diff --git a/crates/owlen-core/src/credentials.rs b/crates/owlen-core/src/credentials.rs
new file mode 100644
index 0000000..c2f27cd
--- /dev/null
+++ b/crates/owlen-core/src/credentials.rs
@@ -0,0 +1,69 @@
+use std::sync::Arc;
+
+use serde::{Deserialize, Serialize};
+
+use crate::{storage::StorageManager, Error, Result};
+
+#[derive(Serialize, Deserialize, Debug)]
+pub struct ApiCredentials {
+    pub api_key: String,
+    pub endpoint: String,
+}
+
+pub struct CredentialManager {
+    storage: Arc<StorageManager>,
+    master_key: Arc<Vec<u8>>,
+    namespace: String,
+}
+
+impl CredentialManager {
+    pub fn new(storage: Arc<StorageManager>, master_key: Arc<Vec<u8>>) -> Self {
+        Self {
+            storage,
+            master_key,
+            namespace: "owlen".to_string(),
+        }
+    }
+
+    fn namespaced_key(&self, tool_name: &str) -> String {
+        format!("{}_{}", self.namespace, tool_name)
+    }
+
+    pub async fn store_credentials(
+        &self,
+        tool_name: &str,
+        credentials: &ApiCredentials,
+    ) -> Result<()> {
+        let key = self.namespaced_key(tool_name);
+        let payload = serde_json::to_vec(credentials).map_err(|e| {
+            Error::Storage(format!(
+                "Failed to serialize credentials for secure storage: {e}"
+            ))
+        })?;
+        self.storage
+            .store_secure_item(&key, &payload, &self.master_key)
+            .await
+    }
+
+    pub async fn get_credentials(&self, tool_name: &str) -> Result<Option<ApiCredentials>> {
+        let key = self.namespaced_key(tool_name);
+        match self
+            .storage
+            .load_secure_item(&key, &self.master_key)
+            .await?
+        {
+            Some(bytes) => {
+                let creds = serde_json::from_slice(&bytes).map_err(|e| {
+                    Error::Storage(format!("Failed to deserialize stored credentials: {e}"))
+                })?;
+                Ok(Some(creds))
+            }
+            None => Ok(None),
+        }
+    }
+
+    pub async fn delete_credentials(&self, tool_name: &str) -> Result<()> {
+        let key = self.namespaced_key(tool_name);
+        self.storage.delete_secure_item(&key).await
+    }
+}
diff --git a/crates/owlen-core/src/encryption.rs b/crates/owlen-core/src/encryption.rs
new file mode 100644
index 0000000..f539a2b
--- /dev/null
+++ b/crates/owlen-core/src/encryption.rs
@@ -0,0 +1,241 @@
+use std::collections::HashMap;
+use std::fs;
+use std::path::PathBuf;
+
+use aes_gcm::{
+    aead::{Aead, KeyInit},
+    Aes256Gcm, Nonce,
+};
+use anyhow::{bail, Context, Result};
+use ring::digest;
+use ring::rand::{SecureRandom, SystemRandom};
+use serde::{Deserialize, Serialize};
+use serde_json::Value as JsonValue;
+
+pub struct EncryptedStorage {
+    cipher: Aes256Gcm,
+    storage_path: PathBuf,
+}
+
+#[derive(Serialize, Deserialize)]
+struct EncryptedData {
+    nonce: [u8; 12],
+    ciphertext: Vec<u8>,
+}
+
+#[derive(Debug, Clone, Serialize, Deserialize, Default)]
+pub struct VaultData {
+    pub master_key: Vec<u8>,
+    #[serde(default)]
+    pub settings: HashMap<String, JsonValue>,
+}
+
+pub struct VaultHandle {
+    storage: EncryptedStorage,
+    pub data: VaultData,
+}
+
+impl VaultHandle {
+    pub fn master_key(&self) -> &[u8] {
+        &self.data.master_key
+    }
+
+    pub fn settings(&self) -> &HashMap<String, JsonValue> {
+        &self.data.settings
+    }
+
+    pub fn settings_mut(&mut self) -> &mut HashMap<String, JsonValue> {
+        &mut self.data.settings
+    }
+
+    pub fn persist(&self) -> Result<()> {
+        self.storage.store(&self.data)
+    }
+}
+
+impl EncryptedStorage {
+    pub fn new(storage_path: PathBuf, password: &str) -> Result<Self> {
+        let digest = digest::digest(&digest::SHA256, password.as_bytes());
+        let cipher = Aes256Gcm::new_from_slice(digest.as_ref())
+            .map_err(|_| anyhow::anyhow!("Invalid key length for AES-256"))?;
+
+        if let Some(parent) = storage_path.parent() {
+            fs::create_dir_all(parent).context("Failed to ensure storage directory exists")?;
+        }
+
+        Ok(Self {
+            cipher,
+            storage_path,
+        })
+    }
+
+    pub fn store<T: Serialize>(&self, data: &T) -> Result<()> {
+        let json = serde_json::to_vec(data).context("Failed to serialize data")?;
+
+        let nonce = generate_nonce()?;
+        let nonce_ref = Nonce::from_slice(&nonce);
+
+        let ciphertext = self
+            .cipher
+            .encrypt(nonce_ref, json.as_ref())
+            .map_err(|e| anyhow::anyhow!("Encryption failed: {}", e))?;
+
+        let encrypted_data = EncryptedData { nonce, ciphertext };
+        let encrypted_json = serde_json::to_vec(&encrypted_data)?;
+
+        fs::write(&self.storage_path, encrypted_json).context("Failed to write encrypted data")?;
+
+        Ok(())
+    }
+
+    pub fn load<T: for<'de> Deserialize<'de>>(&self) -> Result<T> {
