Improve README around the Context object

Enhanced Context and Tools sections with documentation of Context object injection, properties, and methods.

Author: jbkkd

README.md

@@ -303,6 +303,35 @@ def get_weather(city: str, unit: str = "celsius") -> str:
 _Full example: [examples/snippets/servers/basic_tool.py](https://github.com/modelcontextprotocol/python-sdk/blob/main/examples/snippets/servers/basic_tool.py)_
 <!-- /snippet-source -->
 
+Tools can optionally receive a Context object by including a parameter with the `Context` type annotation. This context is automatically injected by the FastMCP framework and provides access to MCP capabilities:
+
+<!-- snippet-source examples/snippets/servers/tool_progress.py -->
+```python
+from mcp.server.fastmcp import Context, FastMCP
+
+mcp = FastMCP(name="Progress Example")
+
+
+@mcp.tool()
+async def long_running_task(task_name: str, ctx: Context, steps: int = 5) -> str:
+    """Execute a task with progress updates."""
+    await ctx.info(f"Starting: {task_name}")
+
+    for i in range(steps):
+        progress = (i + 1) / steps
+        await ctx.report_progress(
+            progress=progress,
+            total=1.0,
+            message=f"Step {i + 1}/{steps}",
+        )
+        await ctx.debug(f"Completed step {i + 1}")
+
+    return f"Task '{task_name}' completed"
+```
+
+_Full example: [examples/snippets/servers/tool_progress.py](https://github.com/modelcontextprotocol/python-sdk/blob/main/examples/snippets/servers/tool_progress.py)_
+<!-- /snippet-source -->
+
 #### Structured Output
 
 Tools will return structured results by default, if their return type
@@ -496,7 +525,59 @@ _Full example: [examples/snippets/servers/images.py](https://github.com/modelcon
 
 ### Context
 
-The Context object gives your tools and resources access to MCP capabilities:
+The Context object is automatically injected into tool and resource functions that request it via type hints. It provides access to MCP capabilities like logging, progress reporting, resource reading, user interaction, and request metadata.
+
+#### Getting Context in Functions
+
+To use context in a tool or resource function, add a parameter with the `Context` type annotation:
+
+```python
+from mcp.server.fastmcp import Context, FastMCP
+
+mcp = FastMCP(name="Context Example")
+
+
+@mcp.tool()
+async def my_tool(x: int, ctx: Context) -> str:
+    """Tool that uses context capabilities."""
+    # The context parameter can have any name as long as it's type-annotated
+    return await process_with_context(x, ctx)
+```
+
+#### Context Properties and Methods
+
+The Context object provides the following capabilities:
+
+**Request Information:**
+
+- `ctx.request_id` - Unique ID for the current request
+- `ctx.client_id` - Client ID if available
+- `ctx.session` - Access to the underlying session for advanced usage
+
+**Logging Methods:**
+
+- `await ctx.debug(message)` - Send debug log message
+- `await ctx.info(message)` - Send info log message  
+- `await ctx.warning(message)` - Send warning log message
+- `await ctx.error(message)` - Send error log message
+- `await ctx.log(level, message, logger_name=None)` - Send log with custom level
+
+**Progress Reporting:**
+
+- `await ctx.report_progress(progress, total=None, message=None)` - Report operation progress
+
+**Resource Access:**
+
+- `await ctx.read_resource(uri)` - Read a resource by URI
+
+**User Interaction:**
+
+- `await ctx.elicit(message, schema)` - Request additional information from user with validation
+
+**Server Access:**
+
+- `ctx.fastmcp` - Access to the FastMCP server instance
+- `ctx.request_context` - Access to the underlying request context for advanced usage
 
 <!-- snippet-source examples/snippets/servers/tool_progress.py -->
 ```python