feat(system-prompt): template-based system prompt builder extension

New @dispatch/system-prompt extension (standard tier):
- Pure parser: [type:name] variables, [if]/[else]/[endif] conditionals,
  negated [if !...], nested blocks, unmatched-tag pass-through.
- Variable resolver (injected adapters): system:time/date/os/hostname,
  prompt:cwd/model/conversation_id, git:branch/status, file:<path> (dynamic).
- Service handle: construct (resolve+persist) + get (cached, cache-safe).
- Default template: persona + AGENTS.md if exists + cwd.
- 52 tests (parser 29, resolver 12, catalog 3, service 8).

transport-contract 0.17.0→0.18.0: SystemPromptTemplateResponse,
SetSystemPromptTemplateRequest, SystemPromptVariable, SystemPromptVariablesResponse.

Design: notes/system-prompt-design.md (caching constraint, compaction
integration, wave plan). 1384 vitest pass.

18 files changed, 1505 insertions, 2 deletions

diff --git a/bun.lock b/bun.lock
index 1dbb882..e6da398 100644
--- a/bun.lock
+++ b/bun.lock
@@ -189,6 +189,14 @@
         "@dispatch/ui-contract": "workspace:*",
       },
     },
+    "packages/system-prompt": {
+      "name": "@dispatch/system-prompt",
+      "version": "0.0.0",
+      "dependencies": {
+        "@dispatch/kernel": "workspace:*",
+        "@dispatch/transport-contract": "workspace:*",
+      },
+    },
     "packages/throughput-store": {
       "name": "@dispatch/throughput-store",
       "version": "0.0.0",
@@ -260,7 +268,7 @@
     },
     "packages/transport-contract": {
       "name": "@dispatch/transport-contract",
-      "version": "0.16.0",
+      "version": "0.18.0",
       "dependencies": {
         "@dispatch/ui-contract": "workspace:*",
         "@dispatch/wire": "workspace:*",
@@ -357,6 +365,8 @@
 
     "@dispatch/surface-registry": ["@dispatch/surface-registry@workspace:packages/surface-registry"],
 
+    "@dispatch/system-prompt": ["@dispatch/system-prompt@workspace:packages/system-prompt"],
+
     "@dispatch/throughput-store": ["@dispatch/throughput-store@workspace:packages/throughput-store"],
 
     "@dispatch/todo": ["@dispatch/todo@workspace:packages/todo"],
diff --git a/notes/system-prompt-design.md b/notes/system-prompt-design.md
new file mode 100644
index 0000000..32e13e0
--- /dev/null
+++ b/notes/system-prompt-design.md
@@ -0,0 +1,213 @@
+# System Prompt Builder — design + plan
+
+> Orchestrator-authored plan. Drives the `prompts/<unit>.md` TASK blocks.
+> User-approved: all variable types, `[else]`, negated `[if !...]`, caching, compaction append.
+
+## 1. Goal
+
+A **template-based system prompt builder** that lets the user define a system prompt
+with variable placeholders (`[type:name]`) and conditionals (`[if]`/`[else]`/`[endif]`).
+Variables are resolved at **construction time** (not every turn) to preserve the prompt
+cache.
+
+Hard requirements:
+- Template persisted globally; resolved system prompt persisted **per conversation**.
+- **Cache-safe:** constructed once (first turn), reused on all subsequent turns.
+  Reconstructed only on **compaction** (fresh variable resolution).
+- Compaction appends its instructions to the constructed system prompt.
+- API: GET/PUT template, GET available variables.
+- Frontend: full-page modal (text editor + variable selector buttons).
+
+## 2. Template format
+
+### Variable insertion
+```
+[type:name]
+```
+Resolves the variable at construction time. Unknown type → blank string.
+Non-existent variable (e.g. file not found) → blank string.
+
+### Conditional blocks
+```
+[if type:name]
+  ...content if variable exists...
+[else]
+  ...content if variable does NOT exist...
+[endif]
+```
+Negated condition:
+```
+[if !type:name]
+  ...content if variable does NOT exist...
+[endif]
+```
+- Nested `[if]` blocks: supported.
+- Multi-line content between tags: supported.
+- Unmatched `[if]`/`[endif]`: treated as literal text (not parsed).
+
+### Edge cases
+- Unknown variable type (e.g. `[unknown:foo]`) → blank string.
+- File read failure → variable is "not existing" → blank string; `[if]` → skipped.
+- Empty template → no system prompt sent (current behavior preserved).
+
+## 3. Variable types
+
+| Type:Name | Description | Source |
+|---|---|---|
+| `system:time` | Current time (ISO 8601) | `new Date().toISOString()` |
+| `system:date` | Current date (YYYY-MM-DD) | derived from `new Date()` |
+| `system:os` | Operating system | `process.platform` |
+| `system:hostname` | Machine hostname | `require("node:os").hostname()` |
+| `prompt:cwd` | Conversation's working directory | passed from session-orchestrator |
+| `prompt:model` | Current model name | passed from session-orchestrator |
+| `prompt:conversation_id` | Conversation ID | passed from session-orchestrator |
+| `git:branch` | Current git branch | `git rev-parse --abbrev-ref HEAD` in cwd |
+| `git:status` | Short git status | `git status --short` in cwd |
+| `file:<path>` | File contents (relative to cwd, or absolute if starts `/`) | `fs.readText` |
+
+The `file:` type is **dynamic** — any path is a valid variable name. All others have
+fixed names. The `git:` variables require `spawn` capability; failures (not a git repo,
+git not installed) → variable is "not existing" → blank string.
+
+## 4. Caching constraint (critical)
+
+**The system prompt is constructed ONCE (on the first turn of a conversation) and
+persisted.** Subsequent turns reuse the persisted system prompt — no reconstruction.
+This preserves the prompt cache (the system prompt is part of the cacheable prefix).
+
+**Reconstruction happens only on compaction** (the conversation is being summarized,
+so fresh variable resolution makes sense — files may have changed, cwd may have changed,
+the time is stale).
+
+Flow:
+1. **First turn** (new conversation): session-orchestrator detects `getConversationMeta
+   === null` → calls `systemPromptService.construct(conversationId, cwd, {model})` →
+   resolves all variables → persists the result → returns the string → sets on
+   `providerOpts.systemPrompt`.
+2. **Subsequent turns:** session-orchestrator calls
+   `systemPromptService.get(conversationId)` → returns the persisted string (or null if
+   never constructed) → sets on `providerOpts.systemPrompt` (or omits if null).
+3. **Compaction turn:** session-orchestrator calls
+   `systemPromptService.construct(conversationId, cwd, {model})` → gets fresh resolved
+   system prompt → appends `COMPACTION_SYSTEM_PROMPT` → uses the combined string as the
+   compaction turn's system prompt. The `construct` call also persists the reconstructed
+   system prompt (without compaction instructions) for future turns.
+4. **Post-compaction turns:** session-orchestrator calls
+   `systemPromptService.get(conversationId)` → returns the reconstructed system prompt.
+
+Changing the template (via `PUT /system-prompt`) does NOT affect existing conversations
+until they are compacted. New conversations use the new template on their first turn.
+
+## 5. Default template
+
+When no template has been set, a built-in default is used:
+```
+You are a helpful coding assistant.
+
+[if file:AGENTS.md]
+[file:AGENTS.md]
+[endif]
+
+The current working directory is [prompt:cwd].
+```
+
+## 6. Architecture
+
+### `system-prompt` extension (new, standard tier)
+
+**Manifest:** `id: "system-prompt"`, `capabilities: { fs: true, spawn: true }`,
+`dependsOn: []` (depends only on kernel contracts).
+
+**Pure parser** (`parser.ts`):
+- `parseTemplate(template: string, resolvedVars: Map<string, string | null>): string`
+- Handles `[type:name]` insertion, `[if]`/`[else]`/`[endif]` conditionals, nesting.
