diff --git a/internal/handler/auth.go b/internal/handler/auth.go
index a994ea8..584ae0f 100644
--- a/internal/handler/auth.go
+++ b/internal/handler/auth.go
@@ -1,6 +1,7 @@
 package handler
 
 import (
+	"errors"
 	"log/slog"
 	"net/http"
 	"strings"
@@ -31,6 +32,70 @@ func (h *authHandler) PasswordPage(w http.ResponseWriter, r *http.Request) {
 	ui.Render(w, r, pages.AuthPassword(""))
 }
 
+func (h *authHandler) LoginWithPassword(w http.ResponseWriter, r *http.Request) {
+	email := strings.TrimSpace(r.FormValue("email"))
+	password := r.FormValue("password")
+
+	if email == "" || password == "" {
+		ui.Render(w, r, pages.AuthPassword("Email and password are required"))
+		return
+	}
+
+	user, err := h.authService.LoginWithPassword(email, password)
+	if err != nil {
+		slog.Warn("password login failed", "error", err, "email", email)
+
+		msg := "An error occurred. Please try again."
+		if errors.Is(err, service.ErrInvalidCredentials) {
+			msg = "Invalid email or password"
+		} else if errors.Is(err, service.ErrNoPassword) {
+			msg = "This account uses passwordless login. Please use a magic link."
+		}
+
+		ui.Render(w, r, pages.AuthPassword(msg))
+		return
+	}
+
+	jwtToken, err := h.authService.GenerateJWT(user)
+	if err != nil {
+		slog.Error("failed to generate JWT", "error", err, "user_id", user.ID)
+		ui.Render(w, r, pages.AuthPassword("An error occurred. Please try again."))
+		return
+	}
+
+	h.authService.SetJWTCookie(w, jwtToken, time.Now().Add(7*24*time.Hour))
+
+	// Check for pending invite
+	inviteCookie, err := r.Cookie("pending_invite")
+	if err == nil && inviteCookie.Value != "" {
+		spaceID, err := h.inviteService.AcceptInvite(inviteCookie.Value, user.ID)
+		if err != nil {
+			slog.Error("failed to process pending invite", "error", err, "token", inviteCookie.Value)
+		} else {
+			slog.Info("accepted pending invite", "user_id", user.ID, "space_id", spaceID)
+			http.SetCookie(w, &http.Cookie{
+				Name:     "pending_invite",
+				Value:    "",
+				Path:     "/",
+				MaxAge:   -1,
+				HttpOnly: true,
+			})
+		}
+	}
+
+	needsOnboarding, err := h.authService.NeedsOnboarding(user.ID)
+	if err != nil {
+		slog.Warn("failed to check onboarding status", "error", err, "user_id", user.ID)
+	}
+
+	if needsOnboarding {
+		http.Redirect(w, r, "/auth/onboarding", http.StatusSeeOther)
+		return
+	}
+
+	http.Redirect(w, r, "/app/dashboard", http.StatusSeeOther)
+}
+
 func (h *authHandler) Logout(w http.ResponseWriter, r *http.Request) {
 	h.authService.ClearJWTCookie(w)
 	http.Redirect(w, r, "/", http.StatusSeeOther)
diff --git a/internal/handler/settings.go b/internal/handler/settings.go
new file mode 100644
index 0000000..9b289cf
--- /dev/null
+++ b/internal/handler/settings.go
@@ -0,0 +1,74 @@
+package handler
+
+import (
+	"errors"
+	"log/slog"
+	"net/http"
+
+	"git.juancwu.dev/juancwu/budgit/internal/ctxkeys"
+	"git.juancwu.dev/juancwu/budgit/internal/service"
+	"git.juancwu.dev/juancwu/budgit/internal/ui"
+	"git.juancwu.dev/juancwu/budgit/internal/ui/pages"
+)
+
+type settingsHandler struct {
+	authService *service.AuthService
+	userService *service.UserService
+}
+
+func NewSettingsHandler(authService *service.AuthService, userService *service.UserService) *settingsHandler {
+	return &settingsHandler{
+		authService: authService,
+		userService: userService,
+	}
+}
+
+func (h *settingsHandler) SettingsPage(w http.ResponseWriter, r *http.Request) {
+	user := ctxkeys.User(r.Context())
+
+	// Re-fetch user from DB since middleware strips PasswordHash
+	fullUser, err := h.userService.ByID(user.ID)
+	if err != nil {
+		slog.Error("failed to fetch user for settings", "error", err, "user_id", user.ID)
+		http.Error(w, "Internal Server Error", http.StatusInternalServerError)
+		return
+	}
+
+	ui.Render(w, r, pages.AppSettings(fullUser.HasPassword(), ""))
+}
+
+func (h *settingsHandler) SetPassword(w http.ResponseWriter, r *http.Request) {
+	user := ctxkeys.User(r.Context())
+
+	currentPassword := r.FormValue("current_password")
+	newPassword := r.FormValue("new_password")
+	confirmPassword := r.FormValue("confirm_password")
+
+	// Re-fetch user to check HasPassword
+	fullUser, err := h.userService.ByID(user.ID)
+	if err != nil {
+		slog.Error("failed to fetch user for set password", "error", err, "user_id", user.ID)
+		http.Error(w, "Internal Server Error", http.StatusInternalServerError)
+		return
+	}
+
+	err = h.authService.SetPassword(user.ID, currentPassword, newPassword, confirmPassword)
+	if err != nil {
+		slog.Warn("set password failed", "error", err, "user_id", user.ID)
+
+		msg := "An error occurred. Please try again."
+		if errors.Is(err, service.ErrInvalidCredentials) {
+			msg = "Current password is incorrect"
+		} else if errors.Is(err, service.ErrPasswordsDoNotMatch) {
+			msg = "New passwords do not match"
+		} else if errors.Is(err, service.ErrWeakPassword) {
+			msg = "Password must be at least 12 characters"
+		}
+
+		ui.Render(w, r, pages.AppSettings(fullUser.HasPassword(), msg))
+		return
+	}
+
+	// Password set successfully — render page with success message
+	ui.Render(w, r, pages.AppSettings(true, ""))
+}
diff --git a/internal/routes/routes.go b/internal/routes/routes.go
index 2497cf3..a671cc6 100644
--- a/internal/routes/routes.go
+++ b/internal/routes/routes.go
@@ -14,6 +14,7 @@ func SetupRoutes(a *app.App) http.Handler {
 	auth := handler.NewAuthHandler(a.AuthService, a.InviteService)
 	home := handler.NewHomeHandler()
 	dashboard := handler.NewDashboardHandler(a.SpaceService, a.ExpenseService)
+	settings := handler.NewSettingsHandler(a.AuthService, a.UserService)
 	space := handler.NewSpaceHandler(a.SpaceService, a.TagService, a.ShoppingListService, a.ExpenseService, a.InviteService, a.EventBus)
 
