diff --git a/docker-compose.yml b/docker-compose.yml
index 121d453..09df9d1 100644
--- a/docker-compose.yml
+++ b/docker-compose.yml
@@ -166,9 +166,13 @@ services:
     environment:
       - PORT=8085
       - DATABASE_URL=postgres://auron:auron_pass@products-db:5432/products_db?sslmode=disable
+      - REDIS_URL=redis://redis:6379/0
+      - KAFKA_BROKERS=kafka:29092
     depends_on:
       products-db:
         condition: service_healthy
+      kafka:
+        condition: service_healthy
     networks:
       - auron-network
     restart: unless-stopped
diff --git a/services/inventory-service/.env.example b/services/inventory-service/.env.example
new file mode 100644
index 0000000..ecc0999
--- /dev/null
+++ b/services/inventory-service/.env.example
@@ -0,0 +1,6 @@
+# Inventory Service
+PORT=8085
+DATABASE_URL=postgres://auron:auron_pass@localhost:5433/products_db?sslmode=disable
+REDIS_URL=redis://localhost:6379/0
+KAFKA_BROKERS=localhost:9092
+GORM_LOG_LEVEL=warn
diff --git a/services/inventory-service/Dockerfile b/services/inventory-service/Dockerfile
new file mode 100644
index 0000000..e6d9ac1
--- /dev/null
+++ b/services/inventory-service/Dockerfile
@@ -0,0 +1,23 @@
+FROM golang:1.25-alpine AS builder
+
+WORKDIR /app
+
+RUN apk add --no-cache git
+
+COPY go.mod go.sum ./
+
+COPY . .
+
+RUN CGO_ENABLED=0 GOOS=linux go build -o /inventory-service .
+
+FROM alpine:3.18
+
+RUN apk add --no-cache ca-certificates curl
+
+WORKDIR /app
+
+COPY --from=builder /inventory-service .
+
+EXPOSE 8085
+
+CMD ["./inventory-service"]
diff --git a/services/inventory-service/IMPLEMENTATION_PLAN.md b/services/inventory-service/IMPLEMENTATION_PLAN.md
new file mode 100644
index 0000000..e9d9389
--- /dev/null
+++ b/services/inventory-service/IMPLEMENTATION_PLAN.md
@@ -0,0 +1,429 @@
+# Inventory Service — Implementation Plan
+
+## Overview
+
+The inventory service (port **8085**) manages stock levels for products.  
+It is a **Kafka consumer + HTTP API** hybrid service:
+
+- Exposes admin-only HTTP endpoints for viewing and manually setting stock
+- Consumes `order.created` → reserves stock (`ReservedQuantity += n`)
+- Consumes `order.cancelled` → releases reservation (`ReservedQuantity -= n`)
+- Publishes `inventory.updated` on every stock change
+- Publishes `inventory.low_stock` when available stock drops below threshold
+
+### Gateway Routes (already wired, admin-only)
+
+| Method | Path | Auth | Purpose |
+|---|---|---|---|
+| `GET` | `/api/inventory/:product_id` | Admin | Get stock levels for a product |
+| `PUT` | `/api/inventory/:product_id` | Admin | Set total stock (restocking) |
+
+### Database
+
+Inventory-service **shares `products_db`** with product-service. It does **not** create the `inventory` table — product-service's AutoMigrate owns it. Inventory-service connects to the same DB and operates directly on the `inventory` table.
+
+The table structure (from product-service):
+```
+inventory
+├── product_id        UUID  PRIMARY KEY
+├── total_quantity    INT   NOT NULL DEFAULT 0
+├── reserved_quantity INT   NOT NULL DEFAULT 0
+├── version           INT   NOT NULL DEFAULT 0   ← optimistic locking
+└── updated_at        TIMESTAMP NOT NULL DEFAULT NOW()
+```
+
+`AvailableQuantity = TotalQuantity - ReservedQuantity`
+
+### Stock Reservation Flow
+
+```
+order-service → publishes order.created
+        ↓
+inventory-service consumes order.created
+        ↓
+Increments ReservedQuantity for each item (optimistic lock on version)
+        ↓
+Publishes inventory.updated (and inventory.low_stock if available stock < threshold)
+
+If order is cancelled:
+order-service → publishes order.cancelled
+        ↓
+inventory-service consumes order.cancelled
+        ↓
+Decrements ReservedQuantity for each item
+        ↓
+Publishes inventory.updated
+```
+
+> **Why not deduct TotalQuantity on order.created?**  
+> Reserved stock stays visible to admins as "committed but not shipped." Total stock only changes when an admin performs a restock (`PUT /inventory/:product_id`). This gives accurate available-stock visibility without needing inter-service HTTP calls.
+
+---
+
+## Folder Structure
+
+```
+services/inventory-service/
+├── cmd/
+│   ├── config.go          # env vars → appConfig
+│   ├── dotenv.go          # load .env in non-production
+│   ├── infrastructure.go  # setupDatabase, setupRedis (no AutoMigrate)
+│   ├── kafka.go           # setupKafkaPublisher, setupKafkaConsumer, startKafkaConsumer
+│   ├── run.go             # wire everything together
+│   └── server.go          # setupRouter, registerGracefulShutdown
+├── db/
+│   └── NOTE.md            # explains that product-service owns the inventory table
+├── internal/
+│   ├── cache/
+│   │   └── inventory_cache.go
+│   ├── domain/
+│   │   ├── inventory.go   # Inventory entity, DTOs, event structs
+│   │   ├── errors.go      # sentinel errors
+│   │   ├── repository.go  # InventoryRepository interface
+│   │   ├── service.go     # InventoryService interface
+│   │   ├── cache.go       # InventoryCache interface
+│   │   └── events.go      # EventPublisher + topic constants
+│   ├── events/
+│   │   ├── kafka_publisher.go
+│   │   └── kafka_consumer.go  # multi-topic consumer (2 topics)
+│   ├── handler/
+│   │   └── inventory_handler.go
+│   ├── repository/
+│   │   └── inventory_repository.go
+│   ├── route/
+│   │   └── inventory_route.go
+│   └── service/
+│       └── inventory_service.go
+├── main.go
+├── Dockerfile
+├── go.mod
+├── .env
+└── .env.example
+```
+
+> `internal/middleware/` exists in the scaffold but is not used — the gateway enforces admin auth via `X-User-Role` header before proxying.
+
+---
+
+## Tasks
+
+### Task 1 — Domain Layer
+
+**`internal/domain/inventory.go`**
+
+```go
+type Inventory struct {
+    ProductID        uuid.UUID `json:"product_id" gorm:"type:uuid;primaryKey"`
+    TotalQuantity    int       `json:"total_quantity" gorm:"not null;default:0"`
+    ReservedQuantity int       `json:"reserved_quantity" gorm:"not null;default:0"`
+    Version          int       `json:"version" gorm:"not null;default:0"`
+    UpdatedAt        time.Time `json:"updated_at" gorm:"not null;default:now()"`
+}
+
+func (Inventory) TableName() string { return "inventory" }
+
+func (i *Inventory) AvailableQuantity() int {
+    return i.TotalQuantity - i.ReservedQuantity
+}
+```
+
+- `InventoryResponse` DTO — adds computed `available_quantity` field
+- `UpdateInventoryRequest` — `{ total_quantity int, binding:"required,min=0" }`
+- `LowStockThreshold = 10` — constant; triggers `inventory.low_stock` event when available stock drops at or below this
+- `OrderCreatedEvent` / `OrderCancelledEvent` — shape of messages from order-service:
+  ```go
+  type OrderCreatedEvent struct {
+      OrderID uuid.UUID        `json:"id"`     // matches Order.ID json tag
+      UserID  uuid.UUID        `json:"user_id"`
+      Items   []OrderEventItem `json:"items"`
+  }
+  type OrderEventItem struct {
+      ProductID uuid.UUID `json:"product_id"`
+      Quantity  int       `json:"quantity"`
+  }
+  ```
+  `OrderCancelledEvent` is identical in shape — same `Order` struct published by order-service.
