diff --git a/campaign/Cargo.toml b/campaign/Cargo.toml
index 55c52fc..2f76b72 100644
--- a/campaign/Cargo.toml
+++ b/campaign/Cargo.toml
@@ -11,6 +11,10 @@ crate-type = ["cdylib", "rlib"]
 soroban-sdk = { workspace = true }
 common = { workspace = true }
 
+[features]
+default = []
+diag = []
+
 [dev-dependencies]
 soroban-sdk = { version = "26.0.1", features = ["testutils"] }
 # Inherit the workspace-wide ed25519-dalek = 2.2.0 exact pin (see
diff --git a/campaign/src/event.rs b/campaign/src/event.rs
index b075e98..d8c952e 100644
--- a/campaign/src/event.rs
+++ b/campaign/src/event.rs
@@ -6,6 +6,9 @@
 
 use soroban_sdk::{Address, Env, String, Symbol};
 
+#[cfg(feature = "diag")]
+use crate::types::CampaignMetrics;
+
 /// Emitted when a donation is received by the campaign.
 pub fn donation_received(
     env: &Env,
@@ -100,3 +103,12 @@ pub fn contract_unfrozen(env: &Env, admin: &Address, timestamp: u64) {
     env.events()
         .publish(("campaign", "contract_unfrozen"), (admin, timestamp));
 }
+
+/// Emit current diagnostic metrics as an event.
+/// Only compiled when the `diag` feature is enabled.
+#[cfg(feature = "diag")]
+pub fn diagnostics_emit(env: &Env, metrics: &CampaignMetrics) {
+    let ledger = env.ledger().sequence();
+    env.events()
+        .publish(("campaign", "diagnostics"), (metrics, ledger));
+}
diff --git a/campaign/src/lib.rs b/campaign/src/lib.rs
index 098abda..afc92fd 100644
--- a/campaign/src/lib.rs
+++ b/campaign/src/lib.rs
@@ -25,6 +25,8 @@ pub mod types;
 pub mod views;
 
 use soroban_sdk::{contract, contractimpl, Address, BytesN, Env, String, Vec};
+#[cfg(feature = "diag")]
+use storage::storage_increment_diagnostic_counter;
 use storage::{
     acquire_lock, get_campaign, get_donor, get_donor_asset_donation, get_milestone,
     increment_donor_asset_donation, is_frozen, release_lock, set_campaign, set_donor, set_frozen,
@@ -35,9 +37,9 @@ use storage::{
 };
 
 use types::{
-    AssetInfo, CampaignData, CampaignInitializedEvent, CampaignReport, CampaignStatus,
-    CampaignStatusResponse, DashboardMetrics, DonorRecord, Error, MilestoneData, MilestoneStatus,
-    PlatformSummary, StellarAsset,
+    AssetInfo, CampaignData, CampaignInitializedEvent, CampaignMetrics, CampaignReport,
+    CampaignStatus, CampaignStatusResponse, DashboardMetrics, DonorRecord, Error, MilestoneData,
+    MilestoneStatus, PlatformSummary, StellarAsset,
 };
 
 pub const VERSION: u32 = 1;
@@ -271,6 +273,12 @@ impl CampaignContract {
             env.ledger().timestamp(),
         );
 
+        // Track diagnostic counter (no-op when `diag` feature is disabled)
+        #[cfg(feature = "diag")]
+        storage_increment_diagnostic_counter(&env, |m: &mut CampaignMetrics| {
+            m.donations_total += 1;
+        });
+
         // Issue #242 – Release reentrancy lock
         release_lock(&env);
     }
@@ -327,6 +335,38 @@ impl CampaignContract {
         }
     }
 
+    /// Emit current diagnostics as a `diagnostics` event.
+    ///
+    /// When the `diag` feature is disabled the event is not published
+    /// (the function body is empty). No auth required (view-like call).
+    pub fn emit_diagnostics(env: Env) {
+        #[cfg(feature = "diag")]
+        {
+            let metrics = crate::storage::storage_get_diagnostic_metrics(&env);
+            event::diagnostics_emit(&env, &metrics);
+            let mut metrics = metrics;
+            metrics.last_diagnostics_ledger = env.ledger().sequence();
+            crate::storage::storage_set_diagnostic_metrics(&env, &metrics);
+        }
+        #[cfg(not(feature = "diag"))]
+        let _ = env;
+    }
+
+    /// Returns diagnostic counters for the campaign contract.
+    ///
+    /// When the `diag` feature is disabled (default), returns all zeros.
+    /// When `diag` is enabled, returns live counters tracked in storage.
+    /// No auth required (read-only view).
+    pub fn metrics_view(env: Env) -> CampaignMetrics {
+        #[cfg(feature = "diag")]
+        {
+            return crate::storage::storage_get_diagnostic_metrics(&env);
+        }
+        #[cfg(not(feature = "diag"))]
+        let _ = env;
+        CampaignMetrics::default()
+    }
+
     /// Returns compact metrics for campaign dashboards.
     pub fn get_dashboard_metrics(env: Env) -> DashboardMetrics {
         let summary = Self::get_platform_summary(env);
@@ -483,6 +523,12 @@ impl CampaignContract {
                     (&donor, donor_record.total_donated),
                 );
 
