diff --git a/extensions/pi-config/index.ts b/extensions/pi-config/index.ts
index 554ce27..85c9b75 100644
--- a/extensions/pi-config/index.ts
+++ b/extensions/pi-config/index.ts
@@ -308,4 +308,101 @@ export default function (pi: ExtensionAPI) {
       ctx.ui.notify(output.join("\n"), "info");
     },
   });
+
+  // ── /config-setup ───────────────────────────────────────────
+  pi.registerCommand("config-setup", {
+    description: "Set up this folder with .pi, settings.json, and memory vault. Creates what's missing and sets MEMCTX_PACKS_PATH for the current session.",
+    handler: async (_args, ctx: ExtensionCommandContext) => {
+      const cwd = ctx.cwd;
+      const piDir = path.join(cwd, ".pi");
+      const settingsPath = path.join(piDir, "settings.json");
+      const memoryPacksDir = path.join(piDir, "memory-vault", "packs");
+
+      const created: string[] = [];
+      const existed: string[] = [];
+
+      // 1. .pi/
+      if (!fs.existsSync(piDir)) {
+        fs.mkdirSync(piDir, { recursive: true });
+        created.push(".pi/");
+      } else {
+        existed.push(".pi/");
+      }
+
+      // 2. settings.json — load or create, ensure ~/.agents package
+      let settings: PiSettings;
+      if (fs.existsSync(settingsPath)) {
+        try {
+          settings = JSON.parse(fs.readFileSync(settingsPath, "utf-8"));
+        } catch {
+          settings = {};
+        }
+        existed.push(".pi/settings.json");
+      } else {
+        settings = {};
+        created.push(".pi/settings.json");
+      }
+      ensureAgentsPackage(settings);
+      saveSettings(cwd, settings);
+
+      // 3. memory-vault/packs/
+      if (!fs.existsSync(memoryPacksDir)) {
+        fs.mkdirSync(memoryPacksDir, { recursive: true });
+        created.push(".pi/memory-vault/packs/");
+      } else {
+        existed.push(".pi/memory-vault/packs/");
+      }
+
+      // 4. Seed a minimal pack so pi-memctx finds this vault (needs at least one pack to exist)
+      const slug = path.basename(cwd).toLowerCase().replace(/[^a-z0-9]+/g, "-").replace(/^-|-$/g, "") || "workspace";
+      const seedPackDir = path.join(memoryPacksDir, slug, "00-system", "pi-agent");
+      if (!fs.existsSync(seedPackDir)) {
+        fs.mkdirSync(seedPackDir, { recursive: true });
+        const today = new Date().toISOString().slice(0, 10);
+        const title = slug.replace(/-/g, " ").replace(/\b\w/g, (c: string) => c.toUpperCase());
+        const manifest = `---
+type: system
+id: system.${slug}.memory-manifest
+title: ${title} Memory Manifest
+status: active
+source_of_truth: true
+freshness: current
+last_reviewed: ${today}
+tags:
+  - agent-memory/system
+  - pack/${slug}
+---
+
+# ${title} Memory Manifest
+
+This pack stores safe durable context generated from \`${cwd}\`.
+
+## Retrieval Protocol
+
+See [[packs/${slug}/00-system/pi-agent/retrieval-protocol|Retrieval Protocol]] and [[packs/${slug}/00-system/pi-agent/resource-map|Resource Map]].
+`;
+        fs.writeFileSync(path.join(seedPackDir, "memory-manifest.md"), manifest);
+        created.push(".pi/memory-vault/packs/" + slug + "/");
+      }
+
+      // 5. Set env var so pi-memctx uses this local vault for the session
+      process.env.MEMCTX_PACKS_PATH = memoryPacksDir;
+
+      const lines = [
+        created.length > 0
+          ? `\u2713 Created: ${created.join(", ")}`
+          : "",
+        existed.length > 0
+          ? `  Already existed: ${existed.join(", ")}`
+          : "",
+        "",
+        `MEMCTX_PACKS_PATH set to:`,
+        `  ${memoryPacksDir}`,
+        "",
+        created.length > 0 ? "Next: run  /memctx-init  in this folder to create the memory pack." : "",
+      ].filter(Boolean).join("\n");
+
+      ctx.ui.notify(lines, "success");
+    },
+  });
 }