diff --git a/cmd/crates/soroban-test/tests/it/integration/hello_world.rs b/cmd/crates/soroban-test/tests/it/integration/hello_world.rs
index 394e510a36..08ff3eca6b 100644
--- a/cmd/crates/soroban-test/tests/it/integration/hello_world.rs
+++ b/cmd/crates/soroban-test/tests/it/integration/hello_world.rs
@@ -23,6 +23,43 @@ async fn invoke_view_with_non_existent_source_account() {
     assert_eq!(res, TxnResult::Res(format!(r#"["Hello",{world:?}]"#)));
 }
 
+#[tokio::test]
+async fn invoke_with_muxed_source_account() {
+    let sandbox = &TestEnv::new();
+    let id = &deploy_hello(sandbox).await;
+
+    // A muxed (M…) source is the funded `test` identity's G… account plus a
+    // mux id (#2645). Sending used to fail at the sequence-number lookup,
+    // which handed the M… strkey to a G-only parser; `--send=yes` forces the
+    // send path even though `hello` is read-only. An M-literal carries no
+    // secret, so signing goes through the identity via `--sign-with-key`.
+    let g_addr = crate::integration::util::test_address(sandbox);
+    let ed25519 = stellar_strkey::ed25519::PublicKey::from_string(&g_addr)
+        .unwrap()
+        .0;
+    let muxed = format!(
+        "{}",
+        stellar_strkey::ed25519::MuxedAccount { ed25519, id: 7 }
+    );
+
+    sandbox
+        .new_assert_cmd("contract")
+        .arg("invoke")
+        .arg("--id")
+        .arg(id)
+        .arg("--source-account")
+        .arg(&muxed)
+        .arg("--sign-with-key")
+        .arg("test")
+        .arg("--send=yes")
+        .arg("--")
+        .arg("hello")
+        .arg("--world=muxed")
+        .assert()
+        .success()
+        .stdout(predicates::str::contains(r#"["Hello","muxed"]"#));
+}
+
 #[tokio::test]
 #[allow(clippy::too_many_lines)]
 async fn invoke_contract() {
diff --git a/cmd/crates/soroban-test/tests/it/integration/token/transfer.rs b/cmd/crates/soroban-test/tests/it/integration/token/transfer.rs
index 3115a1648f..629ca9feff 100644
--- a/cmd/crates/soroban-test/tests/it/integration/token/transfer.rs
+++ b/cmd/crates/soroban-test/tests/it/integration/token/transfer.rs
@@ -219,26 +219,45 @@ async fn transfer_rejects_negative_amount_before_any_rpc() {
 }
 
 #[tokio::test]
-async fn transfer_rejects_muxed_source_with_clear_error() {
+async fn transfer_from_muxed_source() {
     let sandbox = &TestEnv::new();
     let recipient = new_account(sandbox, "recipient");
 
     deploy_sac(sandbox, "native", "test");
+    let sac = sac_id(sandbox, "native");
+
+    // A muxed (M…) source is the funded `test` identity's G… account plus a
+    // mux id (#2645). An M-literal carries no secret, so signing goes through
+    // the identity via `--sign-with-key`.
+    let g_addr = test_address(sandbox);
+    let ed25519 = stellar_strkey::ed25519::PublicKey::from_string(&g_addr)
+        .unwrap()
+        .0;
+    let muxed = format!(
+        "{}",
+        stellar_strkey::ed25519::MuxedAccount { ed25519, id: 1 }
+    );
 
