diff --git a/nitrostack/cli/validators.py b/nitrostack/cli/validators.py
index 990b154..3015aa4 100644
--- a/nitrostack/cli/validators.py
+++ b/nitrostack/cli/validators.py
@@ -21,6 +21,7 @@
     read_text,
     split_requirement,
 )
+from nitrostack.cli.vendor import VENDOR_REL
 
 
 @dataclass
@@ -39,10 +40,14 @@ def format(self) -> str:
 
 
 def _iter_python_files(root: str) -> Iterable[str]:
+    # The vendored SDK is not project code; its testing helpers apply @mcp_app
+    # inside functions, which reads as an app with no decorated class.
+    vendored_sdk = os.path.join(os.path.abspath(root), VENDOR_REL)
     for dirpath, dirnames, filenames in os.walk(root):
         dirnames[:] = [
             d for d in dirnames
             if d not in EXCLUDE_DIR_NAMES and not d.endswith(".egg-info")
+            and os.path.join(os.path.abspath(dirpath), d) != vendored_sdk
         ]
         for filename in filenames:
             if filename.endswith(".py"):
diff --git a/tests/test_cli.py b/tests/test_cli.py
index 2aaf2ed..95046d9 100644
--- a/tests/test_cli.py
+++ b/tests/test_cli.py
@@ -1154,6 +1154,33 @@ def test_validate_catches_broken_imports_and_module_refs(tmp_path: Path):
     assert "→" in messages or "Fix the import" in messages
 
 
+def test_validate_skips_the_vendored_sdk(tmp_path: Path):
+    """`init` vendors the SDK; its testing helpers apply @mcp_app inside functions."""
+    (tmp_path / "pyproject.toml").write_text(
+        "[project]\n"
+        'name = "vendored"\n'
+        'version = "0.1.0"\n'
+        "dependencies = [\n"
+        '    "nitrostack",\n'
+        "]\n",
+        encoding="utf-8",
+    )
+    sdk = tmp_path / "vendor" / "nitrostack" / "nitrostack" / "testing"
+    sdk.mkdir(parents=True)
+    (sdk / "__init__.py").write_text(
+        "from nitrostack import mcp_app, ServerConfig\n\n"
+        "def create(module):\n"
+        "    @mcp_app(module=module, server=ServerConfig(name='test'))\n"
+        "    class TestApp:\n"
+        "        pass\n"
+        "    return TestApp\n",
+        encoding="utf-8",
+    )
+
+    issues = validate_project(str(tmp_path))
+    assert not [issue for issue in issues if "vendor" in issue.path], [i.format() for i in issues]
+
+
 def test_validate_accepts_module_only_bootstrap(tmp_path: Path):
     """Init templates use @module + McpApplicationFactory.create — no @mcp_app."""
     (tmp_path / "pyproject.toml").write_text(