 	mux := http.NewServeMux()
@@ -43,7 +44,8 @@ func SetupRoutes(a *app.App) http.Handler {
 
 	// Auth Actions
 	mux.HandleFunc("POST /auth/magic-link", authRateLimiter(middleware.RequireGuest(auth.SendMagicLink)))
-	mux.HandleFunc("POST /auth/logout", authRateLimiter(auth.Logout))
+	mux.HandleFunc("POST /auth/password", authRateLimiter(middleware.RequireGuest(auth.LoginWithPassword)))
+	mux.HandleFunc("POST /auth/logout", auth.Logout)
 
 	// ====================================================================================
 	// PRIVATE ROUTES
@@ -53,6 +55,8 @@ func SetupRoutes(a *app.App) http.Handler {
 	mux.HandleFunc("POST /auth/onboarding", authRateLimiter(middleware.RequireAuth(auth.CompleteOnboarding)))
 
 	mux.HandleFunc("GET /app/dashboard", middleware.RequireAuth(dashboard.DashboardPage))
+	mux.HandleFunc("GET /app/settings", middleware.RequireAuth(settings.SettingsPage))
+	mux.HandleFunc("POST /app/settings/password", authRateLimiter(middleware.RequireAuth(settings.SetPassword)))
 
 	// Space routes
 	spaceDashboardHandler := middleware.RequireAuth(space.DashboardPage)
diff --git a/internal/service/auth.go b/internal/service/auth.go
index 8274e32..01c8b78 100644
--- a/internal/service/auth.go
+++ b/internal/service/auth.go
@@ -84,6 +84,11 @@ func (s *AuthService) LoginWithPassword(email, password string) (*model.User, er
 		return nil, e.WithError(ErrNoPassword)
 	}
 
+	err = s.ComparePassword(password, *user.PasswordHash)
+	if err != nil {
+		return nil, e.WithError(ErrInvalidCredentials)
+	}
+
 	return user, nil
 }
 
@@ -109,6 +114,45 @@ func (s *AuthService) ComparePassword(password, hash string) error {
 	return nil
 }
 