-    // Muxed (M…) source accounts aren't supported by the invoke pipeline yet
-    // (see #2645). Until then the command must reject them up front with a clear
-    // message rather than a raw strkey decode error deep in the pipeline.
-    let muxed = "MA3D5KRYM6CB7OWQ6TWYRR3Z4T7GNZLKERYNZGGA5SOAOPIFY6YQGAAAAAAAAAPCICBKU";
+    let recipient_before = sac_balance(sandbox, &sac, &recipient);
     sandbox
         .new_assert_cmd("token")
         .args([
-            "transfer", "--id", "native", "--to", &recipient, "--amount", "1", "--from", muxed,
+            "transfer",
+            "--id",
+            "native",
+            "--to",
+            &recipient,
+            "--amount",
+            "1",
+            "--from",
+            &muxed,
+            "--sign-with-key",
+            "test",
         ])
         .assert()
-        .failure()
-        .stderr(predicates::str::contains(
-            "muxed (M…) source accounts are not yet supported",
-        ));
+        .success();
+
+    assert_eq!(sac_balance(sandbox, &sac, &recipient), recipient_before + 1);
 }
 
 #[tokio::test]
diff --git a/cmd/soroban-cli/src/commands/contract/invoke.rs b/cmd/soroban-cli/src/commands/contract/invoke.rs
index 7db83a2a4d..efe7659333 100644
--- a/cmd/soroban-cli/src/commands/contract/invoke.rs
+++ b/cmd/soroban-cli/src/commands/contract/invoke.rs
@@ -348,8 +348,11 @@ impl Cmd {
                 .verify_network_passphrase(Some(&network.network_passphrase))
                 .await?;
 
+            // A muxed (M…) source is an underlying G… account plus a mux id;
+            // only the underlying account exists on ledger, so the sequence
+            // number lookup must use its G… form (#2645).
             client
-                .get_account(&config.source_account()?.to_string())
+                .get_account(&config.source_account()?.account_id().to_string())
                 .await?
         } else {
             if should_send == ShouldSend::DefaultNo {
diff --git a/cmd/soroban-cli/src/commands/token/transfer.rs b/cmd/soroban-cli/src/commands/token/transfer.rs
index 9d6e1efc6d..387b297a3b 100644
--- a/cmd/soroban-cli/src/commands/token/transfer.rs
+++ b/cmd/soroban-cli/src/commands/token/transfer.rs
@@ -68,12 +68,6 @@ pub enum Error {
     Invoke(#[from] invoke::Error),
     #[error(transparent)]
     Serde(#[from] serde_json::Error),
-
-    #[error(
-        "muxed (M…) source accounts are not yet supported for `token transfer`; \
-         use the underlying G… account as `--from` instead"
-    )]
-    MuxedSourceNotSupported,
 }
 
 /// Parse `--amount` as a non-negative `i128`. A negative transfer amount is
@@ -101,7 +95,6 @@ impl Error {
             Error::ScAddress(_) => "invalid_address",
             Error::Invoke(_) => "invoke",
             Error::Serde(_) => "internal",
-            Error::MuxedSourceNotSupported => "unsupported",
         }
     }
 }
@@ -146,17 +139,13 @@ impl Cmd {
             .resolve(&config.locator, &network.network_passphrase)?;
 
         // SEP-41 `transfer(from, to, amount)`: `from` is the source account
-        // (which also signs and authorizes), `to` is the destination.
-        //
-        // The invoke pipeline can't source a transaction from a muxed account
-        // yet (see #2645), and a muxed strkey in the `transfer` arg is rejected
-        // mid-simulation with an opaque host error; reject it up front with a
-        // clear message instead.
-        let source_account = config.source_account()?;
-        if matches!(source_account, crate::xdr::MuxedAccount::MuxedEd25519(_)) {
-            return Err(Error::MuxedSourceNotSupported);
-        }
-        let from = source_account.to_string();
+        // (which also signs and authorizes), `to` is the destination. A muxed
+        // (M…) `from` resolves to its underlying G… account: `from` must
+        // authorize the transfer, muxed accounts are not valid authorizers,
+        // and the host rejects a muxed `from` in simulation with an opaque
+        // `Error(Value, UnexpectedType)` (#2645). A muxed `--to` flows through
+        // as-is, preserving the mux id in the `transfer` argument and events.
+        let from = config.source_account()?.account_id().to_string();
         // `--to` may be an account (`G…`/`M…`), a contract (`C…`), or an alias;
         // resolve it to an `ScAddress` and hand the strkey to the `transfer`
         // arg, which accepts any of these destinations.