diff --git a/src/main.rs b/src/main.rs
index b09e4b3..c20e476 100644
--- a/src/main.rs
+++ b/src/main.rs
@@ -9,6 +9,7 @@ mod interpreter;
 mod lexer;
 mod lsp;
 mod modules;
+mod package;
 mod parser;
 mod schema;
 mod typechecker;
@@ -133,6 +134,10 @@ fn main() {
                     std::process::exit(1);
                 }
             }
+            "pkg" => {
+                // Package manager
+                handle_pkg_command(&args[2..]);
+            }
             path => {
                 // Run a file
                 run_file(path);
@@ -156,6 +161,7 @@ fn print_help() {
     println!("  lux watch <file.lux>  Watch and re-run on changes");
     println!("  lux debug <file.lux>  Start interactive debugger");
     println!("  lux init [name]       Initialize a new project");
+    println!("  lux pkg <command>     Package manager (install, add, remove, list, update)");
     println!("  lux --lsp             Start LSP server (for IDE integration)");
     println!("  lux --help            Show this help");
     println!("  lux --version         Show version");
@@ -382,6 +388,156 @@ fn watch_file(path: &str) {
     }
 }
 
+fn handle_pkg_command(args: &[String]) {
+    use package::{PackageManager, DependencySource};
+    use std::path::PathBuf;
+
+    if args.is_empty() {
+        print_pkg_help();
+        return;
+    }
+
+    // Help doesn't require being in a project
+    if matches!(args[0].as_str(), "help" | "--help" | "-h") {
+        print_pkg_help();
+        return;
+    }
+
+    let project_root = match PackageManager::find_project_root() {
+        Some(root) => root,
+        None => {
+            eprintln!("Error: Not in a Lux project (no lux.toml found)");
+            eprintln!("Run 'lux init' to create a new project");
+            std::process::exit(1);
+        }
+    };
+
+    let pkg = PackageManager::new(&project_root);
+
+    match args[0].as_str() {
+        "install" | "i" => {
+            if let Err(e) = pkg.install() {
+                eprintln!("Error: {}", e);
+                std::process::exit(1);
+            }
+        }
+        "add" => {
+            if args.len() < 2 {
+                eprintln!("Usage: lux pkg add <package> [version] [--git <url>] [--path <path>]");
+                std::process::exit(1);
+            }
+            let name = &args[1];
+            let mut version = "0.0.0".to_string();
+            let mut source = DependencySource::Registry;
+
+            let mut i = 2;
+            while i < args.len() {
+                match args[i].as_str() {
+                    "--git" => {
+                        if i + 1 < args.len() {
+                            let url = args[i + 1].clone();
+                            let branch = if i + 3 < args.len() && args[i + 2] == "--branch" {
+                                i += 2;
+                                Some(args[i + 1].clone())
+                            } else {
+                                None
+                            };
+                            source = DependencySource::Git { url, branch };
+                            i += 2;
+                        } else {
+                            eprintln!("--git requires a URL");
+                            std::process::exit(1);
+                        }
+                    }
+                    "--path" => {
+                        if i + 1 < args.len() {
+                            source = DependencySource::Path {
+                                path: PathBuf::from(&args[i + 1]),
+                            };
+                            i += 2;
+                        } else {
+                            eprintln!("--path requires a path");
+                            std::process::exit(1);
+                        }
+                    }
+                    v if !v.starts_with('-') => {
+                        version = v.to_string();
+                        i += 1;
+                    }
+                    _ => i += 1,
+                }
+            }
+
+            if let Err(e) = pkg.add(name, &version, source) {
+                eprintln!("Error: {}", e);
+                std::process::exit(1);
