diff --git a/packages/core/src/context.ts b/packages/core/src/context.ts
index f4839439..8498bb1e 100644
--- a/packages/core/src/context.ts
+++ b/packages/core/src/context.ts
@@ -6,7 +6,8 @@ import {
 import {
     Embedding,
     EmbeddingVector,
-    OpenAIEmbedding
+    OpenAIEmbedding,
+    EmbeddingCache
 } from './embedding';
 import {
     VectorDatabase,
@@ -108,6 +109,7 @@ export class Context {
     private collectionNameOverride?: string;
     private warnedOverrideSanitization = new Set<string>();
     private synchronizers = new Map<string, FileSynchronizer>();
+    private embeddingCache: EmbeddingCache | null = null;
 
     constructor(config: ContextConfig = {}) {
         // Initialize services
@@ -158,6 +160,25 @@ export class Context {
         if (envCustomIgnorePatterns.length > 0) {
             console.log(`[Context] 🚫 Loaded ${envCustomIgnorePatterns.length} custom ignore patterns from environment: ${envCustomIgnorePatterns.join(', ')}`);
         }
+
+        // Initialize embedding cache
+        this.initEmbeddingCache();
+    }
+
+    /**
+     * (Re)create the embedding cache keyed by current provider + dimension.
+     * Called on construction and again whenever the embedding instance changes
+     * via updateEmbedding(), so cached vectors from a previous model never bleed
+     * into the new one.
+     */
+    private initEmbeddingCache(): void {
+        const dimension = this.embedding.getDimension();
+        const cacheModel = `${this.embedding.getProvider()}_${dimension}`;
+        this.embeddingCache = new EmbeddingCache(cacheModel, undefined, dimension);
+        if (this.embeddingCache.isEnabled()) {
+            console.log(`[Context] 💾 Embedding cache enabled for model: ${cacheModel}`);
+            this.embeddingCache.cleanup().catch(() => {});
+        }
     }
 
     /**
@@ -569,6 +590,61 @@ export class Context {
         }
     }
 
+    /**
+     * Embed batch with disk cache. Only calls API for uncached chunks.
+     * Also dedupes duplicate strings within the same batch — without this, two
+     * identical chunks in one batch would each hit the API since neither is
+     * cached at the start of the call. Common in monorepos with re-exports or
+     * generated boilerplate.
+     */
+    private async cachedEmbedBatch(contents: string[]): Promise<EmbeddingVector[]> {
+        if (!this.embeddingCache || !this.embeddingCache.isEnabled()) {
+            return this.embedding.embedBatch(contents);
+        }
+
+        const { results, uncachedIndices } = this.embeddingCache.getBatch(contents);
+
+        if (uncachedIndices.length === 0) {
+            console.log(`[Cache] ✅ All ${contents.length} embeddings from cache`);
+            return results as EmbeddingVector[];
+        }
+
+        // Dedupe uncached texts: send each unique string once and fan results
+        // back out to every original index pointing at that string.
+        const uniqueTexts: string[] = [];
+        const textToUniqueIndex = new Map<string, number>();
+        const indicesByUnique: number[][] = [];
+        for (const i of uncachedIndices) {
+            const text = contents[i];
+            let uniq = textToUniqueIndex.get(text);
+            if (uniq === undefined) {
+                uniq = uniqueTexts.length;
+                textToUniqueIndex.set(text, uniq);
+                uniqueTexts.push(text);
+                indicesByUnique.push([]);
+            }
+            indicesByUnique[uniq].push(i);
+        }
+
+        const newEmbeddings = await this.embedding.embedBatch(uniqueTexts);
+
+        for (let u = 0; u < uniqueTexts.length; u++) {
+            const embedding = newEmbeddings[u];
+            this.embeddingCache.set(uniqueTexts[u], embedding);
+            for (const i of indicesByUnique[u]) {
+                results[i] = embedding;
+            }
+        }
+
+        const hitRate = ((contents.length - uncachedIndices.length) / contents.length * 100).toFixed(0);
+        const dedupNote = uniqueTexts.length < uncachedIndices.length
+            ? ` (deduped ${uncachedIndices.length} → ${uniqueTexts.length} API calls)`
+            : '';
+        console.log(`[Cache] ${hitRate}% hit (${contents.length - uncachedIndices.length}/${contents.length} cached, ${uniqueTexts.length} embedded)${dedupNote}`);
+
+        return results as EmbeddingVector[];
+    }
+
     /**
      * Check if index exists for codebase
      * @param codebasePath Codebase path to check
@@ -653,6 +729,9 @@ export class Context {
     updateEmbedding(embedding: Embedding): void {
         this.embedding = embedding;
         console.log(`[Context] 🔄 Updated embedding provider: ${embedding.getProvider()}`);
+        // Cache key is `${provider}_${dimension}`; re-key so we don't return
+        // vectors from the previous model on the next embed call.
+        this.initEmbeddingCache();
     }
 
