diff --git a/client/package.json b/client/package.json
index 30b0b2b..08a7785 100644
--- a/client/package.json
+++ b/client/package.json
@@ -14,7 +14,8 @@
     "react-dom": "^19.2.5",
     "react-konva": "^18.2.10",
     "konva": "^9.3.18",
-    "use-image": "^1.1.1"
+    "use-image": "^1.1.1",
+    "@xenova/transformers": "^2.17.2"
   },
   "devDependencies": {
     "@eslint/js": "^9.39.4",
diff --git a/client/src/components/properties/PropertiesPanel.jsx b/client/src/components/properties/PropertiesPanel.jsx
index 7b9140e..c9b46fb 100644
--- a/client/src/components/properties/PropertiesPanel.jsx
+++ b/client/src/components/properties/PropertiesPanel.jsx
@@ -1,3 +1,5 @@
+import { BackgroundRemovalButton } from '../sidebar/BackgroundRemovalButton';
+
 export function PropertiesPanel({ selectedElement, onUpdate, onDelete }) {
   if (!selectedElement) {
     return (
@@ -101,6 +103,13 @@ export function PropertiesPanel({ selectedElement, onUpdate, onDelete }) {
         />
       </div>
 
+      {selectedElement.type === 'image' && (
+        <BackgroundRemovalButton
+          selectedElement={selectedElement}
+          onUpdate={onUpdate}
+        />
+      )}
+
       <button className="delete-btn" onClick={() => onDelete(selectedElement.id)}>
         Delete Element
       </button>
diff --git a/client/src/components/sidebar/BackgroundRemovalButton.jsx b/client/src/components/sidebar/BackgroundRemovalButton.jsx
new file mode 100644
index 0000000..0f93cf7
--- /dev/null
+++ b/client/src/components/sidebar/BackgroundRemovalButton.jsx
@@ -0,0 +1,47 @@
+import { useBackgroundRemoval } from '../../hooks/useBackgroundRemoval';
+
+export function BackgroundRemovalButton({ selectedElement, onUpdate }) {
+  const { loading, progress, hasModel, loadModel, removeBackground } = useBackgroundRemoval();
+
+  const handleRemoveBackground = async () => {
+    if (!selectedElement || selectedElement.type !== 'image') return;
+
+    if (!hasModel) {
+      const loaded = await loadModel();
+      if (!loaded) return;
+    }
+
+    const resultUrl = await removeBackground(selectedElement.src);
+    if (resultUrl) {
+      onUpdate(selectedElement.id, { src: resultUrl });
+    }
+  };
+
+  if (!selectedElement || selectedElement.type !== 'image') {
+    return null;
+  }
+
+  return (
+    <div className="bg-removal-container">
+      <button
+        className="bg-removal-btn"
+        onClick={handleRemoveBackground}
+        disabled={loading}
+      >
+        {loading ? (
+          <>
+            <div className="spinner-small" />
+            {progress > 0 ? `Loading: ${progress}%` : 'Removing Background...'}
+          </>
+        ) : (
+          <>✨ Remove Background</>
+        )}
+      </button>
+      {!hasModel && (
+        <p className="bg-removal-hint">
+          First use requires downloading ~170MB model. Subsequent uses are cached.