+- Pure: input → output, no I/O. Fully testable with zero mocks.
+
+**Variable resolver** (`resolver.ts`):
+- `resolveVariables(cwd: string, context?: { model?: string; conversationId?: string }):
+  Promise<Map<string, string | null>>`
+- Reads files (`fs` capability), runs git commands (`spawn` capability), gets system
+  info. Injected adapters (same pattern as LSP extension).
+- Returns `Map<string, string | null>` — `null` means "not existing" (file not found,
+  git not available, etc.).
+
+**Variable catalog** (`catalog.ts`):
+- `getVariableCatalog(): SystemPromptVariable[]` — the static list of available variables
+  (for `GET /system-prompt/variables`). The `file:` type is marked `dynamic: true`.
+
+**Service handle** (`types.ts`):
+```ts
+export interface SystemPromptService {
+    construct(conversationId: string, cwd: string, context?: {
+        readonly model?: string;
+    }): Promise<string>;
+    get(conversationId: string): Promise<string | null>;
+}
+```
+- `construct`: reads the template from storage, resolves all variables, persists the
+  result under `system-prompt:resolved:<conversationId>`, returns the string.
+- `get`: reads the persisted result (or null).
+
+**Storage:**
+- Template: `host.storage("system-prompt")` key `"template"` (global).
+- Resolved system prompt: `host.storage("system-prompt")` key
+  `"resolved:<conversationId>"` (per conversation).
+
+### Session-orchestrator integration
+
+The session-orchestrator wires `systemPromptService` as an **optional dep** (same pattern
+as `message-queue` / `toolsFilter` — lazily via `host.getService(systemPromptHandle)` in
+`activate`). If the system-prompt extension isn't loaded, no system prompt is sent
+(current behavior preserved).
+
+Changes in `orchestrator.ts`:
+1. **Turn flow (~line 461):** after resolving `effectiveCwd`, determine if this is the
+   first turn (new conversation) or a subsequent turn:
+   - First turn (new conversation, detected via `getConversationMeta === null` already
+     checked earlier for workspace assignment): call
+     `deps.resolveSystemPrompt?.construct(conversationId, effectiveCwd, { model: modelName })`.
+   - Subsequent turns: call `deps.resolveSystemPrompt?.get(conversationId)`.
+   - If the result is non-null, set it on `providerOpts.systemPrompt`.
+2. **Compaction flow (~line 911):** currently sets `systemPrompt: COMPACTION_SYSTEM_PROMPT`.
+   Change to: call `deps.resolveSystemPrompt?.construct(conversationId, cwd, { model })` →
+   get the constructed system prompt → append `"\n\n" + COMPACTION_SYSTEM_PROMPT` → set on
+   `providerOpts.systemPrompt`. If the service is unavailable, fall back to just
+   `COMPACTION_SYSTEM_PROMPT` (current behavior).
+
+### API endpoints (transport-http)
+
+| Method | Path | Description |
+|---|---|---|
+| GET | `/system-prompt` | Returns `{ template: string }` |
+| PUT | `/system-prompt` | Body `{ template: string }` → persists, returns `{ template: string }` |
+| GET | `/system-prompt/variables` | Returns `{ variables: SystemPromptVariable[] }` |
+
+The transport-http extension calls the `systemPromptHandle` service for these (same
+pattern as `lspServiceHandle` for the LSP status endpoint). If the service is unavailable,
+`GET` returns the default template, `PUT` returns 503, `GET /variables` returns the
+static catalog.
+
+## 7. Units & waves
+
+### Wave 0 (orchestrator, contracts)
+- `transport-contract`: add `SystemPromptTemplateResponse`,
+  `SetSystemPromptTemplateRequest`, `SystemPromptVariable`,
+  `SystemPromptVariablesResponse`. Version bump.
+
+### Wave 1
+- `system-prompt` (NEW extension): pure parser + variable resolver + catalog + storage
+  + service handle. Depends only on kernel contracts. Tests: parser (pure, zero mocks),
+  resolver (injected adapters), catalog.
+
+### Wave 2 (parallel — disjoint packages)
+- `session-orchestrator`: wire `systemPromptService` as optional dep; construct on first
+  turn, get on subsequent, construct+append on compaction. + tests.
+- `transport-http`: add `GET/PUT /system-prompt` + `GET /system-prompt/variables` routes.
+  + tests.
+
+### Wave 3
+- `host-bin`: register `system-prompt` in `CORE_EXTENSIONS`.
+- Orchestrator: root tsconfig ref + `bun install`.
+
+### Wave 4
+- Full-graph verify + FE courier handoff.
diff --git a/packages/system-prompt/package.json b/packages/system-prompt/package.json
new file mode 100644
index 0000000..70ce940
--- /dev/null
+++ b/packages/system-prompt/package.json
@@ -0,0 +1,12 @@
+{
+	"name": "@dispatch/system-prompt",
+	"version": "0.0.0",
+	"type": "module",
+	"private": true,
+	"main": "dist/index.js",
+	"types": "dist/index.d.ts",
+	"dependencies": {
+		"@dispatch/kernel": "workspace:*",
+		"@dispatch/transport-contract": "workspace:*"
+	}
+}
diff --git a/packages/system-prompt/src/catalog.test.ts b/packages/system-prompt/src/catalog.test.ts
new file mode 100644
index 0000000..406455b
--- /dev/null
+++ b/packages/system-prompt/src/catalog.test.ts
@@ -0,0 +1,31 @@
+import { describe, expect, it } from "vitest";
+import { getVariableCatalog } from "./catalog.js";
+
+describe("catalog", () => {
+	it("lists all fixed variables", () => {
+		const catalog = getVariableCatalog();
+		const keys = catalog.map((v) => `${v.type}:${v.name}`);
+
+		expect(keys).toContain("system:time");
+		expect(keys).toContain("system:date");
+		expect(keys).toContain("system:os");
+		expect(keys).toContain("system:hostname");
+		expect(keys).toContain("prompt:cwd");
+		expect(keys).toContain("prompt:model");
+		expect(keys).toContain("prompt:conversation_id");
+		expect(keys).toContain("git:branch");
+		expect(keys).toContain("git:status");
+	});
+
+	it("marks the file type as dynamic", () => {
+		const fileVar = getVariableCatalog().find((v) => v.type === "file");
+		expect(fileVar).toBeDefined();
+		expect(fileVar?.dynamic).toBe(true);
+	});
+
+	it("every entry has a description", () => {
+		for (const v of getVariableCatalog()) {
+			expect(v.description.length).toBeGreaterThan(0);
+		}
+	});
+});
diff --git a/packages/system-prompt/src/catalog.ts b/packages/system-prompt/src/catalog.ts
new file mode 100644
index 0000000..cfa3bb1
--- /dev/null
+++ b/packages/system-prompt/src/catalog.ts
@@ -0,0 +1,28 @@
+/**
+ * Static catalog of available system-prompt variables.
+ *
+ * Returned by `GET /system-prompt/variables` so the frontend can render the
+ * variable selector buttons. The `file:` type is marked `dynamic: true` — any
+ * name (file path) is valid for it.
+ */
+import type { SystemPromptVariable } from "@dispatch/transport-contract";
+
+export function getVariableCatalog(): SystemPromptVariable[] {
+	return [
+		{ type: "system", name: "time", description: "Current time in ISO 8601 format" },
+		{ type: "system", name: "date", description: "Current date (YYYY-MM-DD)" },
+		{ type: "system", name: "os", description: "Operating system platform" },
+		{ type: "system", name: "hostname", description: "Machine hostname" },
+		{ type: "prompt", name: "cwd", description: "Conversation working directory" },
+		{ type: "prompt", name: "model", description: "Current model name" },
+		{ type: "prompt", name: "conversation_id", description: "Conversation identifier" },
+		{ type: "git", name: "branch", description: "Current git branch" },
+		{ type: "git", name: "status", description: "Short git status" },
+		{
+			type: "file",
+			name: "<path>",
+			description: "Contents of a file (relative to cwd, or absolute if it starts with /)",
+			dynamic: true,
+		},
+	];
+}
diff --git a/packages/system-prompt/src/extension.ts b/packages/system-prompt/src/extension.ts
new file mode 100644
index 0000000..7b6575d
--- /dev/null
+++ b/packages/system-prompt/src/extension.ts
@@ -0,0 +1,62 @@
+/**
+ * system-prompt extension — manifest + activate(host).
