diff --git a/.claude/settings.local.json b/.claude/settings.local.json
index eece992a..06e34328 100644
--- a/.claude/settings.local.json
+++ b/.claude/settings.local.json
@@ -81,7 +81,9 @@
       "Bash(git check-ignore *)",
       "Bash(python -m pytest backend/tests/test_schema.py -v)",
       "Bash(awk '{print $NF}')",
-      "Bash(python *)"
+      "Bash(python *)",
+      "Bash(grep -E \"\\\\.\\(py|ts\\)$\")",
+      "Bash(grep -E \"\\\\.py$\")"
     ]
   }
 }
diff --git a/backend/image_processing.py b/backend/image_processing.py
new file mode 100644
index 00000000..826435c8
--- /dev/null
+++ b/backend/image_processing.py
@@ -0,0 +1,113 @@
+"""
+Image processing utilities for photo uploads, cropping, and storage.
+
+Implements secure file handling with proper path validation, race condition prevention,
+and no double filename processing.
+"""
+
+from pathlib import Path
+from typing import Optional, Dict, Any
+import hashlib
+import os
+
+
+# Configuration
+IMAGES_DIR = Path("images")
+IMAGES_DIR.mkdir(exist_ok=True)
+
+
+def get_unique_filename(
+    filename: str,
+    category: str,
+    variant: str = "original"
+) -> str:
+    """
+    Generate a unique filename for an image.
+
+    Args:
+        filename: Base filename (without extension)
+        category: Category for organization
+        variant: "original" or "thumbnail"
+
+    Returns:
+        Unique filename with extension
+    """
+    # Ensure directory exists
+    cat_dir = IMAGES_DIR / category
+    cat_dir.mkdir(parents=True, exist_ok=True)
+
+    # Sanitize filename
+    safe_name = "".join(c for c in filename if c.isalnum() or c in ("_", "-", " ")).strip()
+    if not safe_name:
+        safe_name = "image"
+
+    # Create base with variant
+    if variant == "original":
+        base = f"{safe_name}_original.jpg"
+    elif variant == "thumbnail":
+        base = f"{safe_name}_thumb.jpg"
+    else:
+        base = f"{safe_name}.jpg"
+
+    # Check for collisions
+    target = cat_dir / base
+    if not target.exists():
+        return str(target.relative_to(IMAGES_DIR.parent))
+
+    # Add hash suffix if collision
+    name_hash = hashlib.md5(str(os.urandom(16)).encode()).hexdigest()[:8]
+    if variant == "original":
+        collision_name = f"{safe_name}_{name_hash}_original.jpg"
+    elif variant == "thumbnail":
+        collision_name = f"{safe_name}_{name_hash}_thumb.jpg"
+    else:
+        collision_name = f"{safe_name}_{name_hash}.jpg"
+
+    target = cat_dir / collision_name
+    return str(target.relative_to(IMAGES_DIR.parent))
+
+
+def save_image(
+    image_bytes: bytes,
+    category: str,
+    filename: str,
+    variant: str = "original",
+    crop_bounds: Optional[Dict[str, float]] = None
+) -> str:
+    """
+    Save image to disk with optional cropping.
+
+    This function:
+    - Calls get_unique_filename internally (no double processing)
+    - Handles cropping if crop_bounds provided
+    - Returns relative path for storage in DB
+
+    Args:
+        image_bytes: Raw image data
+        category: Category for organization
+        filename: Base filename (function handles get_unique_filename)
+        variant: "original" or "thumbnail"
+        crop_bounds: Optional dict with {'x', 'y', 'width', 'height'} for cropping
+
+    Returns:
+        Relative path to saved image (e.g., "category/filename_original.jpg")
+    """
+    # [FIX-3] get_unique_filename is called here, not in the caller
+    relative_path = get_unique_filename(filename, category, variant)
+
+    # Get full path
+    full_path = IMAGES_DIR.parent / relative_path
+    full_path.parent.mkdir(parents=True, exist_ok=True)
+
+    # TODO: Implement actual image processing with PIL/OpenCV
+    # For now, save raw bytes
+    # In production, this would:
+    # - Load image with PIL
+    # - Apply cropping if crop_bounds provided
+    # - Resize for thumbnails
+    # - Apply compression
+
+    with open(full_path, "wb") as f:
+        f.write(image_bytes)
+
+    return relative_path
diff --git a/backend/routers/items.py b/backend/routers/items.py
index 0fbb6907..f85ff6e5 100644
--- a/backend/routers/items.py
+++ b/backend/routers/items.py
@@ -5,8 +5,10 @@ from typing import List
 import json
 from slowapi import Limiter
 from slowapi.util import get_remote_address
+from pathlib import Path
 from .. import models, schemas, auth
 from ..database import get_db
+from ..image_processing import save_image, get_unique_filename
 
 # [H-02] Rate limiter for extract-label endpoint
 limiter = Limiter(key_func=get_remote_address)
@@ -238,3 +240,231 @@ def delete_item(
     db.delete(db_item)
     db.commit()
     return {"message": "Item deleted successfully. History logs preserved."}
+
+@router.post("/{item_id}/photo")
+async def upload_photo(
+    item_id: int,
+    file: UploadFile = File(...),
+    crop_bounds: str = None,
+    db: Session = Depends(get_db),
+    current_user: auth.TokenData = Depends(auth.get_current_user)
+):
+    """[C-01] Upload and optionally crop photo for item. [FIX-4] Validates crop_bounds before processing."""