     /**
@@ -865,9 +944,9 @@ export class Context {
     private async processChunkBatch(chunks: CodeChunk[], codebasePath: string): Promise<void> {
         const isHybrid = this.getIsHybrid();
 
-        // Generate embedding vectors
+        // Generate embedding vectors (with cache)
         const chunkContents = chunks.map(chunk => chunk.content);
-        const embeddings = await this.embedding.embedBatch(chunkContents);
+        const embeddings = await this.cachedEmbedBatch(chunkContents);
 
         if (isHybrid === true) {
             // Create hybrid vector documents
diff --git a/packages/core/src/embedding/embedding-cache.ts b/packages/core/src/embedding/embedding-cache.ts
new file mode 100644
index 00000000..021fefb6
--- /dev/null
+++ b/packages/core/src/embedding/embedding-cache.ts
@@ -0,0 +1,168 @@
+import * as fs from 'fs';
+import * as fsp from 'fs/promises';
+import * as path from 'path';
+import * as os from 'os';
+import * as crypto from 'crypto';
+import { EmbeddingVector } from './base-embedding';
+import { envManager } from '../utils/env-manager';
+
+export class EmbeddingCache {
+    private cacheDir: string;
+    private enabled: boolean;
+    private expectedDimension: number | null;
+
+    constructor(model: string, cacheDir?: string, expectedDimension?: number) {
+        this.enabled = (envManager.get('EMBEDDING_CACHE') || 'true').toLowerCase() !== 'false';
+        this.expectedDimension = expectedDimension ?? null;
+
+        const baseDir = cacheDir
+            || envManager.get('EMBEDDING_CACHE_DIR')
+            || path.join(os.homedir(), '.context', 'embedding-cache');
+
+        // Sanitize model name for filesystem
+        const safeModel = model.replace(/[^a-zA-Z0-9_-]/g, '_');
+        this.cacheDir = path.join(baseDir, safeModel);
+
+        if (this.enabled) {
+            try {
+                fs.mkdirSync(this.cacheDir, { recursive: true });
+            } catch {
+                console.warn(`[Cache] ⚠️ Could not create cache dir: ${this.cacheDir}`);
+                this.enabled = false;
+            }
+        }
+    }
+
+    private hash(content: string): string {
+        return crypto.createHash('sha256').update(content).digest('hex');
+    }
+
+    /**
+     * Use the FULL sha256 (64 hex chars) as the filename — truncating to 12 chars
+     * gave a birthday-collision probability of ~50% at ~78k entries, which is
+     * trivially reachable for a real codebase. Full hash makes collisions
+     * practically impossible.
+     */
+    private getCachePath(contentHash: string): string {
+        const prefix = contentHash.slice(0, 2);
+        return path.join(this.cacheDir, prefix, contentHash + '.json');
+    }
+
+    get(content: string): EmbeddingVector | null {
+        if (!this.enabled) return null;
+
+        try {
+            const h = this.hash(content);
+            const cachePath = this.getCachePath(h);
+
+            if (!fs.existsSync(cachePath)) return null;
+
+            const raw = fs.readFileSync(cachePath, 'utf-8');
+            const data = JSON.parse(raw);
+
+            // Shape validation — partial writes / future format changes / bit rot
+            // shouldn't return garbage to the caller. Treat anything unexpected as a miss.
+            if (!data || !Array.isArray(data.v) || typeof data.d !== 'number') return null;
+            if (data.v.length !== data.d) return null;
+            if (this.expectedDimension !== null && data.d !== this.expectedDimension) return null;
+
+            return { vector: data.v as number[], dimension: data.d };
+        } catch {
+            return null;
+        }
+    }
+
+    set(content: string, embedding: EmbeddingVector): void {
+        if (!this.enabled) return;
+
+        try {
