diff --git a/README.md b/README.md
index 555052a..3b3677d 100644
--- a/README.md
+++ b/README.md
@@ -86,3 +86,4 @@ base url: `http://localhost:3000`
 
 - Create a new project: `POST /api/organization/:organizationId/team/:teamId/project`
 - Update a project: `PUT /api/organization/:organizationId/team/:teamId/project/:projectId`
+- Update the project status: `PATCH /api/organization/:organizationId/team/:teamId/project/:projectId/status`
diff --git a/src/controllers/project.controller.js b/src/controllers/project.controller.js
index fef5a81..6e7a1bd 100644
--- a/src/controllers/project.controller.js
+++ b/src/controllers/project.controller.js
@@ -502,3 +502,144 @@ export const updateProject = async (req, res, next) => {
     next(error);
   }
 };
+
+/**
+ * @desc   Update project status
+ * @route  /api/organization/:organizationId/team/:teamId/project/:projectId/status
+ * @method PATCH
+ * @access private
+ */
+export const updateProjectStatus = async (req, res, next) => {
+  try {
+    const { organizationId, teamId, projectId } = req.params;
+    const { status } = req.body;
+
+    // Validate required parameters
+    const paramsValidation = validateParams(
+      { organizationId, teamId, projectId },
+      ['organizationId', 'teamId', 'projectId'],
+    );
+
+    if (!paramsValidation.success) {
+      return res.status(400).json({
+        success: false,
+        message: paramsValidation.message,
+      });
+    }
+
+    // Validate status
+    if (!status) {
+      return res.status(400).json({
+        success: false,
+        message: 'Status is required',
+      });
+    }
+
+    // Validate status value
+    const validStatuses = [
+      'PLANNING',
+      'ACTIVE',
+      'ON_HOLD',
+      'COMPLETED',
+      'CANCELED',
+    ];
+    if (!validStatuses.includes(status)) {
+      return res.status(400).json({
+        success: false,
+        message: `Status must be one of: ${validStatuses.join(', ')}`,
+      });
+    }
+
+    // Check if organization exists
+    const orgResult = await checkOrganization(organizationId);
+    if (!orgResult.success) {
+      return res.status(404).json({
+        success: false,
+        message: orgResult.message,
+      });
+    }
+    const existingOrg = orgResult.organization;
+
+    // Check if team exists
+    const teamResult = await checkTeam(teamId, organizationId);
+    if (!teamResult.success) {
+      return res.status(404).json({
+        success: false,
+        message: teamResult.message,
+      });
+    }
+    const team = teamResult.team;
+
+    // Check if project exists
+    const existingProject = await prisma.project.findFirst({
+      where: {
+        id: projectId,
+        teamId: teamId,
+        organizationId: organizationId,
+        deletedAt: null,
+      },
+    });
+
+    if (!existingProject) {
+      return res.status(404).json({
+        success: false,
+        message: 'Project not found',
+      });
+    }
+
+    // Check permissions
+    const permissionCheck = checkTeamPermissions(
+      req.user,
+      existingOrg,
+      team,
+      'update status of',
+    );
+
+    // Check if user is a project member with appropriate rights
+    const projectMembership = await prisma.projectMember.findFirst({
+      where: {
+        projectId: projectId,
+        userId: req.user.id,
+        isActive: true,
+        role: {
+          in: ['PROJECT_OWNER', 'PROJECT_MANAGER'],
+        },
+      },
+    });
+
+    const hasPermission = permissionCheck.success || projectMembership !== null;
+
+    if (!hasPermission) {
+      return res.status(403).json({
+        success: false,
+        message: "You do not have permission to update this project's status",
+      });
+    }
+
+    // If status is the same, no need to update
+    if (existingProject.status === status) {
+      return res.status(200).json({
+        success: true,
+        message: 'Project status remains unchanged',
+        data: existingProject,
+      });
+    }
+
+    // Update the project status
+    const updatedProject = await prisma.project.update({
+      where: { id: projectId },
+      data: {
+        status,
+        lastModifiedBy: req.user.id,
+      },
+    });
+
+    res.status(200).json({
+      success: true,
+      message: 'Project status updated successfully',
+      data: updatedProject,
+    });
+  } catch (error) {
+    next(error);
+  }
+};
diff --git a/src/docs/swagger.json b/src/docs/swagger.json
index b8e908f..acdd4af 100644
--- a/src/docs/swagger.json
+++ b/src/docs/swagger.json
@@ -3394,6 +3394,157 @@
           }
         ]
       }
+    },
+    "/api/organization/{organizationId}/team/{teamId}/project/{projectId}/status": {
+      "patch": {
+        "tags": ["project"],
+        "summary": "Update project status",
+        "description": "Updates the status of an existing project. Requires appropriate permissions (admin, organization owner, team manager, or project owner/manager).",
+        "parameters": [
+          {
