diff --git a/backend/main.py b/backend/main.py
index f848479..17ac833 100644
--- a/backend/main.py
+++ b/backend/main.py
@@ -32,6 +32,8 @@
     move_folder,
     rename_folder,
     delete_folder,
+    save_uploaded_image,
+    validate_path_security,
 )
 from .plugins import PluginManager
 from .themes import get_available_themes, get_theme_css
@@ -433,6 +435,91 @@ async def create_new_folder(data: dict):
         raise HTTPException(status_code=500, detail=str(e))
 
 
+@api_router.get("/images/{image_path:path}")
+async def get_image(image_path: str):
+    """
+    Serve an image file with authentication protection.
+    """
+    try:
+        notes_dir = config['storage']['notes_dir']
+        full_path = Path(notes_dir) / image_path
+        
+        # Security: Validate path is within notes directory
+        if not validate_path_security(notes_dir, full_path):
+            raise HTTPException(status_code=403, detail="Access denied")
+        
+        # Check file exists and is an image
+        if not full_path.exists() or not full_path.is_file():
+            raise HTTPException(status_code=404, detail="Image not found")
+        
+        # Validate it's an image file
+        allowed_extensions = {'.jpg', '.jpeg', '.png', '.gif', '.webp'}
+        if full_path.suffix.lower() not in allowed_extensions:
+            raise HTTPException(status_code=400, detail="Not an image file")
+        
+        # Return the file
+        return FileResponse(full_path)
+    except HTTPException:
+        raise
+    except Exception as e:
+        raise HTTPException(status_code=500, detail=str(e))
+
+
+@api_router.post("/upload-image")
+async def upload_image(file: UploadFile = File(...), note_path: str = Form(...)):
+    """
+    Upload an image file and save it to the attachments directory.
+    Returns the relative path to the image for markdown linking.
+    """
+    try:
+        # Validate file type
+        allowed_types = {'image/jpeg', 'image/jpg', 'image/png', 'image/gif', 'image/webp'}
+        allowed_extensions = {'.jpg', '.jpeg', '.png', '.gif', '.webp'}
+        
+        # Get file extension
+        file_ext = Path(file.filename).suffix.lower() if file.filename else ''
+        
+        if file.content_type not in allowed_types and file_ext not in allowed_extensions:
+            raise HTTPException(
+                status_code=400,
+                detail=f"Invalid file type. Allowed: jpg, jpeg, png, gif, webp. Got: {file.content_type}"
+            )
+        
+        # Read file data
+        file_data = await file.read()
+        
+        # Validate file size (10MB max)
+        max_size = 10 * 1024 * 1024  # 10MB in bytes
+        if len(file_data) > max_size:
+            raise HTTPException(
+                status_code=400,
+                detail=f"File too large. Maximum size: 10MB. Uploaded: {len(file_data) / 1024 / 1024:.2f}MB"
+            )
+        
+        # Save the image
+        image_path = save_uploaded_image(
+            config['storage']['notes_dir'],
+            note_path,
+            file.filename,
+            file_data
+        )
+        
+        if not image_path:
+            raise HTTPException(status_code=500, detail="Failed to save image")
+        
+        return {
+            "success": True,
+            "path": image_path,
+            "filename": Path(image_path).name,
+            "message": "Image uploaded successfully"
+        }
+        
+    except HTTPException:
+        raise
+    except Exception as e:
+        raise HTTPException(status_code=500, detail=str(e))
+
+
 @api_router.post("/notes/move")
 async def move_note_endpoint(data: dict):
     """Move a note to a different folder"""
diff --git a/backend/utils.py b/backend/utils.py
index 9020cbd..e953e93 100644
--- a/backend/utils.py
+++ b/backend/utils.py
@@ -157,23 +157,29 @@ def delete_folder(notes_dir: str, folder_path: str) -> bool:
 
 
 def get_all_notes(notes_dir: str) -> List[Dict]:
-    """Recursively get all markdown notes"""
-    notes = []
+    """Recursively get all markdown notes and images"""
+    items = []
     notes_path = Path(notes_dir)
     
+    # Get all markdown notes
     for md_file in notes_path.rglob("*.md"):
         relative_path = md_file.relative_to(notes_path)
         stat = md_file.stat()
         
-        notes.append({
+        items.append({
             "name": md_file.stem,
             "path": str(relative_path.as_posix()),
             "folder": str(relative_path.parent.as_posix()) if str(relative_path.parent) != "." else "",
             "modified": datetime.fromtimestamp(stat.st_mtime).isoformat(),
-            "size": stat.st_size
+            "size": stat.st_size,
+            "type": "note"
         })
     
-    return sorted(notes, key=lambda x: x['modified'], reverse=True)
+    # Get all images
+    images = get_all_images(notes_dir)
+    items.extend(images)
+    
+    return sorted(items, key=lambda x: x['modified'], reverse=True)
 
 
 def get_note_content(notes_dir: str, note_path: str) -> Optional[str]:
@@ -296,3 +302,127 @@ def create_note_metadata(notes_dir: str, note_path: str) -> Dict:
         "lines": line_count
     }
 
+
+def sanitize_filename(filename: str) -> str:
+    """
+    Sanitize a filename by removing/replacing invalid characters.
+    Keeps only alphanumeric chars, dots, dashes, and underscores.