+ *
+ * Builds the service with real Bun-backed adapters (Bun.file for fs,
+ * Bun.spawn for git), persists the template + resolved prompts via a namespaced
+ * storage, and provides the service through `systemPromptHandle`.
+ */
+import type { Extension, HostAPI, Manifest } from "@dispatch/kernel";
+import type { GitSpawnResult, ResolverAdapters } from "./resolver.js";
+import { createSystemPromptService } from "./service.js";
+import { systemPromptHandle } from "./types.js";
+
+export const manifest: Manifest = {
+	id: "system-prompt",
+	name: "System Prompt",
+	version: "0.0.0",
+	apiVersion: "^0.1.0",
+	trust: "bundled",
+	activation: "eager",
+	dependsOn: [],
+	capabilities: { fs: true, spawn: true },
+	contributes: { services: ["system-prompt"] },
+};
+
+/** Run a command and capture stdout/stderr (used for git). */
+async function realSpawn(
+	command: readonly string[],
+	opts: { readonly cwd: string },
+): Promise<GitSpawnResult> {
+	const proc = Bun.spawn([...command], {
+		cwd: opts.cwd,
+		stdout: "pipe",
+		stderr: "pipe",
+	});
+	const [stdout, stderr, exitCode] = await Promise.all([
+		Bun.readableStreamToText(proc.stdout),
+		Bun.readableStreamToText(proc.stderr),
+		proc.exited,
+	]);
+	return { stdout, stderr, exitCode };
+}
+
+function realFs() {
+	return {
+		readText: async (path: string): Promise<string> => Bun.file(path).text(),
+		exists: async (path: string): Promise<boolean> => Bun.file(path).exists(),
+	};
+}
+
+const adapters: ResolverAdapters = { spawn: realSpawn, fs: realFs() };
+
+export function activate(host: HostAPI): void {
+	const storage = host.storage("system-prompt");
+	const service = createSystemPromptService({ storage, adapters });
+	host.provideService(systemPromptHandle, service);
+	host.logger.info("system-prompt: activated");
+}
+
+export const extension: Extension = {
+	manifest,
+	activate,
+};
diff --git a/packages/system-prompt/src/index.ts b/packages/system-prompt/src/index.ts
new file mode 100644
index 0000000..71cc434
--- /dev/null
+++ b/packages/system-prompt/src/index.ts
@@ -0,0 +1,16 @@
+export { getVariableCatalog } from "./catalog.js";
+export { extension, manifest } from "./extension.js";
+export { extractVariables, parseTemplate } from "./parser.js";
+export type {
+	GitSpawn,
+	GitSpawnResult,
+	ResolveOptions,
+	ResolverAdapters,
+	ResolverContext,
+	ResolverFs,
+} from "./resolver.js";
+export { resolveVariables } from "./resolver.js";
+export type { SystemPromptServiceDeps } from "./service.js";
+export { createSystemPromptService, DEFAULT_TEMPLATE } from "./service.js";
+export type { SystemPromptService } from "./types.js";
+export { systemPromptHandle } from "./types.js";
diff --git a/packages/system-prompt/src/parser.test.ts b/packages/system-prompt/src/parser.test.ts
new file mode 100644
index 0000000..636a50d
--- /dev/null
+++ b/packages/system-prompt/src/parser.test.ts
@@ -0,0 +1,186 @@
+import { describe, expect, it } from "vitest";
+import { extractVariables, parseTemplate } from "./parser.js";
+
+function vars(entries: ReadonlyArray<[string, string | null]>): Map<string, string | null> {
+	return new Map(entries);
+}
+
+describe("parser", () => {
+	describe("variable insertion", () => {
+		it("simple variable insertion", () => {
+			// 1. [system:time] with value → inserts it
+			expect(parseTemplate("[system:time]", vars([["system:time", "12:00"]]))).toBe("12:00");
+		});
+
+		it("unknown variable → blank", () => {
+			// 2. [unknown:foo] not in map → ""
+			expect(parseTemplate("[unknown:foo]", vars([]))).toBe("");
+		});
+
+		it("null variable → blank", () => {
+			// 3. [file:missing.md] with value null → ""
+			expect(parseTemplate("[file:missing.md]", vars([["file:missing.md", null]]))).toBe("");
+		});
+
+		it("inserts value mid-text", () => {
+			expect(parseTemplate("cwd is [prompt:cwd]!", vars([["prompt:cwd", "/proj"]]))).toBe(
+				"cwd is /proj!",
+			);
+		});
+
+		it("non-tag brackets stay literal", () => {
+			expect(parseTemplate("[not a tag] done", vars([]))).toBe("[not a tag] done");
+		});
+
+		it("unclosed bracket stays literal", () => {
+			expect(parseTemplate("[file:x", vars([]))).toBe("[file:x");
+		});
+	});
+
+	describe("conditionals", () => {
+		it("if block renders when variable exists", () => {
+			// 4. [if file:AGENTS.md]YES[endif] with value → "YES"
+			expect(
+				parseTemplate("[if file:AGENTS.md]YES[endif]", vars([["file:AGENTS.md", "content"]])),
+			).toBe("YES");
+		});
+
+		it("if block skipped when variable is null", () => {
+			// 5. same with null → ""
+			expect(parseTemplate("[if file:AGENTS.md]YES[endif]", vars([["file:AGENTS.md", null]]))).toBe(
+				"",
+			);
+		});
+
+		it("if block skipped when variable absent", () => {
+			expect(parseTemplate("[if file:AGENTS.md]YES[endif]", vars([]))).toBe("");
+		});
+
+		it("if/else renders fallback when null", () => {
+			// 6. [if file:X]A[else]B[endif] with null → "B"
+			expect(parseTemplate("[if file:X]A[else]B[endif]", vars([["file:X", null]]))).toBe("B");
+		});
+
+		it("if/else renders then-branch when exists", () => {
+			expect(parseTemplate("[if file:X]A[else]B[endif]", vars([["file:X", "v"]]))).toBe("A");
+		});
+
+		it("negated if renders when variable is null", () => {
+			// 7. [if !file:X]A[endif] with null → "A"
+			expect(parseTemplate("[if !file:X]A[endif]", vars([["file:X", null]]))).toBe("A");
+		});
+
+		it("negated if skipped when variable exists", () => {
+			expect(parseTemplate("[if !file:X]A[endif]", vars([["file:X", "v"]]))).toBe("");
+		});
+
+		it("negated if renders when variable absent", () => {
+			expect(parseTemplate("[if !file:X]A[endif]", vars([]))).toBe("A");
+		});
+
+		it("nested if — inner skipped when its var is null", () => {
+			// 8. [if system:os][if file:X]A[endif][endif] with os=set, file=null → ""
+			expect(
+				parseTemplate(
+					"[if system:os][if file:X]A[endif][endif]",
+					vars([
+						["system:os", "linux"],
+						["file:X", null],
+					]),
+				),
+			).toBe("");
+		});
+
+		it("nested if — inner renders when both exist", () => {
+			expect(
+				parseTemplate(
+					"[if system:os][if file:X]A[endif][endif]",
+					vars([
+						["system:os", "linux"],
+						["file:X", "v"],
+					]),
+				),
+			).toBe("A");
+		});
+
+		it("nested if/else", () => {
+			expect(
+				parseTemplate(
+					"[if system:os]os[if file:X]A[else]B[endif][endif]",
+					vars([
+						["system:os", "linux"],
+						["file:X", null],
+					]),
+				),
+			).toBe("osB");
+		});
+
+		it("unmatched if → literal text", () => {
+			// 9. [if file:X]text (no endif) → "[if file:X]text"
+			expect(parseTemplate("[if file:X]text", vars([["file:X", "v"]]))).toBe("[if file:X]text");
