diff --git a/src/hooks.server.ts b/src/hooks.server.ts
index 62e8b89..2a783ef 100644
--- a/src/hooks.server.ts
+++ b/src/hooks.server.ts
@@ -64,9 +64,38 @@ try {
 }
 
 // ---------------------------------------------------------------------------
-// Request handler (pass-through)
+// CORS headers applied to all /api/* responses
+// ---------------------------------------------------------------------------
+
+const CORS_HEADERS = {
+	'Access-Control-Allow-Origin': '*',
+	'Access-Control-Allow-Methods': 'GET, POST, PATCH, DELETE, OPTIONS',
+	'Access-Control-Allow-Headers': 'Content-Type, Authorization'
+} as const;
+
+// ---------------------------------------------------------------------------
+// Request handler — CORS + pass-through
 // ---------------------------------------------------------------------------
 
 export const handle: Handle = async ({ event, resolve }) => {
-	return resolve(event);
+	const { pathname } = event.url;
+
+	// Handle CORS pre-flight for all API routes.
+	if (event.request.method === 'OPTIONS' && pathname.startsWith('/api/')) {
+		return new Response(null, {
+			status: 204,
+			headers: CORS_HEADERS
+		});
+	}
+
+	const response = await resolve(event);
+
+	// Attach CORS headers to all API responses.
+	if (pathname.startsWith('/api/')) {
+		for (const [key, value] of Object.entries(CORS_HEADERS)) {
+			response.headers.set(key, value);
+		}
+	}
+
+	return response;
 };
diff --git a/src/lib/server/api/formatters.test.ts b/src/lib/server/api/formatters.test.ts
new file mode 100644
index 0000000..9f90884
--- /dev/null
+++ b/src/lib/server/api/formatters.test.ts
@@ -0,0 +1,277 @@
+/**
+ * Unit tests for API formatters (TRUEREF-0010).
+ *
+ * Covers state mapping, library search JSON formatting, and context
+ * JSON/txt response formatting.
+ */
+
+import { describe, it, expect } from 'vitest';
+import {
+	mapState,
+	formatLibrarySearchJson,
+	formatContextJson,
+	formatContextTxt
+} from './formatters';
+import type { LibrarySearchResult } from '$lib/server/search/search.service';
+import type { SnippetSearchResult } from '$lib/server/search/search.service';
+import type { Repository, RepositoryVersion, Snippet } from '$lib/types';
+
+// ---------------------------------------------------------------------------
+// Helpers
+// ---------------------------------------------------------------------------
+
+function makeRepo(overrides: Partial<Repository> = {}): Repository {
+	return {
+		id: '/facebook/react',
+		title: 'React',
+		description: 'A JavaScript library for building user interfaces',
+		source: 'github',
+		sourceUrl: 'https://github.com/facebook/react',
+		branch: 'main',
+		state: 'indexed',
+		totalSnippets: 1247,
+		totalTokens: 142000,
+		trustScore: 9.2,
+		benchmarkScore: 87,
+		stars: 228000,
+		githubToken: null,
+		lastIndexedAt: new Date('2026-03-22T10:00:00Z'),
+		createdAt: new Date('2024-01-01T00:00:00Z'),
+		updatedAt: new Date('2026-03-22T10:00:00Z'),
+		...overrides
+	};
+}
+
+function makeVersion(tag: string): RepositoryVersion {
+	return {
+		id: `/facebook/react/${tag}`,
+		repositoryId: '/facebook/react',
+		tag,
+		title: null,
+		state: 'indexed',
+		totalSnippets: 100,
+		indexedAt: new Date(),
+		createdAt: new Date()
+	};
+}
+
+function makeSnippet(overrides: Partial<Snippet> = {}): Snippet {
+	return {
+		id: 'snippet-1',
+		documentId: 'doc-1',
+		repositoryId: '/facebook/react',
+		versionId: null,
+		type: 'code',
+		title: 'Basic Component',
+		content: 'function MyComponent() {\n  return <div>Hello</div>;\n}',
+		language: 'tsx',
+		breadcrumb: 'Getting Started > Components',
+		tokenCount: 45,
+		createdAt: new Date(),
+		...overrides
+	};
+}
+
+function makeSnippetResult(snippet: Snippet): SnippetSearchResult {
+	return {
+		snippet,
+		score: -1.5,
+		repository: { id: snippet.repositoryId, title: 'React' }
+	};
+}
+
+// ---------------------------------------------------------------------------
+// mapState
+// ---------------------------------------------------------------------------
+
+describe('mapState', () => {
+	it('maps indexed → finalized', () => {
+		expect(mapState('indexed')).toBe('finalized');
+	});
+
+	it('maps pending → initial', () => {
+		expect(mapState('pending')).toBe('initial');
+	});
+
+	it('maps indexing → initial', () => {
+		expect(mapState('indexing')).toBe('initial');