+    """
+    # Get the extension first
+    parts = filename.rsplit('.', 1)
+    name = parts[0]
+    ext = parts[1] if len(parts) > 1 else ''
+    
+    # Remove/replace invalid characters
+    name = re.sub(r'[^a-zA-Z0-9_-]', '_', name)
+    
+    # Rejoin with extension
+    return f"{name}.{ext}" if ext else name
+
+
+def get_attachment_dir(notes_dir: str, note_path: str) -> Path:
+    """
+    Get the attachments directory for a given note.
+    If note is in root, returns /data/_attachments/
+    If note is in folder, returns /data/folder/_attachments/
+    """
+    if not note_path:
+        # Root level
+        return Path(notes_dir) / "_attachments"
+    
+    note_path_obj = Path(note_path)
+    folder = note_path_obj.parent
+    
+    if str(folder) == '.':
+        # Note is in root
+        return Path(notes_dir) / "_attachments"
+    else:
+        # Note is in a folder
+        return Path(notes_dir) / folder / "_attachments"
+
+
+def save_uploaded_image(notes_dir: str, note_path: str, filename: str, file_data: bytes) -> Optional[str]:
+    """
+    Save an uploaded image to the appropriate attachments directory.
+    Returns the relative path to the image if successful, None otherwise.
+    
+    Args:
+        notes_dir: Base notes directory
+        note_path: Path of the note the image is being uploaded to
+        filename: Original filename
+        file_data: Binary file data
+    
+    Returns:
+        Relative path to the saved image, or None if failed
+    """
+    # Sanitize filename
+    sanitized_name = sanitize_filename(filename)
+    
+    # Get extension
+    ext = Path(sanitized_name).suffix
+    name_without_ext = Path(sanitized_name).stem
+    
+    # Add timestamp to prevent collisions
+    timestamp = datetime.now().strftime('%Y%m%d%H%M%S')
+    final_filename = f"{name_without_ext}-{timestamp}{ext}"
+    
+    # Get attachments directory
+    attachments_dir = get_attachment_dir(notes_dir, note_path)
+    
+    # Create directory if it doesn't exist
+    attachments_dir.mkdir(parents=True, exist_ok=True)
+    
+    # Full path to save the image
+    full_path = attachments_dir / final_filename
+    
+    # Security check
+    if not validate_path_security(notes_dir, full_path):
+        print(f"Security: Attempted to save image outside notes directory: {full_path}")
+        return None
+    
+    try:
+        # Write the file
+        with open(full_path, 'wb') as f:
+            f.write(file_data)
+        
+        # Return relative path from notes_dir
+        relative_path = full_path.relative_to(Path(notes_dir))
+        return str(relative_path.as_posix())
+    except Exception as e:
+        print(f"Error saving image: {e}")
+        return None
+
+
+def get_all_images(notes_dir: str) -> List[Dict]:
+    """
+    Get all images from attachments directories.
+    Returns list of image dictionaries with metadata.
+    """
+    images = []
+    notes_path = Path(notes_dir)
+    
+    # Common image extensions
+    image_extensions = {'.jpg', '.jpeg', '.png', '.gif', '.webp'}
+    
+    # Find all attachments directories
+    for attachments_dir in notes_path.rglob("_attachments"):
+        if not attachments_dir.is_dir():
+            continue
+        
+        # Find all images in this attachments directory
+        for image_file in attachments_dir.iterdir():
+            if image_file.is_file() and image_file.suffix.lower() in image_extensions:
+                relative_path = image_file.relative_to(notes_path)
+                stat = image_file.stat()
+                
+                images.append({
+                    "name": image_file.name,
+                    "path": str(relative_path.as_posix()),
+                    "folder": str(relative_path.parent.as_posix()),
+                    "modified": datetime.fromtimestamp(stat.st_mtime).isoformat(),
+                    "size": stat.st_size,
+                    "type": "image"
+                })
+    
+    return images
+
diff --git a/documentation/API.md b/documentation/API.md
index 08a0689..96385bd 100644
--- a/documentation/API.md
+++ b/documentation/API.md
@@ -81,6 +81,67 @@ Content-Type: application/json
 }
 ```
 
+## 🖼️ Images
+
+### Get Image
+```http
+GET /api/images/{image_path}
+```
+Retrieve an image file with authentication protection.
+
+**Example:**
+```bash
+curl http://localhost:8000/api/images/folder/_attachments/image-20240417093343.png
+```
+
+**Security Note:** This endpoint requires authentication and validates that:
+- The image path is within the notes directory (prevents directory traversal)
+- The file exists and is a valid image format
+- The requesting user is authenticated (if auth is enabled)
+
+### Upload Image
+```http
+POST /api/upload-image
+Content-Type: multipart/form-data
+
+file: <image file>
+note_path: <path of note to attach to>
+```
+
+Upload an image file to the `_attachments` directory. Images are automatically organized per-folder and named with timestamps to prevent conflicts.
+
+**Supported formats:** JPG, JPEG, PNG, GIF, WEBP  
+**Maximum size:** 10MB
+
+**Response:**
+```json
+{
+  "success": true,
+  "path": "folder/_attachments/image-20240417093343.png",
+  "filename": "image-20240417093343.png",
+  "message": "Image uploaded successfully"
+}
+```
+
+**Example (using curl):**
+```bash
+curl -X POST http://localhost:8000/api/upload-image \
+  -F "file=@/path/to/image.png" \
+  -F "note_path=folder/mynote.md"
+```
+
+**Windows PowerShell:**
+```powershell
+curl.exe -X POST http://localhost:8000/api/upload-image -F "file=@C:\path\to\image.png" -F "note_path=folder/mynote.md"
+```
+
+**Notes:**
+- Images are stored in `_attachments` folders relative to the note's location
+- Filenames are automatically timestamped (e.g., `image-20240417093343.png`)
+- Images appear in the sidebar navigation and can be viewed/deleted directly
+- Drag & drop images into the editor automatically uploads and inserts markdown
+- All image access requires authentication when security is enabled
+
 ## 📁 Folders
 
 ### Create Folder
@@ -93,6 +154,17 @@ Content-Type: application/json
 }
 ```
 
+### Delete Folder
+```http
+DELETE /api/folders/{folder_path}
+```
+Deletes a folder and all its contents.
