diff --git a/apps/controller-ext/src/actions/bookmark/UpdateBookmarkAction.ts b/apps/controller-ext/src/actions/bookmark/UpdateBookmarkAction.ts
new file mode 100644
index 00000000..7739087c
--- /dev/null
+++ b/apps/controller-ext/src/actions/bookmark/UpdateBookmarkAction.ts
@@ -0,0 +1,82 @@
+/**
+ * @license
+ * Copyright 2025 BrowserOS
+ * SPDX-License-Identifier: AGPL-3.0-or-later
+ */
+import { z } from 'zod'
+import { BookmarkAdapter } from '@/adapters/BookmarkAdapter'
+import { ActionHandler } from '../ActionHandler'
+
+// Input schema
+const UpdateBookmarkInputSchema = z.object({
+  id: z.string().describe('Bookmark ID to update'),
+  title: z.string().optional().describe('New bookmark title'),
+  url: z.string().url().optional().describe('New bookmark URL'),
+})
+
+// Output schema
+const UpdateBookmarkOutputSchema = z.object({
+  id: z.string().describe('Bookmark ID'),
+  title: z.string().describe('Updated bookmark title'),
+  url: z.string().optional().describe('Updated bookmark URL'),
+})
+
+type UpdateBookmarkInput = z.infer<typeof UpdateBookmarkInputSchema>
+type UpdateBookmarkOutput = z.infer<typeof UpdateBookmarkOutputSchema>
+
+/**
+ * UpdateBookmarkAction - Update a bookmark's title or URL
+ *
+ * Updates an existing bookmark with new title and/or URL.
+ *
+ * Input:
+ * - id: Bookmark ID to update
+ * - title (optional): New title for the bookmark
+ * - url (optional): New URL for the bookmark
+ *
+ * Output:
+ * - id: Bookmark ID
+ * - title: Updated title
+ * - url: Updated URL
+ *
+ * Usage:
+ * Update a bookmark's title or URL (at least one must be provided).
+ *
+ * Example:
+ * {
+ *   "id": "123",
+ *   "title": "New Title",
+ *   "url": "https://www.example.com"
+ * }
+ * // Returns: { id: "123", title: "New Title", url: "https://www.example.com" }
+ */
+export class UpdateBookmarkAction extends ActionHandler<
+  UpdateBookmarkInput,
+  UpdateBookmarkOutput
+> {
+  readonly inputSchema = UpdateBookmarkInputSchema
+  private bookmarkAdapter = new BookmarkAdapter()
+
+  async execute(input: UpdateBookmarkInput): Promise<UpdateBookmarkOutput> {
+    const changes: { title?: string; url?: string } = {}
+
+    if (input.title !== undefined) {
+      changes.title = input.title
+    }
+    if (input.url !== undefined) {
+      changes.url = input.url
+    }
+
+    if (Object.keys(changes).length === 0) {
+      throw new Error('At least one of title or url must be provided')
+    }
+
+    const updated = await this.bookmarkAdapter.updateBookmark(input.id, changes)
+
+    return {
+      id: updated.id,
+      title: updated.title,
+      url: updated.url,
+    }
+  }
+}
diff --git a/apps/controller-ext/src/background/BrowserOSController.ts b/apps/controller-ext/src/background/BrowserOSController.ts
index 5a59cd25..f023588a 100644
--- a/apps/controller-ext/src/background/BrowserOSController.ts
+++ b/apps/controller-ext/src/background/BrowserOSController.ts
@@ -11,6 +11,7 @@ import { GetBookmarksAction } from '@/actions/bookmark/GetBookmarksAction'
 import { MoveBookmarkAction } from '@/actions/bookmark/MoveBookmarkAction'
 import { RemoveBookmarkAction } from '@/actions/bookmark/RemoveBookmarkAction'
 import { RemoveBookmarkTreeAction } from '@/actions/bookmark/RemoveBookmarkTreeAction'
+import { UpdateBookmarkAction } from '@/actions/bookmark/UpdateBookmarkAction'
 import { CaptureScreenshotAction } from '@/actions/browser/CaptureScreenshotAction'
 import { CaptureScreenshotPointerAction } from '@/actions/browser/CaptureScreenshotPointerAction'
 import { ClearAction } from '@/actions/browser/ClearAction'
@@ -204,6 +205,7 @@ export class BrowserOSController {
     this.actionRegistry.register('getBookmarks', new GetBookmarksAction())
     this.actionRegistry.register('createBookmark', new CreateBookmarkAction())
     this.actionRegistry.register('removeBookmark', new RemoveBookmarkAction())
+    this.actionRegistry.register('updateBookmark', new UpdateBookmarkAction())
     this.actionRegistry.register(
       'createBookmarkFolder',
       new CreateBookmarkFolderAction(),
diff --git a/apps/server/src/agent/prompt.ts b/apps/server/src/agent/prompt.ts
index 8c2ec72b..052fe69d 100644
--- a/apps/server/src/agent/prompt.ts
+++ b/apps/server/src/agent/prompt.ts
@@ -135,10 +135,25 @@ When user asks to "organize tabs", "group tabs", or "clean up tabs":
 
 Use when built-in tools cannot accomplish the task.
 