+            "name": "organizationId",
+            "in": "path",
+            "description": "Organization ID",
+            "required": true,
+            "schema": {
+              "type": "string"
+            }
+          },
+          {
+            "name": "teamId",
+            "in": "path",
+            "description": "Team ID",
+            "required": true,
+            "schema": {
+              "type": "string"
+            }
+          },
+          {
+            "name": "projectId",
+            "in": "path",
+            "description": "Project ID",
+            "required": true,
+            "schema": {
+              "type": "string"
+            }
+          }
+        ],
+        "requestBody": {
+          "required": true,
+          "content": {
+            "application/json": {
+              "schema": {
+                "type": "object",
+                "required": ["status"],
+                "properties": {
+                  "status": {
+                    "type": "string",
+                    "description": "New project status",
+                    "enum": [
+                      "PLANNING",
+                      "ACTIVE",
+                      "ON_HOLD",
+                      "COMPLETED",
+                      "CANCELED"
+                    ],
+                    "example": "ACTIVE"
+                  }
+                }
+              }
+            }
+          }
+        },
+        "responses": {
+          "200": {
+            "description": "Project status updated successfully",
+            "content": {
+              "application/json": {
+                "schema": {
+                  "type": "object",
+                  "properties": {
+                    "success": {
+                      "type": "boolean",
+                      "example": true
+                    },
+                    "message": {
+                      "type": "string",
+                      "example": "Project status updated successfully"
+                    },
+                    "data": {
+                      "$ref": "#/components/schemas/ProjectBasic"
+                    }
+                  }
+                }
+              }
+            }
+          },
+          "400": {
+            "description": "Bad request - Invalid status or missing status field",
+            "content": {
+              "application/json": {
+                "schema": {
+                  "type": "object",
+                  "properties": {
+                    "success": {
+                      "type": "boolean",
+                      "example": false
+                    },
+                    "message": {
+                      "type": "string",
+                      "example": "Status is required or must be one of: PLANNING, ACTIVE, ON_HOLD, COMPLETED, CANCELED"
+                    }
+                  }
+                }
+              }
+            }
+          },
+          "403": {
+            "description": "Forbidden - Insufficient permissions",
+            "content": {
+              "application/json": {
+                "schema": {
+                  "type": "object",
+                  "properties": {
+                    "success": {
+                      "type": "boolean",
+                      "example": false
+                    },
+                    "message": {
+                      "type": "string",
+                      "example": "You do not have permission to update this project's status"
+                    }
+                  }
+                }
+              }
+            }
+          },
+          "404": {
+            "description": "Not found - Organization, team or project not found",
+            "content": {
+              "application/json": {
+                "schema": {
+                  "type": "object",
+                  "properties": {
+                    "success": {
+                      "type": "boolean",
+                      "example": false
+                    },
+                    "message": {
+                      "type": "string",
+                      "example": "Project not found"
+                    }
+                  }
+                }
+              }
+            }
+          }
+        },
+        "security": [
+          {
+            "bearerAuth": []
+          }
+        ]
+      }
     }
   },
 
diff --git a/src/routes/project.routes.js b/src/routes/project.routes.js
index d0daef5..67bd439 100644
--- a/src/routes/project.routes.js
+++ b/src/routes/project.routes.js
@@ -3,6 +3,7 @@ import { verifyAccessToken } from '../middlewares/auth.middleware.js';
 import {
   createProject,
   updateProject,
+  updateProjectStatus,
 } from '../controllers/project.controller.js';
 
 const router = Router();
@@ -19,4 +20,10 @@ router.put(
   updateProject,
 );
 
+router.patch(
+  '/api/organization/:organizationId/team/:teamId/project/:projectId/status',
+  verifyAccessToken,
+  updateProjectStatus,
+);
+
 export default router;