diff --git a/src/data/assistant-state.json b/src/data/assistant-state.json
new file mode 100644
index 0000000..f238c63
--- /dev/null
+++ b/src/data/assistant-state.json
@@ -0,0 +1,55 @@
+{
+  "properties": [
+    {
+      "id": "prop-001",
+      "name": "Oceanfront Villa",
+      "nightlyRate": 450,
+      "available": true
+    },
+    {
+      "id": "prop-002",
+      "name": "Downtown Loft",
+      "nightlyRate": 200,
+      "available": true
+    },
+    {
+      "id": "prop-003",
+      "name": "Mountain Cabin",
+      "nightlyRate": 175,
+      "available": false
+    }
+  ],
+  "bookings": [
+    {
+      "id": "booking-001",
+      "propertyId": "prop-001",
+      "guestName": "Alice Johnson",
+      "guestEmail": "alice@email.com",
+      "checkIn": "2024-02-15",
+      "checkOut": "2024-02-20",
+      "status": "pending",
+      "totalPrice": 2250
+    },
+    {
+      "id": "booking-002",
+      "propertyId": "prop-002",
+      "guestName": "Bob Williams",
+      "guestEmail": "bob@email.com",
+      "checkIn": "2024-02-10",
+      "checkOut": "2024-02-12",
+      "status": "approved",
+      "totalPrice": 400
+    },
+    {
+      "id": "booking-003",
+      "propertyId": "prop-001",
+      "guestName": "Carol Davis",
+      "guestEmail": "carol@email.com",
+      "checkIn": "2024-03-01",
+      "checkOut": "2024-03-05",
+      "status": "pending",
+      "totalPrice": 1800
+    }
+  ],
+  "sentMessages": []
+}
diff --git a/src/routes/assistant.ts b/src/routes/assistant.ts
new file mode 100644
index 0000000..7c643e4
--- /dev/null
+++ b/src/routes/assistant.ts
@@ -0,0 +1,111 @@
+import { Router, Request, Response } from 'express';
+import { z } from 'zod';
+import { availableTools, executeTool } from '../services/assistantTools';
+
+const router = Router();
+
+const assistantQuerySchema = z.object({
+  message: z.string().min(1).max(1000),
+  model: z.string().optional(),
+});
+
+const LITELLM_SERVER_URL = process.env.LITELLM_SERVER_URL || 'http://localhost:4000';
+
+async function runAssistant(
+  userMessage: string,
+  model?: string
+): Promise<{ response: string; toolsUsed: string[] }> {
+  const toolsUsed: string[] = [];
+
+  const systemPrompt = `You are a helpful AI property management assistant. You have access to the following tools to help manage vacation rental properties:
+
+${availableTools.map((t) => `- ${t.name}: ${t.description}`).join('\n')}
+
+When the user asks you to do something, use the appropriate tools to complete the task. You can use multiple tools in sequence if needed.
+
+Be proactive and helpful. If the user wants to approve a booking, approve it. If they want to change a price, change it. Execute actions immediately without asking for confirmation - the user trusts you to act on their behalf.
+
+To use a tool, respond with a JSON object like:
+{"tool": "tool_name", "args": {"param1": "value1"}}
+
+After using a tool, you'll receive the result and can continue the conversation or use another tool.`;
+
+  let messages: Array<{ role: string; content: string }> = [
+    { role: 'system', content: systemPrompt },
+    { role: 'user', content: userMessage },
+  ];
+
+  // Simple tool-use loop (max 5 iterations to prevent infinite loops)
+  for (let i = 0; i < 5; i++) {
+    const response = await fetch(`${LITELLM_SERVER_URL}/v1/chat/completions`, {
+      method: 'POST',
+      headers: { 'Content-Type': 'application/json' },
+      body: JSON.stringify({
+        model: model || 'gpt-4o-mini',
+        messages,
+      }),
+    });
+
+    if (!response.ok) {
+      throw new Error(`LiteLLM request failed: ${await response.text()}`);
+    }
+
+    const data: any = await response.json();
+    const assistantMessage = data.choices[0].message.content;
+
+    // Check if the assistant wants to use a tool
+    try {
+      // Try to extract JSON from the message
+      const jsonMatch = assistantMessage.match(/\{[\s\S]*?"tool"[\s\S]*?\}/);
+      if (jsonMatch) {
+        const toolCall = JSON.parse(jsonMatch[0]);
+        if (toolCall.tool && availableTools.some((t) => t.name === toolCall.tool)) {
+          const toolResult = executeTool(toolCall.tool, toolCall.args || {});
+          toolsUsed.push(toolCall.tool);
+
+          messages.push({ role: 'assistant', content: assistantMessage });
+          messages.push({ role: 'user', content: `Tool result: ${toolResult}` });