+	});
+
+	it('maps error → error', () => {
+		expect(mapState('error')).toBe('error');
+	});
+});
+
+// ---------------------------------------------------------------------------
+// formatLibrarySearchJson
+// ---------------------------------------------------------------------------
+
+describe('formatLibrarySearchJson', () => {
+	it('returns results array with correct shape', () => {
+		const results: LibrarySearchResult[] = [
+			{
+				repository: makeRepo(),
+				versions: [makeVersion('v18.3.0'), makeVersion('v17.0.2')],
+				score: 150
+			}
+		];
+
+		const response = formatLibrarySearchJson(results);
+
+		expect(response.results).toHaveLength(1);
+		const r = response.results[0];
+		expect(r.id).toBe('/facebook/react');
+		expect(r.title).toBe('React');
+		expect(r.state).toBe('finalized');
+		expect(r.totalTokens).toBe(142000);
+		expect(r.totalSnippets).toBe(1247);
+		expect(r.versions).toEqual(['v18.3.0', 'v17.0.2']);
+		expect(r.stars).toBe(228000);
+		expect(r.lastUpdateDate).toBe('2026-03-22T10:00:00.000Z');
+		expect(r.source).toBe('https://github.com/facebook/react');
+	});
+
+	it('returns empty results array when no results', () => {
+		const response = formatLibrarySearchJson([]);
+		expect(response.results).toEqual([]);
+	});
+
+	it('maps non-indexed state to initial', () => {
+		const results: LibrarySearchResult[] = [
+			{ repository: makeRepo({ state: 'pending' }), versions: [], score: 0 }
+		];
+		const response = formatLibrarySearchJson(results);
+		expect(response.results[0].state).toBe('initial');
+	});
+
+	it('handles null lastIndexedAt', () => {
+		const results: LibrarySearchResult[] = [
+			{ repository: makeRepo({ lastIndexedAt: null }), versions: [], score: 0 }
+		];
+		const response = formatLibrarySearchJson(results);
+		expect(response.results[0].lastUpdateDate).toBeNull();
+	});
+});
+
+// ---------------------------------------------------------------------------
+// formatContextJson
+// ---------------------------------------------------------------------------
+
+describe('formatContextJson', () => {
+	it('formats code snippets correctly', () => {
+		const snippet = makeSnippet({ type: 'code' });
+		const results = [makeSnippetResult(snippet)];
+
+		const response = formatContextJson(results, []);
+
+		expect(response.snippets).toHaveLength(1);
+		const s = response.snippets[0];
+		expect(s.type).toBe('code');
+		if (s.type === 'code') {
+			expect(s.title).toBe('Basic Component');
+			expect(s.language).toBe('tsx');
+			expect(s.codeList).toHaveLength(1);
+			expect(s.codeList[0].code).toContain('MyComponent');
+			expect(s.pageTitle).toBe('Getting Started');
+		}
+	});
+
+	it('formats info snippets correctly', () => {
+		const snippet = makeSnippet({
+			id: 'info-1',
+			type: 'info',
+			title: null,
+			content: 'React components let you split the UI...',
+			language: null,
+			breadcrumb: 'Core Concepts > Components'
+		});
+		const results = [makeSnippetResult(snippet)];
+
+		const response = formatContextJson(results, []);
+
+		const s = response.snippets[0];
+		expect(s.type).toBe('info');
+		if (s.type === 'info') {
+			expect(s.text).toContain('React components');
+			expect(s.breadcrumb).toBe('Core Concepts > Components');
+			expect(s.pageId).toBe('info-1');
+		}
+	});
+
+	it('includes rules in response', () => {
+		const rules = ['Always use functional components', 'Use hooks for state management'];
+		const response = formatContextJson([], rules);
+		expect(response.rules).toEqual(rules);
+	});
+
+	it('computes totalTokens correctly', () => {
+		const snippets = [
+			makeSnippetResult(makeSnippet({ id: 'a', tokenCount: 100 })),
+			makeSnippetResult(makeSnippet({ id: 'b', tokenCount: 200 }))
+		];
+		const response = formatContextJson(snippets, []);
+		expect(response.totalTokens).toBe(300);
+	});
+
+	it('handles null tokenCount in totalTokens sum', () => {
+		const snippets = [makeSnippetResult(makeSnippet({ tokenCount: null }))];
+		const response = formatContextJson(snippets, []);
+		expect(response.totalTokens).toBe(0);
+	});
+});
+
+// ---------------------------------------------------------------------------
+// formatContextTxt
+// ---------------------------------------------------------------------------
+
+describe('formatContextTxt', () => {
