# Toolshed: Scale Tool-Equipped Agents with Advanced RAG-Tool Fusion and Tool Knowledge Bases

arXiv: https://arxiv.org/abs/2410.14594 · HTML: https://mlsanity.com/paper/2410.14594/

## Key facts

- Cited by 23 papers in the map (data through 14 Oct 2026).
- Placed in Tool learning and function calling, one of 16 directions in LLM agents and tool use.
- Builds on 42 of its 54 references that are in the map.
- First posted on arXiv 18 Oct 2024.

## Placed in

- LLM agents and tool use / [Tool learning and function calling](https://mlsanity.com/agents/tool-learning-and-function-calling/)

## Builds on (most cited first, 30 of 42)

- [Chain-of-Thought Prompting Elicits Reasoning in Large Language Models](https://mlsanity.com/paper/2201.11903/) (2022)
- [ReAct: Synergizing Reasoning and Acting in Language Models](https://mlsanity.com/paper/2210.03629/) (2022)
- [Lost in the Middle: How Language Models Use Long Contexts](https://mlsanity.com/paper/2307.03172/) (2023)
- [Retrieval-Augmented Generation for Large Language Models: A Survey](https://mlsanity.com/paper/2312.10997/) (2023)
- [ToolLLM: Facilitating Large Language Models to Master 16000+ Real-world APIs](https://mlsanity.com/paper/2307.16789/) (2023)
- [Self-RAG: Learning to Retrieve, Generate, and Critique through Self-Reflection](https://mlsanity.com/paper/2310.11511/) (2023)
- [τ-bench: A Benchmark for Tool-Agent-User Interaction in Real-World Domains](https://mlsanity.com/paper/2406.12045/) (2024)
- [Gorilla: Large Language Model Connected with Massive APIs](https://mlsanity.com/paper/2305.15334/) (2023)
- [Interleaving Retrieval with Chain-of-Thought Reasoning for Knowledge-Intensive Multi-Step Questions](https://mlsanity.com/paper/2212.10509/) (2022)
- [API-Bank: A Comprehensive Benchmark for Tool-Augmented LLMs](https://mlsanity.com/paper/2304.08244/) (2023)
- [Precise Zero-Shot Dense Retrieval without Relevance Labels](https://mlsanity.com/paper/2212.10496/) (2022)
- [Adaptive-RAG: Learning to Adapt Retrieval-Augmented Large Language Models through Question Complexity](https://mlsanity.com/paper/2403.14403/) (2024)
- [ToolAlpaca: Generalized Tool Learning for Language Models with 3000 Simulated Cases](https://mlsanity.com/paper/2306.05301/) (2023)
- [Is ChatGPT Good at Search? Investigating Large Language Models as Re-Ranking Agents](https://mlsanity.com/paper/2304.09542/) (2023)
- [Demonstrate-Search-Predict: Composing retrieval and language models for knowledge-intensive NLP](https://mlsanity.com/paper/2212.14024/) (2022)
- [ToolSandbox: A Stateful, Conversational, Interactive Evaluation Benchmark for LLM Tool Use Capabilities](https://mlsanity.com/paper/2408.04682/) (2024)
- [MultiHop-RAG: Benchmarking Retrieval-Augmented Generation for Multi-Hop Queries](https://mlsanity.com/paper/2401.15391/) (2024)
- [ToolkenGPT: Augmenting Frozen Language Models with Massive Tools via Tool Embeddings](https://mlsanity.com/paper/2305.11554/) (2023)
- [Tool Learning with Large Language Models: A Survey](https://mlsanity.com/paper/2405.17935/) (2024)
- [MetaTool Benchmark for Large Language Models: Deciding Whether to Use Tools and Which to Use](https://mlsanity.com/paper/2310.03128/) (2023)
- [ToolACE: Winning the Points of LLM Function Calling](https://mlsanity.com/paper/2409.00920/) (2024)
- [Query Rewriting for Retrieval-Augmented Large Language Models](https://mlsanity.com/paper/2305.14283/) (2023)
- [Corrective Retrieval Augmented Generation](https://mlsanity.com/paper/2401.15884/) (2024)
- [ReWOO: Decoupling Reasoning from Observations for Efficient Augmented Language Models](https://mlsanity.com/paper/2305.18323/) (2023)
- [Take a Step Back: Evoking Reasoning via Abstraction in Large Language Models](https://mlsanity.com/paper/2310.06117/) (2023)
- [EASYTOOL: Enhancing LLM-based Agents with Concise Tool Instruction](https://mlsanity.com/paper/2401.06201/) (2024)
- [Query2doc: Query Expansion with Large Language Models](https://mlsanity.com/paper/2303.07678/) (2023)
- [CRAFT: Customizing LLMs by Creating and Retrieving from Specialized Toolsets](https://mlsanity.com/paper/2309.17428/) (2023)
- [AnyTool: Self-Reflective, Hierarchical Agents for Large-Scale API Calls](https://mlsanity.com/paper/2402.04253/) (2024)
- [Blended RAG: Improving RAG (Retriever-Augmented Generation) Accuracy with Semantic Search and Hybrid Query-Based Retrievers](https://mlsanity.com/paper/2404.07220/) (2024)