+            }
+        }
+        "remove" | "rm" => {
+            if args.len() < 2 {
+                eprintln!("Usage: lux pkg remove <package>");
+                std::process::exit(1);
+            }
+            if let Err(e) = pkg.remove(&args[1]) {
+                eprintln!("Error: {}", e);
+                std::process::exit(1);
+            }
+        }
+        "list" | "ls" => {
+            if let Err(e) = pkg.list() {
+                eprintln!("Error: {}", e);
+                std::process::exit(1);
+            }
+        }
+        "update" => {
+            if let Err(e) = pkg.update() {
+                eprintln!("Error: {}", e);
+                std::process::exit(1);
+            }
+        }
+        "clean" => {
+            if let Err(e) = pkg.clean() {
+                eprintln!("Error: {}", e);
+                std::process::exit(1);
+            }
+        }
+        "help" | "--help" | "-h" => {
+            print_pkg_help();
+        }
+        unknown => {
+            eprintln!("Unknown package command: {}", unknown);
+            print_pkg_help();
+            std::process::exit(1);
+        }
+    }
+}
+
+fn print_pkg_help() {
+    println!("Lux Package Manager");
+    println!();
+    println!("Usage: lux pkg <command> [options]");
+    println!();
+    println!("Commands:");
+    println!("  install, i     Install all dependencies from lux.toml");
+    println!("  add <pkg>      Add a dependency");
+    println!("                   Options:");
+    println!("                     [version]         Specify version (default: 0.0.0)");
+    println!("                     --git <url>       Install from git repository");
+    println!("                     --branch <name>   Git branch (with --git)");
+    println!("                     --path <path>     Install from local path");
+    println!("  remove, rm     Remove a dependency");
+    println!("  list, ls       List dependencies and their status");
+    println!("  update         Update all dependencies");
+    println!("  clean          Remove installed packages");
+    println!();
+    println!("Examples:");
+    println!("  lux pkg install");
+    println!("  lux pkg add http 1.0.0");
+    println!("  lux pkg add mylib --git https://github.com/user/mylib");
+    println!("  lux pkg add local-lib --path ../lib");
+    println!("  lux pkg remove http");
+}
+
 fn init_project(name: Option<&str>) {
     use std::fs;
     use std::path::Path;
diff --git a/src/package.rs b/src/package.rs
new file mode 100644
index 0000000..d8f320c
--- /dev/null
+++ b/src/package.rs
@@ -0,0 +1,621 @@
+//! Package manager for Lux
+//!
+//! Handles dependency management, package installation, and version resolution.
+
+use std::collections::HashMap;
+use std::fs;
+use std::path::{Path, PathBuf};
+use std::io::{self, Write};
+
+/// Package manifest (lux.toml)
+#[derive(Debug, Clone)]
+pub struct Manifest {
+    pub project: ProjectInfo,
+    pub dependencies: HashMap<String, Dependency>,
+}
+
+/// Project information from lux.toml
+#[derive(Debug, Clone)]
+pub struct ProjectInfo {
+    pub name: String,
+    pub version: String,
+    pub description: Option<String>,
+    pub authors: Vec<String>,
+    pub license: Option<String>,
+}
+
+/// A package dependency
+#[derive(Debug, Clone)]
+pub struct Dependency {
+    pub name: String,
+    pub version: String,
+    pub source: DependencySource,
+}
+
+/// Source of a dependency
+#[derive(Debug, Clone)]
+pub enum DependencySource {
+    /// From the Lux package registry
+    Registry,
+    /// From a git repository
+    Git { url: String, branch: Option<String> },
+    /// From a local path
+    Path { path: PathBuf },
+}
+
+/// Package manager
+pub struct PackageManager {
+    /// Root directory of the project
+    project_root: PathBuf,
+    /// Directory where packages are cached
+    cache_dir: PathBuf,
+    /// Directory where packages are installed (project-local)
+    packages_dir: PathBuf,
+}
+
+impl PackageManager {
+    pub fn new(project_root: &Path) -> Self {
+        let cache_dir = dirs::cache_dir()
+            .unwrap_or_else(|| PathBuf::from("."))