+        </p>
+      )}
+    </div>
+  );
+}
diff --git a/client/src/hooks/useBackgroundRemoval.js b/client/src/hooks/useBackgroundRemoval.js
new file mode 100644
index 0000000..5d2cd77
--- /dev/null
+++ b/client/src/hooks/useBackgroundRemoval.js
@@ -0,0 +1,120 @@
+import { useState, useCallback } from 'react';
+import { env, AutoModel, AutoProcessor, RawImage } from '@xenova/transformers';
+
+// Use local models only
+env.allowLocalModels = true;
+env.useBrowserCache = true;
+
+export function useBackgroundRemoval() {
+  const [loading, setLoading] = useState(false);
+  const [progress, setProgress] = useState(0);
+  const [model, setModel] = useState(null);
+  const [processor, setProcessor] = useState(null);
+
+  const loadModel = useCallback(async () => {
+    if (model && processor) return true;
+
+    setLoading(true);
+    setProgress(0);
+
+    try {
+      const loadedModel = await AutoModel.from_pretrained('Xenova/rmbg-1.4', {
+        progress_callback: (data) => {
+          if (data.status === 'progress') {
+            setProgress(Math.round(data.progress));
+          }
+        },
+        local_model_path: '/models/rmbg-1.4',
+      });
+
+      const loadedProcessor = await AutoProcessor.from_pretrained('Xenova/rmbg-1.4', {
+        local_model_path: '/models/rmbg-1.4',
+      });
+
+      setModel(loadedModel);
+      setProcessor(loadedProcessor);
+      setLoading(false);
+      return true;
+    } catch (error) {
+      console.error('Failed to load background removal model:', error);
+      setLoading(false);
+      return false;
+    }
+  }, [model, processor]);
+
+  const removeBackground = useCallback(async (imageSrc) => {
+    if (!model || !processor) {
+      const loaded = await loadModel();
+      if (!loaded) return null;
+    }
+
+    setLoading(true);
+
+    try {
+      // Load the image
+      const img = new Image();
+      img.crossOrigin = 'anonymous';
+      img.src = imageSrc;
+      await new Promise((resolve, reject) => {
+        img.onload = resolve;
+        img.onerror = reject;
+      });
+
+      // Process image through the model
+      const inputs = await processor(img);
+      const { pixel_values } = inputs;
+
+      // Run inference
+      const { output } = await model({ pixel_values });
+
+      // Get the mask
+      const maskData = await RawImage.fromTensor(output[0].mul(255).to('uint8')).resize(
+        img.width,
+        img.height
+      );
+
+      // Create canvas to apply mask
+      const canvas = document.createElement('canvas');
+      canvas.width = img.width;
+      canvas.height = img.height;
+      const ctx = canvas.getContext('2d');
+
+      // Draw original image
+      ctx.drawImage(img, 0, 0);
+
+      // Get image data
+      const imageData = ctx.getImageData(0, 0, img.width, img.height);
+      const data = imageData.data;
+      const maskPixels = maskData.data;
+
+      // Apply alpha mask
+      for (let i = 0; i < maskPixels.length; i++) {
+        const alpha = maskPixels[i];
+        data[i * 4 + 3] = alpha; // Set alpha channel
+      }
+
+      ctx.putImageData(imageData, 0, 0);
+
+      // Convert to blob URL
+      const blob = await new Promise((resolve) => {
+        canvas.toBlob(resolve, 'image/png');
+      });
+
+      const url = URL.createObjectURL(blob);
+      setLoading(false);
+      return url;
+    } catch (error) {
+      console.error('Background removal failed:', error);
+      setLoading(false);
+      return null;
+    }
+  }, [model, processor, loadModel]);
+
+  return {
+    loading,
+    progress,
+    hasModel: !!model,
+    loadModel,
+    removeBackground,
+  };
+}
diff --git a/client/src/index.css b/client/src/index.css
index 1790f68..e0f5827 100644
--- a/client/src/index.css
+++ b/client/src/index.css
@@ -490,6 +490,54 @@ input, textarea, select {
   color: white;
 }
 
+.bg-removal-container {
+  margin-top: 1rem;
+  padding-top: 1rem;
+  border-top: 1px solid var(--border);
+}
+
+.bg-removal-btn {
+  width: 100%;
+  padding: 0.75rem;
+  background: linear-gradient(135deg, #8b5cf6, #ec4899);
+  color: white;
+  border: none;
+  border-radius: var(--radius-md);
+  font-weight: 500;
+  cursor: pointer;
+  transition: all 0.2s;
+  display: flex;
+  align-items: center;
+  justify-content: center;
+  gap: 0.5rem;
+}
+
+.bg-removal-btn:hover:not(:disabled) {
+  transform: translateY(-1px);
+  box-shadow: var(--shadow-md);
+}
+
+.bg-removal-btn:disabled {
+  opacity: 0.7;
+  cursor: not-allowed;
+}
+
+.bg-removal-hint {
+  font-size: 0.7rem;
+  color: var(--text-muted);
+  margin: 0.5rem 0 0 0;
+  line-height: 1.4;
+}
+
+.spinner-small {
+  width: 16px;
+  height: 16px;
+  border: 2px solid rgba(255, 255, 255, 0.3);
+  border-top-color: white;
+  border-radius: 50%;
+  animation: spin 1s linear infinite;
+}
+
 /* Responsive */
 @media (max-width: 900px) {
   .app-layout {