+
+**`internal/domain/errors.go`**
+- `ErrInventoryNotFound`, `ErrInsufficientStock`, `ErrInvalidQuantity`
+
+**`internal/domain/repository.go`**
+```go
+type InventoryRepository interface {
+    GetByProductID(productID uuid.UUID) (*Inventory, error)
+    SetTotalQuantity(productID uuid.UUID, quantity int) (*Inventory, error)
+    ReserveStock(productID uuid.UUID, quantity int) (*Inventory, error)
+    ReleaseStock(productID uuid.UUID, quantity int) (*Inventory, error)
+}
+```
+
+**`internal/domain/service.go`**
+```go
+type InventoryService interface {
+    GetInventory(ctx context.Context, productID uuid.UUID) (*InventoryResponse, error)
+    SetInventory(ctx context.Context, productID uuid.UUID, req UpdateInventoryRequest) (*InventoryResponse, error)
+    HandleOrderCreated(ctx context.Context, event OrderCreatedEvent) error
+    HandleOrderCancelled(ctx context.Context, event OrderCreatedEvent) error
+}
+```
+
+**`internal/domain/cache.go`**
+```go
+type InventoryCache interface {
+    GetInventory(ctx context.Context, productID uuid.UUID) (*Inventory, error)
+    SetInventory(ctx context.Context, inv *Inventory) error
+    InvalidateInventory(ctx context.Context, productID uuid.UUID) error
+}
+```
+
+**`internal/domain/events.go`**
+- `EventPublisher` interface: `Publish(ctx, topic string, payload any) error` + `Close() error`
+- Consumed topics (constants, not published):
+  - `TopicOrderCreated = "order.created"`
+  - `TopicOrderCancelled = "order.cancelled"`
+- Published topics:
+  - `TopicInventoryUpdated = "inventory.updated"`
+  - `TopicInventoryLowStock = "inventory.low_stock"`
+
+---
+
+### Task 2 — Repository Layer
+
+**`internal/repository/inventory_repository.go`**
+
+- `GetByProductID` — returns `ErrInventoryNotFound` on GORM `ErrRecordNotFound`
+- `SetTotalQuantity` — admin restock: uses `db.Save()` with upsert semantics (creates if not exists, updates if exists); bumps `Version`
+- `ReserveStock` — uses optimistic locking:
+  ```go
+  result := db.Model(&Inventory{}).
+      Where("product_id = ? AND version = ? AND (total_quantity - reserved_quantity) >= ?",
+            productID, current.Version, quantity).
+      Updates(map[string]any{
+          "reserved_quantity": gorm.Expr("reserved_quantity + ?", quantity),
+          "version":           gorm.Expr("version + 1"),
+          "updated_at":        time.Now(),
+      })
+  if result.RowsAffected == 0 {
+      return nil, domain.ErrInsufficientStock
+  }
+  ```
+  Returns `ErrInsufficientStock` if the WHERE clause misses (concurrent update or not enough stock).
+- `ReleaseStock` — similar pattern; clamps `reserved_quantity` to minimum 0 via `GREATEST`:
+  ```go
+  Updates(map[string]any{
+      "reserved_quantity": gorm.Expr("GREATEST(reserved_quantity - ?, 0)", quantity),
+      "version":           gorm.Expr("version + 1"),
+      "updated_at":        time.Now(),
+  })
+  ```
+
+> **No AutoMigrate** — the `inventory` table is owned by product-service. Inventory-service connects to the same DB and reads/writes the table without managing its schema.
+
+---
+
+### Task 3 — Cache Layer
+
+**`internal/cache/inventory_cache.go`**
+- Key: `inventory:<product_id>` (TTL **5 minutes** — shorter than other caches since stock changes frequently)
+- JSON marshal/unmarshal; Redis miss returns `nil, nil`
+
+---
+
+### Task 4 — Kafka Events (Publisher + Consumer)
+
+**`internal/events/kafka_publisher.go`**
+- Same pattern as other services: `kafkaPublisher` with `writers map[string]*kafka.Writer`
+
+**`internal/events/kafka_consumer.go`**
+
+Multi-topic consumer — subscribes to `order.created` AND `order.cancelled` with a single struct, two readers:
+
+```go
+type KafkaConsumer struct {
+    readers []readerEntry
+    service domain.InventoryService
+}
+
+type readerEntry struct {
+    reader *kafka.Reader
+    topic  string
+}
+
+func NewKafkaConsumer(brokers []string, service domain.InventoryService) *KafkaConsumer
+```
+
+- `Start(ctx)` — launches one goroutine per reader; each goroutine calls `handleMessage(topic, payload)`
+- `handleMessage` — switches on topic, unmarshals the appropriate event type, calls the right service method
+- `Close()` — closes all readers
+
+Group IDs:
+- `order.created` → group `inventory-service-orders`
+- `order.cancelled` → group `inventory-service-orders` (same group, different topic)
+
+---
+
+### Task 5 — Service Layer
+
+**`internal/service/inventory_service.go`**
+
+**`GetInventory(ctx, productID)`**
+1. Cache-aside: check `inventoryCache.GetInventory(ctx, productID)`
+2. DB fallback on miss
+3. Return `InventoryResponse` with computed `available_quantity`
+
+**`SetInventory(ctx, productID, req)`**
+1. Call `repo.SetTotalQuantity(productID, req.TotalQuantity)` (upsert)
+2. Invalidate + re-cache
+3. Publish `inventory.updated` async
+4. Check if available stock ≤ `LowStockThreshold` → publish `inventory.low_stock` async
+
+**`HandleOrderCreated(ctx, event)`**
+- For each `event.Items`:
+  1. Call `repo.ReserveStock(item.ProductID, item.Quantity)`
+  2. On `ErrInsufficientStock`: log error, continue with remaining items (partial reservation is acceptable — could block order fulfillment in a real system, but acceptable for portfolio scope)
+  3. Invalidate cache for affected product
+  4. Publish `inventory.updated` async; if available stock ≤ threshold, also publish `inventory.low_stock`
+
+**`HandleOrderCancelled(ctx, event)`**
+- For each `event.Items`:
+  1. Call `repo.ReleaseStock(item.ProductID, item.Quantity)`
+  2. Invalidate cache
+  3. Publish `inventory.updated` async
+
+---
+
+### Task 6 — Handler + Route Layers
+
+**`internal/handler/inventory_handler.go`**
+- `InventoryHandler` struct with `service domain.InventoryService`
+- `GetInventory(c)` — parse `:product_id` UUID param, call service, return 200/404
+- `SetInventory(c)` — parse `:product_id`, bind `UpdateInventoryRequest`, call service, return 200
+- `handleError(c, err)` — maps `ErrInventoryNotFound` → 404, `ErrInvalidQuantity` → 400, default → 500
+- No `getUserID` helper needed — admin identity is verified at the gateway; inventory-service trusts the request is admin
+
+**`internal/route/inventory_route.go`**
+```go
+func RegisterInventoryRoutes(router *gin.Engine, inventoryHandler *handler.InventoryHandler) {
+    api := router.Group("/")
+    api.GET("/inventory/:product_id", inventoryHandler.GetInventory)
+    api.PUT("/inventory/:product_id", inventoryHandler.SetInventory)
+}
+```
+
+---
+
+### Task 7 — cmd Bootstrap
+
+**`cmd/config.go`**
+```go
+type appConfig struct {
+    Port         string
+    DatabaseURL  string
+    RedisURL     string
+    KafkaBrokers string
+}
+```
+Defaults: port 8085, `localhost:5433/products_db`, `localhost:6379`, `localhost:9092`
+
+> Note: default DATABASE_URL uses port 5433 (host-mapped port for products-db) for local dev.