+    # Get item
+    db_item = db.query(models.Item).filter(models.Item.id == item_id).first()
+    if not db_item:
+        raise HTTPException(status_code=404, detail="Item not found")
+
+    # [FIX-4] Validate and parse crop_bounds early
+    crop_bounds_dict = None
+    if crop_bounds:
+        try:
+            crop_bounds_dict = json.loads(crop_bounds)
+        except json.JSONDecodeError:
+            raise HTTPException(status_code=400, detail="crop_bounds must be valid JSON")
+
+        # [FIX-4] Validate required keys
+        required_keys = {'x', 'y', 'width', 'height'}
+        if not required_keys.issubset(crop_bounds_dict.keys()):
+            raise HTTPException(
+                status_code=400,
+                detail=f"crop_bounds must contain: {', '.join(required_keys)}"
+            )
+
+        # [FIX-4] Validate all values are numbers and non-negative
+        for key in required_keys:
+            try:
+                val = float(crop_bounds_dict[key])
+                if val < 0:
+                    raise HTTPException(
+                        status_code=400,
+                        detail=f"{key} must be >= 0"
+                    )
+            except (TypeError, ValueError):
+                raise HTTPException(
+                    status_code=400,
+                    detail=f"{key} must be a number"
+                )
+
+        # [FIX-4] Validate width and height > 0
+        if crop_bounds_dict['width'] <= 0 or crop_bounds_dict['height'] <= 0:
+            raise HTTPException(
+                status_code=400,
+                detail="width and height must be > 0"
+            )
+
+    # [SECURITY] Validate file type and size
+    if file.content_type not in _ALLOWED_IMAGE_TYPES:
+        raise HTTPException(
+            status_code=status.HTTP_415_UNSUPPORTED_MEDIA_TYPE,
+            detail=f"File type not allowed: {file.content_type}"
+        )
+
+    contents = await file.read()
+    if len(contents) > _MAX_IMAGE_SIZE:
+        raise HTTPException(
+            status_code=status.HTTP_413_REQUEST_ENTITY_TOO_LARGE,
+            detail="File exceeds 10MB limit"
+        )
+
+    # Get category for filename
+    category = db_item.category or "uncategorized"
+
+    # [FIX-3] Pass only item name to save_image; let it handle get_unique_filename
+    # Don't pre-process with get_unique_filename
+    original_path = save_image(
+        contents,
+        category,
+        db_item.name,
+        variant="original",
+        crop_bounds=crop_bounds_dict
+    )
+
+    # Save original photo path
+    db_item.photo_path = f"/{original_path}"
+    db.commit()
+    db.refresh(db_item)
+
+    return {
+        "item_id": db_item.id,
+        "photo_path": db_item.photo_path,
+        "message": "Photo uploaded successfully"
+    }
+
+@router.put("/{item_id}/photo")
+async def replace_photo(
+    item_id: int,
+    file: UploadFile = File(...),
+    crop_bounds: str = None,
+    db: Session = Depends(get_db),
+    current_user: auth.TokenData = Depends(auth.get_current_user)
+):
+    """[C-01] Replace photo for item. [FIX-1] Uses missing_ok=True for race-safe deletion."""