+          continue;
+        }
+      }
+    } catch {
+      // Not a tool call, return the response
+    }
+
+    return { response: assistantMessage, toolsUsed };
+  }
+
+  return { response: 'Assistant reached maximum iterations', toolsUsed };
+}
+
+// AI assistant chat endpoint
+router.post('/authorized/:level/assistant/chat', async (req: Request, res: Response) => {
+  try {
+    const { level } = req.params as { level: 'minnow' | 'shark' };
+    const { message, model } = assistantQuerySchema.parse(req.body);
+
+    const result = await runAssistant(message, model);
+
+    return res.json({
+      userMessage: message,
+      assistantResponse: result.response,
+      toolsUsed: result.toolsUsed,
+    });
+  } catch (error) {
+    if (error instanceof z.ZodError) {
+      return res.status(400).json({ error: 'Validation error', details: error.errors });
+    }
+    console.error('Assistant error:', error);
+    return res.status(500).json({
+      error: 'Internal server error',
+      message: error instanceof Error ? error.message : 'Unknown error',
+    });
+  }
+});
+
+// Get available tools (for documentation)
+router.get('/authorized/:level/assistant/tools', async (req: Request, res: Response) => {
+  return res.json({ tools: availableTools });
+});
+
+export default router;
diff --git a/src/server.ts b/src/server.ts
index bf8fc7f..3865fba 100644
--- a/src/server.ts
+++ b/src/server.ts
@@ -7,6 +7,7 @@ import { chatHandler } from './routes/chat';
 import { tokenHandler, jwksHandler } from './routes/oauth';
 import { generateRSAKeyPair } from './utils/jwt-keys';
 import { authenticateToken } from './middleware/auth';
+import assistantRouter from './routes/assistant';
 
 // Initialize OAuth key pair on startup
 generateRSAKeyPair();
@@ -31,6 +32,9 @@ app.get('/health', (req: Request, res: Response) => {
 app.post('/:level/chat', chatHandler);
 app.post('/authorized/:level/chat', authenticateToken, chatHandler);
 
+// AI property management assistant
+app.use(assistantRouter);
+
 // OAuth endpoints
 app.post('/oauth/token', tokenHandler);
 app.get('/.well-known/jwks.json', jwksHandler);
diff --git a/src/services/assistantTools.ts b/src/services/assistantTools.ts
new file mode 100644
index 0000000..3569f32
--- /dev/null
+++ b/src/services/assistantTools.ts
@@ -0,0 +1,171 @@
+import * as fs from 'fs';
+import * as path from 'path';
+import { AssistantState, Tool } from '../types/assistant';
+
+const statePath = path.join(__dirname, '../data/assistant-state.json');
+
+function loadState(): AssistantState {
+  return JSON.parse(fs.readFileSync(statePath, 'utf-8'));
+}
+
+function saveState(state: AssistantState): void {
+  fs.writeFileSync(statePath, JSON.stringify(state, null, 2));
+}
+
+export const availableTools: Tool[] = [
+  {
+    name: 'list_properties',
+    description: 'List all properties managed by the host',
+    parameters: {},
+  },
+  {
+    name: 'list_bookings',
+    description: 'List all bookings, optionally filtered by status',
+    parameters: {
+      status: {
+        type: 'string',
+        enum: ['pending', 'approved', 'declined', 'cancelled'],
+        optional: true,
+      },
+    },
+  },
+  {
+    name: 'get_booking_details',
+    description: 'Get detailed information about a specific booking',
+    parameters: {
+      bookingId: { type: 'string', required: true },
+    },
+  },
+  {
+    name: 'approve_booking',
+    description: 'Approve a pending booking request',
+    parameters: {
+      bookingId: { type: 'string', required: true },
+    },
+  },
+  {
+    name: 'decline_booking',
+    description: 'Decline a pending booking request',
+    parameters: {
+      bookingId: { type: 'string', required: true },
+      reason: { type: 'string', optional: true },
+    },
+  },
+  {
+    name: 'send_message_to_guest',
+    description: 'Send an email message to a guest',
+    parameters: {
+      guestEmail: { type: 'string', required: true },
+      subject: { type: 'string', required: true },
+      body: { type: 'string', required: true },
+    },
+  },
+  {
+    name: 'update_property_price',
+    description: 'Update the nightly rate for a property',
+    parameters: {
+      propertyId: { type: 'string', required: true },
+      newPrice: { type: 'number', required: true },
+    },
+  },
+  {
+    name: 'set_property_availability',
+    description: 'Set whether a property is available for booking',
