diff --git a/frontend/src/__tests__/install-libraries.test.ts b/frontend/src/__tests__/install-libraries.test.ts
new file mode 100644
index 0000000..537af33
--- /dev/null
+++ b/frontend/src/__tests__/install-libraries.test.ts
@@ -0,0 +1,306 @@
+// @vitest-environment jsdom
+/**
+ * install-libraries.test.ts
+ *
+ * Tests for the automatic library installation feature introduced when
+ * importing Wokwi ZIP projects:
+ *
+ * UNIT — parseLibrariesTxt()
+ *   Parses a libraries.txt string into an array of installable names.
+ *   Verifies filtering of comments, blank lines, and @wokwi: entries.
+ *
+ * INTEGRATION — importFromWokwiZip() :: libraries field
+ *   Creates real in-memory ZIP files with JSZip, runs the full import
+ *   function, and verifies that result.libraries contains the correct names.
+ *
+ * SERVICE — installLibrary() / getInstalledLibraries()
+ *   Stubs global fetch and verifies the correct HTTP requests and response
+ *   handling of the library service functions.
+ */
+
+import { describe, it, expect, beforeEach, afterEach, vi } from 'vitest';
+import JSZip from 'jszip';
+
+import { parseLibrariesTxt, importFromWokwiZip } from '../utils/wokwiZip';
+import { installLibrary, getInstalledLibraries } from '../services/libraryService';
+
+// ─── Helpers ──────────────────────────────────────────────────────────────────
+
+/** Minimal diagram.json so importFromWokwiZip doesn't throw */
+const MINIMAL_DIAGRAM = JSON.stringify({
+  version: 1,
+  author: 'test',
+  editor: 'wokwi',
+  parts: [{ type: 'wokwi-arduino-uno', id: 'uno', top: 0, left: 0, attrs: {} }],
+  connections: [],
+});
+
+/** Build an in-memory ZIP File with the given files */
+async function makeZip(entries: Record<string, string>): Promise<File> {
+  const zip = new JSZip();
+  zip.file('diagram.json', MINIMAL_DIAGRAM);
+  for (const [name, content] of Object.entries(entries)) {
+    zip.file(name, content);
+  }
+  const blob = await zip.generateAsync({ type: 'blob' });
+  return new File([blob], 'test.zip', { type: 'application/zip' });
+}
+
+// ─── Real libraries.txt content (from example_zip/extracted/) ─────────────────
+
+const PONG_LIBRARIES_TXT = `# Wokwi Library List
+# See https://docs.wokwi.com/guides/libraries
+
+# Automatically added based on includes:
+Adafruit GFX Library
+
+Adafruit SSD1306
+`;
+
+const CALCULATOR_LIBRARIES_TXT = `Adafruit GFX Library
+Adafruit FT6206 Library
+Adafruit ILI9341
+LC_Adafruit_1947@wokwi:b065451f35dab6e1021d78f0f79b6eda6910455d
+LC_baseTools@wokwi:95340986110645c1b45e55597a7caf4d023d4b4a
+LC_GUIbase@wokwi:cad247b5fc057dce02f20f7dd8902e0ab3464bb0
+LC_GUIItems@wokwi:0dabc07df1078c562ee693693d51c280c68131ce
+LC_GUITextTools@wokwi:0ea40c37c3578be382f9a915362413565a13779f
+LC_keyboard@wokwi:2f79075f1332b48f679c2ab9f8199344458b2643
+LC_RPNCalculator@wokwi:c670627d569e21d822d4bc5e3a04c299191e9dce
+LC_scrollingList@wokwi:57d9e60a3fbfb0aee4291d3ad9b9bb4ff1ad0650
+LCP_breakout@wokwi:93b61107ec6046ae81014971bbab8821411b066f
+LCP_rpnCalc@wokwi:e87783abb639c397a4c3aa4c4410cd4912407d2c
+SD
+Adafruit SSD1351 library
+`;
+
+const SERVO_LIBRARIES_TXT = `Servo
+`;
+
+// ─── 1. parseLibrariesTxt — unit tests ────────────────────────────────────────
+
+describe('parseLibrariesTxt — unit', () => {
+  it('returns empty array for empty content', () => {
+    expect(parseLibrariesTxt('')).toEqual([]);
+  });
+
+  it('returns empty array when content is only blank lines', () => {
+    expect(parseLibrariesTxt('\n\n\n')).toEqual([]);
+  });
+
+  it('strips comment lines starting with #', () => {
+    const result = parseLibrariesTxt('# comment\n# another\nMyLib\n');
+    expect(result).toEqual(['MyLib']);
+  });
+
+  it('strips blank lines between entries', () => {
+    const result = parseLibrariesTxt('LibA\n\nLibB\n\n\nLibC');
+    expect(result).toEqual(['LibA', 'LibB', 'LibC']);
+  });
+