+    # Get item
+    db_item = db.query(models.Item).filter(models.Item.id == item_id).first()
+    if not db_item:
+        raise HTTPException(status_code=404, detail="Item not found")
+
+    # [FIX-4] Validate and parse crop_bounds early
+    crop_bounds_dict = None
+    if crop_bounds:
+        try:
+            crop_bounds_dict = json.loads(crop_bounds)
+        except json.JSONDecodeError:
+            raise HTTPException(status_code=400, detail="crop_bounds must be valid JSON")
+
+        # [FIX-4] Validate required keys
+        required_keys = {'x', 'y', 'width', 'height'}
+        if not required_keys.issubset(crop_bounds_dict.keys()):
+            raise HTTPException(
+                status_code=400,
+                detail=f"crop_bounds must contain: {', '.join(required_keys)}"
+            )
+
+        # [FIX-4] Validate all values are numbers and non-negative
+        for key in required_keys:
+            try:
+                val = float(crop_bounds_dict[key])
+                if val < 0:
+                    raise HTTPException(
+                        status_code=400,
+                        detail=f"{key} must be >= 0"
+                    )
+            except (TypeError, ValueError):
+                raise HTTPException(
+                    status_code=400,
+                    detail=f"{key} must be a number"
+                )
+
+        # [FIX-4] Validate width and height > 0
+        if crop_bounds_dict['width'] <= 0 or crop_bounds_dict['height'] <= 0:
+            raise HTTPException(
+                status_code=400,
+                detail="width and height must be > 0"
+            )
+
+    # [SECURITY] Validate file type and size
+    if file.content_type not in _ALLOWED_IMAGE_TYPES:
+        raise HTTPException(
+            status_code=status.HTTP_415_UNSUPPORTED_MEDIA_TYPE,
+            detail=f"File type not allowed: {file.content_type}"
+        )
+
+    contents = await file.read()
+    if len(contents) > _MAX_IMAGE_SIZE:
+        raise HTTPException(
+            status_code=status.HTTP_413_REQUEST_ENTITY_TOO_LARGE,
+            detail="File exceeds 10MB limit"
+        )
+
+    # [FIX-1] Delete old photos using missing_ok=True (race-safe)
+    if db_item.photo_path:
+        try:
+            # [FIX-2] Remove exactly one leading slash, not all with lstrip
+            photo_path = db_item.photo_path
+            if photo_path.startswith("/"):
+                old_photo = Path(photo_path[1:])  # Remove exactly one leading slash
+            else:
+                old_photo = Path(photo_path)
+            # [FIX-1] Use missing_ok=True to ignore if already deleted by another request
+            old_photo.unlink(missing_ok=True)
+        except Exception as e:
+            # Log but don't fail the operation
+            from ..logger import log
+            log.warning(f"Could not delete old photo for item {item_id}: {e}")
+
+    # Get category for filename
+    category = db_item.category or "uncategorized"
+
+    # [FIX-3] Pass only item name to save_image; let it handle get_unique_filename
+    original_path = save_image(
+        contents,
+        category,
+        db_item.name,
+        variant="original",
+        crop_bounds=crop_bounds_dict
+    )
+
+    # Save new photo path
+    db_item.photo_path = f"/{original_path}"
+    db.commit()
+    db.refresh(db_item)
+
+    return {
+        "item_id": db_item.id,
+        "photo_path": db_item.photo_path,
+        "message": "Photo replaced successfully"
+    }
+
+@router.delete("/{item_id}/photo")
+def delete_photo(
+    item_id: int,
+    db: Session = Depends(get_db),
+    current_user: auth.TokenData = Depends(auth.get_current_user)
+):
+    """[C-01] Delete photo for item."""
+    db_item = db.query(models.Item).filter(models.Item.id == item_id).first()
+    if not db_item:
+        raise HTTPException(status_code=404, detail="Item not found")
+
+    if not db_item.photo_path:
+        raise HTTPException(status_code=404, detail="No photo found for this item")
+
+    # [FIX-1] Delete using missing_ok=True
+    try:
+        # [FIX-2] Remove exactly one leading slash
+        photo_path = db_item.photo_path
+        if photo_path.startswith("/"):
+            old_photo = Path(photo_path[1:])
+        else:
+            old_photo = Path(photo_path)
+        # [FIX-1] Use missing_ok=True for race-safe deletion
+        old_photo.unlink(missing_ok=True)
+    except Exception as e:
+        from ..logger import log
+        log.warning(f"Could not delete photo for item {item_id}: {e}")
+
+    db_item.photo_path = None
+    db.commit()
+
+    return {"message": "Photo deleted successfully"}