+
+**`cmd/dotenv.go`** — identical pattern to all other services
+
+**`cmd/infrastructure.go`**
+- `setupDatabase` with connection pooling
+- **No `runMigrations`** — product-service owns the `inventory` table; inventory-service skips AutoMigrate
+- `setupRedis` with 5s ping timeout
+- `resolveGormLogLevel`
+
+**`cmd/kafka.go`**
+- `inventoryPublishedTopics`: `TopicInventoryUpdated`, `TopicInventoryLowStock`
+- `setupKafkaPublisher(brokers string) domain.EventPublisher`
+- `setupKafkaConsumer(brokers string, svc domain.InventoryService) *events.KafkaConsumer`
+  - ensures `order.created` and `order.cancelled` topics exist (non-fatal if they already exist)
+- `startKafkaConsumer(ctx, consumer)`
+- `closeKafkaPublisher`, `parseBrokers`, `ensureTopics` — same helpers as other services
+
+**`cmd/run.go`**
+```go
+func Run() {
+    cfg := loadConfig()
+    db := setupDatabase(cfg.DatabaseURL)
+    redisClient := setupRedis(cfg.RedisURL)
+    publisher := setupKafkaPublisher(cfg.KafkaBrokers)
+    inventoryRepo := repository.NewInventoryRepository(db)
+    inventoryCache := cache.NewInventoryCache(redisClient)
+    inventorySvc := service.NewInventoryService(inventoryRepo, inventoryCache, publisher)
+    ctx, cancel := context.WithCancel(context.Background())
+    consumer := setupKafkaConsumer(cfg.KafkaBrokers, inventorySvc)
+    startKafkaConsumer(ctx, consumer)
+    inventoryHandler := handler.NewInventoryHandler(inventorySvc)
+    router := setupRouter(inventoryHandler)
+    registerGracefulShutdown(db, redisClient, publisher, consumer, cancel)
+    router.Run(fmt.Sprintf(":%s", cfg.Port))
+}
+```
+
+**`cmd/server.go`**
+- `setupRouter(*handler.InventoryHandler) *gin.Engine` — release mode, `/health`, `/metrics`, calls `RegisterInventoryRoutes`
+
+---
+
+### Task 8 — Entry Point, Dockerfile, Env Files, docker-compose
+
+**`main.go`** — `cmd.Run()`
+
+**`Dockerfile`** — same multi-stage pattern: `golang:1.25-alpine` builder → `alpine:3.18` runtime; binary `inventory-service`; EXPOSE 8085
+
+**`.env`** — local dev values:
+```
+PORT=8085
+DATABASE_URL=postgres://auron:auron_pass@localhost:5433/products_db?sslmode=disable
+REDIS_URL=redis://localhost:6379/0
+KAFKA_BROKERS=localhost:9092
+GORM_LOG_LEVEL=warn
+```
+
+**`.env.example`** — same with documented placeholders
+
+**`docker-compose.yml`** — update `inventory-service` block:
+```yaml
+environment:
+  - PORT=8085
+  - DATABASE_URL=postgres://auron:auron_pass@products-db:5432/products_db?sslmode=disable
+  - REDIS_URL=redis://redis:6379/0
+  - KAFKA_BROKERS=kafka:29092
+depends_on:
+  products-db:
+    condition: service_healthy
+  kafka:
+    condition: service_healthy
+```
+
+---
+
+## Key Design Decisions
+
+| Decision | Choice | Reason |
+|---|---|---|
+| Shared database | inventory-service reads/writes `products_db` | Product and inventory are tightly coupled; avoids extra DB; consistent with docker-compose original design |
+| No AutoMigrate | inventory-service skips it | product-service owns the `inventory` table schema; running AutoMigrate in both is safe but unnecessary |
+| Reservation vs deduction | Reserve on `order.created`, release on `order.cancelled` | Available stock stays accurate; no HTTP call to order-service needed for `payment.completed` |
+| Optimistic locking | `version` field incremented on every update | Prevents lost updates under concurrent order placement; `ErrInsufficientStock` returned if version mismatches |
+| Multi-topic consumer | Single struct with two readers, one goroutine each | kafka-go Reader only supports one topic; two readers is the idiomatic approach |
+| Low-stock threshold | Constant `LowStockThreshold = 10` | Simple; notification-service can consume `inventory.low_stock` to alert admins |
+| go.mod module | `auron/inventory-service` | Matches pattern of all other services |
+
+---
+
+## Dependencies
+
+```
+github.com/gin-gonic/gin v1.12.0
+github.com/google/uuid v1.6.0
+github.com/redis/go-redis/v9 v9.19.0
+github.com/segmentio/kafka-go v0.4.51
+gorm.io/driver/postgres v1.6.0
+gorm.io/gorm v1.31.1
+```
+
+No Stripe SDK needed. Simpler dependency set than payment-service.
diff --git a/services/inventory-service/cmd/config.go b/services/inventory-service/cmd/config.go
new file mode 100644
index 0000000..704673e
--- /dev/null
+++ b/services/inventory-service/cmd/config.go
@@ -0,0 +1,41 @@
+package cmd
+
+import "os"
+
+type appConfig struct {
+	Port         string
+	DatabaseURL  string
+	RedisURL     string
+	KafkaBrokers string
+}
+
+func loadConfig() appConfig {
+	loadDotEnvFile(".env")
+
+	port := os.Getenv("PORT")
+	if port == "" {
+		port = "8085"
+	}
+
+	databaseURL := os.Getenv("DATABASE_URL")
+	if databaseURL == "" {
+		databaseURL = "postgres://auron:auron_pass@localhost:5433/products_db?sslmode=disable"
+	}
+
+	redisURL := os.Getenv("REDIS_URL")
+	if redisURL == "" {
+		redisURL = "redis://localhost:6379/0"
+	}
+
+	kafkaBrokers := os.Getenv("KAFKA_BROKERS")
+	if kafkaBrokers == "" {
+		kafkaBrokers = "localhost:9092"
+	}
+
+	return appConfig{
+		Port:         port,
+		DatabaseURL:  databaseURL,
+		RedisURL:     redisURL,
+		KafkaBrokers: kafkaBrokers,
+	}
+}
diff --git a/services/inventory-service/cmd/dotenv.go b/services/inventory-service/cmd/dotenv.go
new file mode 100644
index 0000000..3c652db
--- /dev/null
+++ b/services/inventory-service/cmd/dotenv.go
@@ -0,0 +1,42 @@
+package cmd
+
+import (
+	"bufio"
+	"os"
+	"strings"
+)
+
+func loadDotEnvFile(path string) {
+	file, err := os.Open(path)
+	if err != nil {
+		return
+	}
+	defer file.Close()
+
+	scanner := bufio.NewScanner(file)
+	for scanner.Scan() {
+		line := strings.TrimSpace(scanner.Text())
+		if line == "" || strings.HasPrefix(line, "#") {
+			continue
+		}
+
+		parts := strings.SplitN(line, "=", 2)
+		if len(parts) != 2 {
+			continue
+		}
+
+		key := strings.TrimSpace(parts[0])
+		value := strings.TrimSpace(parts[1])
+		value = strings.Trim(value, `"'`)
+
+		if key == "" {
+			continue
+		}
+
+		if _, exists := os.LookupEnv(key); exists {
+			continue
+		}
+
+		_ = os.Setenv(key, value)
+	}
+}
diff --git a/services/inventory-service/cmd/infrastructure.go b/services/inventory-service/cmd/infrastructure.go
new file mode 100644
index 0000000..2d56ad9
--- /dev/null
+++ b/services/inventory-service/cmd/infrastructure.go
@@ -0,0 +1,65 @@
+package cmd
+
+import (
+	"context"
+	"os"
+	"strings"
+	"time"
+
+	"github.com/redis/go-redis/v9"
+	"gorm.io/driver/postgres"
+	"gorm.io/gorm"
