The difference lies in autonomy and execution flow: A Model with Tools (via direct binding/function calling) is a single, stateless step where the LLM merely suggests the best tool and its arguments, requiring the developer to manually execute the tool and initiate any subsequent calls. In contrast, an Agent with Tools leverages an Agent Executor to manage a dynamic, multi-step loop (e.g., ReAct), where the LLM acts as the planner, deciding which tool to call next, and the Executor automatically runs the tool, feeds the observation back to the model, and repeats the cycle until the complex, multi-step goal is autonomously achieved.