diff --git a/aggregators/kagi-news/.env.example b/aggregators/kagi-news/.env.example
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+# Aggregator Identity (pre-created account credentials)
+AGGREGATOR_HANDLE=kagi-news.local.coves.dev
+AGGREGATOR_PASSWORD=your-secure-password-here
+
+# Optional: Override Coves API URL (defaults to config.yaml)
+# COVES_API_URL=http://localhost:3001
diff --git a/aggregators/kagi-news/README.md b/aggregators/kagi-news/README.md
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+# Kagi News RSS Aggregator
+
+A Python-based RSS aggregator that posts Kagi News stories to Coves communities using rich text formatting.
+
+## Overview
+
+This aggregator:
+- Fetches RSS feeds from Kagi News daily via CRON
+- Parses HTML descriptions to extract structured content (highlights, perspectives, sources)
+- Formats posts using Coves rich text with facets (bold, italic, links)
+- Hot-links images from Kagi's proxy (no blob upload)
+- Posts to configured communities via XRPC
+
+## Project Structure
+
+```
+aggregators/kagi-news/
+├── src/
+│   ├── models.py              # Data models (KagiStory, Perspective, etc.)
+│   ├── rss_fetcher.py         # RSS feed fetching with retry logic
+│   ├── html_parser.py         # Parse Kagi HTML to structured data
+│   ├── richtext_formatter.py  # Format content with rich text facets (TODO)
+│   ├── atproto_client.py      # ATProto authentication and operations (TODO)
+│   ├── state_manager.py       # Deduplication state tracking (TODO)
+│   ├── config.py              # Configuration loading (TODO)
+│   └── main.py                # Entry point (TODO)
+├── tests/
+│   ├── test_rss_fetcher.py    # RSS fetcher tests ✓
+│   ├── test_html_parser.py    # HTML parser tests ✓
+│   └── fixtures/
+│       ├── sample_rss_item.xml
+│       └── world.xml
+├── scripts/
+│   └── generate_did.py        # Helper to generate aggregator DID (TODO)
+├── requirements.txt           # Python dependencies
+├── config.example.yaml        # Example configuration
+├── .env.example               # Environment variables template
+├── crontab                    # CRON schedule
+└── README.md
+```
+
+## Setup
+
+### Prerequisites
+
+- Python 3.11+
+- python3-venv package (`apt install python3.12-venv`)
+
+### Installation
+
+1. Create virtual environment:
+   ```bash
+   python3 -m venv venv
+   source venv/bin/activate
+   ```
+
+2. Install dependencies:
+   ```bash
+   pip install -r requirements.txt
+   ```
+
+3. Copy configuration templates:
+   ```bash
+   cp config.example.yaml config.yaml
+   cp .env.example .env
+   ```
+
+4. Edit `config.yaml` to map RSS feeds to communities
+5. Set environment variables in `.env` (aggregator DID and private key)
+
+## Running Tests
+
+```bash
+# Activate virtual environment
+source venv/bin/activate
+
+# Run all tests
+pytest -v
+
+# Run specific test file
+pytest tests/test_html_parser.py -v
+
+# Run with coverage
+pytest --cov=src --cov-report=html
+```
+
+## Development Status
+
+### ✅ Phase 1-2 Complete (Oct 24, 2025)
+- [x] Project structure created
+- [x] Data models defined (KagiStory, Perspective, Quote, Source)
+- [x] RSS fetcher with retry logic and tests
+- [x] HTML parser extracting all sections (summary, highlights, perspectives, sources, quote, image)
+- [x] Test fixtures from real Kagi News feed
+
+### 🚧 Next Steps (Phase 3-4)
+- [ ] Rich text formatter (convert to Coves format with facets)
+- [ ] State manager for deduplication
+- [ ] Configuration loader
+- [ ] ATProto client for post creation
+- [ ] Main orchestration script
+- [ ] End-to-end tests
+
+## Configuration
+
+Edit `config.yaml` to define feed-to-community mappings:
+