+	"gorm.io/gorm/logger"
+)
+
+func setupDatabase(databaseURL string) (*gorm.DB, error) {
+	db, err := gorm.Open(postgres.Open(databaseURL), &gorm.Config{
+		Logger: logger.Default.LogMode(resolveGormLogLevel()),
+	})
+	if err != nil {
+		return nil, err
+	}
+
+	sqlDB, err := db.DB()
+	if err != nil {
+		return nil, err
+	}
+	sqlDB.SetMaxIdleConns(10)
+	sqlDB.SetMaxOpenConns(100)
+	sqlDB.SetConnMaxLifetime(time.Hour)
+
+	return db, nil
+}
+
+func setupRedis(redisURL string) (*redis.Client, error) {
+	opt, err := redis.ParseURL(redisURL)
+	if err != nil {
+		return nil, err
+	}
+
+	client := redis.NewClient(opt)
+
+	ctx, cancel := context.WithTimeout(context.Background(), 5*time.Second)
+	defer cancel()
+
+	if err := client.Ping(ctx).Err(); err != nil {
+		return nil, err
+	}
+
+	return client, nil
+}
+
+func resolveGormLogLevel() logger.LogLevel {
+	switch strings.ToLower(strings.TrimSpace(os.Getenv("GORM_LOG_LEVEL"))) {
+	case "silent":
+		return logger.Silent
+	case "error":
+		return logger.Error
+	case "warn", "warning":
+		return logger.Warn
+	case "info":
+		return logger.Info
+	default:
+		return logger.Warn
+	}
+}
diff --git a/services/inventory-service/cmd/kafka.go b/services/inventory-service/cmd/kafka.go
new file mode 100644
index 0000000..6c4dfdb
--- /dev/null
+++ b/services/inventory-service/cmd/kafka.go
@@ -0,0 +1,112 @@
+package cmd
+
+import (
+	"context"
+	"log/slog"
+	"strconv"
+	"strings"
+	"time"
+
+	"auron/inventory-service/internal/domain"
+	"auron/inventory-service/internal/events"
+
+	"github.com/segmentio/kafka-go"
+)
+
+var inventoryTopics = []string{
+	domain.TopicInventoryUpdated,
+	domain.TopicInventoryLowStock,
+}
+
+func setupKafkaPublisher(kafkaBrokers string) domain.EventPublisher {
+	brokers := parseBrokers(kafkaBrokers)
+	ensureTopics(brokers, inventoryTopics)
+
+	writers := make(map[string]*kafka.Writer, len(inventoryTopics))
+	for _, topic := range inventoryTopics {
+		writers[topic] = &kafka.Writer{
+			Addr:         kafka.TCP(brokers...),
+			Topic:        topic,
+			Balancer:     &kafka.LeastBytes{},
+			RequiredAcks: kafka.RequireOne,
+			BatchTimeout: 10 * time.Millisecond,
+		}
+	}
+
+	return events.NewKafkaPublisher(writers)
+}
+
+func setupKafkaConsumer(kafkaBrokers string, svc domain.InventoryService) *events.KafkaConsumer {
+	brokers := parseBrokers(kafkaBrokers)
+	return events.NewKafkaConsumer(brokers, svc)
+}
+
+func startKafkaConsumer(ctx context.Context, consumer *events.KafkaConsumer) {
+	consumer.Start(ctx)
+	slog.Info("kafka consumer started",
+		"topics", []string{domain.TopicOrderCreated, domain.TopicOrderCancelled},
+		"group", "inventory-service-orders",
+	)
+}
+
+func parseBrokers(kafkaBrokers string) []string {
+	parts := strings.Split(kafkaBrokers, ",")
+	brokers := make([]string, 0, len(parts))
+	for _, b := range parts {
+		if trimmed := strings.TrimSpace(b); trimmed != "" {
+			brokers = append(brokers, trimmed)
+		}
+	}
+	if len(brokers) == 0 {
+		return []string{"localhost:9092"}
+	}
+	return brokers
+}
+
+func ensureTopics(brokers []string, topics []string) {
+	if len(brokers) == 0 || len(topics) == 0 {
+		return
+	}
+
+	conn, err := kafka.Dial("tcp", brokers[0])
+	if err != nil {
+		slog.Warn("kafka topic init skipped: cannot connect", "broker", brokers[0], "error", err)
+		return
+	}
+	defer conn.Close()
+
+	controller, err := conn.Controller()
+	if err != nil {
+		slog.Warn("kafka topic init skipped: cannot get controller", "error", err)
+		return
+	}
+
+	controllerConn, err := kafka.Dial("tcp", controller.Host+":"+strconv.Itoa(controller.Port))
+	if err != nil {
+		slog.Warn("kafka topic init skipped: cannot connect to controller", "error", err)
+		return
+	}
+	defer controllerConn.Close()
+
+	configs := make([]kafka.TopicConfig, 0, len(topics))
+	for _, topic := range topics {
+		configs = append(configs, kafka.TopicConfig{
+			Topic:             topic,
+			NumPartitions:     3,
+			ReplicationFactor: 1,
+		})
+	}
+
+	if err := controllerConn.CreateTopics(configs...); err != nil {
+		slog.Warn("kafka topic init failed", "topics", topics, "error", err)
+		return
+	}
+
+	slog.Info("kafka topics ensured", "topics", topics)
+}
+
+func closeKafkaPublisher(publisher domain.EventPublisher) {
+	if err := publisher.Close(); err != nil {
+		slog.Warn("failed to close kafka publisher", "error", err)
+	}
+}
diff --git a/services/inventory-service/cmd/run.go b/services/inventory-service/cmd/run.go
new file mode 100644
index 0000000..0e69a40
--- /dev/null
+++ b/services/inventory-service/cmd/run.go
@@ -0,0 +1,83 @@
+package cmd
+
+import (
+	"context"
+	"fmt"
+	"log"
+	"log/slog"
+	"os"
+	"os/signal"
+	"syscall"
+
+	"auron/inventory-service/internal/cache"
+	"auron/inventory-service/internal/domain"
+	"auron/inventory-service/internal/events"
+	"auron/inventory-service/internal/handler"
+	"auron/inventory-service/internal/repository"
+	"auron/inventory-service/internal/service"
+
+	"github.com/redis/go-redis/v9"
+	"gorm.io/gorm"
+)
+
+func Run() {
+	cfg := loadConfig()
+
+	db, err := setupDatabase(cfg.DatabaseURL)
+	if err != nil {
+		log.Fatalf("failed to connect to database: %v", err)
+	}
+	log.Println("database connected")
+
+	redisClient, err := setupRedis(cfg.RedisURL)
+	if err != nil {
+		log.Fatalf("failed to connect to Redis: %v", err)
+	}
+
+	publisher := setupKafkaPublisher(cfg.KafkaBrokers)
+
+	inventoryRepo := repository.NewInventoryRepository(db)
+	inventoryCache := cache.NewInventoryCache(redisClient)
+	inventorySvc := service.NewInventoryService(inventoryRepo, inventoryCache, publisher)
+
+	ctx, cancel := context.WithCancel(context.Background())
+	consumer := setupKafkaConsumer(cfg.KafkaBrokers, inventorySvc)
+	startKafkaConsumer(ctx, consumer)
+
+	inventoryHandler := handler.NewInventoryHandler(inventorySvc)
+	router := setupRouter(inventoryHandler)
+
+	registerGracefulShutdown(db, redisClient, publisher, consumer, cancel)
+
+	addr := fmt.Sprintf(":%s", cfg.Port)
+	log.Printf("starting inventory-service on %s", addr)
+	if err := router.Run(addr); err != nil {
+		log.Fatalf("failed to start server: %v", err)
+	}
+}
+
+func registerGracefulShutdown(
+	db *gorm.DB,
+	redisClient *redis.Client,
+	publisher domain.EventPublisher,
+	consumer *events.KafkaConsumer,
+	cancel context.CancelFunc,
+) {
+	quit := make(chan os.Signal, 1)
+	signal.Notify(quit, syscall.SIGINT, syscall.SIGTERM)
+
+	go func() {
+		<-quit
+		fmt.Println("\nshutting down inventory-service...")