+
+**Example:**
+```bash
+curl -X DELETE http://localhost:8000/api/folders/Projects/Archive
+```
+
 ### Move Folder
 ```http
 POST /api/folders/move
diff --git a/documentation/FEATURES.md b/documentation/FEATURES.md
index d0a6022..994fe06 100644
--- a/documentation/FEATURES.md
+++ b/documentation/FEATURES.md
@@ -13,6 +13,11 @@
 - **Mermaid diagrams** - Create flowcharts, sequence diagrams, and more (see [MERMAID.md](MERMAID.md))
 - **HTML Export** - Export notes as standalone HTML files
 
+### Image Support
+- **Drag & drop upload** - Drop images from your file system directly into the editor
+- **Clipboard paste** - Paste images from clipboard with Ctrl+V
+- **Multiple formats** - Supports JPG, PNG, GIF, and WebP (max 10MB)
+
 ### Organization
 - **Folder hierarchy** - Organize notes in nested folders
 - **Drag & drop** - Move notes and folders effortlessly
@@ -24,7 +29,7 @@
 
 ### Internal Links
 - **Wiki-style links** - `[[Note Name]]` syntax
-- **Drag to link** - Hold Ctrl and drag a note into the editor
+- **Drag to link** - Drag notes or images into the editor to insert links
 - **Click to navigate** - Jump between notes seamlessly
 - **External links** - Open in new tabs automatically
 
@@ -143,7 +148,6 @@ graph TD
 | `Ctrl+Y` or `Ctrl+Shift+Z` | `Cmd+Y` or `Cmd+Shift+Z` | Redo |
 | `F3` | `F3` | Next search match |
 | `Shift+F3` | `Shift+F3` | Previous search match |
-| `Ctrl+Drag` | `Cmd+Drag` | Create internal link |
 
 ## 🚀 Performance
 
diff --git a/frontend/app.js b/frontend/app.js
index 849b33f..b55c0a4 100644
--- a/frontend/app.js
+++ b/frontend/app.js
@@ -64,8 +64,9 @@ function noteApp() {
         // Scroll sync state
         isScrolling: false,
         
-        // Drag state for internal linking
-        draggedNoteForLink: null,
+        // Unified drag state
+        draggedItem: null,  // { path: string, type: 'note' | 'image' }
+        dropTarget: null,   // 'editor' | 'folder' | null
         
         // Undo/Redo history
         undoHistory: [],
@@ -95,6 +96,9 @@ function noteApp() {
         // Mermaid state cache
         lastMermaidTheme: null,
         
+        // Image viewer state
+        currentImage: '',
+        
         // DOM element cache (to avoid repeated querySelector calls)
         _domCache: {
             editor: null,
@@ -131,6 +135,8 @@ function noteApp() {
                         this.searchResults = [];
                         this.clearSearchHighlights();
                     }
+                } else if (e.state && e.state.imagePath) {
+                    this.viewImage(e.state.imagePath, false); // false = don't update history
                 }
             });
             
@@ -525,28 +531,46 @@ function noteApp() {
                     });
                 }
                 
-                // Then, render notes in this folder (after subfolders)
+                // Then, render notes and images in this folder (after subfolders)
                 if (folder.notes && folder.notes.length > 0) {
                     folder.notes.forEach(note => {
+                        // Check if it's an image or a note
+                        const isImage = note.type === 'image';
                         const isCurrentNote = this.currentNote === note.path;
+                        const isCurrentImage = this.currentImage === note.path;
+                        const isCurrent = isImage ? isCurrentImage : isCurrentNote;
+                        
+                        // Different icon for images
+                        const icon = isImage ? '🖼️' : '';
+                        
+                        // Click handler
+                        const clickHandler = isImage 
+                            ? `viewImage('${note.path.replace(/'/g, "\\'")}')`
+                            : `loadNote('${note.path.replace(/'/g, "\\'")}')`; 
+                        
+                        // Delete handler
+                        const deleteHandler = isImage
+                            ? `deleteImage('${note.path.replace(/'/g, "\\'")}')`
+                            : `deleteNote('${note.path.replace(/'/g, "\\'")}', '${note.name.replace(/'/g, "\\'")}')`; 
+                        
                         html += `
                             <div 
                                 draggable="true"
                                 x-data="{}"
                                 @dragstart="onNoteDragStart('${note.path.replace(/'/g, "\\'")}', $event)"
                                 @dragend="onNoteDragEnd()"
-                                @click="loadNote('${note.path.replace(/'/g, "\\'")}')"
+                                @click="${clickHandler}"
                                 class="note-item px-3 py-2 mb-1 text-sm rounded relative border-2 border-transparent"
-                                style="${isCurrentNote ? 'background-color: var(--accent-light); color: var(--accent-primary);' : 'color: var(--text-primary);'} cursor: pointer;"
-                                @mouseover="if('${note.path}' !== currentNote) $el.style.backgroundColor='var(--bg-hover)'"
-                                @mouseout="if('${note.path}' !== currentNote) $el.style.backgroundColor='transparent'"
+                                style="${isCurrent ? 'background-color: var(--accent-light); color: var(--accent-primary);' : 'color: var(--text-primary);'} ${isImage ? 'opacity: 0.85;' : ''} cursor: pointer;"
+                                @mouseover="if('${note.path}' !== currentNote && '${note.path}' !== currentImage) $el.style.backgroundColor='var(--bg-hover)'"
+                                @mouseout="if('${note.path}' !== currentNote && '${note.path}' !== currentImage) $el.style.backgroundColor='transparent'"
                             >
-                                <span class="truncate">${note.name}</span>
+                                <span class="truncate" style="display: block; padding-right: 30px;">${icon}${icon ? ' ' : ''}${note.name}</span>
                                 <button 
-                                    @click.stop="deleteNote('${note.path.replace(/'/g, "\\'")}', '${note.name.replace(/'/g, "\\'")}')"
+                                    @click.stop="${deleteHandler}"