+```yaml
+coves_api_url: "https://api.coves.social"
+
+feeds:
+  - name: "World News"
+    url: "https://news.kagi.com/world.xml"
+    community_handle: "world-news.coves.social"
+    enabled: true
+
+  - name: "Tech News"
+    url: "https://news.kagi.com/tech.xml"
+    community_handle: "tech.coves.social"
+    enabled: true
+```
+
+## Architecture
+
+### Data Flow
+
+```
+Kagi RSS Feed
+    ↓ (HTTP GET)
+RSS Fetcher
+    ↓ (feedparser)
+Parsed RSS Items
+    ↓ (for each item)
+HTML Parser
+    ↓ (BeautifulSoup)
+Structured KagiStory
+    ↓
+Rich Text Formatter
+    ↓ (with facets)
+Post Record
+    ↓ (XRPC)
+Coves Community
+```
+
+### Rich Text Format
+
+Posts use Coves rich text with UTF-8 byte-positioned facets:
+
+```python
+{
+  "content": "Summary text...\n\nHighlights:\n• Point 1\n...",
+  "facets": [
+    {
+      "index": {"byteStart": 20, "byteEnd": 31},
+      "features": [{"$type": "social.coves.richtext.facet#bold"}]
+    },
+    {
+      "index": {"byteStart": 50, "byteEnd": 75},
+      "features": [{"$type": "social.coves.richtext.facet#link", "uri": "https://..."}]
+    }
+  ]
+}
+```
+
+## License
+
+See parent Coves project license.
+
+## Related Documentation
+
+- [PRD: Kagi News Aggregator](../../docs/aggregators/PRD_KAGI_NEWS_RSS.md)
+- [PRD: Aggregator System](../../docs/aggregators/PRD_AGGREGATORS.md)
+- [Coves Rich Text Lexicon](../../internal/atproto/lexicon/social/coves/richtext/README.md)
diff --git a/aggregators/kagi-news/config.example.yaml b/aggregators/kagi-news/config.example.yaml
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+# Kagi News RSS Aggregator Configuration
+
+# Coves API endpoint
+coves_api_url: "https://api.coves.social"
+
+# Feed-to-community mappings
+feeds:
+  - name: "World News"
+    url: "https://news.kagi.com/world.xml"
+    community_handle: "world-news.coves.social"
+    enabled: true
+
+  - name: "Tech News"
+    url: "https://news.kagi.com/tech.xml"
+    community_handle: "tech.coves.social"
+    enabled: true
+
+  - name: "Business News"
+    url: "https://news.kagi.com/business.xml"
+    community_handle: "business.coves.social"
+    enabled: false
+
+  - name: "Science News"
+    url: "https://news.kagi.com/science.xml"
+    community_handle: "science.coves.social"
+    enabled: false
+
+# Logging configuration
+log_level: "info"  # debug, info, warning, error
diff --git a/aggregators/kagi-news/crontab b/aggregators/kagi-news/crontab
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+# Run Kagi News aggregator daily at 1 PM UTC (after Kagi updates around noon)
+0 13 * * * cd /app && /usr/local/bin/python -m src.main >> /var/log/cron.log 2>&1
+
+# Blank line required at end of crontab
+
diff --git a/aggregators/kagi-news/pytest.ini b/aggregators/kagi-news/pytest.ini
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+++ b/aggregators/kagi-news/pytest.ini
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+[pytest]
+testpaths = tests
+python_files = test_*.py
+python_classes = Test*
+python_functions = test_*
+addopts =
+    -v
+    --strict-markers
+    --tb=short
+    --cov=src
+    --cov-report=term-missing
+    --cov-report=html
diff --git a/aggregators/kagi-news/requirements.txt b/aggregators/kagi-news/requirements.txt
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+++ b/aggregators/kagi-news/requirements.txt
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+# Core dependencies
+feedparser==6.0.11
+beautifulsoup4==4.12.3
+requests==2.31.0
+atproto==0.0.55
+pyyaml==6.0.1
+
+# Testing
+pytest==8.1.1
+pytest-cov==5.0.0
+responses==0.25.0
+
+# Development
+black==24.3.0
+mypy==1.9.0
+types-PyYAML==6.0.12.12
+types-requests==2.31.0.20240311