diff --git a/backend/src/modules/palace/wakeup.test.ts b/backend/src/modules/palace/wakeup.test.ts
new file mode 100644
index 0000000..1637c95
--- /dev/null
+++ b/backend/src/modules/palace/wakeup.test.ts
@@ -0,0 +1,131 @@
+import { describe, it, expect, beforeEach } from 'vitest';
+import { resetMemoryDatastore, TEST_USER_ID, TEST_PRODUCT_ID } from '../../test-helpers.js';
+import { ensureWing, ensureRoom, storeMemory, getWing } from './repository.js';
+import { buildNoteLettWakeUp, regenerateCriticalFacts } from './wakeup.js';
+import { estimateTokens } from '@bytelyst/palace';
+
+const USER_A = TEST_USER_ID;
+const USER_B = 'test-user-2';
+const PRODUCT = TEST_PRODUCT_ID;
+
+function makeEmbedding(seed: number): number[] {
+  const emb = new Array(8).fill(0);
+  emb[seed % 8] = 1.0;
+  return emb;
+}
+
+describe('Palace Wake-Up Context (N2)', () => {
+  beforeEach(() => {
+    resetMemoryDatastore();
+  });
+
+  it('wake-up context includes workspace identity (L0)', async () => {
+    const wing = await ensureWing(USER_A, PRODUCT, 'ws-1', 'Engineering Notes');
+    await ensureRoom(USER_A, PRODUCT, wing.id, 'auth-migration');
+    await ensureRoom(USER_A, PRODUCT, wing.id, 'api-design');
+
+    const ctx = await buildNoteLettWakeUp(USER_A, PRODUCT, wing.id);
+    expect(ctx.text).toContain('Engineering Notes');
+    expect(ctx.text).toContain('auth-migration');
+    expect(ctx.wingName).toBe('Engineering Notes');
+  });
+
+  it('L1 facts reflect recent decisions and preferences', async () => {
+    const wing = await ensureWing(USER_A, PRODUCT, 'ws-1', 'Work');
+    const room = await ensureRoom(USER_A, PRODUCT, wing.id, 'auth');
+
+    await storeMemory(USER_A, PRODUCT, wing.id, room.id, 'decisions', 'Use JWT for all APIs');
+    await storeMemory(USER_A, PRODUCT, wing.id, room.id, 'preferences', 'Prefer short-lived tokens');
+
+    const ctx = await buildNoteLettWakeUp(USER_A, PRODUCT, wing.id);
+    expect(ctx.text).toContain('JWT');
+    expect(ctx.text).toContain('short-lived');
+  });
+
+  it('L2 context is semantically relevant to task description', async () => {
+    const wing = await ensureWing(USER_A, PRODUCT, 'ws-1', 'Work');
+    const room = await ensureRoom(USER_A, PRODUCT, wing.id, 'auth');
+
+    const emb = makeEmbedding(0);
+    await storeMemory(USER_A, PRODUCT, wing.id, room.id, 'decisions', 'Auth uses JWT', undefined, emb);
+    await storeMemory(USER_A, PRODUCT, wing.id, room.id, 'events', 'Database migrated', undefined, makeEmbedding(4));
+
+    // Search with same embedding as JWT memory → should rank it first
+    const ctx = await buildNoteLettWakeUp(USER_A, PRODUCT, wing.id, 'auth implementation');
+    // Can't guarantee semantic ranking without real embeddings,
+    // but the context should include both memories
+    expect(ctx.text.length).toBeGreaterThan(0);
+  });
+
+  it('L2 falls back to recent memories when no task description', async () => {
+    const wing = await ensureWing(USER_A, PRODUCT, 'ws-1', 'Work');
+    const room = await ensureRoom(USER_A, PRODUCT, wing.id, 'auth');
+    await storeMemory(USER_A, PRODUCT, wing.id, room.id, 'events', 'Sprint planning completed');
+
+    const ctx = await buildNoteLettWakeUp(USER_A, PRODUCT, wing.id);
+    expect(ctx.text).toContain('Sprint planning');
+  });
+
+  it('total tokens stay within ~600 budget', async () => {
+    const wing = await ensureWing(USER_A, PRODUCT, 'ws-1', 'Work');
+    const room = await ensureRoom(USER_A, PRODUCT, wing.id, 'auth');
+
+    // Store many memories to fill the budget
+    for (let i = 0; i < 20; i++) {
+      await storeMemory(USER_A, PRODUCT, wing.id, room.id, 'decisions', `Decision number ${i}: ${Array(50).fill('word').join(' ')}`);