                                     class="note-delete-btn absolute right-2 top-1/2 transform -translate-y-1/2 px-1 py-0.5 text-xs rounded hover:brightness-110 transition-opacity"
                                     style="opacity: 0; color: var(--error);"
-                                    title="Delete note"
+                                    title="${isImage ? 'Delete image' : 'Delete note'}"
                                 >
                                     <svg class="w-4 h-4" fill="none" stroke="currentColor" viewBox="0 0 24 24">
                                         <path stroke-linecap="round" stroke-linejoin="round" stroke-width="2" d="M19 7l-.867 12.142A2 2 0 0116.138 21H7.862a2 2 0 01-1.995-1.858L5 7m5 4v6m4-6v6m1-10V4a1 1 0 00-1-1h-4a1 1 0 00-1 1v3M4 7h16"></path>
@@ -667,25 +691,32 @@ function noteApp() {
         
         // Drag and drop handlers
         onNoteDragStart(notePath, event) {
-            // Check if Ctrl/Cmd is held for link mode
-            if (event.ctrlKey || event.metaKey) {
-                // Link mode: drag to create internal link
-                this.draggedNoteForLink = notePath;
-                event.dataTransfer.effectAllowed = 'link';
-            } else {
-                // Move mode: drag to move note
+            // Check if this is an image
+            const item = this.notes.find(n => n.path === notePath);
+            const isImage = item && item.type === 'image';
+            
+            // Set unified drag state
+            this.draggedItem = {
+                path: notePath,
+                type: isImage ? 'image' : 'note'
+            };
+            
+            // For notes, also set legacy draggedNote for folder move logic
+            if (!isImage) {
                 this.draggedNote = notePath;
-                event.dataTransfer.effectAllowed = 'move';
                 // Make drag image semi-transparent
                 if (event.target) {
                     event.target.style.opacity = '0.5';
                 }
             }
+            
+            event.dataTransfer.effectAllowed = 'all';
         },
         
         onNoteDragEnd() {
             this.draggedNote = null;
-            this.draggedNoteForLink = null;
+            this.draggedItem = null;
+            this.dropTarget = null;
             this.dragOverFolder = null;
             // Reset opacity of all note items
             document.querySelectorAll('.note-item').forEach(el => {
@@ -695,7 +726,10 @@ function noteApp() {
         
         // Handle dragover on editor to show cursor position
         onEditorDragOver(event) {
-            if (!this.draggedNoteForLink) return;
+            if (!this.draggedItem) return;
+            
+            event.preventDefault();
+            this.dropTarget = 'editor';
             
             // Update cursor position as user drags over text
             const textarea = event.target;
@@ -716,27 +750,50 @@ function noteApp() {
         
         // Handle dragenter on editor
         onEditorDragEnter(event) {
-            if (!this.draggedNoteForLink) return;
+            if (!this.draggedItem) return;
             event.preventDefault();
+            this.dropTarget = 'editor';
         },
         
         // Handle dragleave on editor
         onEditorDragLeave(event) {
-            // Note: draggedNoteForLink will be cleared on dragend anyway
+            // Only clear dropTarget if we're actually leaving the editor
+            // (not just moving between child elements)
+            if (event.target.tagName === 'TEXTAREA') {
+                this.dropTarget = null;
+            }
         },
         
-        // Handle drop into editor to create internal link
-        onEditorDrop(event) {
+        // Handle drop into editor to create internal link or upload image
+        async onEditorDrop(event) {
             event.preventDefault();
+            this.dropTarget = null;
             
-            if (!this.draggedNoteForLink) return;
+            // Check if files are being dropped (images from file system)
+            if (event.dataTransfer && event.dataTransfer.files && event.dataTransfer.files.length > 0) {
+                await this.handleImageDrop(event);
+                return;
+            }
             
-            const notePath = this.draggedNoteForLink;
-            const noteName = notePath.split('/').pop().replace('.md', '');
+            // Otherwise, handle note/image link drop from sidebar
+            if (!this.draggedItem) return;
             
-            // Create markdown link (URL-encode the path to handle spaces and special characters)
-            const encodedPath = notePath.split('/').map(segment => encodeURIComponent(segment)).join('/');
-            const link = `[${noteName}](${encodedPath})`;
+            const notePath = this.draggedItem.path;
+            const isImage = this.draggedItem.type === 'image';
+            
+            let link;
+            if (isImage) {
+                // For images, insert image markdown
+                const filename = notePath.split('/').pop().replace(/\.[^/.]+$/, ''); // Remove extension
+                // URL-encode the path to handle spaces and special characters
+                const encodedPath = notePath.split('/').map(segment => encodeURIComponent(segment)).join('/');
+                link = `![${filename}](/api/images/${encodedPath})`;
+            } else {
+                // For notes, insert note link
+                const noteName = notePath.split('/').pop().replace('.md', '');
+                const encodedPath = notePath.split('/').map(segment => encodeURIComponent(segment)).join('/');
+                link = `[${noteName}](${encodedPath})`;
+            }
             
             // Insert at cursor position
             const textarea = event.target;
@@ -755,7 +812,174 @@ function noteApp() {
             // Trigger autosave
             this.autoSave();
             
-            this.draggedNoteForLink = null;
+            this.draggedItem = null;
+        },
+        
+        // Handle image files dropped into editor
+        async handleImageDrop(event) {
+            if (!this.currentNote) {
+                alert('Please open a note first before uploading images.');
+                return;