+            .join("lux")
+            .join("packages");
+
+        let packages_dir = project_root.join(".lux_packages");
+
+        Self {
+            project_root: project_root.to_path_buf(),
+            cache_dir,
+            packages_dir,
+        }
+    }
+
+    /// Find the project root by looking for lux.toml
+    pub fn find_project_root() -> Option<PathBuf> {
+        let mut current = std::env::current_dir().ok()?;
+
+        loop {
+            if current.join("lux.toml").exists() {
+                return Some(current);
+            }
+
+            if !current.pop() {
+                return None;
+            }
+        }
+    }
+
+    /// Load the manifest from lux.toml
+    pub fn load_manifest(&self) -> Result<Manifest, String> {
+        let manifest_path = self.project_root.join("lux.toml");
+
+        if !manifest_path.exists() {
+            return Err("No lux.toml found in project root".to_string());
+        }
+
+        let content = fs::read_to_string(&manifest_path)
+            .map_err(|e| format!("Failed to read lux.toml: {}", e))?;
+
+        parse_manifest(&content)
+    }
+
+    /// Save the manifest to lux.toml
+    pub fn save_manifest(&self, manifest: &Manifest) -> Result<(), String> {
+        let manifest_path = self.project_root.join("lux.toml");
+        let content = format_manifest(manifest);
+
+        fs::write(&manifest_path, content)
+            .map_err(|e| format!("Failed to write lux.toml: {}", e))
+    }
+
+    /// Add a dependency to the project
+    pub fn add(&self, name: &str, version: &str, source: DependencySource) -> Result<(), String> {
+        let mut manifest = self.load_manifest()?;
+
+        let dep = Dependency {
+            name: name.to_string(),
+            version: version.to_string(),
+            source,
+        };
+
+        manifest.dependencies.insert(name.to_string(), dep);
+        self.save_manifest(&manifest)?;
+
+        println!("Added {} v{} to dependencies", name, version);
+        Ok(())
+    }
+
+    /// Remove a dependency from the project
+    pub fn remove(&self, name: &str) -> Result<(), String> {
+        let mut manifest = self.load_manifest()?;
+
+        if manifest.dependencies.remove(name).is_some() {
+            self.save_manifest(&manifest)?;
+
+            // Remove from packages dir if it exists
+            let pkg_dir = self.packages_dir.join(name);
+            if pkg_dir.exists() {
+                fs::remove_dir_all(&pkg_dir)
+                    .map_err(|e| format!("Failed to remove package directory: {}", e))?;
+            }
+
+            println!("Removed {} from dependencies", name);
+            Ok(())
+        } else {
+            Err(format!("Dependency '{}' not found", name))
+        }
+    }
+
+    /// Install all dependencies
+    pub fn install(&self) -> Result<(), String> {
+        let manifest = self.load_manifest()?;
+
+        if manifest.dependencies.is_empty() {
+            println!("No dependencies to install.");
+            return Ok(());
+        }
+
+        // Create packages directory
+        fs::create_dir_all(&self.packages_dir)
+            .map_err(|e| format!("Failed to create packages directory: {}", e))?;
+
+        println!("Installing {} dependencies...", manifest.dependencies.len());
+        println!();
+
+        for (name, dep) in &manifest.dependencies {
+            self.install_dependency(dep)?;
+        }
+
+        println!();
+        println!("Done! Installed {} packages.", manifest.dependencies.len());
+        Ok(())
+    }
+
+    /// Install a single dependency
+    fn install_dependency(&self, dep: &Dependency) -> Result<(), String> {
+        print!("  Installing {} v{}... ", dep.name, dep.version);
+        io::stdout().flush().unwrap();
+
+        let dest_dir = self.packages_dir.join(&dep.name);
+
+        match &dep.source {
+            DependencySource::Registry => {
+                // For now, simulate registry installation
+                // In a real implementation, this would fetch from a package registry
+                self.install_from_registry(dep, &dest_dir)?;
+            }
+            DependencySource::Git { url, branch } => {
+                self.install_from_git(url, branch.as_deref(), &dest_dir)?;
+            }
+            DependencySource::Path { path } => {
+                self.install_from_path(path, &dest_dir)?;
+            }
+        }
+
+        println!("done");
+        Ok(())
+    }
+
+    fn install_from_registry(&self, dep: &Dependency, dest: &Path) -> Result<(), String> {
+        // Check if already installed with correct version