+	it('prepends rules section when rules are present', () => {
+		const rules = ['Always use functional components'];
+		const txt = formatContextTxt([], rules);
+		expect(txt).toContain('## Library Rules');
+		expect(txt).toContain('- Always use functional components');
+	});
+
+	it('omits rules section when no rules', () => {
+		const snippet = makeSnippet();
+		const txt = formatContextTxt([makeSnippetResult(snippet)], []);
+		expect(txt).not.toContain('## Library Rules');
+	});
+
+	it('formats code snippets with fenced code block', () => {
+		const snippet = makeSnippet({ type: 'code', language: 'tsx' });
+		const txt = formatContextTxt([makeSnippetResult(snippet)], []);
+		expect(txt).toContain('```tsx');
+		expect(txt).toContain('MyComponent');
+		expect(txt).toContain('```');
+	});
+
+	it('formats info snippets as plain text', () => {
+		const snippet = makeSnippet({
+			type: 'info',
+			content: 'React is a UI library.',
+			language: null
+		});
+		const txt = formatContextTxt([makeSnippetResult(snippet)], []);
+		expect(txt).toContain('React is a UI library.');
+		expect(txt).not.toContain('```');
+	});
+
+	it('includes breadcrumb as italic line', () => {
+		const snippet = makeSnippet({ breadcrumb: 'Getting Started > Components' });
+		const txt = formatContextTxt([makeSnippetResult(snippet)], []);
+		expect(txt).toContain('*Getting Started > Components*');
+	});
+
+	it('separates snippets with ---', () => {
+		const s1 = makeSnippetResult(makeSnippet({ id: 'a' }));
+		const s2 = makeSnippetResult(makeSnippet({ id: 'b', type: 'info', content: 'hello' }));
+		const txt = formatContextTxt([s1, s2], []);
+		expect(txt).toContain('---');
+	});
+
+	it('returns empty string for empty inputs with no rules', () => {
+		const txt = formatContextTxt([], []);
+		expect(txt).toBe('');
+	});
+});
diff --git a/src/lib/server/api/formatters.ts b/src/lib/server/api/formatters.ts
new file mode 100644
index 0000000..cdd64aa
--- /dev/null
+++ b/src/lib/server/api/formatters.ts
@@ -0,0 +1,237 @@
+/**
+ * Response formatters for the context7-compatible REST API.
+ *
+ * Provides two output shapes for each endpoint:
+ *   - JSON  (`type=json`, default): structured data for programmatic consumers.
+ *   - Text  (`type=txt`): plain Markdown formatted for direct LLM injection.
+ *
+ * State mapping (TrueRef → context7):
+ *   pending  → initial
+ *   indexing → initial
+ *   indexed  → finalized
+ *   error    → error
+ */
+
+import type { Repository, RepositoryVersion, Snippet } from '$lib/types';
+import type { LibrarySearchResult } from '$lib/server/search/search.service';
+import type { SnippetSearchResult } from '$lib/server/search/search.service';
+
+// ---------------------------------------------------------------------------
+// State mapping
+// ---------------------------------------------------------------------------
+
+type TrueRefState = 'pending' | 'indexing' | 'indexed' | 'error';
+type Context7State = 'initial' | 'finalized' | 'error';
+
+export function mapState(state: TrueRefState): Context7State {
+	switch (state) {
+		case 'indexed':
+			return 'finalized';
+		case 'error':
+			return 'error';
+		default:
+			return 'initial';
+	}
+}
+
+// ---------------------------------------------------------------------------
+// CORS headers
+// ---------------------------------------------------------------------------
+
+export const CORS_HEADERS = {
+	'Access-Control-Allow-Origin': '*',
+	'Access-Control-Allow-Methods': 'GET, POST, PATCH, DELETE, OPTIONS',
+	'Access-Control-Allow-Headers': 'Content-Type, Authorization'
+} as const;
+
+// ---------------------------------------------------------------------------
+// /api/v1/libs/search — JSON response shape
+// ---------------------------------------------------------------------------
+
+export interface LibrarySearchJsonResult {
+	id: string;
+	title: string;
+	description: string | null;
+	branch: string | null;
+	lastUpdateDate: string | null;
+	state: Context7State;
+	totalTokens: number | null;
+	totalSnippets: number | null;
+	stars: number | null;
+	trustScore: number | null;
+	benchmarkScore: number | null;
+	versions: string[];
+	source: string;
+}
+
+export interface LibrarySearchJsonResponse {
+	results: LibrarySearchJsonResult[];
+}
+
+/**
+ * Convert internal LibrarySearchResult[] to the context7-compatible JSON body.