+  it('excludes @wokwi: hash entries', () => {
+    const result = parseLibrariesTxt(
+      'GoodLib\nBadLib@wokwi:abc123deadbeef\nAnotherGood\n',
+    );
+    expect(result).toEqual(['GoodLib', 'AnotherGood']);
+  });
+
+  it('handles inline whitespace (leading/trailing spaces on a line)', () => {
+    const result = parseLibrariesTxt('  Adafruit GFX Library  \n  \n  Servo  \n');
+    expect(result).toEqual(['Adafruit GFX Library', 'Servo']);
+  });
+
+  it('parses pong libraries.txt → 2 standard libs', () => {
+    const result = parseLibrariesTxt(PONG_LIBRARIES_TXT);
+    expect(result).toEqual(['Adafruit GFX Library', 'Adafruit SSD1306']);
+  });
+
+  it('parses calculator-breakout-icon libraries.txt → only standard libs, no @wokwi:', () => {
+    const result = parseLibrariesTxt(CALCULATOR_LIBRARIES_TXT);
+    expect(result).toContain('Adafruit GFX Library');
+    expect(result).toContain('Adafruit FT6206 Library');
+    expect(result).toContain('Adafruit ILI9341');
+    expect(result).toContain('SD');
+    expect(result).toContain('Adafruit SSD1351 library');
+    // none of the @wokwi: entries
+    for (const entry of result) {
+      expect(entry).not.toContain('@wokwi:');
+    }
+    expect(result).toHaveLength(5);
+  });
+
+  it('parses ServoOverdone libraries.txt → [Servo]', () => {
+    const result = parseLibrariesTxt(SERVO_LIBRARIES_TXT);
+    expect(result).toEqual(['Servo']);
+  });
+});
+
+// ─── 2. importFromWokwiZip — libraries field ───────────────────────────────────
+
+describe('importFromWokwiZip — libraries field', () => {
+  it('returns empty array when no libraries.txt is present', async () => {
+    const file = await makeZip({ 'sketch.ino': 'void setup(){}void loop(){}' });
+    const result = await importFromWokwiZip(file);
+    expect(result.libraries).toEqual([]);
+  });
+
+  it('returns standard libs from a minimal libraries.txt', async () => {
+    const file = await makeZip({
+      'sketch.ino': 'void setup(){}void loop(){}',
+      'libraries.txt': 'Adafruit GFX Library\nAdafruit SSD1306\n',
+    });
+    const result = await importFromWokwiZip(file);
+    expect(result.libraries).toEqual(['Adafruit GFX Library', 'Adafruit SSD1306']);
+  });
+
+  it('excludes @wokwi: entries from the returned array', async () => {
+    const file = await makeZip({
+      'sketch.ino': 'void setup(){}void loop(){}',
+      'libraries.txt': 'GoodLib\nBadLib@wokwi:deadbeef12345\n',
+    });
+    const result = await importFromWokwiZip(file);
+    expect(result.libraries).toEqual(['GoodLib']);
+  });
+
+  it('returns empty array when libraries.txt is only comments', async () => {
+    const file = await makeZip({
+      'sketch.ino': 'void setup(){}void loop(){}',
+      'libraries.txt': '# Wokwi Library List\n# no real libs here\n\n',
+    });
+    const result = await importFromWokwiZip(file);
+    expect(result.libraries).toEqual([]);
+  });
+
+  it('pong ZIP — extracts 2 standard libs', async () => {
+    const file = await makeZip({
+      'sketch.ino': 'void setup(){}void loop(){}',
+      'libraries.txt': PONG_LIBRARIES_TXT,
+    });
+    const result = await importFromWokwiZip(file);
+    expect(result.libraries).toEqual(['Adafruit GFX Library', 'Adafruit SSD1306']);
+  });
+
+  it('calculator ZIP — 5 standard libs, zero @wokwi: entries', async () => {
+    const file = await makeZip({
+      'sketch.ino': 'void setup(){}void loop(){}',
+      'libraries.txt': CALCULATOR_LIBRARIES_TXT,
+    });
+    const result = await importFromWokwiZip(file);
+    expect(result.libraries).toHaveLength(5);
+    for (const lib of result.libraries) {
+      expect(lib).not.toContain('@wokwi:');
+    }
+  });
+
+  it('libraries field does not interfere with files[], components[], wires[]', async () => {
+    const file = await makeZip({
+      'sketch.ino': '#include <Servo.h>\nvoid setup(){}void loop(){}',