+        let version_file = dest.join(".version");
+        if version_file.exists() {
+            let installed_version = fs::read_to_string(&version_file).unwrap_or_default();
+            if installed_version.trim() == dep.version {
+                return Ok(());
+            }
+        }
+
+        // Check cache first
+        let cache_path = self.cache_dir.join(&dep.name).join(&dep.version);
+
+        if cache_path.exists() {
+            // Copy from cache
+            copy_dir_recursive(&cache_path, dest)?;
+        } else {
+            // Create placeholder package (in real impl, would download)
+            fs::create_dir_all(dest)
+                .map_err(|e| format!("Failed to create package directory: {}", e))?;
+
+            // Create a lib.lux placeholder
+            let lib_content = format!(
+                "// Package: {} v{}\n// This is a placeholder - real package would be downloaded from registry\n\n",
+                dep.name, dep.version
+            );
+            fs::write(dest.join("lib.lux"), lib_content)
+                .map_err(|e| format!("Failed to create lib.lux: {}", e))?;
+        }
+
+        // Write version file
+        fs::write(&version_file, &dep.version)
+            .map_err(|e| format!("Failed to write version file: {}", e))?;
+
+        Ok(())
+    }
+
+    fn install_from_git(&self, url: &str, branch: Option<&str>, dest: &Path) -> Result<(), String> {
+        // Remove existing if present
+        if dest.exists() {
+            fs::remove_dir_all(dest)
+                .map_err(|e| format!("Failed to remove existing directory: {}", e))?;
+        }
+
+        // Clone the repository
+        let mut cmd = std::process::Command::new("git");
+        cmd.arg("clone")
+            .arg("--depth").arg("1");
+
+        if let Some(b) = branch {
+            cmd.arg("--branch").arg(b);
+        }
+
+        cmd.arg(url).arg(dest);
+
+        let output = cmd.output()
+            .map_err(|e| format!("Failed to run git: {}", e))?;
+
+        if !output.status.success() {
+            return Err(format!(
+                "Git clone failed: {}",
+                String::from_utf8_lossy(&output.stderr)
+            ));
+        }
+
+        // Remove .git directory to save space
+        let git_dir = dest.join(".git");
+        if git_dir.exists() {
+            fs::remove_dir_all(&git_dir).ok();
+        }
+
+        Ok(())
+    }
+
+    fn install_from_path(&self, source: &Path, dest: &Path) -> Result<(), String> {
+        let source = if source.is_absolute() {
+            source.to_path_buf()
+        } else {
+            self.project_root.join(source)
+        };
+
+        if !source.exists() {
+            return Err(format!("Source path does not exist: {}", source.display()));
+        }
+
+        // Remove existing if present
+        if dest.exists() {
+            fs::remove_dir_all(dest)
+                .map_err(|e| format!("Failed to remove existing directory: {}", e))?;
+        }
+
+        // Copy the directory
+        copy_dir_recursive(&source, dest)?;
+
+        Ok(())
+    }
+
+    /// List installed packages
+    pub fn list(&self) -> Result<(), String> {
+        let manifest = self.load_manifest()?;
+
+        if manifest.dependencies.is_empty() {
+            println!("No dependencies in lux.toml");
+            return Ok(());
+        }
+
+        println!("Dependencies:");
+        for (name, dep) in &manifest.dependencies {
+            let source_info = match &dep.source {
+                DependencySource::Registry => "registry".to_string(),
+                DependencySource::Git { url, branch } => {
+                    if let Some(b) = branch {
+                        format!("git: {} ({})", url, b)
+                    } else {
+                        format!("git: {}", url)
+                    }
+                }
+                DependencySource::Path { path } => format!("path: {}", path.display()),
+            };
+
+            let installed = self.packages_dir.join(name).exists();
+            let status = if installed { "✓" } else { "✗" };
+
+            println!("  {} {} v{} [{}]", status, name, dep.version, source_info);
+        }
+
+        Ok(())
+    }
+
+    /// Update all dependencies
+    pub fn update(&self) -> Result<(), String> {
+        let manifest = self.load_manifest()?;
+
+        if manifest.dependencies.is_empty() {
+            println!("No dependencies to update.");
+            return Ok(());
+        }
+
+        println!("Updating {} dependencies...", manifest.dependencies.len());
+        println!();
+