+            }
+            
+            const files = Array.from(event.dataTransfer.files);
+            const imageFiles = files.filter(file => {
+                const type = file.type.toLowerCase();
+                return type.startsWith('image/') && 
+                       ['image/jpeg', 'image/jpg', 'image/png', 'image/gif', 'image/webp'].includes(type);
+            });
+            
+            if (imageFiles.length === 0) {
+                alert('No valid image files found. Supported formats: JPG, PNG, GIF, WEBP');
+                return;
+            }
+            
+            const textarea = event.target;
+            const cursorPos = textarea.selectionStart || 0;
+            
+            // Upload each image
+            for (const file of imageFiles) {
+                try {
+                    const imagePath = await this.uploadImage(file, this.currentNote);
+                    if (imagePath) {
+                        this.insertImageMarkdown(imagePath, file.name, cursorPos);
+                    }
+                } catch (error) {
+                    ErrorHandler.handle(`upload image ${file.name}`, error);
+                }
+            }
+        },
+        
+        // Upload an image file
+        async uploadImage(file, notePath) {
+            const formData = new FormData();
+            formData.append('file', file);
+            formData.append('note_path', notePath);
+            
+            try {
+                const response = await fetch('/api/upload-image', {
+                    method: 'POST',
+                    body: formData
+                });
+                
+                if (!response.ok) {
+                    const error = await response.json();
+                    throw new Error(error.detail || 'Upload failed');
+                }
+                
+                const data = await response.json();
+                return data.path;
+            } catch (error) {
+                throw error;
+            }
+        },
+        
+        // Insert image markdown at cursor position
+        insertImageMarkdown(imagePath, altText, cursorPos) {
+            const filename = altText.replace(/\.[^/.]+$/, ''); // Remove extension
+            // URL-encode the path to handle spaces and special characters
+            const encodedPath = imagePath.split('/').map(segment => encodeURIComponent(segment)).join('/');
+            const markdown = `![${filename}](/api/images/${encodedPath})`;
+            
+            const textBefore = this.noteContent.substring(0, cursorPos);
+            const textAfter = this.noteContent.substring(cursorPos);
+            
+            this.noteContent = textBefore + markdown + '\n' + textAfter;
+            
+            // Trigger autosave
+            this.autoSave();
+            
+            // Reload notes to show the new image in sidebar
+            this.loadNotes();
+        },
+        
+        // Handle paste event for clipboard images
+        async handlePaste(event) {
+            if (!this.currentNote) return;
+            
+            const items = event.clipboardData?.items;
+            if (!items) return;
+            
+            for (const item of items) {
+                if (item.type.startsWith('image/')) {
+                    event.preventDefault();
+                    
+                    const blob = item.getAsFile();
+                    if (blob) {
+                        try {
+                            const textarea = event.target;
+                            const cursorPos = textarea.selectionStart || 0;
+                            
+                            // Create a filename based on timestamp (format: YYYYMMDDHHMMSS)
+                            const now = new Date();
+                            const timestamp = now.getFullYear() +
+                                String(now.getMonth() + 1).padStart(2, '0') +
+                                String(now.getDate()).padStart(2, '0') +
+                                String(now.getHours()).padStart(2, '0') +
+                                String(now.getMinutes()).padStart(2, '0') +
+                                String(now.getSeconds()).padStart(2, '0');
+                            const ext = item.type.split('/')[1] || 'png';
+                            const filename = `pasted-image-${timestamp}.${ext}`;
+                            
+                            // Create a File from the blob
+                            const file = new File([blob], filename, { type: item.type });
+                            
+                            const imagePath = await this.uploadImage(file, this.currentNote);
+                            if (imagePath) {
+                                this.insertImageMarkdown(imagePath, filename, cursorPos);
+                            }
+                        } catch (error) {
+                            ErrorHandler.handle('paste image', error);
+                        }
+                    }
+                    break; // Only handle first image
+                }
+            }
+        },
+        
+        // View an image in the main pane
+        viewImage(imagePath, updateHistory = true) {
+            this.currentNote = '';
+            this.currentNoteName = '';
+            this.noteContent = '';
+            this.currentImage = imagePath;
+            this.viewMode = 'preview'; // Use preview mode to show image
+            
+            // Update browser URL
+            if (updateHistory) {
+                // Encode each path segment to handle special characters
+                const encodedPath = imagePath.split('/').map(segment => encodeURIComponent(segment)).join('/');
+                window.history.pushState(
+                    { imagePath: imagePath },
+                    '',
+                    `/${encodedPath}`
+                );
+            }
+        },
+        
+        // Delete an image
+        async deleteImage(imagePath) {
+            const filename = imagePath.split('/').pop();
+            if (!confirm(`Delete image "${filename}"?`)) return;
+            
+            try {
+                const response = await fetch(`/api/notes/${encodeURIComponent(imagePath)}`, {
