diff --git a/bot.py b/bot.py
index c0610d9..20ab2a0 100644
--- a/bot.py
+++ b/bot.py
@@ -2,6 +2,10 @@ import os
 import json
 import asyncio
 import logging
+import time
+
+import httpx
+from openai import AsyncOpenAI
 
 from nio import (
     AsyncClient,
@@ -9,6 +13,7 @@ from nio import (
     LoginResponse,
     InviteMemberEvent,
     MegolmEvent,
+    RoomMessageText,
     SyncResponse,
     UnknownEvent,
     KeyVerificationStart,
@@ -21,6 +26,7 @@ from livekit import api
 
 BOT_DEVICE_ID = "AIBOT"
 CALL_MEMBER_TYPE = "org.matrix.msc3401.call.member"
+MODEL_STATE_TYPE = "ai.agiliton.model"
 
 logger = logging.getLogger("matrix-ai-bot")
 
@@ -34,6 +40,57 @@ AGENT_NAME = os.environ.get("AGENT_NAME", "matrix-ai")
 STORE_PATH = os.environ.get("CRYPTO_STORE_PATH", "/data/crypto_store")
 CREDS_FILE = os.path.join(STORE_PATH, "credentials.json")
 
+LITELLM_URL = os.environ.get("LITELLM_BASE_URL", "")
+LITELLM_KEY = os.environ.get("LITELLM_API_KEY", "not-needed")
+DEFAULT_MODEL = os.environ.get("DEFAULT_MODEL", "claude-sonnet")
+WILDFILES_BASE_URL = os.environ.get("WILDFILES_BASE_URL", "")
+WILDFILES_ORG = os.environ.get("WILDFILES_ORG", "")
+
+SYSTEM_PROMPT = """You are a helpful AI assistant in a Matrix chat room.
+Keep answers concise but thorough. Use markdown formatting when helpful.
+If document context is provided, use it to inform your answers."""
+
+HELP_TEXT = """**AI Bot Commands**
+- `!ai help` — Show this help
+- `!ai models` — List available models
+- `!ai set-model <model>` — Set model for this room
+- `!ai search <query>` — Search documents (WildFiles)
+- **@mention the bot** or start with `!ai` for a regular AI response"""
+
+
+class DocumentRAG:
+    """Search WildFiles for relevant documents."""
+
+    def __init__(self, base_url: str, org: str):
+        self.base_url = base_url.rstrip("/")
+        self.org = org
+        self.enabled = bool(base_url and org)
+
+    async def search(self, query: str, top_k: int = 3) -> list[dict]:
+        if not self.enabled:
+            return []
+        try:
+            async with httpx.AsyncClient(timeout=5.0) as client:
+                resp = await client.post(
+                    f"{self.base_url}/api/v1/rag/search",
+                    json={"query": query, "org": self.org, "top_k": top_k},
+                )
+                resp.raise_for_status()
+                return resp.json().get("results", [])
+        except Exception:
+            logger.debug("WildFiles search failed", exc_info=True)
+            return []
+
+    def format_context(self, results: list[dict]) -> str:
+        if not results:
+            return ""
+        parts = ["**Relevant documents:**"]
+        for r in results:
+            title = r.get("title", r.get("filename", "Untitled"))
+            snippet = r.get("content", r.get("text", ""))[:500]
+            parts.append(f"- **{title}**: {snippet}")
+        return "\n".join(parts)
+
 
 class Bot:
     def __init__(self):
@@ -52,6 +109,10 @@ class Bot:
         self.lkapi = None
         self.dispatched_rooms = set()
         self.active_calls = set()  # rooms where we've sent call member event
+        self.rag = DocumentRAG(WILDFILES_BASE_URL, WILDFILES_ORG)
+        self.llm = AsyncOpenAI(base_url=LITELLM_URL, api_key=LITELLM_KEY) if LITELLM_URL else None
+        self.room_models: dict[str, str] = {}  # room_id -> model name
+        self._sync_token_received = False
 
     async def start(self):
         # Restore existing session or create new one
@@ -86,6 +147,7 @@ class Bot:
         self.client.add_event_callback(self.on_invite, InviteMemberEvent)
         self.client.add_event_callback(self.on_megolm, MegolmEvent)
         self.client.add_event_callback(self.on_unknown, UnknownEvent)
+        self.client.add_event_callback(self.on_text_message, RoomMessageText)
         self.client.add_response_callback(self.on_sync, SyncResponse)
         self.client.add_to_device_callback(self.on_key_verification, KeyVerificationStart)
         self.client.add_to_device_callback(self.on_key_verification, KeyVerificationKey)
@@ -102,6 +164,9 @@ class Bot:
 
     async def on_sync(self, response: SyncResponse):
         """After each sync, trust all devices in our rooms."""
+        if not self._sync_token_received:
+            self._sync_token_received = True
+            logger.info("Initial sync complete, text handler active")
         for user_id in list(self.client.device_store.users):
             for device in self.client.device_store.active_user_devices(user_id):
                 if not device.verified:
@@ -192,6 +257,153 @@ class Bot:
                 except Exception:
                     logger.exception("Failed to leave call in %s", room_id)
 