+        for (name, dep) in &manifest.dependencies {
+            // Force reinstall
+            let dest_dir = self.packages_dir.join(name);
+            if dest_dir.exists() {
+                fs::remove_dir_all(&dest_dir).ok();
+            }
+            self.install_dependency(dep)?;
+        }
+
+        println!();
+        println!("Done!");
+        Ok(())
+    }
+
+    /// Get the search paths for installed packages
+    pub fn get_package_paths(&self) -> Vec<PathBuf> {
+        let mut paths = vec![];
+
+        if self.packages_dir.exists() {
+            paths.push(self.packages_dir.clone());
+        }
+
+        // Also include global cache
+        if self.cache_dir.exists() {
+            paths.push(self.cache_dir.clone());
+        }
+
+        paths
+    }
+
+    /// Clean the packages directory
+    pub fn clean(&self) -> Result<(), String> {
+        if self.packages_dir.exists() {
+            fs::remove_dir_all(&self.packages_dir)
+                .map_err(|e| format!("Failed to remove packages directory: {}", e))?;
+            println!("Cleaned .lux_packages directory");
+        } else {
+            println!("Nothing to clean");
+        }
+        Ok(())
+    }
+}
+
+/// Parse a lux.toml manifest
+fn parse_manifest(content: &str) -> Result<Manifest, String> {
+    let mut project = ProjectInfo {
+        name: String::new(),
+        version: String::new(),
+        description: None,
+        authors: vec![],
+        license: None,
+    };
+    let mut dependencies = HashMap::new();
+
+    let mut current_section = "";
+
+    for line in content.lines() {
+        let line = line.trim();
+
+        // Skip comments and empty lines
+        if line.is_empty() || line.starts_with('#') {
+            continue;
+        }
+
+        // Section header
+        if line.starts_with('[') && line.ends_with(']') {
+            current_section = &line[1..line.len()-1];
+            continue;
+        }
+
+        // Key = value
+        if let Some(eq_pos) = line.find('=') {
+            let key = line[..eq_pos].trim();
+            let value = line[eq_pos+1..].trim();
+            let value = value.trim_matches('"');
+
+            match current_section {
+                "project" => {
+                    match key {
+                        "name" => project.name = value.to_string(),
+                        "version" => project.version = value.to_string(),
+                        "description" => project.description = Some(value.to_string()),
+                        "license" => project.license = Some(value.to_string()),
+                        "authors" => {
+                            // Simple array parsing
+                            let authors_str = value.trim_matches(|c| c == '[' || c == ']');
+                            project.authors = authors_str
+                                .split(',')
+                                .map(|s| s.trim().trim_matches('"').to_string())
+                                .filter(|s| !s.is_empty())
+                                .collect();
+                        }
+                        _ => {}
+                    }
+                }
+                "dependencies" => {
+                    // Parse dependency
+                    let dep = parse_dependency(key, value)?;
+                    dependencies.insert(key.to_string(), dep);
+                }
+                _ => {}
+            }
+        }
+    }
+
+    if project.name.is_empty() {
+        return Err("Missing project name in lux.toml".to_string());
+    }
+    if project.version.is_empty() {
+        return Err("Missing project version in lux.toml".to_string());
+    }
+
+    Ok(Manifest { project, dependencies })
+}
+
+fn parse_dependency(name: &str, value: &str) -> Result<Dependency, String> {
+    let value = value.trim();
+
+    // Simple version string: "1.0.0"
+    if value.starts_with('"') || value.chars().next().map(|c| c.is_ascii_digit()).unwrap_or(false) {
+        let version = value.trim_matches('"');
+        return Ok(Dependency {
+            name: name.to_string(),
+            version: version.to_string(),
+            source: DependencySource::Registry,
+        });
+    }
+
+    // Inline table: { version = "1.0", git = "..." }
+    if value.starts_with('{') && value.ends_with('}') {
+        let inner = &value[1..value.len()-1];
+        let mut version = "0.0.0".to_string();
+        let mut git_url = None;
+        let mut git_branch = None;
+        let mut path = None;
+
+        for part in inner.split(',') {
+            let part = part.trim();
+            if let Some(eq_pos) = part.find('=') {