## Built on by (most cited first, 23 of 23)

- [OctoTools: An Agentic Framework with Extensible Tools for Complex Reasoning](https://mlsanity.com/paper/2502.11271/) (2025)
- [A Survey of LLM-based Deep Search Agents: Paradigm, Optimization, Evaluation, and Challenges](https://mlsanity.com/paper/2508.05668/) (2025)
- [ScaleMCP: Dynamic and Auto-Synchronizing Model Context Protocol Tools for LLM Agents](https://mlsanity.com/paper/2505.06416/) (2025)
- [MemTool: Optimizing Short-Term Memory Management for Dynamic Tool Calling in LLM Agent Multi-Turn Conversations](https://mlsanity.com/paper/2507.21428/) (2025)
- [ToolScope: Enhancing LLM Agent Tool Use through Tool Merging and Context-Aware Filtering](https://mlsanity.com/paper/2510.20036/) (2025)
- [Don't Break the Cache: An Evaluation of Prompt Caching for Long-Horizon Agentic Tasks](https://mlsanity.com/paper/2601.06007/) (2026)
- [LongFuncEval: Measuring the effectiveness of long context models for function calling](https://mlsanity.com/paper/2505.10570/) (2025)
- [Toward Efficient Agents: Memory, Tool learning, and Planning](https://mlsanity.com/paper/2601.14192/) (2026)
- [Graph RAG-Tool Fusion](https://mlsanity.com/paper/2502.07223/) (2025)
- [Tool-to-Agent Retrieval: Bridging Tools and Agents for Scalable LLM Multi-Agent Systems](https://mlsanity.com/paper/2511.01854/) (2025)
- [Comparison of Text-Based and Image-Based Retrieval in Multimodal Retrieval Augmented Generation Large Language Model Systems](https://mlsanity.com/paper/2511.16654/) (2025)
- [Agent-as-a-Graph: Knowledge Graph-Based Tool and Agent Retrieval for LLM Multi-Agent Systems](https://mlsanity.com/paper/2511.18194/) (2025)
- [Solving Context Window Overflow in AI Agents](https://mlsanity.com/paper/2511.22729/) (2025)
- [Beyond Rows to Reasoning: Agentic Retrieval for Multimodal Spreadsheet Understanding and Editing](https://mlsanity.com/paper/2603.06503/) (2026)
- [Online-Optimized RAG for Tool Use and Function Calling](https://mlsanity.com/paper/2509.20415/) (2025)
- [Rethinking Retrieval: From Traditional Retrieval Augmented Generation to Agentic and Non-Vector Reasoning Systems in the Financial Domain for Large Language Models](https://mlsanity.com/paper/2511.18177/) (2025)
- [In-N-Out: A Parameter-Level API Graph Dataset for Tool Agents](https://mlsanity.com/paper/2509.01560/) (2025)
- [Don't Offer What Can't Be Done: Deterministic Executability Gating for LLM Skill Selection at Scale](https://mlsanity.com/paper/2608.01050/) (2026)
- [Repairing Tool Calls Using Post-tool Execution Reflection and RAG](https://mlsanity.com/paper/2510.17874/) (2025)
- [ETOM: A Five-Level Benchmark for Evaluating Tool Orchestration within the MCP Ecosystem](https://mlsanity.com/paper/2510.19423/) (2025)
- [Agentic Jackal: Live Execution and Semantic Value Grounding for Text-to-JQL](https://mlsanity.com/paper/2604.09470/) (2026)
- [Adaptive Query Routing: A Tier-Based Framework for Hybrid Retrieval Across Financial, Legal, and Medical Documents](https://mlsanity.com/paper/2604.14222/) (2026)
- [CoHyDE: Iterative Co-Training of LLM Rewriter & Dense Encoder for Tool Retrieval](https://mlsanity.com/paper/2605.29271/) (2026)

## Abstract (arXiv)

Recent advancements in tool-equipped Agents (LLMs) have enabled complex tasks like secure database interactions and multi-agent code development. However, scaling tool capacity beyond agent reasoning or model limits remains a challenge. In this paper, we address these challenges by introducing Toolshed Knowledge Bases, a tool knowledge base (vector database) designed to store enhanced tool representations and optimize tool selection for large-scale tool-equipped Agents. Additionally, we propose Advanced RAG-Tool Fusion, a novel ensemble of tool-applied advanced retrieval-augmented generation (RAG) techniques across the pre-retrieval, intra-retrieval, and post-retrieval phases, without requiring model fine-tuning. During pre-retrieval, tool documents are enhanced with key information and stored in the Toolshed Knowledge Base. Intra-retrieval focuses on query planning and transformation to increase retrieval accuracy. Post-retrieval refines the retrieved tool documents and enables self-reflection. Furthermore, by varying both the total number of tools (tool-M) an Agent has access to and the tool selection threshold (top-k), we address trade-offs between retrieval accuracy, agent performance, and token cost. Our approach achieves 46%, 56%, and 47% absolute improvements on the ToolE single-tool, ToolE multi-tool and Seal-Tools benchmark datasets, respectively (Recall@5).