+      'libraries.txt': 'Servo\n',
+    });
+    const result = await importFromWokwiZip(file);
+    // Board detected
+    expect(result.boardType).toBe('arduino-uno');
+    // Files parsed
+    expect(result.files.some((f) => f.name === 'sketch.ino')).toBe(true);
+    // Libraries parsed
+    expect(result.libraries).toEqual(['Servo']);
+  });
+});
+
+// ─── 3. installLibrary service — HTTP stubs ────────────────────────────────────
+
+describe('installLibrary service', () => {
+  afterEach(() => vi.unstubAllGlobals());
+
+  it('POSTs to /api/libraries/install with the library name in the body', async () => {
+    const mockFetch = vi.fn().mockResolvedValue({
+      ok: true,
+      json: async () => ({ success: true }),
+    });
+    vi.stubGlobal('fetch', mockFetch);
+
+    await installLibrary('Adafruit GFX Library');
+
+    expect(mockFetch).toHaveBeenCalledOnce();
+    const [url, opts] = mockFetch.mock.calls[0];
+    expect(url).toContain('/libraries/install');
+    expect(opts.method).toBe('POST');
+    expect(JSON.parse(opts.body)).toEqual({ name: 'Adafruit GFX Library' });
+  });
+
+  it('returns { success: true } when the backend responds 200 ok', async () => {
+    vi.stubGlobal('fetch', vi.fn().mockResolvedValue({
+      ok: true,
+      json: async () => ({ success: true }),
+    }));
+
+    const result = await installLibrary('Servo');
+    expect(result.success).toBe(true);
+    expect(result.error).toBeUndefined();
+  });
+
+  it('returns { success: false, error } when the backend reports failure', async () => {
+    vi.stubGlobal('fetch', vi.fn().mockResolvedValue({
+      ok: true,
+      json: async () => ({ success: false, error: 'Library not found' }),
+    }));
+
+    const result = await installLibrary('NonExistentLib99999');
+    expect(result.success).toBe(false);
+    expect(result.error).toBe('Library not found');
+  });
+
+  it('installs multiple libraries sequentially without interference', async () => {
+    const calls: string[] = [];
+    vi.stubGlobal('fetch', vi.fn().mockImplementation((_url: string, opts: RequestInit) => {
+      calls.push(JSON.parse(opts.body as string).name);
+      return Promise.resolve({ ok: true, json: async () => ({ success: true }) });
+    }));
+
+    const libs = ['Adafruit GFX Library', 'Adafruit SSD1306', 'Servo'];
+    for (const lib of libs) await installLibrary(lib);
+
+    expect(calls).toEqual(libs);
+  });
+});
+
+// ─── 4. getInstalledLibraries service ─────────────────────────────────────────
+
+describe('getInstalledLibraries service', () => {
+  afterEach(() => vi.unstubAllGlobals());
+
+  it('GETs /api/libraries/list and returns the libraries array', async () => {
+    const mockLibs = [
+      { library: { name: 'Servo', version: '1.2.1', author: 'Arduino' } },
+      { library: { name: 'Adafruit GFX Library', version: '1.11.9', author: 'Adafruit' } },
+    ];
+    vi.stubGlobal('fetch', vi.fn().mockResolvedValue({
+      ok: true,
+      json: async () => ({ success: true, libraries: mockLibs }),
+    }));
+
+    const result = await getInstalledLibraries();
+    expect(result).toHaveLength(2);
+    expect(result[0].library?.name).toBe('Servo');
+    expect(result[1].library?.name).toBe('Adafruit GFX Library');
+  });
+
+  it('returns empty array when no libraries are installed', async () => {
+    vi.stubGlobal('fetch', vi.fn().mockResolvedValue({
+      ok: true,
+      json: async () => ({ success: true, libraries: [] }),
+    }));
+
+    const result = await getInstalledLibraries();
+    expect(result).toEqual([]);
+  });
+
+  it('throws when the request fails (non-ok response)', async () => {
+    vi.stubGlobal('fetch', vi.fn().mockResolvedValue({
+      ok: false,
+      json: async () => ({ detail: 'Internal server error' }),
+    }));
+
+    await expect(getInstalledLibraries()).rejects.toThrow('Internal server error');
+  });
+});