diff --git a/backend/tests/test_categories.py b/backend/tests/test_categories.py
new file mode 100644
index 00000000..ecfe9168
--- /dev/null
+++ b/backend/tests/test_categories.py
@@ -0,0 +1,81 @@
+import pytest
+from fastapi import status
+
+
+class TestCategoryCRUD:
+    """Test category creation, read, update, delete."""
+
+    def test_create_category(self, test_client):
+        """Test creating a category."""
+        response = test_client.post(
+            "/api/categories",
+            json={
+                "name": "Electronics",
+                "description": "Electronic components"
+            }
+        )
+        assert response.status_code == status.HTTP_201_CREATED
+        data = response.json()
+        assert data["name"] == "Electronics"
+
+    def test_get_category_by_id(self, test_client, test_db):
+        """Test retrieving a category by ID."""
+        from backend.models import Category
+
+        category = Category(name="Electronics", description="Electronic components")
+        test_db.add(category)
+        test_db.commit()
+
+        response = test_client.get(f"/api/categories/{category.id}")
+        assert response.status_code == status.HTTP_200_OK
+        data = response.json()
+        assert data["name"] == "Electronics"
+
+    def test_list_categories(self, test_client, test_db):
+        """Test listing all categories."""
+        from backend.models import Category
+
+        cat1 = Category(name="Electronics", description="Desc1")
+        cat2 = Category(name="Mechanical", description="Desc2")
+        test_db.add_all([cat1, cat2])
+        test_db.commit()
+
+        response = test_client.get("/api/categories")
+        assert response.status_code == status.HTTP_200_OK
+        data = response.json()
+        assert len(data) >= 2
+
+    def test_update_category(self, test_client, test_db):
+        """Test updating a category."""
+        from backend.models import Category
+
+        category = Category(name="Electronics", description="Old description")
+        test_db.add(category)
+        test_db.commit()
+
+        response = test_client.put(
+            f"/api/categories/{category.id}",
+            json={"description": "New description"}
+        )
+        assert response.status_code == status.HTTP_200_OK
+        data = response.json()
+        assert data["description"] == "New description"
+
+    def test_delete_category_admin_only(self, test_client, test_db, admin_token):
+        """Test deleting a category (admin only)."""
+        from backend.models import Category
+
+        category = Category(name="Electronics", description="Desc")
+        test_db.add(category)
+        test_db.commit()
+        cat_id = category.id
+
+        response = test_client.delete(
+            f"/api/categories/{cat_id}",
+            headers={"Authorization": f"Bearer {admin_token}"}
+        )
+        assert response.status_code == status.HTTP_204_NO_CONTENT
+
+        # Verify deletion
+        response = test_client.get(f"/api/categories/{cat_id}")
+        assert response.status_code == status.HTTP_404_NOT_FOUND