+    }
+
+    const ctx = await buildNoteLettWakeUp(USER_A, PRODUCT, wing.id);
+    const tokens = estimateTokens(ctx.text);
+    expect(tokens).toBeLessThanOrEqual(700); // Allow small overhead for labels
+  });
+
+  it('wake-up for user A never includes user B memories', async () => {
+    const wingA = await ensureWing(USER_A, PRODUCT, 'ws-a', 'A Workspace');
+    const roomA = await ensureRoom(USER_A, PRODUCT, wingA.id, 'topic');
+    await storeMemory(USER_A, PRODUCT, wingA.id, roomA.id, 'decisions', 'User A secret decision');
+
+    const wingB = await ensureWing(USER_B, PRODUCT, 'ws-b', 'B Workspace');
+    const roomB = await ensureRoom(USER_B, PRODUCT, wingB.id, 'topic');
+    await storeMemory(USER_B, PRODUCT, wingB.id, roomB.id, 'decisions', 'User B private info');
+
+    const ctxA = await buildNoteLettWakeUp(USER_A, PRODUCT, wingA.id);
+    const ctxB = await buildNoteLettWakeUp(USER_B, PRODUCT, wingB.id);
+
+    expect(ctxA.text).toContain('User A secret');
+    expect(ctxA.text).not.toContain('User B private');
+    expect(ctxB.text).toContain('User B private');
+    expect(ctxB.text).not.toContain('User A secret');
+  });
+
+  it('empty palace returns minimal context gracefully', async () => {
+    const wing = await ensureWing(USER_A, PRODUCT, 'ws-1', 'Empty Workspace');
+
+    const ctx = await buildNoteLettWakeUp(USER_A, PRODUCT, wing.id);
+    expect(ctx.wingName).toBe('Empty Workspace');
+    expect(ctx.text).toContain('Empty Workspace');
+    // Should not throw
+  });
+
+  it('non-existent wing returns empty context', async () => {
+    const ctx = await buildNoteLettWakeUp(USER_A, PRODUCT, 'non-existent-wing');
+    expect(ctx.text).toBe('');
+    expect(ctx.totalChars).toBe(0);
+  });
+
+  it('L1 cache regeneration updates wing doc', async () => {
+    const wing = await ensureWing(USER_A, PRODUCT, 'ws-1', 'Work');
+    const room = await ensureRoom(USER_A, PRODUCT, wing.id, 'auth');
+    await storeMemory(USER_A, PRODUCT, wing.id, room.id, 'decisions', 'Use Fastify 5');
+    await storeMemory(USER_A, PRODUCT, wing.id, room.id, 'preferences', 'Always validate with Zod');
+
+    const l1 = await regenerateCriticalFacts(USER_A, PRODUCT, wing.id);
+    expect(l1).toContain('Fastify');
+    expect(l1).toContain('Zod');
+
+    // Check that wing doc has cached L1
+    const updatedWing = await getWing(USER_A, PRODUCT, wing.id);
+    expect(updatedWing!.l1Cache).toContain('Fastify');
+    expect(updatedWing!.l1CacheUpdatedAt).toBeTruthy();
+  });
+});
diff --git a/backend/src/modules/palace/wakeup.ts b/backend/src/modules/palace/wakeup.ts
new file mode 100644
index 0000000..f68a444
--- /dev/null
+++ b/backend/src/modules/palace/wakeup.ts
@@ -0,0 +1,175 @@
+/**
+ * Wake-up context builder for NoteLett palace.
+ *
+ * Builds L0/L1/L2 layered context within a configurable token budget.
+ * Uses @bytelyst/palace shared wakeup builder for assembly + truncation.
+ */
+
+import { buildWakeUpLayers, WAKEUP_PRESETS, estimateTokens, truncateToTokenBudget } from '@bytelyst/palace';
+import type { WakeUpContext } from '@bytelyst/palace';
+import { config } from '../../lib/config.js';
+import { embedText, stripHtmlForEmbedding } from '../../lib/embeddings.js';
+import { getWing, listRooms, listMemories, searchSemantic, getWingSummary } from './repository.js';
+import type { PalaceMemoryDoc, PalaceWingDoc } from './types.js';
+
+export type { WakeUpContext };
+
+export interface NoteLettWakeUpContext extends WakeUpContext {
+  wingId: string;
+  wingName: string;
+}
+
+const NOTELETT_PRESET = WAKEUP_PRESETS.notelett ?? {
+  totalBudget: 600, l0Budget: 50, l1Budget: 150, l2Budget: 400,
+};
+
+/**
+ * Build wake-up context for a workspace/wing.