+		cancel()
+		if err := consumer.Close(); err != nil {
+			slog.Warn("error closing kafka consumer", "error", err)
+		}
+		if sqlDB, err := db.DB(); err == nil {
+			_ = sqlDB.Close()
+		}
+		_ = redisClient.Close()
+		closeKafkaPublisher(publisher)
+		os.Exit(0)
+	}()
+}
diff --git a/services/inventory-service/cmd/server.go b/services/inventory-service/cmd/server.go
new file mode 100644
index 0000000..64b5f60
--- /dev/null
+++ b/services/inventory-service/cmd/server.go
@@ -0,0 +1,34 @@
+package cmd
+
+import (
+	"time"
+
+	"auron/inventory-service/internal/handler"
+	"auron/inventory-service/internal/route"
+
+	"github.com/gin-gonic/gin"
+)
+
+func setupRouter(inventoryHandler *handler.InventoryHandler) *gin.Engine {
+	gin.SetMode(gin.ReleaseMode)
+	router := gin.New()
+
+	router.Use(gin.Logger())
+	router.Use(gin.Recovery())
+
+	router.GET("/health", func(c *gin.Context) {
+		c.JSON(200, gin.H{
+			"status":    "healthy",
+			"service":   "inventory-service",
+			"timestamp": time.Now().UTC(),
+		})
+	})
+
+	router.GET("/metrics", func(c *gin.Context) {
+		c.String(200, "# Prometheus metrics endpoint\n")
+	})
+
+	route.RegisterInventoryRoutes(router, inventoryHandler)
+
+	return router
+}
diff --git a/services/inventory-service/go.mod b/services/inventory-service/go.mod
new file mode 100644
index 0000000..b747470
--- /dev/null
+++ b/services/inventory-service/go.mod
@@ -0,0 +1,55 @@
+module auron/inventory-service
+
+go 1.25.8
+
+require (
+	github.com/gin-gonic/gin v1.12.0
+	github.com/google/uuid v1.6.0
+	github.com/redis/go-redis/v9 v9.19.0
+	github.com/segmentio/kafka-go v0.4.51
+	gorm.io/driver/postgres v1.6.0
+	gorm.io/gorm v1.31.1
+)
+
+require (
+	github.com/bytedance/gopkg v0.1.3 // indirect
+	github.com/bytedance/sonic v1.15.0 // indirect
+	github.com/bytedance/sonic/loader v0.5.0 // indirect
+	github.com/cespare/xxhash/v2 v2.3.0 // indirect
+	github.com/cloudwego/base64x v0.1.6 // indirect
+	github.com/gabriel-vasile/mimetype v1.4.12 // indirect
+	github.com/gin-contrib/sse v1.1.0 // indirect
+	github.com/go-playground/locales v0.14.1 // indirect
+	github.com/go-playground/universal-translator v0.18.1 // indirect
+	github.com/go-playground/validator/v10 v10.30.1 // indirect
+	github.com/goccy/go-json v0.10.5 // indirect
+	github.com/goccy/go-yaml v1.19.2 // indirect
+	github.com/jackc/pgpassfile v1.0.0 // indirect
+	github.com/jackc/pgservicefile v0.0.0-20240606120523-5a60cdf6a761 // indirect
+	github.com/jackc/pgx/v5 v5.6.0 // indirect
+	github.com/jackc/puddle/v2 v2.2.2 // indirect
+	github.com/jinzhu/inflection v1.0.0 // indirect
+	github.com/jinzhu/now v1.1.5 // indirect
+	github.com/json-iterator/go v1.1.12 // indirect
+	github.com/klauspost/compress v1.17.6 // indirect
+	github.com/klauspost/cpuid/v2 v2.3.0 // indirect
+	github.com/leodido/go-urn v1.4.0 // indirect
+	github.com/mattn/go-isatty v0.0.20 // indirect
+	github.com/modern-go/concurrent v0.0.0-20180306012644-bacd9c7ef1dd // indirect
+	github.com/modern-go/reflect2 v1.0.2 // indirect
+	github.com/pelletier/go-toml/v2 v2.2.4 // indirect
+	github.com/pierrec/lz4/v4 v4.1.15 // indirect
+	github.com/quic-go/qpack v0.6.0 // indirect
+	github.com/quic-go/quic-go v0.59.0 // indirect
+	github.com/twitchyliquid64/golang-asm v0.15.1 // indirect
+	github.com/ugorji/go/codec v1.3.1 // indirect
+	go.mongodb.org/mongo-driver/v2 v2.5.0 // indirect
+	go.uber.org/atomic v1.11.0 // indirect
+	golang.org/x/arch v0.22.0 // indirect
+	golang.org/x/crypto v0.48.0 // indirect
+	golang.org/x/net v0.51.0 // indirect
+	golang.org/x/sync v0.19.0 // indirect
+	golang.org/x/sys v0.41.0 // indirect
+	golang.org/x/text v0.34.0 // indirect
+	google.golang.org/protobuf v1.36.10 // indirect
+)
diff --git a/services/inventory-service/go.sum b/services/inventory-service/go.sum
new file mode 100644
index 0000000..0e9a0de
--- /dev/null
+++ b/services/inventory-service/go.sum
@@ -0,0 +1,134 @@
+github.com/bsm/ginkgo/v2 v2.12.0 h1:Ny8MWAHyOepLGlLKYmXG4IEkioBysk6GpaRTLC8zwWs=
+github.com/bsm/ginkgo/v2 v2.12.0/go.mod h1:SwYbGRRDovPVboqFv0tPTcG1sN61LM1Z4ARdbAV9g4c=
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diff --git a/services/inventory-service/internal/cache/inventory_cache.go b/services/inventory-service/internal/cache/inventory_cache.go
new file mode 100644
index 0000000..6e62266
--- /dev/null
+++ b/services/inventory-service/internal/cache/inventory_cache.go
@@ -0,0 +1,55 @@
+package cache
+
+import (
+	"context"
+	"encoding/json"
+	"time"
+
+	"auron/inventory-service/internal/domain"
+
+	"github.com/google/uuid"
+	"github.com/redis/go-redis/v9"
+)
+
+const (
+	inventoryPrefix = "inventory:"
+	inventoryTTL    = 5 * time.Minute
+)
+
+type InventoryCache struct {
+	redis *redis.Client
+}
+
+func NewInventoryCache(redisClient *redis.Client) domain.InventoryCache {
+	return &InventoryCache{redis: redisClient}
+}
+
+func (c *InventoryCache) GetInventory(ctx context.Context, productID uuid.UUID) (*domain.Inventory, error) {
+	key := inventoryPrefix + productID.String()
+	cached, err := c.redis.Get(ctx, key).Result()
+	if err != nil {
+		if err == redis.Nil {
+			return nil, nil
+		}
+		return nil, err
+	}
+
+	var inv domain.Inventory
+	if err := json.Unmarshal([]byte(cached), &inv); err != nil {
+		return nil, err
+	}
+	return &inv, nil
+}
+
+func (c *InventoryCache) SetInventory(ctx context.Context, inv *domain.Inventory) error {
+	key := inventoryPrefix + inv.ProductID.String()
+	data, err := json.Marshal(inv)
+	if err != nil {
+		return err
+	}
+	return c.redis.Set(ctx, key, data, inventoryTTL).Err()
+}
+
+func (c *InventoryCache) InvalidateInventory(ctx context.Context, productID uuid.UUID) error {
+	return c.redis.Del(ctx, inventoryPrefix+productID.String()).Err()
+}
diff --git a/services/inventory-service/internal/domain/cache.go b/services/inventory-service/internal/domain/cache.go
new file mode 100644
index 0000000..b135404
--- /dev/null
+++ b/services/inventory-service/internal/domain/cache.go
@@ -0,0 +1,13 @@
+package domain
+
+import (
+	"context"
+
+	"github.com/google/uuid"
+)
+
+type InventoryCache interface {