+        let encrypted_json =
+            fs::read(&self.storage_path).context("Failed to read encrypted data")?;
+
+        let encrypted_data: EncryptedData =
+            serde_json::from_slice(&encrypted_json).context("Failed to parse encrypted data")?;
+
+        let nonce_ref = Nonce::from_slice(&encrypted_data.nonce);
+        let plaintext = self
+            .cipher
+            .decrypt(nonce_ref, encrypted_data.ciphertext.as_ref())
+            .map_err(|e| anyhow::anyhow!("Decryption failed: {}", e))?;
+
+        let data: T =
+            serde_json::from_slice(&plaintext).context("Failed to deserialize decrypted data")?;
+
+        Ok(data)
+    }
+
+    pub fn exists(&self) -> bool {
+        self.storage_path.exists()
+    }
+
+    pub fn delete(&self) -> Result<()> {
+        if self.exists() {
+            fs::remove_file(&self.storage_path).context("Failed to delete encrypted storage")?;
+        }
+        Ok(())
+    }
+
+    pub fn verify_password(&self) -> Result<()> {
+        if !self.exists() {
+            return Ok(());
+        }
+
+        let encrypted_json =
+            fs::read(&self.storage_path).context("Failed to read encrypted data")?;
+
+        if encrypted_json.is_empty() {
+            return Ok(());
+        }
+
+        let encrypted_data: EncryptedData =
+            serde_json::from_slice(&encrypted_json).context("Failed to parse encrypted data")?;
+
+        let nonce_ref = Nonce::from_slice(&encrypted_data.nonce);
+        self.cipher
+            .decrypt(nonce_ref, encrypted_data.ciphertext.as_ref())
+            .map(|_| ())
+            .map_err(|e| anyhow::anyhow!("Decryption failed: {}", e))
+    }
+}
+
+pub fn prompt_password(prompt: &str) -> Result<String> {
+    let password = rpassword::prompt_password(prompt)
+        .map_err(|e| anyhow::anyhow!("Failed to read password: {e}"))?;
+    if password.is_empty() {
+        bail!("Password cannot be empty");
+    }
+    Ok(password)
+}
+
+pub fn prompt_new_password() -> Result<String> {
+    loop {
+        let first = prompt_password("Enter new master password: ")?;
+        let confirm = prompt_password("Confirm master password: ")?;
+        if first == confirm {
+            return Ok(first);
+        }
+        println!("Passwords did not match. Please try again.");
+    }
+}
+
+pub fn unlock_with_password(storage_path: PathBuf, password: &str) -> Result<VaultHandle> {
+    let storage = EncryptedStorage::new(storage_path, password)?;
+    let data = load_or_initialize_vault(&storage)?;
+    Ok(VaultHandle { storage, data })
+}
+
+pub fn unlock_interactive(storage_path: PathBuf) -> Result<VaultHandle> {
+    if storage_path.exists() {
+        for attempt in 0..3 {
+            let password = prompt_password("Enter master password: ")?;
+            match unlock_with_password(storage_path.clone(), &password) {
+                Ok(handle) => return Ok(handle),
+                Err(err) => {
+                    println!("Failed to unlock vault: {err}");
+                    if attempt == 2 {
+                        return Err(err);
+                    }
+                }
+            }
+        }
+        bail!("Failed to unlock encrypted storage after multiple attempts");
+    } else {
+        println!(
+            "No encrypted storage found at {}. Initializing a new vault.",
+            storage_path.display()
+        );
+        let password = prompt_new_password()?;
+        let storage = EncryptedStorage::new(storage_path, &password)?;
+        let data = VaultData {
+            master_key: generate_master_key()?,
+            ..Default::default()
+        };
+        storage.store(&data)?;
+        Ok(VaultHandle { storage, data })
+    }
+}
+
+fn load_or_initialize_vault(storage: &EncryptedStorage) -> Result<VaultData> {
+    match storage.load::<VaultData>() {
+        Ok(data) => {
+            if data.master_key.len() != 32 {
+                bail!(
+                    "Corrupted vault: master key has invalid length ({}). \
+                    Expected 32 bytes for AES-256. Vault cannot be recovered.",
+                    data.master_key.len()
+                );
+            }
+            Ok(data)
+        }
+        Err(err) => {
+            if storage.exists() {
+                return Err(err);
+            }
+            let data = VaultData {
+                master_key: generate_master_key()?,
+                ..Default::default()
+            };
+            storage.store(&data)?;
+            Ok(data)
+        }
+    }
+}
+
+fn generate_master_key() -> Result<Vec<u8>> {
+    let mut key = vec![0u8; 32];
+    SystemRandom::new()
+        .fill(&mut key)
+        .map_err(|_| anyhow::anyhow!("Failed to generate master key"))?;
+    Ok(key)
+}
+
+fn generate_nonce() -> Result<[u8; 12]> {
+    let mut nonce = [0u8; 12];
+    let rng = SystemRandom::new();
+    rng.fill(&mut nonce)
+        .map_err(|_| anyhow::anyhow!("Failed to generate nonce"))?;
+    Ok(nonce)
+}