+                    method: 'DELETE'
+                });
+                
+                if (response.ok) {
+                    await this.loadNotes(); // Refresh tree
+                    
+                    // Clear viewer if deleting currently viewed image
+                    if (this.currentImage === imagePath) {
+                        this.currentImage = '';
+                    }
+                } else {
+                    throw new Error('Failed to delete image');
+                }
+            } catch (error) {
+                ErrorHandler.handle('delete image', error);
+            }
         },
         
         // Handle clicks on internal links in preview
@@ -808,6 +1032,7 @@ function noteApp() {
         
         onFolderDragEnd() {
             this.draggedFolder = null;
+            this.dropTarget = null;
             this.dragOverFolder = null;
             // Reset opacity of all folder items
             document.querySelectorAll('.folder-item').forEach(el => {
@@ -816,11 +1041,23 @@ function noteApp() {
         },
         
         async onFolderDrop(targetFolderPath) {
+            // Ignore if we're dropping into the editor
+            if (this.dropTarget === 'editor') {
+                return;
+            }
+            
             // Handle note drop into folder
             if (this.draggedNote) {
                 const note = this.notes.find(n => n.path === this.draggedNote);
                 if (!note) return;
                 
+                // Don't allow moving images to folders
+                if (note.type === 'image') {
+                    this.draggedNote = null;
+                    this.draggedItem = null;
+                    return;
+                }
+                
                 // Get note filename
                 const filename = note.path.split('/').pop();
                 const newPath = targetFolderPath ? `${targetFolderPath}/${filename}` : filename;
@@ -901,6 +1138,7 @@ function noteApp() {
                 }
                 
                 this.draggedFolder = null;
+                this.dropTarget = null;
             }
         },
         
@@ -919,6 +1157,7 @@ function noteApp() {
                         window.history.replaceState({}, '', '/');
                         this.currentNote = '';
                         this.noteContent = '';
+                        this.currentImage = '';
                         return;
                     }
                     throw new Error(`HTTP error! status: ${response.status}`);
@@ -929,6 +1168,7 @@ function noteApp() {
                 this.currentNote = notePath;
                 this.noteContent = data.content;
                 this.currentNoteName = notePath.split('/').pop().replace('.md', '');
+                this.currentImage = ''; // Clear image viewer when loading a note
                 this.lastSaved = false;
                 
                 // Initialize undo/redo history for this note
@@ -1006,23 +1246,33 @@ function noteApp() {
                 return;
             }
             
-            // Remove leading slash, decode URL encoding (e.g., %20 -> space), and add .md extension
+            // Remove leading slash and decode URL encoding (e.g., %20 -> space)
             const decodedPath = decodeURIComponent(path.substring(1));
-            const notePath = decodedPath + '.md';
-            
-            // Parse query string for search parameter
-            const urlParams = new URLSearchParams(window.location.search);
-            const searchParam = urlParams.get('search');
             
-            // Try to load the note directly - the backend will handle 404 if it doesn't exist
-            // This is more robust than checking the frontend notes list
-            this.loadNote(notePath, false, searchParam || '');
+            // Check if this is an image path (check if it exists in notes list as an image)
+            const matchedItem = this.notes.find(n => n.path === decodedPath);
             
-            // If there's a search parameter, populate the search box and trigger search
-            if (searchParam) {
-                this.searchQuery = searchParam;
-                // Trigger search to populate results list
-                this.searchNotes();
+            if (matchedItem && matchedItem.type === 'image') {
+                // It's an image, view it
+                this.viewImage(decodedPath, false); // false = don't update history (we're already at this URL)
+            } else {
+                // It's a note, add .md extension and load it
+                const notePath = decodedPath + '.md';
+                
+                // Parse query string for search parameter
+                const urlParams = new URLSearchParams(window.location.search);
+                const searchParam = urlParams.get('search');
+                
+                // Try to load the note directly - the backend will handle 404 if it doesn't exist
+                // This is more robust than checking the frontend notes list
+                this.loadNote(notePath, false, searchParam || '');
+                
+                // If there's a search parameter, populate the search box and trigger search
+                if (searchParam) {
+                    this.searchQuery = searchParam;
+                    // Trigger search to populate results list
+                    this.searchNotes();
+                }
             }
         },
         
@@ -1605,24 +1855,8 @@ function noteApp() {
         async deleteCurrentNote() {
             if (!this.currentNote) return;
             
-            if (!confirm(`Delete "${this.currentNoteName}"?`)) return;
-            
-            try {
-                const response = await fetch(`/api/notes/${this.currentNote}`, {
-                    method: 'DELETE'
-                });
-                
-                if (response.ok) {
-                    this.currentNote = '';
-                    this.noteContent = '';
-                    this.currentNoteName = '';
-                    await this.loadNotes();
-                } else {
-                    ErrorHandler.handle('delete note', new Error('Server returned error'));
-                }
-            } catch (error) {