+		});
+
+		it("unmatched if with null var still emits literal tag", () => {
+			expect(parseTemplate("[if file:X]text", vars([["file:X", null]]))).toBe("[if file:X]text");
+		});
+
+		it("stray endif → literal text", () => {
+			expect(parseTemplate("a[endif]b", vars([]))).toBe("a[endif]b");
+		});
+
+		it("stray else → literal text", () => {
+			expect(parseTemplate("a[else]b", vars([]))).toBe("a[else]b");
+		});
+
+		it("multi-line content renders correctly", () => {
+			// 10. if block spanning multiple lines
+			const template = "[if file:AGENTS.md]line1\nline2\nline3[endif]";
+			expect(parseTemplate(template, vars([["file:AGENTS.md", "c"]]))).toBe("line1\nline2\nline3");
+		});
+
+		it("multi-line if/else block", () => {
+			const template = "[if file:X]\nA\n[else]\nB\n[endif]";
+			expect(parseTemplate(template, vars([["file:X", null]]))).toBe("\nB\n");
+		});
+
+		it("default-template-like structure renders", () => {
+			const template =
+				"You are a helpful coding assistant.\n\n[if file:AGENTS.md]\n[file:AGENTS.md]\n[endif]\n\nThe current working directory is [prompt:cwd].\n";
+			expect(
+				parseTemplate(
+					template,
+					vars([
+						["file:AGENTS.md", "RULES"],
+						["prompt:cwd", "/proj"],
+					]),
+				),
+			).toBe(
+				"You are a helpful coding assistant.\n\n\nRULES\n\n\nThe current working directory is /proj.\n",
+			);
+		});
+
+		it("default-template-like structure without AGENTS.md", () => {
+			const template = "[if file:AGENTS.md]\n[file:AGENTS.md]\n[endif]\nThe cwd is [prompt:cwd].";
+			expect(parseTemplate(template, vars([["prompt:cwd", "/proj"]]))).toBe("\nThe cwd is /proj.");
+		});
+	});
+
+	describe("extractVariables", () => {
+		it("collects insertion + condition keys", () => {
+			const template = "[system:time] [if file:AGENTS.md][file:AGENTS.md][endif] [if !git:branch]";
+			expect(extractVariables(template)).toEqual(["system:time", "file:AGENTS.md", "git:branch"]);
+		});
+
+		it("deduplicates keys", () => {
+			expect(extractVariables("[file:X][if file:X][file:X]")).toEqual(["file:X"]);
+		});
+
+		it("returns empty for plain text", () => {
+			expect(extractVariables("no variables here")).toEqual([]);
+		});
+
+		it("ignores unmatched tags", () => {
+			expect(extractVariables("[if file:X]no endif")).toEqual(["file:X"]);
+		});
+	});
+});
diff --git a/packages/system-prompt/src/parser.ts b/packages/system-prompt/src/parser.ts
new file mode 100644
index 0000000..5b39b7f
--- /dev/null
+++ b/packages/system-prompt/src/parser.ts
@@ -0,0 +1,281 @@
+/**
+ * Pure template parser — input → output, zero I/O.
+ *
+ * Handles variable insertion (`[type:name]`) and conditional blocks
+ * (`[if]`/`[else]`/`[endif]`, including negated `[if !...]` and nesting).
+ * Unmatched control tags are emitted as literal text (the tag passes through
+ * unchanged; surrounding content is parsed normally).
+ *
+ * Variable resolution rules (driven by the `vars` map):
+ * - value is a string → insert it
+ * - value is `null` (not existing) → insert empty string
+ * - key absent from the map (unknown type) → insert empty string
+ *
+ * Conditional existence: a variable "exists" iff it is present in the map AND
+ * its value is a string (not `null`). A `null` value or an absent key both mean
+ * "does not exist".
+ */
+
+// ─── Token model ─────────────────────────────────────────────────────────────
+
+interface TextToken {
+	readonly kind: "text";
+	readonly value: string;
+}
+interface VarToken {
+	readonly kind: "var";
+	readonly key: string;
+	readonly raw: string;
+}
+interface IfToken {
+	readonly kind: "if";
+	readonly key: string;
+	readonly negated: boolean;
+	readonly raw: string;
+}
+interface ElseToken {
+	readonly kind: "else";
+	readonly raw: string;
+}
+interface EndifToken {
+	readonly kind: "endif";
+	readonly raw: string;
+}
+type Token = TextToken | VarToken | IfToken | ElseToken | EndifToken;
+
+// ─── Node model (AST) ────────────────────────────────────────────────────────
+
+interface TextNode {
+	readonly kind: "text";
+	readonly value: string;
+}
+interface VarNode {
+	readonly kind: "var";
+	readonly key: string;
+}
+interface IfNode {
+	kind: "if";
+	key: string;
+	negated: boolean;
+	thenBranch: Node[];
+	else: Node[] | null;
+	matched: boolean;
+	readonly raw: string;
+}
+type Node = TextNode | VarNode | IfNode;
+
+// ─── Tokenizer ───────────────────────────────────────────────────────────────
+
+/**
+ * Classify the content between `[` and `]` into a control/variable token, or
+ * `null` when it is not a recognized tag (then it stays literal text).
+ */
+function classifyTag(content: string): Token | null {
+	const trimmed = content.trim();
+	if (trimmed === "endif") return { kind: "endif", raw: `[${content}]` };
+	if (trimmed === "else") return { kind: "else", raw: `[${content}]` };
+
+	// `[if type:name]` / `[if !type:name]`
+	const ifMatch = /^if\s+(!?)(\w+:.*)$/.exec(trimmed);
+	if (ifMatch) {
+		const negated = (ifMatch[1] ?? "") === "!";
+		const key = ifMatch[2] ?? "";
+		return { kind: "if", key, negated, raw: `[${content}]` };
+	}
+
+	// `[type:name]` — variable insertion (any `word:rest`)
+	const varMatch = /^(\w+:.*)$/.exec(trimmed);
+	if (varMatch) return { kind: "var", key: trimmed, raw: `[${content}]` };
+
+	return null;
+}
+
+/**
+ * Split a template into a flat token stream: text, variable, and control tags.
+ * A `[` with no closing `]`, or whose content is not a recognized tag, is kept
+ * as literal text.
+ */
+function tokenize(template: string): Token[] {
+	const tokens: Token[] = [];
+	let buf = "";
+	let i = 0;
+	const n = template.length;
+
+	const flush = (): void => {
+		if (buf.length > 0) {
+			tokens.push({ kind: "text", value: buf });
+			buf = "";
+		}
+	};
+
+	while (i < n) {
+		const ch = template[i];
+		if (ch === undefined) break;
+		if (ch === "[") {
+			const close = template.indexOf("]", i + 1);
+			if (close === -1) {
+				buf += "[";
+				i++;
+				continue;
+			}
+			const content = template.slice(i + 1, close);
+			const tag = classifyTag(content);
+			if (tag !== null) {
+				flush();
+				tokens.push(tag);
+				i = close + 1;
+				continue;
+			}
+			buf += "[";
+			i++;
+		} else {
+			buf += ch;
+			i++;
+		}
+	}
+	flush();
+	return tokens;
+}
+
+// ─── Parser (token stream → AST) ─────────────────────────────────────────────
+
+const EMPTY: readonly Node[] = Object.freeze([]) as readonly Node[];
+
+/**
+ * Build an AST from tokens using an explicit stack. `if`/`else`/`endif` are
+ * matched here: an `if` left open at end-of-input is marked unmatched, and a
+ * stray `else`/`endif` (no open `if`) becomes a literal text node.