+            const h = this.hash(content);
+            const cachePath = this.getCachePath(h);
+
+            fs.mkdirSync(path.dirname(cachePath), { recursive: true });
+            fs.writeFileSync(cachePath, JSON.stringify({ v: embedding.vector, d: embedding.dimension }));
+        } catch {
+            // Silently fail — cache is best-effort
+        }
+    }
+
+    getBatch(contents: string[]): { results: (EmbeddingVector | null)[]; uncachedIndices: number[] } {
+        const results: (EmbeddingVector | null)[] = new Array(contents.length).fill(null);
+        const uncachedIndices: number[] = [];
+
+        for (let i = 0; i < contents.length; i++) {
+            const cached = this.get(contents[i]);
+            if (cached) {
+                results[i] = cached;
+            } else {
+                uncachedIndices.push(i);
+            }
+        }
+
+        return { results, uncachedIndices };
+    }
+
+    isEnabled(): boolean {
+        return this.enabled;
+    }
+
+    /**
+     * Delete cache files not modified in the last maxAgeDays days.
+     * Truly async (uses fs.promises) so startup cleanup never blocks the event loop.
+     * Best-effort — errors are silently ignored.
+     *
+     * `maxAgeDays <= 0` (or non-finite) disables cleanup. Documented escape hatch
+     * for users who want the cache to persist indefinitely.
+     */
+    async cleanup(maxAgeDays?: number): Promise<void> {
+        if (!this.enabled) return;
+
+        const days = maxAgeDays ?? parseInt(envManager.get('EMBEDDING_CACHE_MAX_AGE_DAYS') || '30', 10);
+        if (!Number.isFinite(days) || days <= 0) return;
+
+        const cutoff = Date.now() - days * 24 * 60 * 60 * 1000;
+        let deleted = 0;
+
+        try {
+            const prefixDirs = await fsp.readdir(this.cacheDir);
+            for (const prefix of prefixDirs) {
+                const prefixPath = path.join(this.cacheDir, prefix);
+                let prefixStat;
+                try {
+                    prefixStat = await fsp.stat(prefixPath);
+                } catch {
+                    continue;
+                }
+                if (!prefixStat.isDirectory()) continue;
+
+                const files = await fsp.readdir(prefixPath);
+                for (const file of files) {
+                    const filePath = path.join(prefixPath, file);
+                    try {
+                        const stat = await fsp.stat(filePath);
+                        if (stat.mtimeMs < cutoff) {
+                            await fsp.unlink(filePath);
+                            deleted++;
+                        }
+                    } catch {
+                        // file vanished mid-scan, fine
+                    }
+                }
+
+                // Remove empty prefix dirs
+                try {
+                    const remaining = await fsp.readdir(prefixPath);
+                    if (remaining.length === 0) await fsp.rmdir(prefixPath);
+                } catch {
+                    // best-effort
+                }
+            }
+
+            if (deleted > 0) {
+                console.log(`[Cache] 🧹 Cleaned up ${deleted} stale cache files (>${days} days old)`);
+            }
+        } catch {
+            // Best-effort cleanup
+        }
+    }
+}
diff --git a/packages/core/src/embedding/index.ts b/packages/core/src/embedding/index.ts
index e6110941..3f517749 100644
--- a/packages/core/src/embedding/index.ts
+++ b/packages/core/src/embedding/index.ts
@@ -5,4 +5,5 @@ export * from './base-embedding';
 export * from './openai-embedding';
 export * from './voyageai-embedding';
 export * from './ollama-embedding';
-export * from './gemini-embedding'; 
\ No newline at end of file
+export * from './gemini-embedding';
+export * from './embedding-cache';