-                ErrorHandler.handle('delete note', error);
-            }
+            // Just call deleteNote with current note details
+            await this.deleteNote(this.currentNote, this.currentNoteName);
         },
         
         // Delete any note from sidebar
diff --git a/frontend/index.html b/frontend/index.html
index f52dce6..8a4b366 100644
--- a/frontend/index.html
+++ b/frontend/index.html
@@ -77,6 +77,14 @@
             color: var(--text-primary, #111827);
         }
         
+        /* Truncate utility for long text */
+        .truncate {
+            overflow: hidden;
+            text-overflow: ellipsis;
+            white-space: nowrap;
+            max-width: 100%;
+        }
+        
         .bg-themed {
             background-color: var(--bg-primary);
         }
@@ -929,7 +937,7 @@ <h1 class="text-xl font-bold" style="color: var(--text-primary);" x-text="appNam
                                 @drop="if(draggedNote || draggedFolder) onFolderDrop('')"
                                 style="height: 28px; line-height: 20px; display: flex; align-items: center; justify-content: center;"
                             >
-                                <span x-show="!draggedNote && !draggedFolder">💡 Drag=Move | <kbd style="padding: 1px 4px; border-radius: 3px; background: var(--bg-tertiary); font-size: 10px;">Ctrl</kbd>+Drag=Link</span>
+                                <span x-show="!draggedNote && !draggedFolder && !draggedItem">💡 Drag=Move </span>
                                 <span x-show="draggedNote || draggedFolder">📂 Root folder</span>
                             </div>
                         </div>
@@ -939,24 +947,27 @@ <h1 class="text-xl font-bold" style="color: var(--text-primary);" x-text="appNam
                             <div x-html="renderFolderRecursive(folder, 0, true)"></div>
                         </template>
                         
-                        <!-- Root notes (no folder) - shown after folders -->
+                        <!-- Root notes and images (no folder) - shown after folders -->
                         <template x-for="note in (folderTree.__root__ && folderTree.__root__.notes ? folderTree.__root__.notes : [])" :key="note.path">
                             <div 
                                 draggable="true"
                                 @dragstart="onNoteDragStart(note.path, $event)"
                                 @dragend="onNoteDragEnd()"
-                                @click="loadNote(note.path)"
+                                @click="note.type === 'image' ? viewImage(note.path) : loadNote(note.path)"
                                 class="note-item px-3 py-2 mb-1 text-sm rounded relative border-2 border-transparent"
-                                :style="(currentNote === note.path ? 'background-color: var(--accent-light); color: var(--accent-primary);' : 'color: var(--text-primary);') + (draggedNote || draggedFolder ? ' cursor: grabbing;' : ' cursor: pointer;')"
-                                @mouseover="if(currentNote !== note.path) $el.style.backgroundColor='var(--bg-hover)'"
-                                @mouseout="if(currentNote !== note.path) $el.style.backgroundColor='transparent'"
+                                :style="((note.type === 'image' ? currentImage === note.path : currentNote === note.path) ? 'background-color: var(--accent-light); color: var(--accent-primary);' : 'color: var(--text-primary);') + (note.type === 'image' ? ' opacity: 0.85;' : '') + (draggedNote || draggedFolder ? ' cursor: grabbing;' : ' cursor: pointer;')"
+                                @mouseover="if(currentNote !== note.path && currentImage !== note.path) $el.style.backgroundColor='var(--bg-hover)'"
+                                @mouseout="if(currentNote !== note.path && currentImage !== note.path) $el.style.backgroundColor='transparent'"
                             >
-                                <span class="truncate" x-text="note.name"></span>
+                                <span class="truncate" style="display: block; padding-right: 30px;">
+                                    <template x-if="note.type === 'image'">🖼️ </template>
+                                    <span x-text="note.name"></span>
+                                </span>
                                 <button 
-                                    @click.stop="deleteNote(note.path, note.name)"
+                                    @click.stop="note.type === 'image' ? deleteImage(note.path) : deleteNote(note.path, note.name)"
                                     class="note-delete-btn absolute right-2 top-1/2 transform -translate-y-1/2 px-1 py-0.5 text-xs rounded hover:brightness-110 transition-opacity"
                                     style="opacity: 0; color: var(--error);"
-                                    title="Delete note"
+                                    :title="note.type === 'image' ? 'Delete image' : 'Delete note'"
                                 >
                                     <svg class="w-4 h-4" fill="none" stroke="currentColor" viewBox="0 0 24 24">
                                         <path stroke-linecap="round" stroke-linejoin="round" stroke-width="2" d="M19 7l-.867 12.142A2 2 0 0116.138 21H7.862a2 2 0 01-1.995-1.858L5 7m5 4v6m4-6v6m1-10V4a1 1 0 00-1-1h-4a1 1 0 00-1 1v3M4 7h16"></path>
@@ -996,7 +1007,7 @@ <h1 class="text-xl font-bold" style="color: var(--text-primary);" x-text="appNam
         <!-- Main Content Area -->
         <div class="flex-1 flex flex-col overflow-hidden">
             
-            <template x-if="!currentNote">
+            <template x-if="!currentNote && !currentImage">
                 <!-- Welcome Screen -->
                 <div class="flex-1 flex items-center justify-center" style="background-color: var(--bg-primary);">
                     <div class="text-center">
@@ -1018,7 +1029,7 @@ <h2 class="text-2xl font-bold mb-2" style="color: var(--text-primary);" x-text="
                 </div>
             </template>
             
-            <template x-if="currentNote">
+            <template x-if="currentNote || currentImage">
                 <!-- Editor Area -->
                 <div class="flex-1 flex flex-col overflow-hidden" style="background-color: var(--bg-primary);">