+ */
+function parse(tokens: readonly Token[]): Node[] {
+	const root: Node[] = [];
+	const stack: IfNode[] = [];
+	let current: Node[] = root;
+
+	for (const tok of tokens) {
+		switch (tok.kind) {
+			case "text":
+				current.push({ kind: "text", value: tok.value });
+				break;
+			case "var":
+				current.push({ kind: "var", key: tok.key });
+				break;
+			case "if": {
+				const node: IfNode = {
+					kind: "if",
+					key: tok.key,
+					negated: tok.negated,
+					thenBranch: [],
+					else: null,
+					matched: true,
+					raw: tok.raw,
+				};
+				current.push(node);
+				stack.push(node);
+				current = node.thenBranch;
+				break;
+			}
+			case "else": {
+				const top = stack[stack.length - 1];
+				if (top !== undefined && top.else === null) {
+					top.else = [];
+					current = top.else;
+				} else {
+					// stray else (no open if, or if already has an else) → literal
+					current.push({ kind: "text", value: tok.raw });
+				}
+				break;
+			}
+			case "endif": {
+				const top = stack.pop();
+				if (top === undefined) {
+					// stray endif → literal
+					current.push({ kind: "text", value: tok.raw });
+					break;
+				}
+				const parent = stack[stack.length - 1];
+				current = parent === undefined ? root : (parent.else ?? parent.thenBranch);
+				break;
+			}
+		}
+	}
+
+	// Any `if` still on the stack never found its `endif` → unmatched.
+	for (const node of stack) node.matched = false;
+	return root;
+}
+
+// ─── Renderer (AST → string) ────────────────────────────────────────────────
+
+function variableExists(key: string, vars: ReadonlyMap<string, string | null>): boolean {
+	return vars.has(key) && vars.get(key) !== null;
+}
+
+function render(nodes: readonly Node[], vars: ReadonlyMap<string, string | null>): string {
+	let out = "";
+	for (const node of nodes) {
+		switch (node.kind) {
+			case "text":
+				out += node.value;
+				break;
+			case "var":
+				out += vars.get(node.key) ?? "";
+				break;
+			case "if": {
+				if (node.matched) {
+					const exists = variableExists(node.key, vars);
+					const takeThen = node.negated ? !exists : exists;
+					const branch = takeThen ? node.thenBranch : (node.else ?? EMPTY);
+					out += render(branch, vars);
+				} else {
+					// Unmatched `if` → the tag is literal text; content still renders.
+					out += node.raw;
+					out += render(node.thenBranch, vars);
+					if (node.else !== null) {
+						out += "[else]";
+						out += render(node.else, vars);
+					}
+				}
+				break;
+			}
+		}
+	}
+	return out;
+}
+
+// ─── Public API ──────────────────────────────────────────────────────────────
+
+/**
+ * Resolve a template against a variable map → the final string.
+ *
+ * - `[type:name]` → the resolved value, or empty string when absent/null.
+ * - `[if type:name] ... [endif]` → renders when the variable exists (string).
+ * - `[if !type:name]` → renders when it does NOT exist.
+ * - `[else]` provides the fallback branch.
+ * - Unmatched `[if]`/`[endif]` tags pass through as literal text.
+ */
+export function parseTemplate(template: string, vars: ReadonlyMap<string, string | null>): string {
+	const tokens = tokenize(template);
+	const ast = parse(tokens);
+	return render(ast, vars);
+}
+
+/**
+ * Collect every variable key referenced by a template — from both insertion
+ * (`[type:name]`) and conditionals (`[if type:name]` / `[if !type:name]`).
+ * Used by the resolver to know which dynamic `file:<path>` variables to read.
+ * Returns unique keys in first-seen order.
+ */
+export function extractVariables(template: string): string[] {
+	const tokens = tokenize(template);
+	const seen = new Set<string>();
+	const keys: string[] = [];
+	for (const tok of tokens) {
+		if (tok.kind === "var" || tok.kind === "if") {
+			if (!seen.has(tok.key)) {
+				seen.add(tok.key);
+				keys.push(tok.key);
+			}
+		}
+	}
+	return keys;
+}
diff --git a/packages/system-prompt/src/resolver.test.ts b/packages/system-prompt/src/resolver.test.ts
new file mode 100644
index 0000000..0585a33
--- /dev/null
+++ b/packages/system-prompt/src/resolver.test.ts
@@ -0,0 +1,210 @@
+import { describe, expect, it } from "vitest";
+import type { GitSpawnResult, ResolverAdapters, ResolverFs } from "./resolver.js";
+import { resolveVariables } from "./resolver.js";
+
+/** A spawn that returns canned output per command (joined argv → result). */
+function fakeSpawn(
+	table: ReadonlyMap<string, GitSpawnResult> | GitSpawnResult,
+): ResolverAdapters["spawn"] {
+	return async (command) => {
+		if (table instanceof Map) {
+			return table.get(command.join(" ")) ?? { stdout: "", stderr: "", exitCode: 128 };
+		}
+		return table;
+	};
+}
+
+function fakeFs(files: ReadonlyMap<string, string>): ResolverFs {
+	return {
+		readText: async (path: string) => files.get(path) ?? "",
+		exists: async (path: string) => files.has(path),
+	};
+}
+
+const failSpawn = (): ResolverAdapters["spawn"] => async () => ({
+	stdout: "",
+	stderr: "not a git repo",
+	exitCode: 128,
+});
+
+const fixedNow = new Date("2024-06-15T12:30:00.000Z");
+
+describe("resolver", () => {
+	describe("system variables", () => {
+		it("resolves system:* to non-null strings", async () => {
+			// 11. system:time, system:date, system:os, system:hostname
+			const map = await resolveVariables("/proj", {
+				spawn: failSpawn(),
+				fs: fakeFs(new Map()),
+				now: () => fixedNow,
+				platform: () => "linux",
+				hostname: () => "myhost",
+			});
+
+			expect(map.get("system:time")).toBe("2024-06-15T12:30:00.000Z");
+			expect(map.get("system:date")).toBe("2024-06-15");
+			expect(map.get("system:os")).toBe("linux");
+			expect(map.get("system:hostname")).toBe("myhost");
+		});
+
+		it("prompt:cwd is the cwd, model/conversation_id follow context", async () => {
+			const map = await resolveVariables(
+				"/proj",
+				{
+					spawn: failSpawn(),
+					fs: fakeFs(new Map()),
+					now: () => fixedNow,
+				},
+				{ context: { model: "gpt-4", conversationId: "conv-1" } },
+			);
+
+			expect(map.get("prompt:cwd")).toBe("/proj");
+			expect(map.get("prompt:model")).toBe("gpt-4");
+			expect(map.get("prompt:conversation_id")).toBe("conv-1");
+		});
+
+		it("prompt:model / prompt:conversation_id are null when absent", async () => {
+			const map = await resolveVariables("/proj", {
+				spawn: failSpawn(),
+				fs: fakeFs(new Map()),
+				now: () => fixedNow,
+			});
+
+			expect(map.get("prompt:model")).toBeNull();
+			expect(map.get("prompt:conversation_id")).toBeNull();
+		});
+	});
+
+	describe("file variables", () => {
+		it("reads a file relative to cwd", async () => {
+			// 12. file variable reads relative path; missing → null
+			const files = new Map<string, string>([["/proj/AGENTS.md", "rules"]]);
+			const map = await resolveVariables(
+				"/proj",
+				{
+					spawn: failSpawn(),
+					fs: fakeFs(files),
+					now: () => fixedNow,
+				},
+				{ referencedKeys: ["file:AGENTS.md"] },
+			);
+
