diff --git a/AUTOMATED_DEV.md b/AUTOMATED_DEV.md
index 460951f..f5aebd5 100644
--- a/AUTOMATED_DEV.md
+++ b/AUTOMATED_DEV.md
@@ -72,6 +72,121 @@ The issue tracker is the single source of truth for what needs doing, who's
 doing it, and what's done. Everything else (PRs, branches, deployments) links
 back to issues.
 
+### PR State Machine
+
+Once a PR exists, it enters a finite state machine tracked by Gitea labels and
+issue assignments. Labels represent the current state; the assignment field
+represents who's responsible for the next action.
+
+#### States (Gitea Labels)
+
+| Label          | Color  | Meaning                                           |
+| -------------- | ------ | ------------------------------------------------- |
+| `needs-rebase` | red    | PR has merge conflicts or is behind main          |
+| `needs-checks` | orange | `make check` does not pass cleanly                |
+| `needs-review` | yellow | Code review not yet done                          |
+| `needs-rework` | purple | Code review found issues that need fixing         |
+| `merge-ready`  | green  | All checks pass, reviewed, rebased, conflict-free |
+
+#### Transitions
+
+```
+New PR created
+  │
+  ▼
+[needs-rebase] ──rebase onto main──▶ [needs-checks]
+  ▲                                        │
+  │                                   run make check
+  │ (main updated,                         │
+  │  conflicts)              ┌─────────────┴──────────────┐
+  │                          │                              │
+  │                       passes                          fails
+  │                          │                              │
+  │                          ▼                              ▼
+  │                   [needs-review]                  [needs-checks]
+  │                          │                        (fix code, re-run)
+  │                     code review
+  │                          │
+  │                ┌─────────┴──────────┐
+  │                │                      │
+  │             approved             issues found
+  │                │                      │
+  │                ▼                      ▼
+  │          [merge-ready]          [needs-rework]
+  │                │                      │
+  │           assign human           fix issues
+  │                                       │
+  │                                       ▼
+  └───────────────────────────── [needs-rebase]
+                                 (restart cycle)
+```
+
+The cycle can repeat multiple times: rebase → check → review → rework → rebase →
+check → review → rework → ... until the PR is clean. Each iteration typically
+addresses a smaller set of issues until everything converges.
+
+#### Assignment Rules
+
+- **PR in any state except `merge-ready`** → assigned to the agent. It's the
+  agent's job to drive it forward through the state machine.
+- **PR reaches `merge-ready`** → assigned to the human. This is the ONLY time a
+  PR should land in the human's queue.
+- **Human requests changes during review** → PR moves back to `needs-rework`,
+  reassigned to agent.
+
+This means the human's PR inbox contains only PRs that are genuinely ready to
+merge — no half-finished work, no failing CI, no merge conflicts. Everything
+else is the agent's problem.
+
+#### The Loop in Practice
+
+A typical PR might go through this cycle:
+
+1. Agent creates PR, labels `needs-rebase`
+2. Agent rebases onto main → labels `needs-checks`
+3. Agent runs `make check` — lint fails → fixes lint, pushes → back to
+   `needs-rebase` (new commit)
+4. Agent rebases → `needs-checks` → runs checks → passes → `needs-review`
+5. Agent does code review — finds a missing error check → `needs-rework`
+6. Agent fixes the error check, pushes → `needs-rebase`
+7. Agent rebases → `needs-checks` → passes → `needs-review`
+8. Agent reviews — looks good → `merge-ready`
+9. Agent assigns to human
+10. Human reviews, merges
+
+Steps 1-9 happen without human involvement. The human sees a clean, reviewed,
+passing PR ready for a final look.
+
+#### Automated Sweep
+
+A periodic cron job (every 4 hours) scans all open PRs across all repos:
+
+- **No label** → classify into the correct state
+- **`needs-rebase`** → spawn agent to rebase
+- **`needs-checks`** → spawn agent to run checks and fix failures
+- **`needs-review`** → spawn agent to do code review
+- **`needs-rework`** → spawn agent to fix review feedback
+- **`merge-ready`** → verify still true (main may have updated since), ensure
+  assigned to human
+
+This catches PRs that fell through the cracks — an agent session that timed out
+mid-rework, a rebase that became necessary when main moved forward, etc.
+
+#### Why Labels + Assignments
+
+You could track PR state in a file, a database, or just in the agent's memory.
+Labels and assignments are better because:
+
+- **Visible in the Gitea UI.** Anyone can glance at the PR list and see what
+  state each PR is in without reading comments.
+- **Queryable via API.** "Show me all PRs that need review" is a single API call
+  with a label filter.
+- **Durable.** Labels survive agent restarts, session timeouts, and context
+  loss. The state is in Gitea, not in the agent's head.
+- **Human-readable.** Color-coded labels in a PR list give an instant dashboard:
+  lots of red = rebase debt, lots of orange = CI problems, lots of green = ready
+  for review.
+
 ## Real-Time Activity Feed: Gitea → Mattermost
 
 Every repo has a Gitea webhook that sends all activity (pushes, PRs, issues,