+                let k = part[..eq_pos].trim();
+                let v = part[eq_pos+1..].trim().trim_matches('"');
+
+                match k {
+                    "version" => version = v.to_string(),
+                    "git" => git_url = Some(v.to_string()),
+                    "branch" => git_branch = Some(v.to_string()),
+                    "path" => path = Some(PathBuf::from(v)),
+                    _ => {}
+                }
+            }
+        }
+
+        let source = if let Some(url) = git_url {
+            DependencySource::Git { url, branch: git_branch }
+        } else if let Some(p) = path {
+            DependencySource::Path { path: p }
+        } else {
+            DependencySource::Registry
+        };
+
+        return Ok(Dependency {
+            name: name.to_string(),
+            version,
+            source,
+        });
+    }
+
+    Err(format!("Invalid dependency format for {}: {}", name, value))
+}
+
+/// Format a manifest as TOML
+fn format_manifest(manifest: &Manifest) -> String {
+    let mut output = String::new();
+
+    output.push_str("[project]\n");
+    output.push_str(&format!("name = \"{}\"\n", manifest.project.name));
+    output.push_str(&format!("version = \"{}\"\n", manifest.project.version));
+
+    if let Some(desc) = &manifest.project.description {
+        output.push_str(&format!("description = \"{}\"\n", desc));
+    }
+
+    if !manifest.project.authors.is_empty() {
+        let authors: Vec<String> = manifest.project.authors.iter()
+            .map(|a| format!("\"{}\"", a))
+            .collect();
+        output.push_str(&format!("authors = [{}]\n", authors.join(", ")));
+    }
+
+    if let Some(license) = &manifest.project.license {
+        output.push_str(&format!("license = \"{}\"\n", license));
+    }
+
+    output.push_str("\n[dependencies]\n");
+
+    for (name, dep) in &manifest.dependencies {
+        match &dep.source {
+            DependencySource::Registry => {
+                output.push_str(&format!("{} = \"{}\"\n", name, dep.version));
+            }
+            DependencySource::Git { url, branch } => {
+                if let Some(b) = branch {
+                    output.push_str(&format!(
+                        "{} = {{ version = \"{}\", git = \"{}\", branch = \"{}\" }}\n",
+                        name, dep.version, url, b
+                    ));
+                } else {
+                    output.push_str(&format!(
+                        "{} = {{ version = \"{}\", git = \"{}\" }}\n",
+                        name, dep.version, url
+                    ));
+                }
+            }
+            DependencySource::Path { path } => {
+                output.push_str(&format!(
+                    "{} = {{ version = \"{}\", path = \"{}\" }}\n",
+                    name, dep.version, path.display()
+                ));
+            }
+        }
+    }
+
+    output
+}
+
+/// Recursively copy a directory
+fn copy_dir_recursive(src: &Path, dst: &Path) -> Result<(), String> {
+    fs::create_dir_all(dst)
+        .map_err(|e| format!("Failed to create directory: {}", e))?;
+
+    for entry in fs::read_dir(src).map_err(|e| format!("Failed to read directory: {}", e))? {
+        let entry = entry.map_err(|e| format!("Failed to read entry: {}", e))?;
+        let path = entry.path();
+        let dest_path = dst.join(entry.file_name());
+
+        if path.is_dir() {
+            copy_dir_recursive(&path, &dest_path)?;
+        } else {
+            fs::copy(&path, &dest_path)
+                .map_err(|e| format!("Failed to copy file: {}", e))?;
+        }
+    }
+
+    Ok(())
+}
+
+// Platform-specific cache directory handling
+mod dirs {
+    use std::path::PathBuf;
+
+    pub fn cache_dir() -> Option<PathBuf> {
+        #[cfg(target_os = "linux")]
+        {
+            std::env::var("XDG_CACHE_HOME")
+                .map(PathBuf::from)
+                .ok()
+                .or_else(|| {
+                    std::env::var("HOME")
+                        .map(|h| PathBuf::from(h).join(".cache"))
+                        .ok()
+                })
+        }
+
+        #[cfg(target_os = "macos")]
+        {
+            std::env::var("HOME")
+                .map(|h| PathBuf::from(h).join("Library").join("Caches"))
+                .ok()
+        }
+
+        #[cfg(target_os = "windows")]
+        {
+            std::env::var("LOCALAPPDATA")
+                .map(PathBuf::from)
+                .ok()
+        }
+
+        #[cfg(not(any(target_os = "linux", target_os = "macos", target_os = "windows")))]
+        {
+            None
+        }
+    }
+}