+	GetInventory(ctx context.Context, productID uuid.UUID) (*Inventory, error)
+	SetInventory(ctx context.Context, inv *Inventory) error
+	InvalidateInventory(ctx context.Context, productID uuid.UUID) error
+}
diff --git a/services/inventory-service/internal/domain/errors.go b/services/inventory-service/internal/domain/errors.go
new file mode 100644
index 0000000..f49fe03
--- /dev/null
+++ b/services/inventory-service/internal/domain/errors.go
@@ -0,0 +1,9 @@
+package domain
+
+import "errors"
+
+var (
+	ErrInventoryNotFound = errors.New("inventory not found")
+	ErrInsufficientStock = errors.New("insufficient stock")
+	ErrInvalidQuantity   = errors.New("quantity must be >= 0")
+)
diff --git a/services/inventory-service/internal/domain/events.go b/services/inventory-service/internal/domain/events.go
new file mode 100644
index 0000000..d9f2112
--- /dev/null
+++ b/services/inventory-service/internal/domain/events.go
@@ -0,0 +1,18 @@
+package domain
+
+import "context"
+
+type EventPublisher interface {
+	Publish(ctx context.Context, topic string, payload any) error
+	Close() error
+}
+
+const (
+	// Consumed topics
+	TopicOrderCreated   = "order.created"
+	TopicOrderCancelled = "order.cancelled"
+
+	// Published topics
+	TopicInventoryUpdated  = "inventory.updated"
+	TopicInventoryLowStock = "inventory.low_stock"
+)
diff --git a/services/inventory-service/internal/domain/inventory.go b/services/inventory-service/internal/domain/inventory.go
new file mode 100644
index 0000000..5fc699f
--- /dev/null
+++ b/services/inventory-service/internal/domain/inventory.go
@@ -0,0 +1,61 @@
+package domain
+
+import (
+	"time"
+
+	"github.com/google/uuid"
+)
+
+const LowStockThreshold = 10
+
+type Inventory struct {
+	ProductID        uuid.UUID `json:"product_id" gorm:"type:uuid;primaryKey"`
+	TotalQuantity    int       `json:"total_quantity" gorm:"not null;default:0"`
+	ReservedQuantity int       `json:"reserved_quantity" gorm:"not null;default:0"`
+	Version          int       `json:"version" gorm:"not null;default:0"`
+	UpdatedAt        time.Time `json:"updated_at" gorm:"not null;default:now()"`
+}
+
+func (Inventory) TableName() string {
+	return "inventory"
+}
+
+func (i *Inventory) AvailableQuantity() int {
+	return i.TotalQuantity - i.ReservedQuantity
+}
+
+func (i *Inventory) ToResponse() *InventoryResponse {
+	return &InventoryResponse{
+		ProductID:         i.ProductID,
+		TotalQuantity:     i.TotalQuantity,
+		ReservedQuantity:  i.ReservedQuantity,
+		AvailableQuantity: i.AvailableQuantity(),
+		UpdatedAt:         i.UpdatedAt,
+	}
+}
+
+type InventoryResponse struct {
+	ProductID         uuid.UUID `json:"product_id"`
+	TotalQuantity     int       `json:"total_quantity"`
+	ReservedQuantity  int       `json:"reserved_quantity"`
+	AvailableQuantity int       `json:"available_quantity"`
+	UpdatedAt         time.Time `json:"updated_at"`
+}
+
+type UpdateInventoryRequest struct {
+	TotalQuantity int `json:"total_quantity" binding:"required,min=0"`
+}
+
+// OrderCreatedEvent is the shape of the Kafka message from order-service.
+// Used for both order.created and order.cancelled — order-service publishes
+// the full Order struct for both events, which has json:"id" for the order ID.
+type OrderCreatedEvent struct {
+	OrderID uuid.UUID        `json:"id"`
+	UserID  uuid.UUID        `json:"user_id"`
+	Items   []OrderEventItem `json:"items"`
+}
+
+type OrderEventItem struct {
+	ProductID uuid.UUID `json:"product_id"`
+	Quantity  int       `json:"quantity"`
+}
diff --git a/services/inventory-service/internal/domain/repository.go b/services/inventory-service/internal/domain/repository.go
new file mode 100644
index 0000000..b66e4f0
--- /dev/null
+++ b/services/inventory-service/internal/domain/repository.go
@@ -0,0 +1,10 @@
+package domain
+
+import "github.com/google/uuid"
+
+type InventoryRepository interface {
+	GetByProductID(productID uuid.UUID) (*Inventory, error)
+	SetTotalQuantity(productID uuid.UUID, quantity int) (*Inventory, error)
+	ReserveStock(productID uuid.UUID, quantity int) (*Inventory, error)
+	ReleaseStock(productID uuid.UUID, quantity int) (*Inventory, error)
+}
diff --git a/services/inventory-service/internal/domain/service.go b/services/inventory-service/internal/domain/service.go
new file mode 100644
index 0000000..6c4e4f8
--- /dev/null
+++ b/services/inventory-service/internal/domain/service.go
@@ -0,0 +1,14 @@
+package domain
+
+import (
+	"context"
+
+	"github.com/google/uuid"
+)
+
+type InventoryService interface {
+	GetInventory(ctx context.Context, productID uuid.UUID) (*InventoryResponse, error)
+	SetInventory(ctx context.Context, productID uuid.UUID, req UpdateInventoryRequest) (*InventoryResponse, error)
+	HandleOrderCreated(ctx context.Context, event OrderCreatedEvent) error
+	HandleOrderCancelled(ctx context.Context, event OrderCreatedEvent) error
+}
diff --git a/services/inventory-service/internal/events/kafka_consumer.go b/services/inventory-service/internal/events/kafka_consumer.go
new file mode 100644
index 0000000..b5538c9
--- /dev/null
+++ b/services/inventory-service/internal/events/kafka_consumer.go
@@ -0,0 +1,96 @@
+package events
+
+import (
+	"context"
+	"encoding/json"
+	"fmt"
+	"log/slog"
+
+	"auron/inventory-service/internal/domain"
+
+	"github.com/segmentio/kafka-go"
+)
+
+type readerEntry struct {
+	reader *kafka.Reader
+	topic  string
+}
+
+type KafkaConsumer struct {
+	readers []readerEntry
+	service domain.InventoryService
+}
+
+func NewKafkaConsumer(brokers []string, service domain.InventoryService) *KafkaConsumer {
+	topics := []string{domain.TopicOrderCreated, domain.TopicOrderCancelled}
+	entries := make([]readerEntry, 0, len(topics))
+	for _, topic := range topics {
+		reader := kafka.NewReader(kafka.ReaderConfig{
+			Brokers:  brokers,
+			Topic:    topic,
+			GroupID:  "inventory-service-orders",
+			MinBytes: 10e3,
+			MaxBytes: 10e6,
+		})
+		entries = append(entries, readerEntry{reader: reader, topic: topic})
+	}
+	return &KafkaConsumer{readers: entries, service: service}
+}
+
+// Start launches one consumer goroutine per subscribed topic.
