diff --git a/frontend/e2e/workflows/3-ai-extraction.spec.ts b/frontend/e2e/workflows/3-ai-extraction.spec.ts
new file mode 100644
index 00000000..99218e17
--- /dev/null
+++ b/frontend/e2e/workflows/3-ai-extraction.spec.ts
@@ -0,0 +1,266 @@
+import { test, expect } from '@playwright/test';
+import * as auth from '../fixtures/auth';
+import * as assertions from '../utils/assertions';
+import * as helpers from '../utils/helpers';
+import { LOCAL_USERS } from '../fixtures/test-data';
+
+test.describe('AI Extraction Workflow', () => {
+  const BASE_URL = process.env.BASE_URL || 'http://localhost:3000';
+
+  test.beforeEach(async ({ page }) => {
+    // Navigate to app and login
+    await page.goto(BASE_URL);
+    await auth.loginWithLocalUser(page, LOCAL_USERS.admin, BASE_URL);
+    await assertions.assertUserAuthenticated(page, BASE_URL);
+
+    // Navigate to new item creation (AI extraction)
+    await page.goto(`${BASE_URL}/inventory/new`);
+  });
+
+  test('should display AI onboarding wizard', async ({ page }) => {
+    const aiWizard = page.locator('[data-testid="ai-onboarding-wizard"]');
+    await expect(aiWizard).toBeVisible();
+
+    // Check for step indicators
+    const stepIndicator = page.locator('[data-testid="wizard-step"]');
+    expect(await stepIndicator.count()).toBeGreaterThan(0);
+  });
+
+  test('should show capture step in AI wizard', async ({ page }) => {
+    const captureStep = page.locator('[data-testid="wizard-step-capture"]');
+    await expect(captureStep).toBeVisible();
+
+    // Camera view should be displayed
+    const cameraView = page.locator('[data-testid="capture-camera"]');
+    await expect(cameraView).toBeVisible();
+
+    // Capture button should be visible
+    const captureButton = page.locator('[data-testid="capture-button"]');
+    await expect(captureButton).toBeVisible();
+  });
+
+  test('should allow manual item entry as alternative to AI', async ({ page }) => {
+    const manualEntryTab = page.locator('[data-testid="manual-entry-tab"]');
+    if (await manualEntryTab.isVisible()) {
+      await manualEntryTab.click();
+
+      // Form should be displayed
+      const itemForm = page.locator('[data-testid="item-manual-form"]');
+      await expect(itemForm).toBeVisible();
+    }
+  });
+
+  test('should handle camera permission denied', async ({ page, context }) => {
+    // Simulate camera permission denial
+    await context.grantPermissions([]);
+
+    // Reload to trigger permission check
+    await page.reload();
+
+    // Should show error or fallback UI
+    const errorMessage = page.locator('[data-testid="camera-permission-error"]');
+    const fallbackForm = page.locator('[data-testid="manual-entry-form"]');
+
+    const hasError = await errorMessage.isVisible().catch(() => false);
+    const hasFallback = await fallbackForm.isVisible().catch(() => false);
+
+    expect(hasError || hasFallback).toBe(true);
+  });
+
+  test('should display AI provider selection', async ({ page }) => {
+    const providerSelect = page.locator('[data-testid="ai-provider-select"]');
+    if (await providerSelect.isVisible()) {
+      // At least Gemini or Claude should be available
+      const options = page.locator('[data-testid="provider-option"]');
+      expect(await options.count()).toBeGreaterThan(0);
+    }
+  });
+
+  test('should show extraction results after AI processing', async ({ page }) => {
+    // Click capture button (mock will return predefined response)
+    const captureButton = page.locator('[data-testid="capture-button"]');
+    await captureButton.click();
+
+    // Show extraction overlay
+    const extractionOverlay = page.locator('[data-testid="ai-extraction-overlay"]');
+    await expect(extractionOverlay).toBeVisible({ timeout: 10000 });
+
+    // Results form should appear
+    const resultsForm = page.locator('[data-testid="extraction-results-form"]');
+    await expect(resultsForm).toBeVisible({ timeout: 15000 });
+  });
+
+  test('should display extracted fields for user confirmation', async ({ page }) => {
+    const captureButton = page.locator('[data-testid="capture-button"]');
+    await captureButton.click();
+
+    // Wait for results
+    const resultsForm = page.locator('[data-testid="extraction-results-form"]');
+    await expect(resultsForm).toBeVisible({ timeout: 15000 });
+
+    // Check for extracted fields
+    const nameField = page.locator('[data-testid="extracted-name"]');
+    const categoryField = page.locator('[data-testid="extracted-category"]');
+
+    await expect(nameField).toBeVisible();
+    if (await categoryField.isVisible()) {
+      // Category might be optional
+    }
+  });
+
+  test('should allow editing extracted values', async ({ page }) => {
+    const captureButton = page.locator('[data-testid="capture-button"]');
+    await captureButton.click();
+
+    // Wait for results
+    const resultsForm = page.locator('[data-testid="extraction-results-form"]');
+    await expect(resultsForm).toBeVisible({ timeout: 15000 });
+
+    // Edit extracted name
+    const nameField = page.locator('[data-testid="extracted-name"]');
+    await nameField.fill('Modified Item Name');
+
+    const value = await helpers.getInputValue(page, '[data-testid="extracted-name"]');
+    expect(value).toBe('Modified Item Name');
+  });
+
+  test('should allow confirming and saving extracted item', async ({ page }) => {