+			expect(map.get("file:AGENTS.md")).toBe("rules");
+		});
+
+		it("missing file → null", async () => {
+			const map = await resolveVariables(
+				"/proj",
+				{
+					spawn: failSpawn(),
+					fs: fakeFs(new Map()),
+					now: () => fixedNow,
+				},
+				{ referencedKeys: ["file:missing.md"] },
+			);
+
+			expect(map.get("file:missing.md")).toBeNull();
+		});
+
+		it("absolute path reads from absolute location", async () => {
+			const files = new Map<string, string>([["/etc/config", "data"]]);
+			const map = await resolveVariables(
+				"/proj",
+				{
+					spawn: failSpawn(),
+					fs: fakeFs(files),
+					now: () => fixedNow,
+				},
+				{ referencedKeys: ["file:/etc/config"] },
+			);
+
+			expect(map.get("file:/etc/config")).toBe("data");
+		});
+
+		it("reads nested relative path", async () => {
+			const files = new Map<string, string>([["/proj/src/foo.ts", "export {}"]]);
+			const map = await resolveVariables(
+				"/proj",
+				{
+					spawn: failSpawn(),
+					fs: fakeFs(files),
+					now: () => fixedNow,
+				},
+				{ referencedKeys: ["file:src/foo.ts"] },
+			);
+
+			expect(map.get("file:src/foo.ts")).toBe("export {}");
+		});
+
+		it("non-file referenced keys are not added to the map", async () => {
+			const map = await resolveVariables(
+				"/proj",
+				{
+					spawn: failSpawn(),
+					fs: fakeFs(new Map()),
+					now: () => fixedNow,
+				},
+				{ referencedKeys: ["unknown:foo"] },
+			);
+
+			expect(map.has("unknown:foo")).toBe(false);
+		});
+	});
+
+	describe("git variables", () => {
+		it("git:branch returns the branch name", async () => {
+			// 13. git:branch via injected spawn
+			const table = new Map<string, GitSpawnResult>([
+				["git rev-parse --abbrev-ref HEAD", { stdout: "feature/x\n", stderr: "", exitCode: 0 }],
+				["git status --short", { stdout: " M a.ts\n", stderr: "", exitCode: 0 }],
+			]);
+			const map = await resolveVariables("/proj", {
+				spawn: fakeSpawn(table),
+				fs: fakeFs(new Map()),
+				now: () => fixedNow,
+			});
+
+			expect(map.get("git:branch")).toBe("feature/x");
+			expect(map.get("git:status")).toBe(" M a.ts");
+		});
+
+		it("non-git cwd → null", async () => {
+			const map = await resolveVariables("/proj", {
+				spawn: failSpawn(),
+				fs: fakeFs(new Map()),
+				now: () => fixedNow,
+			});
+
+			expect(map.get("git:branch")).toBeNull();
+			expect(map.get("git:status")).toBeNull();
+		});
+
+		it("throwing spawn → null", async () => {
+			const throwingSpawn = async (): Promise<GitSpawnResult> => {
+				throw new Error("git not installed");
+			};
+			const map = await resolveVariables("/proj", {
+				spawn: throwingSpawn,
+				fs: fakeFs(new Map()),
+				now: () => fixedNow,
+			});
+
+			expect(map.get("git:branch")).toBeNull();
+			expect(map.get("git:status")).toBeNull();
+		});
+
+		it("clean repo → git:status is empty string (existing)", async () => {
+			const table = new Map<string, GitSpawnResult>([
+				["git rev-parse --abbrev-ref HEAD", { stdout: "main\n", stderr: "", exitCode: 0 }],
+				["git status --short", { stdout: "", stderr: "", exitCode: 0 }],
+			]);
+			const map = await resolveVariables("/proj", {
+				spawn: fakeSpawn(table),
+				fs: fakeFs(new Map()),
+				now: () => fixedNow,
+			});
+
+			expect(map.get("git:status")).toBe("");
+		});
+	});
+});
diff --git a/packages/system-prompt/src/resolver.ts b/packages/system-prompt/src/resolver.ts
new file mode 100644
index 0000000..eed7bcb
--- /dev/null
+++ b/packages/system-prompt/src/resolver.ts
@@ -0,0 +1,139 @@
+/**
+ * Variable resolver — resolves the system-prompt template variables against the
+ * current environment (cwd, system state, git, files).
+ *
+ * The decision logic is pure: all effects (spawning git, reading files) are
+ * injected as adapters. The resolver never touches `Bun`/`process` directly
+ * except through injectable defaults, so it is fully testable with fakes.
+ *
+ * Returns a `Map<string, string | null>` keyed by `"type:name"`:
+ * - `string` → the variable exists with this value.
+ * - `null`   → the variable is "not existing" (file missing, git unavailable, …).
+ * Keys that are never set (e.g. an unknown type) are simply absent from the map.
+ */
+
+import { hostname as osHostname } from "node:os";
+import { isAbsolute, resolve as resolvePath } from "node:path";
+
+/** Result of a spawned command (used for git). */
+export interface GitSpawnResult {
+	readonly stdout: string;
+	readonly stderr: string;
+	readonly exitCode: number | null;
+}
+
+/**
+ * Spawn a command and capture its output. Throws are surfaced as `null` by the
+ * resolver (e.g. git not installed, bad cwd).
+ */
+export type GitSpawn = (
+	command: readonly string[],
+	opts: { readonly cwd: string },
+) => Promise<GitSpawnResult>;
+
+/** Filesystem adapter — the read effects the resolver needs. */
+export interface ResolverFs {
+	readonly readText: (path: string) => Promise<string>;
+	readonly exists: (path: string) => Promise<boolean>;
+}
+
+/** Injected effects + optional overridable clocks for deterministic tests. */
+export interface ResolverAdapters {
+	/** Run a command (git) and capture stdout. */
+	readonly spawn: GitSpawn;
+	/** File read effects. */
+	readonly fs: ResolverFs;
+	/** Override the current time (defaults to `new Date()`). */
+	readonly now?: () => Date;
+	/** Override `process.platform` (defaults to the real platform). */
+	readonly platform?: () => string;
+	/** Override the hostname (defaults to `os.hostname()`). */
+	readonly hostname?: () => string;
+}
+
+/** Per-construction context forwarded by the session-orchestrator. */
+export interface ResolverContext {
+	readonly model?: string;
+	readonly conversationId?: string;
+}
+
+export interface ResolveOptions {
+	readonly context?: ResolverContext;
+	/** Variable keys referenced by the template (drives dynamic `file:` reads). */
+	readonly referencedKeys?: readonly string[];
+}
+
+/** Run a git subcommand in `cwd`; return raw stdout on success, else null. */
+async function runGit(
+	args: readonly string[],
+	cwd: string,
+	spawn: GitSpawn,
+): Promise<string | null> {
+	try {
+		const res = await spawn(["git", ...args], { cwd });
+		if (res.exitCode !== 0) return null;
+		return res.stdout;
+	} catch {
+		return null;
+	}
+}
+
+/** Read a file (relative to cwd, or absolute). Missing/error → null. */
+async function readFile(filePath: string, cwd: string, fs: ResolverFs): Promise<string | null> {
+	const abs = isAbsolute(filePath) ? filePath : resolvePath(cwd, filePath);
+	try {
+		if (!(await fs.exists(abs))) return null;
+		return await fs.readText(abs);
+	} catch {
+		return null;
+	}
+}
+
+/**
+ * Resolve all variables for a construction.
+ *
+ * Always resolves the fixed catalog (`system:*`, `prompt:*`, `git:*`), plus any
+ * `file:<path>` keys present in `options.referencedKeys` (the paths referenced by
+ * the template). Unknown types are intentionally left out of the map.