+ *
+ * L0 — Identity: workspace name + room topics (~50 tokens)
+ * L1 — Critical Facts: recent decisions/preferences/insights (~150 tokens)
+ * L2 — Task Context: semantically relevant memories (~400 tokens)
+ */
+export async function buildNoteLettWakeUp(
+  userId: string,
+  productId: string,
+  wingId: string,
+  taskDescription?: string,
+): Promise<NoteLettWakeUpContext> {
+  const wing = await getWing(userId, productId, wingId);
+  if (!wing) {
+    return {
+      text: '',
+      layers: [],
+      totalChars: 0,
+      truncated: false,
+      wingId,
+      wingName: 'Unknown',
+    };
+  }
+
+  const budget = {
+    ...NOTELETT_PRESET,
+    totalBudget: config.PALACE_WAKE_UP_BUDGET,
+  };
+
+  const l0 = await buildL0Identity(userId, productId, wing);
+  const l1 = await buildL1CriticalFacts(userId, productId, wingId, wing);
+  const l2 = await buildL2TaskContext(userId, productId, wingId, taskDescription);
+
+  const ctx = buildWakeUpLayers(l0, l1, l2, budget);
+
+  return {
+    ...ctx,
+    wingId,
+    wingName: wing.name,
+  };
+}
+
+/**
+ * L0 — Identity: workspace name, description, room topics.
+ */
+async function buildL0Identity(
+  userId: string,
+  productId: string,
+  wing: PalaceWingDoc,
+): Promise<string> {
+  const rooms = await listRooms(userId, productId, wing.id);
+  const roomNames = rooms.map(r => r.name).slice(0, 10).join(', ');
+
+  const parts = [`Workspace: ${wing.name}`];
+  if (wing.description) parts.push(wing.description);
+  if (roomNames) parts.push(`Topics: ${roomNames}`);
+
+  return parts.join('\n');
+}
+
+/**
+ * L1 — Critical Facts: recent decisions, preferences, insights.
+ * Uses cached L1 if available, otherwise regenerates.
+ */
+async function buildL1CriticalFacts(
+  userId: string,
+  productId: string,
+  wingId: string,
+  wing: PalaceWingDoc,
+): Promise<string> {
+  // Try cached L1
+  if (wing.l1Cache && wing.l1CacheUpdatedAt) {
+    const cacheAge = Date.now() - new Date(wing.l1CacheUpdatedAt).getTime();
+    if (cacheAge < 24 * 3600_000) return wing.l1Cache;
+  }
+
+  // Rebuild from recent decisions + preferences + insights
+  const factHalls = ['decisions', 'preferences', 'insights'] as const;
+  const recentFacts: PalaceMemoryDoc[] = [];
+
+  for (const hall of factHalls) {
+    const mems = await listMemories(userId, productId, {
+      wingId,
+      hall,
+      limit: 5,
+    });
+    recentFacts.push(...mems);
+  }
+
+  if (recentFacts.length === 0) return '';
+
+  // Sort by recency
+  recentFacts.sort((a, b) => b.updatedAt.localeCompare(a.updatedAt));
+
+  const lines = recentFacts.slice(0, 8).map(m => `- [${m.hall}] ${m.content}`);
+  return lines.join('\n');
+}
+
+/**
+ * L2 — Task Context: semantically relevant memories (or recent if no task).
+ */
+async function buildL2TaskContext(
+  userId: string,
+  productId: string,
+  wingId: string,
+  taskDescription?: string,
+): Promise<string> {
+  let memories: PalaceMemoryDoc[];
+
+  if (taskDescription && taskDescription.trim().length > 0) {
+    const embedding = await embedText(taskDescription);
+    if (embedding) {
+      memories = await searchSemantic(userId, productId, taskDescription, embedding, wingId, 8);
+    } else {
+      memories = await listMemories(userId, productId, { wingId, limit: 8 });
+    }
+  } else {
+    memories = await listMemories(userId, productId, { wingId, limit: 8 });
+  }
+
+  if (memories.length === 0) return '';
+
+  const lines = memories.map(m => `- [${m.hall}] ${m.content}`);
+  return lines.join('\n');
+}
+
+/**
+ * Regenerate L1 cache for a wing (called after memory extraction).
+ */
+export async function regenerateCriticalFacts(
+  userId: string,
+  productId: string,
+  wingId: string,
+): Promise<string> {
+  const wing = await getWing(userId, productId, wingId);
+  if (!wing) return '';
+
+  const l1 = await buildL1CriticalFacts(userId, productId, wingId, wing);
+
+  // Update wing doc with cached L1
+  const { getCollection } = await import('../../lib/datastore.js');
+  const col = getCollection<PalaceWingDoc>('palace_wings', '/userId');
+  await col.update(wingId, userId, {
+    l1Cache: l1,
+    l1CacheUpdatedAt: new Date().toISOString(),
+  } as Partial<PalaceWingDoc>);
+
+  return l1;
+}