRef = ref(null);
+
 const fetchCustomTools = (page = 1) => {
   store.dispatch('captainCustomTools/get', { page });
 };
 
 const onPageChange = page => fetchCustomTools(page);
 
+const openCreateDialog = () => {
+  createDialogRef.value.dialogRef.open();
+};
+
 onMounted(() => {
   fetchCustomTools();
 });
@@ -37,13 +44,14 @@ onMounted(() => {
     :is-empty="!customTools.length"
     :feature-flag="FEATURE_FLAGS.CAPTAIN_CUSTOM_TOOLS"
     @update:current-page="onPageChange"
+    @button-click="openCreateDialog"
   >
     <template #paywall>
       <CaptainPaywall />
     </template>
 
     <template #emptyState>
-      <CustomToolsPageEmptyState />
+      <CustomToolsPageEmptyState @click="openCreateDialog" />
     </template>
 
     <template #body>
@@ -76,4 +84,6 @@ onMounted(() => {
       </div>
     </template>
   </PageLayout>
+
+  <CreateCustomToolDialog ref="createDialogRef" />
 </template>