diff --git a/the-matrix/index.html b/the-matrix/index.html
index b5fac26..3308a8c 100644
--- a/the-matrix/index.html
+++ b/the-matrix/index.html
@@ -71,6 +71,15 @@
       pointer-events: none; z-index: 10;
     }
     .log-entry { opacity: 0.7; white-space: nowrap; overflow: hidden; text-overflow: ellipsis; }
+    #clear-history-btn {
+      position: fixed; bottom: 80px; left: 300px;
+      background: transparent; border: 1px solid #1a1a2e;
+      color: #334466; font-family: 'Courier New', monospace;
+      font-size: 9px; letter-spacing: 1px; padding: 2px 8px;
+      cursor: pointer; z-index: 10;
+      transition: color 0.2s, border-color 0.2s;
+    }
+    #clear-history-btn:hover { color: #6688bb; border-color: #4466aa; }
 
     /* ── Top button bar ───────────────────────────────────────────────── */
     #top-buttons {
@@ -495,6 +504,7 @@
 
   <div id="connection-status">OFFLINE</div>
   <div id="event-log"></div>
+  <button id="clear-history-btn">CLEAR HISTORY</button>
 
   <!-- ── Timmy identity card ────────────────────────────────────────── -->
   <div id="timmy-id-card">
diff --git a/the-matrix/js/session.js b/the-matrix/js/session.js
index bfaedf7..78b17cb 100644
--- a/the-matrix/js/session.js
+++ b/the-matrix/js/session.js
@@ -13,7 +13,7 @@
  */
 
 import { setSpeechBubble, setMood } from './agents.js';
-import { appendSystemMessage, setSessionSendHandler, setInputBarSessionMode } from './ui.js';
+import { appendSystemMessage, appendChatMessage, setSessionSendHandler, setInputBarSessionMode } from './ui.js';
 import { getOrRefreshToken } from './nostr-identity.js';
 import { sentiment } from './edge-worker-client.js';
 
@@ -110,7 +110,7 @@ export async function sessionSendHandler(text) {
 
   _inFlight = true;
   _setSendBusy(true);
-  appendSystemMessage(`you: ${text}`);
+  appendChatMessage('you', `you: ${text}`, null, 'timmy');
 
   // Attach Nostr token if available
   const nostrToken = await getOrRefreshToken('/api');
@@ -158,7 +158,7 @@ export async function sessionSendHandler(text) {
 
     const reply = data.result || data.reason || '…';
     setSpeechBubble(reply);
-    appendSystemMessage('Timmy: ' + reply.slice(0, 80));
+    appendChatMessage('Timmy', 'Timmy: ' + reply.slice(0, 80), null, 'timmy');
 
     // Sentiment-driven mood on inbound Timmy reply
     sentiment(reply).then(s => {
diff --git a/the-matrix/js/ui.js b/the-matrix/js/ui.js
index b646057..fd8ccc3 100644
--- a/the-matrix/js/ui.js
+++ b/the-matrix/js/ui.js
@@ -138,6 +138,15 @@ export function initUI() {
   if (uiInitialized) return;
   uiInitialized = true;
   initInputBar();
+  // Restore chat history from localStorage on load
+  renderChatHistory('timmy');
+  // Wire up Clear History button
+  const $clearBtn = document.getElementById('clear-history-btn');
+  if ($clearBtn) {
+    $clearBtn.addEventListener('click', () => {
+      clearChatHistory('timmy');
+    });
+  }
 }
 
 function initInputBar() {
@@ -159,7 +168,8 @@ function initInputBar() {
 
     if (cls.complexity === 'trivial' && cls.localReply) {
       // Greeting / small-talk → answer locally, 0 sats, no network call in any mode
-      appendSystemMessage(`you: ${text}`);
+      appendChatMessage('you', `you: ${text}`, null, 'timmy');
+      appendChatMessage('timmy', `${cls.localReply} ⚡ local`, null, 'timmy');
       setSpeechBubble(`${cls.localReply} ⚡ local`);
       _showCostPreview('answered locally ⚡ 0 sats', '#44dd88');
       setTimeout(_hideCostPreview, 3000);
@@ -184,7 +194,7 @@ function initInputBar() {
 
     // Route to server via WebSocket
     sendVisitorMessage(text);
-    appendSystemMessage(`you: ${text}`);
+    appendChatMessage('you', `you: ${text}`, null, 'timmy');
   }
 