+                // Track diagnostic counter (no-op when `diag` feature is disabled)
+                #[cfg(feature = "diag")]
+                storage_increment_diagnostic_counter(&env, |m: &mut CampaignMetrics| {
+                    m.refunds_total += 1;
+                });
+
                 // Issue #242 – Release reentrancy lock
                 release_lock(&env);
             }
@@ -841,6 +887,7 @@ pub fn validate_milestone_transition(
 mod test {
     pub mod budget_invariant_tests;
     pub mod claim_refund_tests;
+    pub mod diagnostics_tests;
     pub mod get_campaign_status_tests;
     pub mod integration_tests;
     pub mod invariant_tests;
diff --git a/campaign/src/multi_asset_release.rs b/campaign/src/multi_asset_release.rs
index ada1805..d53f3a8 100644
--- a/campaign/src/multi_asset_release.rs
+++ b/campaign/src/multi_asset_release.rs
@@ -1,9 +1,13 @@
 use crate::event;
+#[cfg(feature = "diag")]
+use crate::storage::storage_increment_diagnostic_counter;
 use crate::storage::{
     acquire_lock, get_campaign, get_milestone, is_frozen, release_lock, set_milestone,
     storage_get_asset_raised, storage_get_total_raised, storage_increment_release_count,
     storage_set_asset_raised, storage_set_total_raised,
 };
+#[cfg(feature = "diag")]
+use crate::types::CampaignMetrics;
 use crate::types::{Error, MilestoneStatus};
 use soroban_sdk::{panic_with_error, symbol_short, token, Address, Env};
 
@@ -197,6 +201,10 @@ pub fn release_milestone_multi_asset(env: &Env, milestone_index: u32, recipient:
     let new_total_raised = total_raised.checked_sub(total_released).unwrap_or(0).max(0);
     storage_set_total_raised(env, new_total_raised);
     storage_increment_release_count(env);
+    #[cfg(feature = "diag")]
+    storage_increment_diagnostic_counter(env, |m: &mut CampaignMetrics| {
+        m.milestones_released_total += 1;
+    });
 
     // Issue #242 – Release reentrancy lock
     release_lock(env);
diff --git a/campaign/src/release_milestone.rs b/campaign/src/release_milestone.rs
index 47ca2b9..5b7ecac 100644
--- a/campaign/src/release_milestone.rs
+++ b/campaign/src/release_milestone.rs
@@ -1,8 +1,12 @@
 use crate::event;
+#[cfg(feature = "diag")]
+use crate::storage::storage_increment_diagnostic_counter;
 use crate::storage::{
     acquire_lock, get_campaign, get_milestone, is_frozen, release_lock, set_milestone,
     storage_increment_release_count,
 };
+#[cfg(feature = "diag")]
+use crate::types::CampaignMetrics;
 use crate::types::{Error, MilestoneStatus};
 use soroban_sdk::{panic_with_error, token, Address, Env};
 
@@ -125,6 +129,10 @@ pub fn release_milestone(env: &Env, milestone_index: u32, recipient: Address) {
     milestone.released_to = Some(recipient);
     set_milestone(env, milestone_index, &milestone);
     storage_increment_release_count(env);
+    #[cfg(feature = "diag")]
+    storage_increment_diagnostic_counter(env, |m: &mut CampaignMetrics| {
+        m.milestones_released_total += 1;
+    });
 
     // Issue #242 – Release reentrancy lock
     release_lock(env);
diff --git a/campaign/src/storage.rs b/campaign/src/storage.rs
index 5553f4f..da34029 100644
--- a/campaign/src/storage.rs
+++ b/campaign/src/storage.rs
@@ -1,5 +1,7 @@
 // src/storage.rs
 