+    const captureButton = page.locator('[data-testid="capture-button"]');
+    await captureButton.click();
+
+    // Wait for results
+    const resultsForm = page.locator('[data-testid="extraction-results-form"]');
+    await expect(resultsForm).toBeVisible({ timeout: 15000 });
+
+    // Confirm extraction
+    const confirmButton = page.locator('[data-testid="confirm-extraction"]');
+    await confirmButton.click();
+
+    // Should show success and redirect
+    const successToast = page.locator('[data-testid="toast-success"]');
+    await expect(successToast).toBeVisible({ timeout: 5000 });
+
+    // Should redirect to inventory or item detail page
+    await page.waitForURL(/inventory|items/, { timeout: 5000 });
+  });
+
+  test('should allow rejecting AI extraction results', async ({ page }) => {
+    const captureButton = page.locator('[data-testid="capture-button"]');
+    await captureButton.click();
+
+    // Wait for results
+    const resultsForm = page.locator('[data-testid="extraction-results-form"]');
+    await expect(resultsForm).toBeVisible({ timeout: 15000 });
+
+    // Click reject/redo
+    const rejectButton = page.locator('[data-testid="reject-extraction"]');
+    if (await rejectButton.isVisible()) {
+      await rejectButton.click();
+
+      // Should return to capture step
+      const captureStep = page.locator('[data-testid="wizard-step-capture"]');
+      await expect(captureStep).toBeVisible({ timeout: 3000 });
+    }
+  });
+
+  test('should handle AI extraction errors gracefully', async ({ page }) => {
+    // Mock API error
+    await page.route('**/api/ai/extract', (route) => {
+      route.abort('failed');
+    });
+
+    const captureButton = page.locator('[data-testid="capture-button"]');
+    await captureButton.click();
+
+    // Should show error message
+    const errorToast = page.locator('[data-testid="toast-error"]');
+    await expect(errorToast).toBeVisible({ timeout: 10000 });
+  });
+
+  test('should support multi-item extraction from single image', async ({ page }) => {
+    // If multiple items detected feature is supported
+    const multiItemToggle = page.locator('[data-testid="multi-item-toggle"]');
+    if (await multiItemToggle.isVisible()) {
+      await multiItemToggle.click();
+
+      const captureButton = page.locator('[data-testid="capture-button"]');
+      await captureButton.click();
+
+      // Results should show multiple items
+      const itemRows = page.locator('[data-testid="extraction-item-row"]');
+      const count = await itemRows.count();
+      expect(count).toBeGreaterThanOrEqual(1);
+    }
+  });
+
+  test('should display confidence scores for extracted fields', async ({ page }) => {
+    const captureButton = page.locator('[data-testid="capture-button"]');
+    await captureButton.click();
+
+    // Wait for results
+    const resultsForm = page.locator('[data-testid="extraction-results-form"]');
+    await expect(resultsForm).toBeVisible({ timeout: 15000 });
+
+    // Check for confidence indicator
+    const confidenceIndicator = page.locator('[data-testid="field-confidence"]');
+    if (await confidenceIndicator.isVisible()) {
+      const score = await confidenceIndicator.textContent();
+      expect(score).toMatch(/\d+%|High|Medium|Low/);
+    }
+  });
+
+  test('should allow retaking capture', async ({ page }) => {
+    // Mock to get to results
+    const captureButton = page.locator('[data-testid="capture-button"]');
+    await captureButton.click();
+
+    const resultsForm = page.locator('[data-testid="extraction-results-form"]');
+    await expect(resultsForm).toBeVisible({ timeout: 15000 });
+
+    // Click retake button
+    const retakeButton = page.locator('[data-testid="retake-button"]');
+    if (await retakeButton.isVisible()) {
+      await retakeButton.click();
+
+      // Should return to camera
+      const captureStep = page.locator('[data-testid="wizard-step-capture"]');
+      await expect(captureStep).toBeVisible({ timeout: 3000 });
+    }
+  });
+
+  test('should validate required fields before submission', async ({ page }) => {
+    const captureButton = page.locator('[data-testid="capture-button"]');
+    await captureButton.click();
+
+    const resultsForm = page.locator('[data-testid="extraction-results-form"]');
+    await expect(resultsForm).toBeVisible({ timeout: 15000 });
+
+    // Clear required field
+    const nameField = page.locator('[data-testid="extracted-name"]');
+    await nameField.fill('');
+
+    // Try to confirm
+    const confirmButton = page.locator('[data-testid="confirm-extraction"]');
+    if (await confirmButton.isEnabled()) {
+      await confirmButton.click();
+
+      // Should show validation error
+      const errorToast = page.locator('[data-testid="toast-error"]');
+      await expect(errorToast).toBeVisible({ timeout: 3000 });
+    }
+  });
+
+  test('should show step progress indicator', async ({ page }) => {
+    const progressBar = page.locator('[data-testid="wizard-progress"]');
+    if (await progressBar.isVisible()) {
+      const currentStep = page.locator('[data-testid="current-step"]');
+      const totalSteps = page.locator('[data-testid="total-steps"]');
+
+      const current = await currentStep.textContent();
+      const total = await totalSteps.textContent();
+
+      expect(current).toBeTruthy();
+      expect(total).toBeTruthy();
+    }
+  });
+});