+ */
+export function formatLibrarySearchJson(results: LibrarySearchResult[]): LibrarySearchJsonResponse {
+	return {
+		results: results.map(({ repository, versions }) =>
+			formatSingleLibraryJson(repository, versions)
+		)
+	};
+}
+
+export function formatSingleLibraryJson(
+	repository: Repository,
+	versions: RepositoryVersion[]
+): LibrarySearchJsonResult {
+	return {
+		id: repository.id,
+		title: repository.title,
+		description: repository.description ?? null,
+		branch: repository.branch ?? null,
+		lastUpdateDate: repository.lastIndexedAt ? repository.lastIndexedAt.toISOString() : null,
+		state: mapState(repository.state as TrueRefState),
+		totalTokens: repository.totalTokens ?? null,
+		totalSnippets: repository.totalSnippets ?? null,
+		stars: repository.stars ?? null,
+		trustScore: repository.trustScore ?? null,
+		benchmarkScore: repository.benchmarkScore ?? null,
+		versions: versions.map((v) => v.tag),
+		source: repository.sourceUrl
+	};
+}
+
+// ---------------------------------------------------------------------------
+// /api/v1/context — JSON response shapes
+// ---------------------------------------------------------------------------
+
+export interface CodeListItem {
+	language: string;
+	code: string;
+}
+
+export interface CodeSnippetJson {
+	type: 'code';
+	title: string | null;
+	description: string | null;
+	language: string | null;
+	codeList: CodeListItem[];
+	id: string;
+	tokenCount: number | null;
+	pageTitle: string | null;
+}
+
+export interface InfoSnippetJson {
+	type: 'info';
+	text: string;
+	breadcrumb: string | null;
+	pageId: string;
+	tokenCount: number | null;
+}
+
+export type SnippetJson = CodeSnippetJson | InfoSnippetJson;
+
+export interface ContextJsonResponse {
+	snippets: SnippetJson[];
+	rules: string[];
+	totalTokens: number;
+}
+
+/**
+ * Convert a ranked list of snippets to the context7-compatible JSON body.
+ *
+ * @param snippets - Ranked snippet search results (already token-budget trimmed).
+ * @param rules    - Rules from `trueref.json` / `repository_configs`.
+ */
+export function formatContextJson(
+	snippets: SnippetSearchResult[],
+	rules: string[]
+): ContextJsonResponse {
+	const mapped: SnippetJson[] = snippets.map(({ snippet }) => {
+		if (snippet.type === 'code') {
+			const codeSnippet: CodeSnippetJson = {
+				type: 'code',
+				title: snippet.title ?? null,
+				description: snippet.breadcrumb ?? null,
+				language: snippet.language ?? null,
+				codeList: [
+					{
+						language: snippet.language ?? '',
+						code: snippet.content
+					}
+				],
+				id: snippet.id,
+				tokenCount: snippet.tokenCount ?? null,
+				pageTitle: extractPageTitle(snippet.breadcrumb)
+			};
+			return codeSnippet;
+		} else {
+			const infoSnippet: InfoSnippetJson = {
+				type: 'info',
+				text: snippet.content,
+				breadcrumb: snippet.breadcrumb ?? null,
+				pageId: snippet.id,
+				tokenCount: snippet.tokenCount ?? null
+			};
+			return infoSnippet;
+		}
+	});
+
+	const totalTokens = snippets.reduce((sum, { snippet }) => sum + (snippet.tokenCount ?? 0), 0);
+
+	return {
+		snippets: mapped,
+		rules,
+		totalTokens
+	};
+}
+
+/**
+ * Extract the top-level page title from a breadcrumb string.
+ * e.g. "Getting Started > Components" → "Getting Started"
+ */
+function extractPageTitle(breadcrumb: string | null | undefined): string | null {
+	if (!breadcrumb) return null;
+	const parts = breadcrumb.split('>');
+	return parts[0].trim() || null;
+}
+
+// ---------------------------------------------------------------------------
+// /api/v1/context — txt response
+// ---------------------------------------------------------------------------
+
+/**
+ * Format snippets as plain Markdown text suitable for direct LLM injection.
+ *
+ * @param snippets - Ranked snippet search results (already token-budget trimmed).
+ * @param rules    - Rules from `trueref.json` / `repository_configs`.