+#[cfg(feature = "diag")]
+use crate::types::CampaignMetrics;
 use crate::types::{CampaignData, DataKey, DonorRecord, Error, MilestoneData};
 use soroban_sdk::{panic_with_error, Address, Env};
 
@@ -371,6 +373,39 @@ pub fn set_frozen(env: &Env, frozen: bool) {
     bump_persistent(env, &key);
 }
 
+// ─── Diagnostic metrics (feature-gated) ──────────────────────────────────────
+
+/// Load the diagnostic metrics counter record.
+/// Returns default (all zeros) if never written.
+#[cfg(feature = "diag")]
+pub fn storage_get_diagnostic_metrics(env: &Env) -> CampaignMetrics {
+    let value: CampaignMetrics = env
+        .storage()
+        .persistent()
+        .get(&DataKey::DiagnosticMetrics)
+        .unwrap_or_default();
+    bump_persistent(env, &DataKey::DiagnosticMetrics);
+    value
+}
+
+/// Persist the diagnostic metrics.
+#[cfg(feature = "diag")]
+pub fn storage_set_diagnostic_metrics(env: &Env, metrics: &CampaignMetrics) {
+    env.storage()
+        .persistent()
+        .set(&DataKey::DiagnosticMetrics, metrics);
+    bump_persistent(env, &DataKey::DiagnosticMetrics);
+}
+
+/// Increment a diagnostic counter in storage.
+/// No-op when the `diag` feature is disabled (the function body is not compiled).
+#[cfg(feature = "diag")]
+pub fn storage_increment_diagnostic_counter(env: &Env, field: fn(&mut CampaignMetrics)) {
+    let mut metrics = storage_get_diagnostic_metrics(env);
+    field(&mut metrics);
+    storage_set_diagnostic_metrics(env, &metrics);
+}
+
 // ─── Bulk TTL refresh ─────────────────────────────────────────────────────────
 
 /// Refresh TTL for all core persistent keys in a single call.
diff --git a/campaign/src/test/diagnostics_tests.rs b/campaign/src/test/diagnostics_tests.rs
new file mode 100644
index 0000000..b61fa83
--- /dev/null
+++ b/campaign/src/test/diagnostics_tests.rs
@@ -0,0 +1,75 @@
+#![cfg(test)]
+
+use soroban_sdk::testutils::Address as _;
+use soroban_sdk::{Env, String};
+
+use super::with_contract;
+use crate::types::{CampaignMetrics, StellarAsset};
+use crate::CampaignContract;
+
+fn setup_basic_env(env: &Env) {
+    env.mock_all_auths();
+    with_contract(env, || {
+        let creator = soroban_sdk::Address::generate(env);
+        let mut assets: soroban_sdk::Vec<StellarAsset> = soroban_sdk::Vec::new(env);
+        assets.push_back(StellarAsset {
+            asset_code: String::from_str(env, "XLM"),
+            issuer: Some(soroban_sdk::Address::generate(env)),
+        });
+        let mut milestones: soroban_sdk::Vec<crate::types::MilestoneData> =
+            soroban_sdk::Vec::new(env);
+        milestones.push_back(crate::types::MilestoneData {
+            index: 0,
+            target_amount: 1000,
+            released_amount: 0,
+            description_hash: soroban_sdk::BytesN::from_array(env, &[1u8; 32]),
+            status: crate::types::MilestoneStatus::Locked,
+            released_at: None,
+            released_at_ledger: None,
+            release_tx: None,
+            released_to: None,
+        });
+
+        CampaignContract::initialize(
+            env.clone(),
+            creator,
+            1000,
+            env.ledger().timestamp() + 86400,
+            assets,
+            milestones,
+            0,
+        )
+        .unwrap();
+    });
+}
+
+#[test]
+fn test_metrics_view_returns_defaults_before_any_ops() {
+    let env = Env::default();
+    setup_basic_env(&env);
+    with_contract(&env, || {
+        let metrics = CampaignContract::metrics_view(env.clone());
+        assert_eq!(metrics.donations_total, 0);
+        assert_eq!(metrics.milestones_released_total, 0);
+        assert_eq!(metrics.refunds_total, 0);
+    });
+}
+
+#[test]
+fn test_emit_diagnostics_does_not_panic() {
+    let env = Env::default();
+    setup_basic_env(&env);
+    with_contract(&env, || {
+        CampaignContract::emit_diagnostics(env.clone());
+    });
+}
+
+#[test]
+fn test_metrics_view_returns_struct() {
+    let env = Env::default();
+    let metrics = CampaignMetrics::default();
+    assert_eq!(metrics.donations_total, 0);
+    assert_eq!(metrics.milestones_released_total, 0);
+    assert_eq!(metrics.refunds_total, 0);
+    assert_eq!(metrics.last_diagnostics_ledger, 0);
+}
diff --git a/campaign/src/types.rs b/campaign/src/types.rs
index fd3c2bc..3d592a9 100644
--- a/campaign/src/types.rs
+++ b/campaign/src/types.rs
@@ -182,6 +182,22 @@ pub const WIRE_CODE_TABLE: &[(Error, u32)] = &[
     (Error::InvalidPage, 84),
 ];
 