+    async def on_text_message(self, room, event: RoomMessageText):
+        """Handle text messages: commands and AI responses."""
+        if event.sender == BOT_USER:
+            return
+        if not self._sync_token_received:
+            return  # ignore messages from initial sync / backfill
+        # Ignore old messages (>30s) to avoid replaying history
+        server_ts = event.server_timestamp / 1000
+        if time.time() - server_ts > 30:
+            return
+
+        body = event.body.strip()
+
+        # Command handling
+        if body.startswith("!ai "):
+            cmd = body[4:].strip()
+            await self._handle_command(room, cmd)
+            return
+        if body == "!ai":
+            await self._send_text(room.room_id, HELP_TEXT)
+            return
+
+        # Check if bot is mentioned (display name or user ID)
+        bot_display = self.client.user_id.split(":")[0].lstrip("@")
+        mentioned = (
+            BOT_USER in body
+            or f"@{bot_display}" in body.lower()
+            or bot_display.lower() in body.lower()
+        )
+        if not mentioned:
+            return
+
+        if not self.llm:
+            await self._send_text(room.room_id, "LLM not configured (LITELLM_BASE_URL not set).")
+            return
+
+        await self.client.room_typing(room.room_id, typing_state=True)
+        try:
+            await self._respond_with_ai(room, body)
+        finally:
+            await self.client.room_typing(room.room_id, typing_state=False)
+
+    async def _handle_command(self, room, cmd: str):
+        if cmd == "help":
+            await self._send_text(room.room_id, HELP_TEXT)
+
+        elif cmd == "models":
+            if not self.llm:
+                await self._send_text(room.room_id, "LLM not configured.")
+                return
+            try:
+                models = await self.llm.models.list()
+                names = sorted(m.id for m in models.data)
+                current = self.room_models.get(room.room_id, DEFAULT_MODEL)
+                text = "**Available models:**\n"
+                text += "\n".join(f"- `{n}` {'← current' if n == current else ''}" for n in names)
+                await self._send_text(room.room_id, text)
+            except Exception:
+                logger.exception("Failed to list models")
+                await self._send_text(room.room_id, "Failed to fetch model list.")
+
+        elif cmd.startswith("set-model "):
+            model = cmd[10:].strip()
+            if not model:
+                await self._send_text(room.room_id, "Usage: `!ai set-model <model-name>`")
+                return
+            self.room_models[room.room_id] = model
+            # Persist in room state for cross-restart persistence
+            try:
+                await self.client.room_put_state(
+                    room.room_id, MODEL_STATE_TYPE, {"model": model}, state_key="",
+                )
+            except Exception:
+                logger.debug("Could not persist model to room state", exc_info=True)
+            await self._send_text(room.room_id, f"Model set to `{model}` for this room.")
+
+        elif cmd.startswith("search "):
+            query = cmd[7:].strip()
+            if not query:
+                await self._send_text(room.room_id, "Usage: `!ai search <query>`")
+                return
+            results = await self.rag.search(query, top_k=5)
+            if not results:
+                await self._send_text(room.room_id, "No documents found.")
+                return
+            await self._send_text(room.room_id, self.rag.format_context(results))
+
+        else:
+            # Treat unknown commands as AI prompts
+            if self.llm:
+                await self.client.room_typing(room.room_id, typing_state=True)
+                try:
+                    await self._respond_with_ai(room, cmd)
+                finally:
+                    await self.client.room_typing(room.room_id, typing_state=False)
+            else:
+                await self._send_text(room.room_id, f"Unknown command: `{cmd}`\n\n{HELP_TEXT}")
+
+    async def _respond_with_ai(self, room, user_message: str):
+        model = self.room_models.get(room.room_id, DEFAULT_MODEL)
+
+        # Build conversation context from room timeline
+        messages = [{"role": "system", "content": SYSTEM_PROMPT}]
+
+        # WildFiles document context
+        doc_results = await self.rag.search(user_message)
+        doc_context = self.rag.format_context(doc_results)
+        if doc_context:
+            messages.append({"role": "system", "content": doc_context})
+
+        # Last N messages from room timeline as context
+        timeline = room.timeline
+        history = list(timeline)[-10:] if timeline else []
+        for evt in history:
+            if not hasattr(evt, "body"):
+                continue
+            role = "assistant" if evt.sender == BOT_USER else "user"
+            messages.append({"role": role, "content": evt.body})
+
+        # Ensure last message is the current user message
+        if not messages or messages[-1].get("content") != user_message:
+            messages.append({"role": "user", "content": user_message})
+
+        try:
+            resp = await self.llm.chat.completions.create(
+                model=model,
+                messages=messages,
+                max_tokens=2048,
+            )
+            reply = resp.choices[0].message.content
+            await self._send_text(room.room_id, reply)
+        except Exception:
+            logger.exception("LLM call failed")
+            await self._send_text(room.room_id, "Sorry, I couldn't generate a response.")
+
+    async def _send_text(self, room_id: str, text: str):
+        await self.client.room_send(
+            room_id,
+            message_type="m.room.message",
+            content={
+                "msgtype": "m.text",
+                "body": text,
+                "format": "org.matrix.custom.html",
+                "formatted_body": text,
+            },
+        )
+
     async def on_megolm(self, room, event: MegolmEvent):
         """Log undecryptable messages."""
         logger.warning(
diff --git a/docker-compose.yml b/docker-compose.yml
index 9c33884..ec7063b 100644
--- a/docker-compose.yml
+++ b/docker-compose.yml
@@ -11,6 +11,12 @@ services:
     command: python bot.py
     env_file: .env
     restart: unless-stopped
+    environment:
+      - LITELLM_BASE_URL
+      - LITELLM_API_KEY
+      - DEFAULT_MODEL
+      - WILDFILES_BASE_URL
+      - WILDFILES_ORG
     volumes:
       - bot-crypto:/data/crypto_store
 
diff --git a/requirements.txt b/requirements.txt
index be0843d..46960de 100644
--- a/requirements.txt
+++ b/requirements.txt
@@ -6,3 +6,5 @@ livekit>=1.0,<2.0
 livekit-api>=1.0,<2.0
 matrix-nio[e2e]>=0.25,<1.0
 canonicaljson>=2.0,<3.0
+httpx>=0.27,<1.0
+openai>=1.0,<2.0