+ */
+export function formatContextTxt(snippets: SnippetSearchResult[], rules: string[]): string {
+	const parts: string[] = [];
+
+	if (rules.length > 0) {
+		parts.push('## Library Rules\n' + rules.map((r) => `- ${r}`).join('\n'));
+		parts.push('---');
+	}
+
+	for (const { snippet } of snippets) {
+		const section: string[] = [];
+
+		if (snippet.type === 'code') {
+			if (snippet.title) section.push(`### ${snippet.title}`);
+			if (snippet.breadcrumb) section.push(`*${snippet.breadcrumb}*`);
+			section.push(`\`\`\`${snippet.language ?? ''}\n${snippet.content}\n\`\`\``);
+		} else {
+			if (snippet.title) section.push(`### ${snippet.title}`);
+			if (snippet.breadcrumb) section.push(`*${snippet.breadcrumb}*`);
+			section.push(snippet.content);
+		}
+
+		parts.push(section.filter(Boolean).join('\n'));
+		parts.push('---');
+	}
+
+	// Remove trailing separator
+	if (parts.at(-1) === '---') parts.pop();
+
+	return parts.join('\n\n');
+}
diff --git a/src/lib/server/api/library-id.test.ts b/src/lib/server/api/library-id.test.ts
new file mode 100644
index 0000000..abfb505
--- /dev/null
+++ b/src/lib/server/api/library-id.test.ts
@@ -0,0 +1,48 @@
+/**
+ * Unit tests for parseLibraryId (TRUEREF-0010).
+ */
+
+import { describe, it, expect } from 'vitest';
+import { parseLibraryId } from './library-id';
+
+describe('parseLibraryId', () => {
+	it('parses /owner/repo (default branch)', () => {
+		const result = parseLibraryId('/facebook/react');
+		expect(result.repositoryId).toBe('/facebook/react');
+		expect(result.version).toBeUndefined();
+	});
+
+	it('parses /owner/repo/version', () => {
+		const result = parseLibraryId('/facebook/react/v18.3.0');
+		expect(result.repositoryId).toBe('/facebook/react');
+		expect(result.version).toBe('v18.3.0');
+	});
+
+	it('parses /owner/repo/version with dot-separated version', () => {
+		const result = parseLibraryId('/sveltejs/svelte/4.0.0');
+		expect(result.repositoryId).toBe('/sveltejs/svelte');
+		expect(result.version).toBe('4.0.0');
+	});
+
+	it('parses /owner/repo/branch-name as version', () => {
+		const result = parseLibraryId('/vercel/next.js/canary');
+		expect(result.repositoryId).toBe('/vercel/next.js');
+		expect(result.version).toBe('canary');
+	});
+
+	it('throws on missing leading slash', () => {
+		expect(() => parseLibraryId('facebook/react')).toThrow('Invalid libraryId');
+	});
+
+	it('throws on empty string', () => {
+		expect(() => parseLibraryId('')).toThrow('Invalid libraryId');
+	});
+
+	it('throws on single-segment path', () => {
+		expect(() => parseLibraryId('/react')).toThrow('Invalid libraryId');
+	});
+
+	it('throws on path with only a slash', () => {
+		expect(() => parseLibraryId('/')).toThrow('Invalid libraryId');
+	});
+});
diff --git a/src/lib/server/api/library-id.ts b/src/lib/server/api/library-id.ts
new file mode 100644
index 0000000..c25f299
--- /dev/null
+++ b/src/lib/server/api/library-id.ts
@@ -0,0 +1,32 @@
+/**
+ * Library ID parsing utilities.
+ *
+ * Parses the `libraryId` query parameter used by the context7-compatible API.
+ * Supports two formats:
+ *   - /owner/repo           (default branch)
+ *   - /owner/repo/version   (specific version tag)
+ */
+
+export interface ParsedLibraryId {
+	/** The canonical repository ID, e.g. "/facebook/react" */
+	repositoryId: string;
+	/** The version tag, e.g. "v18.3.0" — absent for default branch queries */
+	version?: string;
+}
+
+/**
+ * Parse a libraryId string into its constituent parts.
+ *
+ * @throws Error when the string does not match the expected pattern.
+ */
+export function parseLibraryId(libraryId: string): ParsedLibraryId {
+	const match = libraryId.match(/^(\/[^/]+\/[^/]+)(\/(.+))?$/);
+	if (!match) {
+		throw new Error(`Invalid libraryId: ${libraryId}`);
+	}
+
+	return {
+		repositoryId: match[1],
+		version: match[3]
+	};
+}
diff --git a/src/lib/server/api/token-budget.test.ts b/src/lib/server/api/token-budget.test.ts
new file mode 100644
index 0000000..423aa9c
--- /dev/null
+++ b/src/lib/server/api/token-budget.test.ts
@@ -0,0 +1,75 @@
+/**
+ * Unit tests for selectSnippetsWithinBudget (TRUEREF-0010).