+/// Diagnostic counters for the campaign contract.
+///
+/// Only populated when the `diag` feature is enabled. The `metrics_view`
+/// entrypoint always exists but returns all zeros when the feature is off.
+#[contracttype]
+#[derive(Clone, Debug, Eq, PartialEq, Default)]
+pub struct CampaignMetrics {
+    /// Total number of successful donation calls.
+    pub donations_total: u64,
+    /// Total number of completed milestone releases.
+    pub milestones_released_total: u64,
+    /// Total number of successfully processed refunds.
+    pub refunds_total: u64,
+    /// Ledger sequence when diagnostics were last emitted.
+    pub last_diagnostics_ledger: u32,
+}
 #[cfg(test)]
 mod error_code_tests {
     #[test]
@@ -375,6 +391,8 @@ pub enum DataKey {
     ReentrancyLock,
     /// Freeze flag; present and true = contract is frozen, mutating ops blocked.
     Frozen,
+    /// Diagnostic counters (only written when feature `diag` is enabled).
+    DiagnosticMetrics,
 }
 
 // ─── Asset types ──────────────────────────────────────────────────────────────
diff --git a/docs/observability.md b/docs/observability.md
new file mode 100644
index 0000000..47ab36a
--- /dev/null
+++ b/docs/observability.md
@@ -0,0 +1,79 @@
+# Observability — Diagnostic Metrics & Events
+
+The campaign contract supports an optional `diag` feature that enables structured
+tracing and runtime counters for observability. When the feature is disabled
+(default), all diagnostic code is compiled away — zero storage overhead, zero
+event emission.
+
+## Feature Flag
+
+| Flag   | Default | Description                                          |
+|--------|---------|------------------------------------------------------|
+| `diag` | off     | Enables diagnostic counters and `diagnostics` events |
+
+Enable at build time:
+
+```bash
+cargo build -p milestonex-campaign --features diag --target wasm32v1-none --release
+```
+
+## Metrics View
+
+`metrics_view` — always available; returns all-zero counters when `diag` is off.
+
+### `CampaignMetrics`
+
+| Counter                   | Type    | Description                               |
+|---------------------------|---------|-------------------------------------------|
+| `donations_total`         | `u64`   | Successful donation calls                 |
+| `milestones_released_total` | `u64` | Completed milestone releases              |
+| `refunds_total`           | `u64`   | Successfully processed refunds            |
+| `last_diagnostics_ledger` | `u32`   | Ledger sequence of last `emit_diagnostics` |
+
+## Diagnostics Event
+
+`emit_diagnostics` publishes a `("campaign", "diagnostics")` event containing
+the current `CampaignMetrics` struct and the ledger sequence. The event is only
+emitted when the `diag` feature is enabled; when disabled the entrypoint is a
+no-op.
+
+### Event payload (feature `diag` on)
+
+```json
+{
+  "topic": ["campaign", "diagnostics"],
+  "data": {
+    "metrics": {
+      "donations_total": 42,
+      "milestones_released_total": 3,
+      "refunds_total": 1,
+      "last_diagnostics_ledger": 20100
+    },
+    "ledger": 20100
+  }
+}
+```
+
+## Usage
+
+```rust
+// Read counters (always available)
+let metrics = contract_client.metrics_view();
+
+// Emit a diagnostics event (only emits when built with --features diag)
+contract_client.emit_diagnostics();
+```
+
+## Testing
+
+Run diagnostics tests with the default (diag off) configuration:
+
+```bash
+cargo test -p milestonex-campaign -- diagnostics
+```
+
+Run diagnostics tests with the feature enabled:
+
+```bash
+cargo test -p milestonex-campaign --features diag -- diagnostics
+```