+ */
+export async function resolveVariables(
+	cwd: string,
+	adapters: ResolverAdapters,
+	options?: ResolveOptions,
+): Promise<Map<string, string | null>> {
+	const ctx = options?.context;
+	const referencedKeys = options?.referencedKeys;
+	const now = adapters.now?.() ?? new Date();
+	const vars = new Map<string, string | null>();
+
+	// ── system:* ────────────────────────────────────────────────────────────
+	vars.set("system:time", now.toISOString());
+	vars.set("system:date", now.toISOString().slice(0, 10));
+	vars.set("system:os", adapters.platform?.() ?? process.platform);
+	vars.set("system:hostname", adapters.hostname?.() ?? osHostname());
+
+	// ── prompt:* ────────────────────────────────────────────────────────────
+	vars.set("prompt:cwd", cwd);
+	vars.set("prompt:model", ctx?.model ?? null);
+	vars.set("prompt:conversation_id", ctx?.conversationId ?? null);
+
+	// ── git:* ────────────────────────────────────────────────────────────────
+	// branch is a single value — trim fully; status keeps its leading status
+	// indicators, dropping only the trailing newline (trimEnd).
+	const branch = await runGit(["rev-parse", "--abbrev-ref", "HEAD"], cwd, adapters.spawn);
+	vars.set("git:branch", branch === null ? null : branch.trim());
+	const status = await runGit(["status", "--short"], cwd, adapters.spawn);
+	vars.set("git:status", status === null ? null : status.trimEnd());
+
+	// ── file:<path> (dynamic — only those referenced by the template) ────────
+	if (referencedKeys !== undefined) {
+		for (const key of referencedKeys) {
+			if (key.startsWith("file:")) {
+				const filePath = key.slice("file:".length);
+				vars.set(key, await readFile(filePath, cwd, adapters.fs));
+			}
+		}
+	}
+
+	return vars;
+}
diff --git a/packages/system-prompt/src/service.test.ts b/packages/system-prompt/src/service.test.ts
new file mode 100644
index 0000000..91592f8
--- /dev/null
+++ b/packages/system-prompt/src/service.test.ts
@@ -0,0 +1,151 @@
+import type { StorageNamespace } from "@dispatch/kernel";
+import { describe, expect, it } from "vitest";
+import type { GitSpawnResult, ResolverAdapters, ResolverFs } from "./resolver.js";
+import { createSystemPromptService, DEFAULT_TEMPLATE } from "./service.js";
+
+/** In-memory StorageNamespace for tests. */
+function memoryStorage(): StorageNamespace {
+	const store = new Map<string, string>();
+	return {
+		get: async (key: string) => store.get(key) ?? null,
+		set: async (key: string, value: string) => {
+			store.set(key, value);
+		},
+		delete: async (key: string) => {
+			store.delete(key);
+		},
+		has: async (key: string) => store.has(key),
+		keys: async (prefix?: string) =>
+			[...store.keys()].filter((k) => (prefix === undefined ? true : k.startsWith(prefix))),
+	};
+}
+
+function fakeFs(files: ReadonlyMap<string, string>): ResolverFs {
+	return {
+		readText: async (path: string) => files.get(path) ?? "",
+		exists: async (path: string) => files.has(path),
+	};
+}
+
+const failSpawn = async (): Promise<GitSpawnResult> => ({
+	stdout: "",
+	stderr: "",
+	exitCode: 128,
+});
+
+function adapters(files: ReadonlyMap<string, string>): ResolverAdapters {
+	return {
+		spawn: failSpawn,
+		fs: fakeFs(files),
+		now: () => new Date("2024-06-15T12:30:00.000Z"),
+		platform: () => "linux",
+		hostname: () => "myhost",
+	};
+}
+
+describe("system-prompt service", () => {
+	it("construct persists and returns the resolved string", async () => {
+		// 14. construct writes to storage and returns the resolved string.
+		const storage = memoryStorage();
+		const service = createSystemPromptService({
+			storage,
+			adapters: adapters(new Map([["/proj/AGENTS.md", "RULES"]])),
+		});
+
+		const result = await service.construct("conv-1", "/proj", { model: "gpt-4" });
+
+		expect(result).toContain("You are a helpful coding assistant.");
+		expect(result).toContain("RULES");
+		expect(result).toContain("/proj");
+		// persisted under resolved:<conversationId>
+		expect(await storage.get("resolved:conv-1")).toBe(result);
+	});
+
+	it("get returns persisted value after construct", async () => {
+		// 15. after construct, get returns the same string.
+		const service = createSystemPromptService({
+			storage: memoryStorage(),
+			adapters: adapters(new Map()),
+		});
+
+		// before construct → null
+		expect(await service.get("conv-2")).toBeNull();
+
+		const result = await service.construct("conv-2", "/proj");
+		expect(await service.get("conv-2")).toBe(result);
+	});
+
+	it("get returns null before construct", async () => {
+		const service = createSystemPromptService({
+			storage: memoryStorage(),
+			adapters: adapters(new Map()),
+		});
+
+		expect(await service.get("never-constructed")).toBeNull();
+	});
+
+	it("empty/no template stored → default template → non-empty", async () => {
+		// 16. no template stored → default template used → resolves to non-empty.
+		const service = createSystemPromptService({
+			storage: memoryStorage(),
+			adapters: adapters(new Map()), // no AGENTS.md
+		});
+
+		const result = await service.construct("conv-3", "/proj");
+
+		expect(result.length).toBeGreaterThan(0);
+		expect(result).toContain("You are a helpful coding assistant.");
+		expect(result).toContain("/proj");
+		// no AGENTS.md file → the [if file:AGENTS.md] block is omitted
+		expect(result).not.toContain("AGENTS.md");
+	});
+
+	it("stored template is used instead of default", async () => {
+		const storage = memoryStorage();
+		await storage.set("template", "cwd=[prompt:cwd] os=[system:os]");
+		const service = createSystemPromptService({
+			storage,
+			adapters: adapters(new Map()),
+		});
+
+		const result = await service.construct("conv-4", "/work");
+		expect(result).toBe("cwd=/work os=linux");
+	});
+
+	it("empty stored template → empty string", async () => {
+		const storage = memoryStorage();
+		await storage.set("template", "");
+		const service = createSystemPromptService({
+			storage,
+			adapters: adapters(new Map()),
+		});
+
+		const result = await service.construct("conv-5", "/proj");
+		expect(result).toBe("");
+		expect(await service.get("conv-5")).toBe("");
+	});
+
+	it("construct is independent per conversation", async () => {
+		const storage = memoryStorage();
+		await storage.set("template", "[prompt:cwd]");
+		const service = createSystemPromptService({
+			storage,
+			adapters: adapters(new Map()),
+		});
+
+		const a = await service.construct("conv-a", "/dir-a");
+		const b = await service.construct("conv-b", "/dir-b");
+
+		expect(a).toBe("/dir-a");
+		expect(b).toBe("/dir-b");
+		expect(await service.get("conv-a")).toBe("/dir-a");
+		expect(await service.get("conv-b")).toBe("/dir-b");
+	});
+
+	it("DEFAULT_TEMPLATE contains the expected structure", () => {
+		expect(DEFAULT_TEMPLATE).toContain("You are a helpful coding assistant.");
+		expect(DEFAULT_TEMPLATE).toContain("[if file:AGENTS.md]");
+		expect(DEFAULT_TEMPLATE).toContain("[file:AGENTS.md]");
+		expect(DEFAULT_TEMPLATE).toContain("[prompt:cwd]");
+	});
+});
diff --git a/packages/system-prompt/src/service.ts b/packages/system-prompt/src/service.ts
new file mode 100644
index 0000000..45645b9
--- /dev/null
+++ b/packages/system-prompt/src/service.ts
@@ -0,0 +1,67 @@
+/**
+ * System-prompt service factory — owns the construct/get decision logic.