+ */
+
+import { describe, it, expect } from 'vitest';
+import { selectSnippetsWithinBudget, DEFAULT_TOKEN_BUDGET } from './token-budget';
+import type { Snippet } from '$lib/types';
+
+// ---------------------------------------------------------------------------
+// Helpers
+// ---------------------------------------------------------------------------
+
+function makeSnippet(id: string, tokenCount: number | null): Snippet {
+	return {
+		id,
+		documentId: 'doc-1',
+		repositoryId: '/test/repo',
+		versionId: null,
+		type: 'info',
+		title: null,
+		content: 'content',
+		language: null,
+		breadcrumb: null,
+		tokenCount,
+		createdAt: new Date()
+	};
+}
+
+// ---------------------------------------------------------------------------
+// Tests
+// ---------------------------------------------------------------------------
+
+describe('selectSnippetsWithinBudget', () => {
+	it('returns all snippets when total tokens are within budget', () => {
+		const snippets = [makeSnippet('a', 100), makeSnippet('b', 200), makeSnippet('c', 300)];
+		const result = selectSnippetsWithinBudget(snippets, 1000);
+		expect(result.map((s) => s.id)).toEqual(['a', 'b', 'c']);
+	});
+
+	it('stops adding when next snippet exceeds the budget', () => {
+		const snippets = [makeSnippet('a', 100), makeSnippet('b', 500), makeSnippet('c', 200)];
+		// budget = 550 → a (100) + b (500) = 600 exceeds; only a fits then b would push over
+		const result = selectSnippetsWithinBudget(snippets, 550);
+		// a(100) fits; a+b=600 > 550, stop
+		expect(result.map((s) => s.id)).toEqual(['a']);
+	});
+
+	it('includes exactly one snippet when it fits the budget precisely', () => {
+		const snippets = [makeSnippet('a', 100)];
+		const result = selectSnippetsWithinBudget(snippets, 100);
+		expect(result.map((s) => s.id)).toEqual(['a']);
+	});
+
+	it('returns empty array when first snippet already exceeds budget', () => {
+		const snippets = [makeSnippet('a', 200), makeSnippet('b', 50)];
+		const result = selectSnippetsWithinBudget(snippets, 100);
+		expect(result).toHaveLength(0);
+	});
+
+	it('treats null tokenCount as 0', () => {
+		const snippets = [makeSnippet('a', null), makeSnippet('b', null), makeSnippet('c', null)];
+		const result = selectSnippetsWithinBudget(snippets, 0);
+		// 0 + 0 = 0 which does NOT exceed 0, so all three pass
+		expect(result.map((s) => s.id)).toEqual(['a', 'b', 'c']);
+	});
+
+	it('returns empty array for empty input', () => {
+		const result = selectSnippetsWithinBudget([], 10_000);
+		expect(result).toHaveLength(0);
+	});
+
+	it('DEFAULT_TOKEN_BUDGET is 10000', () => {
+		expect(DEFAULT_TOKEN_BUDGET).toBe(10_000);
+	});
+});
diff --git a/src/lib/server/api/token-budget.ts b/src/lib/server/api/token-budget.ts
new file mode 100644
index 0000000..27da49e
--- /dev/null
+++ b/src/lib/server/api/token-budget.ts
@@ -0,0 +1,36 @@
+/**
+ * Token budget selection for context responses.
+ *
+ * Implements a greedy selection algorithm: snippets are added in ranked order
+ * until adding the next snippet would exceed the token budget.
+ */
+
+import type { Snippet } from '$lib/types';
+
+/**
+ * Select snippets from a ranked list up to a maximum token budget.
+ *
+ * Snippets are evaluated in order. A snippet is included when its token count
+ * does not push the running total past `maxTokens`. The loop halts at the
+ * first snippet that would exceed the budget.
+ *
+ * @param snippets  - Ranked list of snippets (best first).
+ * @param maxTokens - Inclusive upper bound on total token count.
+ * @returns The largest prefix of `snippets` whose combined token count
+ *          does not exceed `maxTokens`.
+ */
+export function selectSnippetsWithinBudget(snippets: Snippet[], maxTokens: number): Snippet[] {
+	const selected: Snippet[] = [];
+	let usedTokens = 0;
+
+	for (const snippet of snippets) {
+		if (usedTokens + (snippet.tokenCount ?? 0) > maxTokens) break;
+		selected.push(snippet);
+		usedTokens += snippet.tokenCount ?? 0;
+	}
+
+	return selected;
+}
+
+/** Default token budget when the caller does not specify `tokens`. */
+export const DEFAULT_TOKEN_BUDGET = 10_000;
diff --git a/src/routes/api/v1/context/+server.ts b/src/routes/api/v1/context/+server.ts
new file mode 100644
index 0000000..ee87e13
--- /dev/null
+++ b/src/routes/api/v1/context/+server.ts
@@ -0,0 +1,207 @@
+/**
+ * GET /api/v1/context
+ *
+ * Fetch documentation snippets for a library. Compatible with context7's
+ * GET /api/v2/context interface.