+func (c *KafkaConsumer) Start(ctx context.Context) {
+	for _, entry := range c.readers {
+		go c.consumeTopic(ctx, entry)
+	}
+}
+
+func (c *KafkaConsumer) consumeTopic(ctx context.Context, entry readerEntry) {
+	for {
+		msg, err := entry.reader.FetchMessage(ctx)
+		if err != nil {
+			if ctx.Err() != nil {
+				return
+			}
+			slog.Error("kafka consumer: fetch error", "topic", entry.topic, "error", err)
+			continue
+		}
+
+		if err := c.handleMessage(ctx, entry.topic, msg.Value); err != nil {
+			slog.Error("kafka consumer: handle error", "topic", entry.topic, "offset", msg.Offset, "error", err)
+		}
+
+		if err := entry.reader.CommitMessages(ctx, msg); err != nil {
+			slog.Warn("kafka consumer: commit failed", "topic", entry.topic, "error", err)
+		}
+	}
+}
+
+func (c *KafkaConsumer) handleMessage(ctx context.Context, topic string, payload []byte) error {
+	switch topic {
+	case domain.TopicOrderCreated:
+		var event domain.OrderCreatedEvent
+		if err := json.Unmarshal(payload, &event); err != nil {
+			return fmt.Errorf("unmarshal order.created: %w", err)
+		}
+		return c.service.HandleOrderCreated(ctx, event)
+	case domain.TopicOrderCancelled:
+		var event domain.OrderCreatedEvent
+		if err := json.Unmarshal(payload, &event); err != nil {
+			return fmt.Errorf("unmarshal order.cancelled: %w", err)
+		}
+		return c.service.HandleOrderCancelled(ctx, event)
+	default:
+		slog.Warn("kafka consumer: unhandled topic", "topic", topic)
+		return nil
+	}
+}
+
+func (c *KafkaConsumer) Close() error {
+	var closeErr error
+	for _, entry := range c.readers {
+		if err := entry.reader.Close(); err != nil && closeErr == nil {
+			closeErr = err
+		}
+	}
+	return closeErr
+}
diff --git a/services/inventory-service/internal/events/kafka_publisher.go b/services/inventory-service/internal/events/kafka_publisher.go
new file mode 100644
index 0000000..d54f3b8
--- /dev/null
+++ b/services/inventory-service/internal/events/kafka_publisher.go
@@ -0,0 +1,52 @@
+package events
+
+import (
+	"context"
+	"encoding/json"
+	"fmt"
+	"log/slog"
+
+	"auron/inventory-service/internal/domain"
+
+	"github.com/segmentio/kafka-go"
+)
+
+type kafkaPublisher struct {
+	writers map[string]*kafka.Writer
+}
+
+func NewKafkaPublisher(writers map[string]*kafka.Writer) domain.EventPublisher {
+	return &kafkaPublisher{writers: writers}
+}
+
+func (p *kafkaPublisher) Publish(ctx context.Context, topic string, payload any) error {
+	writer, ok := p.writers[topic]
+	if !ok {
+		return fmt.Errorf("publisher: no writer registered for topic %q", topic)
+	}
+
+	data, err := json.Marshal(payload)
+	if err != nil {
+		return fmt.Errorf("publisher: marshal payload: %w", err)
+	}
+
+	if err := writer.WriteMessages(ctx, kafka.Message{Value: data}); err != nil {
+		return fmt.Errorf("publisher: write to topic %q: %w", topic, err)
+	}
+
+	slog.Debug("event published", slog.String("topic", topic))
+	return nil
+}
+
+func (p *kafkaPublisher) Close() error {
+	var closeErr error
+	for _, writer := range p.writers {
+		if writer == nil {
+			continue
+		}
+		if err := writer.Close(); err != nil && closeErr == nil {
+			closeErr = err
+		}
+	}
+	return closeErr
+}
diff --git a/services/inventory-service/internal/handler/inventory_handler.go b/services/inventory-service/internal/handler/inventory_handler.go
new file mode 100644
index 0000000..8ce7544
--- /dev/null
+++ b/services/inventory-service/internal/handler/inventory_handler.go
@@ -0,0 +1,70 @@
+package handler
+
+import (
+	"errors"
+	"net/http"
+
+	"auron/inventory-service/internal/domain"
+
+	"github.com/gin-gonic/gin"
+	"github.com/google/uuid"
+)
+
+type InventoryHandler struct {
+	service domain.InventoryService
+}
+
+func NewInventoryHandler(service domain.InventoryService) *InventoryHandler {
+	return &InventoryHandler{service: service}
+}
+
+func (h *InventoryHandler) GetInventory(c *gin.Context) {
+	productID, err := uuid.Parse(c.Param("product_id"))
+	if err != nil {
+		c.JSON(http.StatusBadRequest, gin.H{"success": false, "error": "invalid product id"})
+		return
+	}
+
+	inv, err := h.service.GetInventory(c.Request.Context(), productID)
+	if err != nil {
+		h.handleError(c, err)
+		return
+	}
+
+	c.JSON(http.StatusOK, gin.H{"success": true, "data": inv})
+}
+
+func (h *InventoryHandler) SetInventory(c *gin.Context) {
+	productID, err := uuid.Parse(c.Param("product_id"))
+	if err != nil {
+		c.JSON(http.StatusBadRequest, gin.H{"success": false, "error": "invalid product id"})
+		return
+	}
+
+	var req domain.UpdateInventoryRequest
+	if err := c.ShouldBindJSON(&req); err != nil {
+		c.JSON(http.StatusBadRequest, gin.H{"success": false, "error": err.Error()})
+		return
+	}
+
+	inv, err := h.service.SetInventory(c.Request.Context(), productID, req)
+	if err != nil {
+		h.handleError(c, err)
+		return
+	}
+
+	c.JSON(http.StatusOK, gin.H{"success": true, "data": inv})
+}
+
+func (h *InventoryHandler) handleError(c *gin.Context, err error) {
+	switch {
+	case errors.Is(err, domain.ErrInventoryNotFound):
+		c.JSON(http.StatusNotFound, gin.H{"success": false, "error": err.Error()})
+	case errors.Is(err, domain.ErrInsufficientStock):
+		c.JSON(http.StatusConflict, gin.H{"success": false, "error": err.Error()})
+	case errors.Is(err, domain.ErrInvalidQuantity):
+		c.JSON(http.StatusBadRequest, gin.H{"success": false, "error": err.Error()})
+	default:
+		c.JSON(http.StatusInternalServerError, gin.H{"success": false, "error": "internal server error"})
+	}
+}
diff --git a/services/inventory-service/internal/repository/inventory_repository.go b/services/inventory-service/internal/repository/inventory_repository.go
new file mode 100644
index 0000000..b841de9
--- /dev/null
+++ b/services/inventory-service/internal/repository/inventory_repository.go
@@ -0,0 +1,88 @@
+package repository
+
+import (
+	"time"
+
+	"auron/inventory-service/internal/domain"
+
+	"github.com/google/uuid"
+	"gorm.io/gorm"
+	"gorm.io/gorm/clause"
+)
+
+type InventoryRepository struct {
+	db *gorm.DB
+}
+
+func NewInventoryRepository(db *gorm.DB) domain.InventoryRepository {
+	return &InventoryRepository{db: db}
+}
+
+func (r *InventoryRepository) GetByProductID(productID uuid.UUID) (*domain.Inventory, error) {
+	var inv domain.Inventory
+	if err := r.db.First(&inv, "product_id = ?", productID).Error; err != nil {
+		if err == gorm.ErrRecordNotFound {
+			return nil, domain.ErrInventoryNotFound
+		}
+		return nil, err
+	}
+	return &inv, nil
+}
+
+func (r *InventoryRepository) SetTotalQuantity(productID uuid.UUID, quantity int) (*domain.Inventory, error) {
+	now := time.Now()
+	inv := &domain.Inventory{
+		ProductID:     productID,
+		TotalQuantity: quantity,
+		UpdatedAt:     now,
+	}
+	if err := r.db.Clauses(clause.OnConflict{
+		Columns: []clause.Column{{Name: "product_id"}},
+		DoUpdates: clause.Assignments(map[string]any{
+			"total_quantity": quantity,
+			"version":        gorm.Expr("inventory.version + 1"),
+			"updated_at":     now,
+		}),
+	}).Create(inv).Error; err != nil {
+		return nil, err
+	}
+	return r.GetByProductID(productID)
+}
+
+func (r *InventoryRepository) ReserveStock(productID uuid.UUID, quantity int) (*domain.Inventory, error) {
+	result := r.db.Model(&domain.Inventory{}).