   $sendBtn.addEventListener('click', send);
@@ -226,9 +236,81 @@ export function appendSystemMessage(text) {
 }
 
 export function appendChatMessage(agentLabel, message, cssColor, agentId) {
-  void agentLabel; void cssColor; void agentId;
-  appendSystemMessage(message);
+  const id = agentId || 'timmy';
+  const entry = { agentLabel, message, cssColor, agentId: id, timestamp: Date.now() };
+  const history = loadChatHistory(id);
+  history.push(entry);
+  saveChatHistory(id, history);
+  _renderChatEntry(entry);
 }
 
-export function loadChatHistory() { return []; }
-export function saveChatHistory() {}
+// ── Chat history persistence (localStorage, 100-msg cap per agent) ───────────
+
+const CHAT_MAX = 100;
+
+function _chatKey(agentId) {
+  return `matrix:chat:${agentId}`;
+}
+
+export function loadChatHistory(agentId) {
+  try {
+    const raw = localStorage.getItem(_chatKey(agentId));
+    if (!raw) return [];
+    const parsed = JSON.parse(raw);
+    return Array.isArray(parsed) ? parsed : [];
+  } catch {
+    return [];
+  }
+}
+
+export function saveChatHistory(agentId, messages) {
+  const capped = messages.length > CHAT_MAX
+    ? messages.slice(messages.length - CHAT_MAX)
+    : messages;
+  try {
+    localStorage.setItem(_chatKey(agentId), JSON.stringify(capped));
+  } catch { /* storage full — silently drop */ }
+}
+
+export function clearChatHistory(agentId) {
+  localStorage.removeItem(_chatKey(agentId));
+  // Clear rendered log entries
+  if ($log) {
+    while ($log.firstChild) $log.removeChild($log.firstChild);
+    logEntries.length = 0;
+  }
+}
+
+function _formatTimestamp(ts) {
+  const d = new Date(ts);
+  const hh = String(d.getHours()).padStart(2, '0');
+  const mm = String(d.getMinutes()).padStart(2, '0');
+  return `${hh}:${mm}`;
+}
+
+function _renderChatEntry(entry) {
+  if (!$log) return;
+  const el = document.createElement('div');
+  el.className = 'log-entry';
+  const time = entry.timestamp ? `[${_formatTimestamp(entry.timestamp)}] ` : '';
+  el.textContent = `${time}${entry.message}`;
+  if (entry.cssColor) el.style.color = entry.cssColor;
+  logEntries.push(el);
+  if (logEntries.length > MAX_LOG) {
+    const removed = logEntries.shift();
+    $log.removeChild(removed);
+  }
+  $log.appendChild(el);
+  $log.scrollTop = $log.scrollHeight;
+}
+
+/**
+ * Render stored chat history for an agent into the event log.
+ * Call on panel open / page load to restore conversation continuity.
+ */
+export function renderChatHistory(agentId) {
+  const history = loadChatHistory(agentId);
+  for (const entry of history) {
+    _renderChatEntry(entry);
+  }
+}
diff --git a/the-matrix/js/websocket.js b/the-matrix/js/websocket.js
index 8ef4a04..0cdcb86 100644
--- a/the-matrix/js/websocket.js
+++ b/the-matrix/js/websocket.js
@@ -1,5 +1,5 @@
 import { setAgentState, setSpeechBubble, applyAgentStates, setMood } from './agents.js';
-import { appendSystemMessage } from './ui.js';
+import { appendSystemMessage, appendChatMessage } from './ui.js';
 import { sentiment } from './edge-worker-client.js';
 import { setLabelState } from './hud-labels.js';
 
@@ -110,9 +110,9 @@ function handleMessage(msg) {
 
     case 'chat': {
       if (msg.agentId === 'timmy') {
-        // Timmy's AI reply: show in speech bubble + event log
+        // Timmy's AI reply: show in speech bubble + persist to chat history
         if (msg.text) setSpeechBubble(msg.text);
-        appendSystemMessage('Timmy: ' + (msg.text || '').slice(0, 80));
+        appendChatMessage('Timmy', 'Timmy: ' + (msg.text || '').slice(0, 80), null, 'timmy');
         // Sentiment-driven facial expression on inbound Timmy messages
         if (msg.text) {
           sentiment(msg.text).then(s => {
@@ -122,7 +122,7 @@ function handleMessage(msg) {
         }
       } else if (msg.agentId === 'visitor') {
         // Another visitor's message: event log only (don't hijack the speech bubble)
-        appendSystemMessage((msg.text || '').slice(0, 80));
+        appendChatMessage('visitor', (msg.text || '').slice(0, 80), null, 'timmy');
       } else {
         // System agent messages (delta payment confirmations, etc.): speech bubble
         if (msg.text) setSpeechBubble(msg.text);