diff --git a/docs/FAQ.md b/docs/FAQ.md
new file mode 100644
index 00000000..5348ac08
--- /dev/null
+++ b/docs/FAQ.md
@@ -0,0 +1,107 @@
+# AegisAI — FAQ & Troubleshooting
+
+Common issues and their fixes for setting up and running AegisAI.
+
+---
+
+## 1. Backend fails to start immediately after cloning
+
+**Problem:** Running `uvicorn app.main:app --reload` crashes on startup.
+
+**Cause:** Missing or incomplete `.env` file in the `backend/` directory.
+
+**Fix:**
+```bash
+cd backend
+cp .env.example .env
+```
+Then open `.env` and set at minimum:
+- `SECRET_KEY` — any random 32-character string
+- `LLM_API_KEY` — your OpenAI key, or `ollama` if using Ollama
+
+---
+
+## 2. `LLM_API_KEY` error when using Ollama (free, no key)
+
+**Problem:** RAG queries fail with an authentication error even though
+you are using Ollama locally.
+
+**Cause:** `LLM_API_KEY` is not set to the special Ollama value.
+
+**Fix:** In `backend/.env`, set:
+LLM_API_KEY=ollama LLM_BASE_URL=http://localhost:11434/v1LLM_MODEL=llama3.2
+
+Make sure Ollama is running and the model is pulled:
+```bash
+ollama pull llama3.2
+```
+
+---
+
+## 3. PostgreSQL connection refused on startup
+
+**Problem:** Backend logs show `connection refused` for the database.
+
+**Cause:** PostgreSQL is not running, or Docker Compose was not started.
+
+**Fix (Docker users):**
+```bash
+docker compose up -d
+```
+**Fix (manual setup):** Start your local PostgreSQL service and ensure
+`DATABASE_URL` in `backend/.env` matches your local credentials.
+
+---
+
+## 4. Frontend shows a blank page or API errors in the browser
+
+**Problem:** Visiting `http://localhost:5173` shows a blank screen or
+every API call fails.
+
+**Cause:** The backend is not running, or `VITE_API_URL` is not set.
+
+**Fix:**
+1. Make sure the backend is running on port `8000`.
+2. In `frontend/`, check that `VITE_API_URL=http://localhost:8000` is set
+   (create a `.env` file in `frontend/` if it doesn't exist).
+
+---
+
+## 5. `pip install` fails with a Python version error
+
+**Problem:** Installing `requirements.txt` throws compatibility errors.
+
+**Cause:** AegisAI requires **Python 3.11 or higher**. Earlier versions
+are not supported.
+
+**Fix:** Check your Python version:
+```bash
+python --version
+```
+If below 3.11, download Python 3.11+ from https://python.org and
+recreate your virtual environment.
+
+---
+
+## 6. Docker Compose port conflict on startup
+
+**Problem:** `docker compose up -d` fails with "port is already in use."
+
+**Cause:** Another service is already using port `5173`, `8000`, or `5432`.
+
+**Fix:** Either stop the conflicting service, or override the ports in
+`docker-compose.override.yml`:
+```yaml
+services:
+  frontend:
+    ports:
+      - "5174:5173"
+  backend:
+    ports:
+      - "8001:8000"
+```
+
+---
+
+> Still stuck? Open a [Discussion](https://github.com/SdSarthak/AegisAI/discussions)
+> or search existing [Issues](https://github.com/SdSarthak/AegisAI/issues).