+ *
+ * Query parameters:
+ *   libraryId  (required) — e.g. "/facebook/react" or "/facebook/react/v18.3.0"
+ *   query      (required) — specific question about the library
+ *   type       (optional) — "json" (default) or "txt"
+ *   tokens     (optional) — approximate max token count (default 10000)
+ */
+
+import type { RequestHandler } from './$types';
+import { getClient } from '$lib/server/db/client';
+import { SearchService } from '$lib/server/search/search.service';
+import { HybridSearchService } from '$lib/server/search/hybrid.search.service';
+import { parseLibraryId } from '$lib/server/api/library-id';
+import { selectSnippetsWithinBudget, DEFAULT_TOKEN_BUDGET } from '$lib/server/api/token-budget';
+import {
+	formatContextJson,
+	formatContextTxt,
+	CORS_HEADERS
+} from '$lib/server/api/formatters';
+
+// ---------------------------------------------------------------------------
+// Helpers
+// ---------------------------------------------------------------------------
+
+function getServices() {
+	const db = getClient();
+	const searchService = new SearchService(db);
+	// No embedding provider — pure FTS5 mode (alpha=0 equivalent).
+	const hybridService = new HybridSearchService(db, searchService, null);
+	return { db, searchService, hybridService };
+}
+
+interface RawRepoConfig {
+	rules: string | null;
+}
+
+function getRules(db: ReturnType<typeof getClient>, repositoryId: string): string[] {
+	const row = db
+		.prepare<[string], RawRepoConfig>(`SELECT rules FROM repository_configs WHERE repository_id = ?`)
+		.get(repositoryId);
+
+	if (!row?.rules) return [];
+
+	try {
+		const parsed = JSON.parse(row.rules);
+		return Array.isArray(parsed) ? (parsed as string[]) : [];
+	} catch {
+		return [];
+	}
+}
+
+interface RawRepoState {
+	state: 'pending' | 'indexing' | 'indexed' | 'error';
+	title: string;
+}
+
+// ---------------------------------------------------------------------------
+// Route handler
+// ---------------------------------------------------------------------------
+
+export const GET: RequestHandler = async ({ url }) => {
+	const libraryId = url.searchParams.get('libraryId');
+
+	if (!libraryId || !libraryId.trim()) {
+		return new Response(
+			JSON.stringify({ error: 'libraryId is required', code: 'MISSING_PARAMETER' }),
+			{
+				status: 400,
+				headers: { 'Content-Type': 'application/json', ...CORS_HEADERS }
+			}
+		);
+	}
+
+	const query = url.searchParams.get('query');
+
+	if (!query || !query.trim()) {
+		return new Response(
+			JSON.stringify({ error: 'query is required', code: 'MISSING_PARAMETER' }),
+			{
+				status: 400,
+				headers: { 'Content-Type': 'application/json', ...CORS_HEADERS }
+			}
+		);
+	}
+
+	const responseType = url.searchParams.get('type') ?? 'json';
+	const tokensRaw = parseInt(url.searchParams.get('tokens') ?? String(DEFAULT_TOKEN_BUDGET), 10);
+	const maxTokens = isNaN(tokensRaw) || tokensRaw < 1 ? DEFAULT_TOKEN_BUDGET : tokensRaw;
+
+	// Parse the libraryId
+	let parsed: ReturnType<typeof parseLibraryId>;
+	try {
+		parsed = parseLibraryId(libraryId);
+	} catch {
+		return new Response(
+			JSON.stringify({ error: `Invalid libraryId: ${libraryId}`, code: 'MISSING_PARAMETER' }),
+			{
+				status: 400,
+				headers: { 'Content-Type': 'application/json', ...CORS_HEADERS }
+			}
+		);
+	}
+
+	try {
+		const { db, hybridService } = getServices();
+
+		// Verify the repository exists and check its state.
+		const repo = db
+			.prepare<[string], RawRepoState>(`SELECT state, title FROM repositories WHERE id = ?`)
+			.get(parsed.repositoryId);
+
+		if (!repo) {
+			return new Response(
+				JSON.stringify({
+					error: `Library ${parsed.repositoryId} not found or not yet indexed`,
+					code: 'LIBRARY_NOT_FOUND'
+				}),
+				{
+					status: 404,
+					headers: { 'Content-Type': 'application/json', ...CORS_HEADERS }
+				}
+			);
+		}
+
+		if (repo.state === 'indexing' || repo.state === 'pending') {
+			return new Response(
+				JSON.stringify({
+					error: 'Library is currently being indexed, please try again shortly',
+					code: 'INDEXING_IN_PROGRESS'
+				}),
+				{
+					status: 503,
+					headers: { 'Content-Type': 'application/json', ...CORS_HEADERS }
+				}
+			);
+		}
+
+		// Resolve version ID if a specific version was requested.