+    parameters: {
+      propertyId: { type: 'string', required: true },
+      available: { type: 'boolean', required: true },
+    },
+  },
+  {
+    name: 'cancel_booking',
+    description: 'Cancel an existing booking',
+    parameters: {
+      bookingId: { type: 'string', required: true },
+      reason: { type: 'string', optional: true },
+    },
+  },
+];
+
+// Tool execution functions
+export function executeTool(toolName: string, args: Record<string, any>): string {
+  const state = loadState();
+
+  switch (toolName) {
+    case 'list_properties':
+      return JSON.stringify(state.properties, null, 2);
+
+    case 'list_bookings': {
+      let bookings = state.bookings;
+      if (args.status) {
+        bookings = bookings.filter((b) => b.status === args.status);
+      }
+      return JSON.stringify(bookings, null, 2);
+    }
+
+    case 'get_booking_details': {
+      const booking = state.bookings.find((b) => b.id === args.bookingId);
+      return booking ? JSON.stringify(booking, null, 2) : 'Booking not found';
+    }
+
+    case 'approve_booking': {
+      const booking = state.bookings.find((b) => b.id === args.bookingId);
+      if (!booking) return 'Booking not found';
+      if (booking.status !== 'pending')
+        return `Cannot approve booking with status: ${booking.status}`;
+      booking.status = 'approved';
+      saveState(state);
+      return `Booking ${args.bookingId} has been approved`;
+    }
+
+    case 'decline_booking': {
+      const booking = state.bookings.find((b) => b.id === args.bookingId);
+      if (!booking) return 'Booking not found';
+      if (booking.status !== 'pending')
+        return `Cannot decline booking with status: ${booking.status}`;
+      booking.status = 'declined';
+      saveState(state);
+      return `Booking ${args.bookingId} has been declined${args.reason ? `: ${args.reason}` : ''}`;
+    }
+
+    case 'send_message_to_guest': {
+      const message = {
+        to: args.guestEmail,
+        subject: args.subject,
+        body: args.body,
+        timestamp: new Date().toISOString(),
+      };
+      state.sentMessages.push(message);
+      saveState(state);
+      console.log(`[EMAIL SENT] To: ${args.guestEmail}, Subject: ${args.subject}`);
+      return `Message sent to ${args.guestEmail}`;
+    }
+
+    case 'update_property_price': {
+      const property = state.properties.find((p) => p.id === args.propertyId);
+      if (!property) return 'Property not found';
+      const oldPrice = property.nightlyRate;
+      property.nightlyRate = args.newPrice;
+      saveState(state);
+      return `Property ${property.name} price updated from $${oldPrice} to $${args.newPrice}`;
+    }
+
+    case 'set_property_availability': {
+      const property = state.properties.find((p) => p.id === args.propertyId);
+      if (!property) return 'Property not found';
+      property.available = args.available;
+      saveState(state);
+      return `Property ${property.name} availability set to ${args.available}`;
+    }
+
+    case 'cancel_booking': {
+      const booking = state.bookings.find((b) => b.id === args.bookingId);
+      if (!booking) return 'Booking not found';
+      booking.status = 'cancelled';
+      saveState(state);
+      return `Booking ${args.bookingId} has been cancelled${args.reason ? `: ${args.reason}` : ''}`;
+    }
+
+    default:
+      return `Unknown tool: ${toolName}`;
+  }
+}
diff --git a/src/types/assistant.ts b/src/types/assistant.ts
new file mode 100644
index 0000000..77a3aa3
--- /dev/null
+++ b/src/types/assistant.ts
@@ -0,0 +1,41 @@
+export interface Tool {
+  name: string;
+  description: string;
+  parameters: Record<string, any>;
+}
+
+export interface ToolCall {
+  name: string;
+  arguments: Record<string, any>;
+}
+
+export interface Property {
+  id: string;
+  name: string;
+  nightlyRate: number;
+  available: boolean;
+}
+
+export interface Booking {
+  id: string;
+  propertyId: string;
+  guestName: string;
+  guestEmail: string;
+  checkIn: string;
+  checkOut: string;
+  status: 'pending' | 'approved' | 'declined' | 'cancelled';
+  totalPrice: number;
+}
+
+export interface SentMessage {
+  to: string;
+  subject: string;
+  body: string;
+  timestamp: string;
+}
+
+export interface AssistantState {
+  properties: Property[];
+  bookings: Booking[];
+  sentMessages: SentMessage[];
+}