+ *
+ * Pure-ish: takes a storage namespace + resolver adapters as deps (both
+ * injectable), so the service is testable with an in-memory storage and fake
+ * adapters. The real Bun-backed adapters are wired in `extension.ts`.
+ */
+import type { StorageNamespace } from "@dispatch/kernel";
+import { extractVariables, parseTemplate } from "./parser.js";
+import type { ResolverAdapters, ResolverContext } from "./resolver.js";
+import { resolveVariables } from "./resolver.js";
+import type { SystemPromptService } from "./types.js";
+
+/**
+ * The default template used when no template has been stored. Embeds the
+ * working directory and an optional `AGENTS.md` (only when the file exists).
+ */
+export const DEFAULT_TEMPLATE = `You are a helpful coding assistant.
+
+[if file:AGENTS.md]
+[file:AGENTS.md]
+[endif]
+
+The current working directory is [prompt:cwd].
+`;
+
+/** Storage keys. */
+const TEMPLATE_KEY = "template";
+const resolvedKey = (conversationId: string): string => `resolved:${conversationId}`;
+
+export interface SystemPromptServiceDeps {
+	/** Namespaced KV (`host.storage("system-prompt")`). */
+	readonly storage: StorageNamespace;
+	/** Injected effects for variable resolution. */
+	readonly adapters: ResolverAdapters;
+}
+
+/**
+ * Create a `SystemPromptService` backed by a storage namespace + adapters.
+ * State is owned (not ambient): the storage reference lives in this closure.
+ */
+export function createSystemPromptService(deps: SystemPromptServiceDeps): SystemPromptService {
+	return {
+		async construct(conversationId, cwd, context) {
+			let template = await deps.storage.get(TEMPLATE_KEY);
+			if (template === null) template = DEFAULT_TEMPLATE;
+
+			const referencedKeys = extractVariables(template);
+			const resolverContext: ResolverContext =
+				context?.model !== undefined
+					? { model: context.model, conversationId }
+					: { conversationId };
+			const vars = await resolveVariables(cwd, deps.adapters, {
+				context: resolverContext,
+				referencedKeys,
+			});
+			const result = parseTemplate(template, vars);
+
+			await deps.storage.set(resolvedKey(conversationId), result);
+			return result;
+		},
+
+		async get(conversationId) {
+			return deps.storage.get(resolvedKey(conversationId));
+		},
+	};
+}
diff --git a/packages/system-prompt/src/types.ts b/packages/system-prompt/src/types.ts
new file mode 100644
index 0000000..9e87512
--- /dev/null
+++ b/packages/system-prompt/src/types.ts
@@ -0,0 +1,39 @@
+/**
+ * System-prompt service handle + interface.
+ *
+ * The service is the single-responder anchor the session-orchestrator obtains
+ * (lazily, via `host.getService(systemPromptHandle)`) to construct and read the
+ * per-conversation resolved system prompt.
+ */
+import { defineService, type ServiceHandle } from "@dispatch/kernel";
+
+/**
+ * The system-prompt service.
+ *
+ * `construct` resolves the template once (first turn / compaction) and persists
+ * the result; `get` reads the persisted result on subsequent turns (cache-safe —
+ * no per-turn reconstruction).
+ */
+export interface SystemPromptService {
+	/**
+	 * Resolve the template against the current environment and persist the
+	 * result under `resolved:<conversationId>`. Returns the resolved string.
+	 * When no template is stored, the built-in default template is used. An
+	 * empty template yields an empty string.
+	 */
+	construct(
+		conversationId: string,
+		cwd: string,
+		context?: { readonly model?: string },
+	): Promise<string>;
+
+	/** Read the persisted resolved system prompt, or `null` if never constructed. */
+	get(conversationId: string): Promise<string | null>;
+}
+
+/**
+ * Typed handle anchoring the system-prompt service. The single symbol the
+ * session-orchestrator imports to reach the builder — no string-keyed lookup.
+ */
+export const systemPromptHandle: ServiceHandle<SystemPromptService> =
+	defineService<SystemPromptService>("system-prompt");
diff --git a/packages/system-prompt/tsconfig.json b/packages/system-prompt/tsconfig.json
new file mode 100644
index 0000000..883420c
--- /dev/null
+++ b/packages/system-prompt/tsconfig.json
@@ -0,0 +1,6 @@
+{
+	"extends": "../../tsconfig.base.json",
+	"compilerOptions": { "rootDir": "src", "outDir": "dist", "composite": true },
+	"include": ["src/**/*.ts"],
+	"references": [{ "path": "../kernel" }, { "path": "../transport-contract" }]
+}
diff --git a/packages/transport-contract/package.json b/packages/transport-contract/package.json
index 95e1aef..542ed90 100644
--- a/packages/transport-contract/package.json
+++ b/packages/transport-contract/package.json
@@ -1,6 +1,6 @@
 {
 	"name": "@dispatch/transport-contract",
-	"version": "0.17.0",
+	"version": "0.18.0",
 	"type": "module",
 	"private": true,
 	"main": "dist/index.js",
diff --git a/packages/transport-contract/src/index.ts b/packages/transport-contract/src/index.ts
index b195171..2a3bb9f 100644
--- a/packages/transport-contract/src/index.ts
+++ b/packages/transport-contract/src/index.ts
@@ -299,6 +299,57 @@ export interface CloseConversationResponse {
 	readonly abortedTurn: boolean;
 }
 
+// ─── System prompt template ───────────────────────────────────────────────────
+
+/**
+ * Response of `GET /system-prompt` — the current global system prompt template.
+ *
+ * The template is a text string with variable placeholders (`[type:name]`) and
+ * conditional blocks (`[if]`/`[else]`/`[endif]`). At construction time (first
+ * turn or compaction), variables are resolved against the conversation's cwd
+ * and system state. The resolved system prompt is persisted per conversation
+ * and reused on all subsequent turns (cache-safe — no per-turn reconstruction).
+ */
+export interface SystemPromptTemplateResponse {
+	/** The template text (may be empty — then no system prompt is sent). */
+	readonly template: string;
+}
+
+/**
+ * Body of `PUT /system-prompt` — set the global system prompt template.
+ *
+ * Changing the template does NOT affect existing conversations until they are
+ * compacted (the persisted resolved system prompt is stable). New
+ * conversations use the new template on their first turn.
+ */
+export interface SetSystemPromptTemplateRequest {
+	readonly template: string;
+}
+
+/**
+ * One available variable for the system prompt template, as reported by
+ * `GET /system-prompt/variables` so the frontend can render the variable
+ * selector buttons.
+ */
+export interface SystemPromptVariable {
+	/** The variable type/source: `"system"`, `"file"`, `"prompt"`, `"git"`. */
+	readonly type: string;
+	/** The variable name (e.g. `"time"`, `"date"`, `"os"`). For dynamic types, a description. */
+	readonly name: string;
+	/** Human-readable description of what the variable resolves to. */
+	readonly description: string;
+	/**
+	 * When `true`, any name is valid for this type (e.g. `file:<path>` accepts
+	 * any file path). The frontend should allow free-text input for the name.
+	 */
+	readonly dynamic?: boolean;
+}
+
+/** Response of `GET /system-prompt/variables`. */
+export interface SystemPromptVariablesResponse {
+	readonly variables: readonly SystemPromptVariable[];
+}
+
 // ─── Message queue (steering) ─────────────────────────────────────────────────
 
 /**
diff --git a/tsconfig.json b/tsconfig.json
index 39f3887..7babef3 100644
--- a/tsconfig.json
+++ b/tsconfig.json
@@ -29,6 +29,7 @@
 		{ "path": "./packages/cache-warming" },
 		{ "path": "./packages/message-queue" },
 		{ "path": "./packages/lsp" },
+		{ "path": "./packages/system-prompt" },
 		{ "path": "./packages/cli" },
 		{ "path": "./packages/journal-sink" },
 		{ "path": "./packages/trace-store" },