+		let versionId: string | undefined;
+		if (parsed.version) {
+			const versionRow = db
+				.prepare<[string, string], { id: string }>(
+					`SELECT id FROM repository_versions WHERE repository_id = ? AND tag = ?`
+				)
+				.get(parsed.repositoryId, parsed.version);
+
+			// Version not found is not fatal — fall back to default branch.
+			versionId = versionRow?.id;
+		}
+
+		// Execute hybrid search (falls back to FTS5 when no embedding provider is set).
+		const searchResults = await hybridService.search(query, {
+			repositoryId: parsed.repositoryId,
+			versionId,
+			limit: 50 // fetch more than needed; token budget will trim
+		});
+
+		// Apply token budget.
+		const snippets = searchResults.map((r) => r.snippet);
+		const selected = selectSnippetsWithinBudget(snippets, maxTokens);
+
+		// Re-wrap selected snippets as SnippetSearchResult for formatters.
+		const selectedResults = selected.map((snippet) => {
+			const found = searchResults.find((r) => r.snippet.id === snippet.id)!;
+			return found;
+		});
+
+		// Load rules from repository_configs.
+		const rules = getRules(db, parsed.repositoryId);
+
+		if (responseType === 'txt') {
+			const text = formatContextTxt(selectedResults, rules);
+			return new Response(text, {
+				status: 200,
+				headers: {
+					'Content-Type': 'text/plain; charset=utf-8',
+					...CORS_HEADERS
+				}
+			});
+		}
+
+		// Default: JSON
+		const body = formatContextJson(selectedResults, rules);
+		return new Response(JSON.stringify(body), {
+			status: 200,
+			headers: { 'Content-Type': 'application/json', ...CORS_HEADERS }
+		});
+	} catch (err) {
+		const message = err instanceof Error ? err.message : 'Internal server error';
+		return new Response(JSON.stringify({ error: message, code: 'INTERNAL_ERROR' }), {
+			status: 500,
+			headers: { 'Content-Type': 'application/json', ...CORS_HEADERS }
+		});
+	}
+};
+
+export const OPTIONS: RequestHandler = () => {
+	return new Response(null, {
+		status: 204,
+		headers: CORS_HEADERS
+	});
+};
diff --git a/src/routes/api/v1/libs/search/+server.ts b/src/routes/api/v1/libs/search/+server.ts
new file mode 100644
index 0000000..bf7c1c5
--- /dev/null
+++ b/src/routes/api/v1/libs/search/+server.ts
@@ -0,0 +1,64 @@
+/**
+ * GET /api/v1/libs/search
+ *
+ * Search libraries by name. Compatible with context7's
+ * GET /api/v2/libs/search interface.
+ *
+ * Query parameters:
+ *   libraryName  (required) — library name to search for
+ *   query        (optional) — user's question for relevance ranking
+ *   limit        (optional) — max results, default 10, max 50
+ *   type         (optional) — "json" (default) or "txt"
+ */
+
+import { json } from '@sveltejs/kit';
+import type { RequestHandler } from './$types';
+import { getClient } from '$lib/server/db/client';
+import { SearchService } from '$lib/server/search/search.service';
+import { formatLibrarySearchJson } from '$lib/server/api/formatters';
+import { CORS_HEADERS } from '$lib/server/api/formatters';
+
+function getService(): SearchService {
+	return new SearchService(getClient());
+}
+
+export const GET: RequestHandler = ({ url }) => {
+	const libraryName = url.searchParams.get('libraryName');
+
+	if (!libraryName || !libraryName.trim()) {
+		return new Response(
+			JSON.stringify({ error: 'libraryName is required', code: 'MISSING_PARAMETER' }),
+			{
+				status: 400,
+				headers: { 'Content-Type': 'application/json', ...CORS_HEADERS }
+			}
+		);
+	}
+
+	const query = url.searchParams.get('query') ?? undefined;
+	const limitRaw = parseInt(url.searchParams.get('limit') ?? '10', 10);
+	const limit = Math.min(isNaN(limitRaw) || limitRaw < 1 ? 10 : limitRaw, 50);
+
+	try {
+		const service = getService();
+		const results = service.searchRepositories({ libraryName, query, limit });
+		const body = formatLibrarySearchJson(results);
+
+		return json(body, {
+			headers: CORS_HEADERS
+		});
+	} catch (err) {
+		const message = err instanceof Error ? err.message : 'Internal server error';
+		return new Response(JSON.stringify({ error: message, code: 'INTERNAL_ERROR' }), {
+			status: 500,
+			headers: { 'Content-Type': 'application/json', ...CORS_HEADERS }
+		});
+	}
+};
+
+export const OPTIONS: RequestHandler = () => {
+	return new Response(null, {
+		status: 204,
+		headers: CORS_HEADERS
+	});
+};