+func (s *AuthService) SetPassword(userID, currentPassword, newPassword, confirmPassword string) error {
+	e := exception.New("AuthService.SetPassword")
+
+	user, err := s.userRepository.ByID(userID)
+	if err != nil {
+		return e.WithError(err)
+	}
+
+	// If user already has a password, verify current password
+	if user.HasPassword() {
+		err = s.ComparePassword(currentPassword, *user.PasswordHash)
+		if err != nil {
+			return e.WithError(ErrInvalidCredentials)
+		}
+	}
+
+	if newPassword != confirmPassword {
+		return e.WithError(ErrPasswordsDoNotMatch)
+	}
+
+	err = validation.ValidatePassword(newPassword)
+	if err != nil {
+		return e.WithError(ErrWeakPassword)
+	}
+
+	hashed, err := s.HashPassword(newPassword)
+	if err != nil {
+		return e.WithError(err)
+	}
+
+	user.PasswordHash = &hashed
+	err = s.userRepository.Update(user)
+	if err != nil {
+		return e.WithError(err)
+	}
+
+	return nil
+}
+
 func (s *AuthService) GenerateJWT(user *model.User) (string, error) {
 	claims := jwt.MapClaims{
 		"user_id": user.ID,
diff --git a/internal/ui/layouts/app.templ b/internal/ui/layouts/app.templ
index 48f55a4..416c54f 100644
--- a/internal/ui/layouts/app.templ
+++ b/internal/ui/layouts/app.templ
@@ -146,14 +146,14 @@ templ AppSidebarDropdown(user *model.User, profile *model.Profile) {
 				}
 			</div>
 			@dropdown.Separator()
-			<!-- @dropdown.Item(dropdown.ItemProps{ -->
-			<!-- 	Href: "/app/settings", -->
-			<!-- }) { -->
-			<!-- 	<span class="flex items-center"> -->
-			<!-- 		@icon.Settings(icon.Props{Size: 16, Class: "mr-2"}) -->
-			<!-- 		Settings -->
-			<!-- 	</span> -->
-			<!-- } -->
+			@dropdown.Item(dropdown.ItemProps{
+				Href: "/app/settings",
+			}) {
+				<span class="flex items-center">
+					@icon.Settings(icon.Props{Size: 16, Class: "mr-2"})
+					Settings
+				</span>
+			}
 			<form action="/auth/logout" method="POST" class="contents">
 				@csrf.Token()
 				@dropdown.Item(dropdown.ItemProps{
diff --git a/internal/ui/pages/app_settings.templ b/internal/ui/pages/app_settings.templ
new file mode 100644
index 0000000..4d16adf
--- /dev/null
+++ b/internal/ui/pages/app_settings.templ
@@ -0,0 +1,106 @@
+package pages
+
+import (
+	"git.juancwu.dev/juancwu/budgit/internal/ui/layouts"
+	"git.juancwu.dev/juancwu/budgit/internal/ui/components/button"
+	"git.juancwu.dev/juancwu/budgit/internal/ui/components/csrf"
+	"git.juancwu.dev/juancwu/budgit/internal/ui/components/form"
+	"git.juancwu.dev/juancwu/budgit/internal/ui/components/input"
+	"git.juancwu.dev/juancwu/budgit/internal/ui/components/label"
+	"git.juancwu.dev/juancwu/budgit/internal/ui/components/card"
+)
+
+templ AppSettings(hasPassword bool, errorMsg string) {
+	@layouts.App("Settings") {
+		<div class="container max-w-2xl px-6 py-8">
+			<div class="mb-8">
+				<h1 class="text-3xl font-bold">Settings</h1>
+				<p class="text-muted-foreground mt-2">Manage your account settings</p>
+			</div>
+			@card.Card() {
+				@card.Header() {
+					@card.Title() {
+						if hasPassword {
+							Change Password
+						} else {
+							Set Password
+						}
+					}
+					@card.Description() {
+						if hasPassword {
+							Update your existing password
+						} else {
+							Set a password to sign in without a magic link
+						}
+					}
+				}
+				@card.Content() {
+					<form action="/app/settings/password" method="POST" class="space-y-4">
+						@csrf.Token()
+						if hasPassword {
+							@form.Item() {
+								@label.Label(label.Props{
+									For:   "current_password",
+									Class: "block mb-2",
+								}) {
+									Current Password
+								}
+								@input.Input(input.Props{
+									ID:          "current_password",
+									Name:        "current_password",
+									Type:        input.TypePassword,
+									Placeholder: "••••••••",
+									HasError:    errorMsg != "",
+								})
+							}
+						}
+						@form.Item() {
+							@label.Label(label.Props{
+								For:   "new_password",
+								Class: "block mb-2",
+							}) {
+								New Password
+							}
+							@input.Input(input.Props{
+								ID:          "new_password",
+								Name:        "new_password",
+								Type:        input.TypePassword,
+								Placeholder: "••••••••",
+								HasError:    errorMsg != "",
+							})
+						}
+						@form.Item() {
+							@label.Label(label.Props{
+								For:   "confirm_password",
+								Class: "block mb-2",
+							}) {
+								Confirm Password
+							}
+							@input.Input(input.Props{
+								ID:          "confirm_password",
+								Name:        "confirm_password",
+								Type:        input.TypePassword,
+								Placeholder: "••••••••",
+								HasError:    errorMsg != "",
+							})
+							if errorMsg != "" {
+								@form.Message(form.MessageProps{Variant: form.MessageVariantError}) {
+									{ errorMsg }
+								}
+							}
+						}
+						@button.Button(button.Props{
+							Type: button.TypeSubmit,
+						}) {
+							if hasPassword {
+								Change Password
+							} else {
+								Set Password
+							}
+						}
+					</form>
+				}
+			}
+		</div>
+	}
+}
diff --git a/internal/validation/password.go b/internal/validation/password.go
new file mode 100644
index 0000000..aa7743e
--- /dev/null
+++ b/internal/validation/password.go
@@ -0,0 +1,15 @@
+package validation
+
+import "errors"
+
+func ValidatePassword(password string) error {
+	if password == "" {
+		return errors.New("password is required")
+	}
+
+	if len(password) < 12 {
+		return errors.New("password must be at least 12 characters")
+	}
+
+	return nil
+}