diff --git a/packages/exchange/src/exchange/utils.py b/packages/exchange/src/exchange/utils.py
index b95f1c48..bcdd18f0 100644
--- a/packages/exchange/src/exchange/utils.py
+++ b/packages/exchange/src/exchange/utils.py
@@ -1,7 +1,7 @@
 import inspect
 import uuid
 from importlib.metadata import entry_points
-from typing import get_args, get_origin
+from typing import Literal, get_args, get_origin, Any, Union
 
 from griffe import (
     Docstring,
@@ -107,16 +107,27 @@ def json_schema(func: any) -> dict[str, any]:  # noqa: ANN401
     return schema
 
 
-def _map_type_to_schema(py_type: type) -> dict[str, any]:  # noqa: ANN401
+def _map_type_to_schema(py_type: type) -> dict[str, Any]:
     origin = get_origin(py_type)
     args = get_args(py_type)
 
-    if origin is list or origin is tuple:
-        return {"type": "array", "items": _map_type_to_schema(args[0] if args else any)}
+    if origin is Union:
+        # Handle Optional[X], which is Union[X, NoneType]
+        non_none_args = [arg for arg in args if arg is not type(None)]
+        if len(non_none_args) == 1:
+            # This is Optional[X]
+            return _map_type_to_schema(non_none_args[0])
+        else:
+            # General Union
+            return {"anyOf": [_map_type_to_schema(arg) for arg in non_none_args]}
+    elif origin is Literal:
+        return {"enum": list(args)}
+    elif origin in (list, tuple):
+        return {"type": "array", "items": _map_type_to_schema(args[0] if args else Any)}
     elif origin is dict:
         return {
             "type": "object",
-            "additionalProperties": _map_type_to_schema(args[1] if len(args) > 1 else any),
+            "additionalProperties": _map_type_to_schema(args[1] if len(args) > 1 else Any),
         }
     elif py_type is int:
         return {"type": "integer"}
diff --git a/packages/exchange/tests/test_utils.py b/packages/exchange/tests/test_utils.py
index 6bc00f9e..09f72970 100644
--- a/packages/exchange/tests/test_utils.py
+++ b/packages/exchange/tests/test_utils.py
@@ -1,3 +1,4 @@
+from typing import Literal
 import pytest
 from exchange import utils
 from unittest.mock import patch
@@ -65,6 +66,34 @@ def dummy_func(a, b, c):
     assert "Attempted to load from a function" in str(e.value)
 
 
+def test_parse_docstring_with_optional_params() -> None:
+    from typing import Optional, List
+
+    def dummy_func(a: int, b: List[int], c: Literal["foo", "bar"] = "foo", d: Optional[str] = None) -> None:
+        """This function does something.
+
+        Args:
+            a (int): The first required parameter.
+            b (List[int]): The second parameter.
+            c (Literal["foo", "bar"], optional): A parameter with a literal default value. Defaults to "foo".
+            d (Optional[str], optional): Optional fourth parameter. Defaults to None.
+        """
+        pass
+
+    description, parameters = utils.parse_docstring(dummy_func)
+    assert description == "This function does something."
+    assert parameters == [
+        {"name": "a", "annotation": "int", "description": "The first required parameter."},
+        {"name": "b", "annotation": "List[int]", "description": "The second parameter."},
+        {
+            "name": "c",
+            "annotation": 'Literal["foo", "bar"]',
+            "description": 'A parameter with a literal default value. Defaults to "foo".',
+        },
+        {"name": "d", "annotation": "Optional[str]", "description": "Optional fourth parameter. Defaults to None."},
+    ]
+
+
 def test_json_schema() -> None:
     def dummy_func(a: int, b: str, c: list) -> None:
         pass
@@ -82,6 +111,31 @@ def dummy_func(a: int, b: str, c: list) -> None:
     }
 
 
+def test_json_schema_with_optional_params() -> None:
+    from typing import Optional, List
+
+    def dummy_func(
+        a: int,
+        b: Literal["foo", "bar"] = "foo",
+        c: Optional[List[int]] = None,
+        d: Optional[str] = None,
+    ) -> None:
+        pass
+
+    schema = utils.json_schema(dummy_func)
+
+    assert schema == {
+        "type": "object",
+        "properties": {
+            "a": {"type": "integer"},
+            "b": {"enum": ["foo", "bar"], "default": "foo"},
+            "c": {"type": "array", "items": {"type": "integer"}, "default": None},
+            "d": {"type": "string", "default": None},
+        },
+        "required": ["a"],
+    }
+
+
 def test_load_plugins() -> None:
     class DummyEntryPoint:
         def __init__(self, name, plugin):