diff --git a/python/packages/openai/agent_framework_openai/_chat_client.py b/python/packages/openai/agent_framework_openai/_chat_client.py
index e1686b071a4..d7b7e0735cb 100644
--- a/python/packages/openai/agent_framework_openai/_chat_client.py
+++ b/python/packages/openai/agent_framework_openai/_chat_client.py
@@ -2483,7 +2483,15 @@ def _shell_item_to_contents(self, item: Any, local_shell_tool_name: str | None)
             )
             shell_timeout_ms = getattr(action, "timeout_ms", None)
             shell_max_output = getattr(action, "max_output_length", None)
-            is_local_environment = getattr(getattr(item, "environment", None), "type", None) == "local"
+            item_environment: object = getattr(item, "environment", None)
+            env_type: object = (
+                cast("Mapping[str, object]", item_environment).get("type")
+                if isinstance(item_environment, Mapping)
+                else getattr(item_environment, "type", None)
+            )
+            is_local_environment: bool = bool(
+                env_type == "local" or (item_environment is None and local_shell_tool_name is not None)
+            )
             if (
                 local_shell_tool_name
                 and is_local_environment
diff --git a/python/packages/openai/tests/openai/test_openai_chat_client.py b/python/packages/openai/tests/openai/test_openai_chat_client.py
index 3a26012111b..fcb31c961b3 100644
--- a/python/packages/openai/tests/openai/test_openai_chat_client.py
+++ b/python/packages/openai/tests/openai/test_openai_chat_client.py
@@ -2828,11 +2828,14 @@ def local_exec(command: str) -> str:
     mock_action.timeout_ms = 60000
     mock_action.max_output_length = 4096
 
+    mock_environment = MagicMock()
+    mock_environment.type = "container_reference"
+
     mock_shell_call = MagicMock()
     mock_shell_call.type = "shell_call"
     mock_shell_call.call_id = "shell-call-1"
     mock_shell_call.action = mock_action
-    mock_shell_call.environment = None
+    mock_shell_call.environment = mock_environment
     mock_shell_call.status = "completed"
 
     mock_response.output = [mock_shell_call]
@@ -2849,6 +2852,89 @@ def local_exec(command: str) -> str:
     assert call_content.status == "completed"
 
 
+def test_foundry_shell_call_without_environment_uses_registered_local_executor() -> None:
+    """An unmarked shell call executes locally when a local shell executor is registered."""
+    client = OpenAIChatClient(model="test-model", api_key="test-key")
+
+    def local_exec(command: str) -> str:
+        return command
+
+    local_shell_tool = OpenAIChatClient.get_shell_tool(func=local_exec)
+
+    mock_response = MagicMock()
+    mock_response.output_parsed = None
+    mock_response.metadata = {}
+    mock_response.usage = None
+    mock_response.id = "test-id"
+    mock_response.model = "test-model"
+    mock_response.created_at = 1000000000
+    mock_response.status = "completed"
+    mock_response.incomplete = None
+
+    mock_action = MagicMock()
+    mock_action.commands = ["ls -la", "pwd"]
+    mock_action.timeout_ms = 60000
+    mock_action.max_output_length = 4096
+
+    mock_shell_call = MagicMock()
+    mock_shell_call.type = "shell_call"
+    mock_shell_call.id = "shell-item-1"
+    mock_shell_call.call_id = "shell-call-1"
+    mock_shell_call.action = mock_action
+    mock_shell_call.environment = None
+    mock_shell_call.status = "completed"
+
+    mock_response.output = [mock_shell_call]
+
+    response = client._parse_response_from_openai(mock_response, options={"tools": [local_shell_tool]})  # type: ignore[arg-type]
+
+    assert len(response.messages[0].contents) == 1
+    call_content = response.messages[0].contents[0]
+    assert call_content.type == "function_call"
+    assert call_content.call_id == "shell-call-1"
+    assert call_content.name == local_shell_tool.name
+    assert call_content.parse_arguments() == {"command": "ls -la\npwd"}
+    assert call_content.informational_only is False
+
+
+def test_foundry_shell_call_without_environment_without_local_executor_remains_hosted() -> None:
+    """An unmarked shell call remains hosted informational content when no local executor is registered."""
+    client = OpenAIChatClient(model="test-model", api_key="test-key")
+
+    mock_response = MagicMock()
+    mock_response.output_parsed = None
+    mock_response.metadata = {}
+    mock_response.usage = None
+    mock_response.id = "test-id"
+    mock_response.model = "test-model"
+    mock_response.created_at = 1000000000
+    mock_response.status = "completed"
+    mock_response.incomplete = None
+
+    mock_action = MagicMock()
+    mock_action.commands = ["ls -la", "pwd"]
+    mock_action.timeout_ms = 60000
+    mock_action.max_output_length = 4096
+
+    mock_shell_call = MagicMock()
+    mock_shell_call.type = "shell_call"
+    mock_shell_call.id = "shell-item-1"
+    mock_shell_call.call_id = "shell-call-1"
+    mock_shell_call.action = mock_action
+    mock_shell_call.environment = None
+    mock_shell_call.status = "completed"
+
+    mock_response.output = [mock_shell_call]
+
+    response = client._parse_response_from_openai(mock_response, options={})  # type: ignore[arg-type]
+
+    assert len(response.messages[0].contents) == 1
+    call_content = response.messages[0].contents[0]
+    assert call_content.type == "shell_tool_call"
+    assert call_content.call_id == "shell-call-1"
+    assert call_content.commands == ["ls -la", "pwd"]
+
+
 def test_response_content_creation_with_shell_call_output() -> None:
     """Test _parse_response_from_openai with shell_call_output output."""
     client = OpenAIChatClient(model="test-model", api_key="test-key")
@@ -4243,6 +4329,45 @@ def local_exec(command: str) -> str:
     assert call_content.additional_properties["openai.responses.shell.output_type"] == "shell_call_output"
 
 
+def test_parse_chunk_from_openai_shell_call_without_environment_emits_command() -> None:
+    """An unmarked completed shell call emits an executable function call when local executor is registered."""
+    client = OpenAIChatClient(model="test-model", api_key="test-key")
+
+    def local_exec(command: str) -> str:
+        return command
+
+    local_shell_tool = OpenAIChatClient.get_shell_tool(func=local_exec, approval_mode="never_require")
+    function_call_ids: dict[int, tuple[str, str]] = {}
+
+    mock_action = MagicMock()
+    mock_action.commands = ["python --version"]
+    mock_action.timeout_ms = 30000
+
+    mock_item = MagicMock()
+    mock_item.type = "shell_call"
+    mock_item.id = "local-shell-item-1"
+    mock_item.call_id = "local-shell-call-1"
+    mock_item.action = mock_action
+    mock_item.environment = None
+    mock_item.status = "completed"
+
+    mock_event = MagicMock()
+    mock_event.type = "response.output_item.done"
+    mock_event.item = mock_item
+
+    update = client._parse_chunk_from_openai(
+        mock_event, options={"tools": [local_shell_tool]}, function_call_ids=function_call_ids
+    )
+
+    assert len(update.contents) == 1
+    call_content = update.contents[0]
+    assert call_content.type == "function_call"
+    assert call_content.call_id == "local-shell-call-1"
+    assert call_content.name == local_shell_tool.name
+    assert call_content.parse_arguments() == {"command": "python --version"}
+    assert call_content.additional_properties["openai.responses.shell.output_type"] == "shell_call_output"
+
+
 def test_parse_chunk_from_openai_shell_call_output_added_defers_result() -> None:
     """An in-progress shell_call_output on output_item.added must emit nothing.