+		Where("product_id = ? AND (total_quantity - reserved_quantity) >= ?", productID, quantity).
+		Updates(map[string]any{
+			"reserved_quantity": gorm.Expr("reserved_quantity + ?", quantity),
+			"version":           gorm.Expr("version + 1"),
+			"updated_at":        time.Now(),
+		})
+	if result.Error != nil {
+		return nil, result.Error
+	}
+	if result.RowsAffected == 0 {
+		// Distinguish between not found and insufficient stock
+		if _, err := r.GetByProductID(productID); err != nil {
+			return nil, err
+		}
+		return nil, domain.ErrInsufficientStock
+	}
+	return r.GetByProductID(productID)
+}
+
+func (r *InventoryRepository) ReleaseStock(productID uuid.UUID, quantity int) (*domain.Inventory, error) {
+	result := r.db.Model(&domain.Inventory{}).
+		Where("product_id = ?", productID).
+		Updates(map[string]any{
+			"reserved_quantity": gorm.Expr("GREATEST(reserved_quantity - ?, 0)", quantity),
+			"version":           gorm.Expr("version + 1"),
+			"updated_at":        time.Now(),
+		})
+	if result.Error != nil {
+		return nil, result.Error
+	}
+	if result.RowsAffected == 0 {
+		return nil, domain.ErrInventoryNotFound
+	}
+	return r.GetByProductID(productID)
+}
diff --git a/services/inventory-service/internal/route/inventory_route.go b/services/inventory-service/internal/route/inventory_route.go
new file mode 100644
index 0000000..2807f67
--- /dev/null
+++ b/services/inventory-service/internal/route/inventory_route.go
@@ -0,0 +1,13 @@
+package route
+
+import (
+	"auron/inventory-service/internal/handler"
+
+	"github.com/gin-gonic/gin"
+)
+
+func RegisterInventoryRoutes(router *gin.Engine, inventoryHandler *handler.InventoryHandler) {
+	api := router.Group("/")
+	api.GET("/inventory/:product_id", inventoryHandler.GetInventory)
+	api.PUT("/inventory/:product_id", inventoryHandler.SetInventory)
+}
diff --git a/services/inventory-service/internal/service/inventory_service.go b/services/inventory-service/internal/service/inventory_service.go
new file mode 100644
index 0000000..d2c7ea9
--- /dev/null
+++ b/services/inventory-service/internal/service/inventory_service.go
@@ -0,0 +1,120 @@
+package service
+
+import (
+	"context"
+	"log/slog"
+
+	"auron/inventory-service/internal/domain"
+
+	"github.com/google/uuid"
+)
+
+type InventoryService struct {
+	repo      domain.InventoryRepository
+	cache     domain.InventoryCache
+	publisher domain.EventPublisher
+}
+
+func NewInventoryService(
+	repo domain.InventoryRepository,
+	cache domain.InventoryCache,
+	publisher domain.EventPublisher,
+) domain.InventoryService {
+	return &InventoryService{
+		repo:      repo,
+		cache:     cache,
+		publisher: publisher,
+	}
+}
+
+func (s *InventoryService) GetInventory(ctx context.Context, productID uuid.UUID) (*domain.InventoryResponse, error) {
+	if cached, err := s.cache.GetInventory(ctx, productID); err == nil && cached != nil {
+		return cached.ToResponse(), nil
+	}
+
+	inv, err := s.repo.GetByProductID(productID)
+	if err != nil {
+		return nil, err
+	}
+
+	if err := s.cache.SetInventory(ctx, inv); err != nil {
+		slog.Warn("failed to cache inventory", "product_id", productID, "error", err)
+	}
+
+	return inv.ToResponse(), nil
+}
+
+func (s *InventoryService) SetInventory(ctx context.Context, productID uuid.UUID, req domain.UpdateInventoryRequest) (*domain.InventoryResponse, error) {
+	inv, err := s.repo.SetTotalQuantity(productID, req.TotalQuantity)
+	if err != nil {
+		return nil, err
+	}
+
+	if err := s.cache.SetInventory(ctx, inv); err != nil {
+		slog.Warn("failed to cache inventory after set", "product_id", productID, "error", err)
+	}
+
+	go s.publishUpdated(inv)
+	if inv.AvailableQuantity() <= domain.LowStockThreshold {
+		go s.publishLowStock(inv)
+	}
+
+	return inv.ToResponse(), nil
+}
+
+func (s *InventoryService) HandleOrderCreated(ctx context.Context, event domain.OrderCreatedEvent) error {
+	for _, item := range event.Items {
+		inv, err := s.repo.ReserveStock(item.ProductID, item.Quantity)
+		if err != nil {
+			slog.Error("failed to reserve stock",
+				"order_id", event.OrderID,
+				"product_id", item.ProductID,
+				"quantity", item.Quantity,
+				"error", err)
+			continue
+		}
+
+		if err := s.cache.InvalidateInventory(ctx, item.ProductID); err != nil {
+			slog.Warn("failed to invalidate inventory cache", "product_id", item.ProductID, "error", err)
+		}
+
+		go s.publishUpdated(inv)
+		if inv.AvailableQuantity() <= domain.LowStockThreshold {
+			go s.publishLowStock(inv)
+		}
+	}
+	return nil
+}
+
+func (s *InventoryService) HandleOrderCancelled(ctx context.Context, event domain.OrderCreatedEvent) error {
+	for _, item := range event.Items {
+		inv, err := s.repo.ReleaseStock(item.ProductID, item.Quantity)
+		if err != nil {
+			slog.Error("failed to release stock",
+				"order_id", event.OrderID,
+				"product_id", item.ProductID,
+				"quantity", item.Quantity,
+				"error", err)
+			continue
+		}
+
+		if err := s.cache.InvalidateInventory(ctx, item.ProductID); err != nil {
+			slog.Warn("failed to invalidate inventory cache", "product_id", item.ProductID, "error", err)
+		}
+
+		go s.publishUpdated(inv)
+	}
+	return nil
+}
+
+func (s *InventoryService) publishUpdated(inv *domain.Inventory) {
+	if err := s.publisher.Publish(context.Background(), domain.TopicInventoryUpdated, inv.ToResponse()); err != nil {
+		slog.Warn("failed to publish inventory.updated", "product_id", inv.ProductID, "error", err)
+	}
+}
+
+func (s *InventoryService) publishLowStock(inv *domain.Inventory) {
+	if err := s.publisher.Publish(context.Background(), domain.TopicInventoryLowStock, inv.ToResponse()); err != nil {
+		slog.Warn("failed to publish inventory.low_stock", "product_id", inv.ProductID, "error", err)
+	}
+}
diff --git a/services/inventory-service/main.go b/services/inventory-service/main.go
new file mode 100644
index 0000000..65ae388
--- /dev/null
+++ b/services/inventory-service/main.go
@@ -0,0 +1,7 @@
+package main
+
+import "auron/inventory-service/cmd"
+
+func main() {
+	cmd.Run()
+}