                     <!-- Toolbar -->
@@ -1039,10 +1050,12 @@ <h2 class="text-2xl font-bold mb-2" style="color: var(--text-primary);" x-text="
                             </button>
                             <input 
                                 type="text" 
-                                x-model="currentNoteName"
-                                @blur="renameNote()"
+                                :value="currentNote ? currentNoteName : (currentImage ? currentImage.split('/').pop() : '')"
+                                @input="if (currentNote) currentNoteName = $event.target.value"
+                                @blur="if (currentNote) renameNote()"
+                                :readonly="!currentNote"
                                 class="text-xl font-semibold border-none focus:outline-none focus:ring-2 rounded px-3 py-1.5"
-                                style="background-color: var(--bg-primary); color: var(--text-primary); border: 1px solid var(--border-primary); min-width: 150px; max-width: 300px;"
+                                :style="'background-color: var(--bg-primary); color: var(--text-primary); border: 1px solid var(--border-primary); min-width: 150px; max-width: 300px;' + (!currentNote ? ' cursor: default; opacity: 0.9;' : '')"
                             >
                             <!-- Undo Button -->
                             <button 
@@ -1091,8 +1104,8 @@ <h2 class="text-2xl font-bold mb-2" style="color: var(--text-primary);" x-text="
                             <span x-show="!isSaving && lastSaved" class="text-xs" style="color: var(--success);">✓ Saved</span>
                         </div>
                         
-                        <div class="flex items-center space-x-2">
-                            <!-- View Toggle -->
+                        <div class="flex items-center space-x-2" x-show="currentNote">
+                            <!-- View Toggle (only for notes) -->
                             <div class="flex rounded-lg p-1" style="background-color: var(--bg-tertiary);">
                                 <button 
                                     @click="viewMode = 'edit'"
@@ -1119,7 +1132,6 @@ <h2 class="text-2xl font-bold mb-2" style="color: var(--text-primary);" x-text="
                             
                             <!-- Export HTML Button -->
                             <button 
-                                x-show="currentNote"
                                 @click="exportToHTML()"
                                 class="px-2 md:px-3 py-1 md:py-1.5 text-xs md:text-sm rounded transition hover:opacity-80"
                                 style="background-color: var(--accent-secondary); color: var(--text-primary);"
@@ -1147,9 +1159,10 @@ <h2 class="text-2xl font-bold mb-2" style="color: var(--text-primary);" x-text="
                                 @dragover.prevent="onEditorDragOver($event)"
                                 @dragenter="onEditorDragEnter($event)"
                                 @dragleave="onEditorDragLeave($event)"
-                                :class="'flex-1 w-full p-6 resize-none focus:outline-none editor-textarea' + (draggedNoteForLink ? ' link-drop-target' : '')"
-                                :style="'background-color: var(--bg-primary); color: var(--text-primary);' + (draggedNoteForLink ? ' outline: 2px dashed var(--accent-primary); outline-offset: -2px; box-shadow: 0 0 20px var(--accent-light);' : '')"
-                                :placeholder="draggedNoteForLink ? '💡 Drop here to create link at cursor position...' : 'Start writing in markdown...'"
+                                @paste="handlePaste($event)"
+                                :class="'flex-1 w-full p-6 resize-none focus:outline-none editor-textarea' + (draggedItem && dropTarget === 'editor' ? ' link-drop-target' : '')"
+                                :style="'background-color: var(--bg-primary); color: var(--text-primary);' + (draggedItem && dropTarget === 'editor' ? ' outline: 2px dashed var(--accent-primary); outline-offset: -2px; box-shadow: 0 0 20px var(--accent-light);' : '')"
+                                :placeholder="draggedItem && dropTarget === 'editor' ? '💡 Drop here to insert at cursor position...' : 'Start writing in markdown...'"
                             ></textarea>
                         </div>
                         
@@ -1165,7 +1178,7 @@ <h2 class="text-2xl font-bold mb-2" style="color: var(--text-primary);" x-text="
                         
                         <!-- Preview -->
                         <div 
-                            x-show="viewMode === 'preview' || viewMode === 'split'"
+                            x-show="(viewMode === 'preview' || viewMode === 'split') && !currentImage"
                             class="overflow-y-auto overflow-x-hidden custom-scrollbar"
                             style="background-color: var(--bg-primary); min-height: 0;"
                             :style="viewMode === 'split' ? `width: ${100 - editorWidth}%;` : 'width: 100%;'"
@@ -1176,6 +1189,20 @@ <h2 class="text-2xl font-bold mb-2" style="color: var(--text-primary);" x-text="
                                 @click="handleInternalLink($event)"
                             ></div>
                         </div>
+                        
+                        <!-- Image Viewer -->
+                        <template x-if="currentImage">
+                            <div 
+                                class="flex-1 flex items-center justify-center overflow-auto"
+                                style="background-color: var(--bg-primary); min-height: 0;"
+                            >
+                                <img 
+                                    :src="`/api/images/${currentImage}`" 
+                                    :alt="currentImage.split('/').pop()"
+                                    style="max-width: 100%; max-height: 100%; object-fit: contain; padding: 2rem;"
+                                />
+                            </div>
+                        </template>
                     </div>
                     
                     <!-- Stats Status Bar (only shows if plugin enabled) -->