-## Bookmarks & History
-- \`browser_get_bookmarks(folderId?)\` - Get bookmarks
-- \`browser_create_bookmark(title, url, parentId?)\` - Create bookmark
+## Bookmarks
+- \`browser_get_bookmarks(folderId?)\` - Get all bookmarks or from specific folder
+- \`browser_create_bookmark(title, url, parentId?)\` - Create bookmark (use parentId to place in folder)
+- \`browser_update_bookmark(bookmarkId, title?, url?)\` - Edit bookmark title or URL
 - \`browser_remove_bookmark(bookmarkId)\` - Delete bookmark
+- \`browser_create_bookmark_folder(title, parentId?)\` - Create folder (returns folderId to use as parentId)
+- \`browser_get_bookmark_children(folderId)\` - Get contents of a folder
+- \`browser_move_bookmark(bookmarkId, parentId?, index?)\` - Move bookmark or folder to new location
+- \`browser_remove_bookmark_tree(folderId, confirm)\` - Delete folder and all contents
+
+**Organizing bookmarks into folders:**
+\`\`\`
+1. browser_create_bookmark_folder("Work") → folderId: "123"
+2. browser_create_bookmark("Docs", "https://docs.google.com", parentId="123")
+3. browser_move_bookmark(existingBookmarkId, parentId="123")
+\`\`\`
+Use \`browser_get_bookmarks\` to find existing folder IDs, or create new folders with \`browser_create_bookmark_folder\`.
+
+## History
 - \`browser_search_history(query, maxResults?)\` - Search history
 - \`browser_get_recent_history(count?)\` - Recent history
 
diff --git a/apps/server/src/tools/controller-based/registry.ts b/apps/server/src/tools/controller-based/registry.ts
index 56235627..ca488906 100644
--- a/apps/server/src/tools/controller-based/registry.ts
+++ b/apps/server/src/tools/controller-based/registry.ts
@@ -20,6 +20,7 @@ export {
   moveBookmark,
   removeBookmark,
   removeBookmarkTree,
+  updateBookmark,
 } from './tools/bookmarks'
 // Content Extraction
 export { getPageContent } from './tools/content'
@@ -77,6 +78,7 @@ import {
   moveBookmark,
   removeBookmark,
   removeBookmarkTree,
+  updateBookmark,
 } from './tools/bookmarks'
 import { getPageContent } from './tools/content'
 import { clickCoordinates, typeAtCoordinates } from './tools/coordinates'
@@ -106,7 +108,7 @@ import {
 } from './tools/tab-management'
 import { createWindow } from './tools/window-management'
 
-// Array export for convenience (36 tools total)
+// Array export for convenience (37 tools total)
 export const allControllerTools = [
   getActiveTab,
   listTabs,
@@ -142,6 +144,7 @@ export const allControllerTools = [
   getBookmarkChildren,
   moveBookmark,
   removeBookmarkTree,
+  updateBookmark,
   searchHistory,
   getRecentHistory,
   createWindow,
diff --git a/apps/server/src/tools/controller-based/tools/bookmarks.ts b/apps/server/src/tools/controller-based/tools/bookmarks.ts
index d108f016..fda5bd46 100644
--- a/apps/server/src/tools/controller-based/tools/bookmarks.ts
+++ b/apps/server/src/tools/controller-based/tools/bookmarks.ts
@@ -60,7 +60,8 @@ export const getBookmarks = defineTool<z.ZodRawShape, Context, Response>({
 
 export const createBookmark = defineTool<z.ZodRawShape, Context, Response>({
   name: 'browser_create_bookmark',
-  description: 'Create a new bookmark',
+  description:
+    'Create a new bookmark. Use parentId to place it inside an existing folder or a newly created one.',
   annotations: {
     category: ToolCategories.BOOKMARKS,
     readOnlyHint: false,
@@ -68,7 +69,12 @@ export const createBookmark = defineTool<z.ZodRawShape, Context, Response>({
   schema: {
     title: z.string().describe('Bookmark title'),
     url: z.string().describe('URL to bookmark'),
-    parentId: z.string().optional().describe('Optional parent folder ID'),
+    parentId: z
+      .string()
+      .optional()
+      .describe(
+        'Folder ID to create bookmark in (from browser_get_bookmarks or browser_create_bookmark_folder)',
+      ),
     windowId: z.number().optional().describe('Window ID for routing'),
   },
   handler: async (request, response, context) => {
@@ -116,13 +122,51 @@ export const removeBookmark = defineTool<z.ZodRawShape, Context, Response>({
   },
 })
 
+export const updateBookmark = defineTool<z.ZodRawShape, Context, Response>({
+  name: 'browser_update_bookmark',
+  description: 'Update a bookmark title or URL',
+  annotations: {
+    category: ToolCategories.BOOKMARKS,
+    readOnlyHint: false,
+  },
+  schema: {
+    bookmarkId: z.string().describe('Bookmark ID to update'),
+    title: z.string().optional().describe('New title for the bookmark'),
+    url: z.string().url().optional().describe('New URL for the bookmark'),
+    windowId: z.number().optional().describe('Window ID for routing'),
+  },
+  handler: async (request, response, context) => {
+    const { bookmarkId, title, url, windowId } = request.params as {
+      bookmarkId: string
+      title?: string
+      url?: string
+      windowId?: number
+    }
+
+    const result = await context.executeAction('updateBookmark', {
+      id: bookmarkId,
+      title,
+      url,
+      windowId,
+    })
+    const data = result as { id: string; title: string; url?: string }
+
+    response.appendResponseLine(`Updated bookmark: ${data.title}`)
+    if (data.url) {
+      response.appendResponseLine(`URL: ${data.url}`)
+    }
+    response.appendResponseLine(`ID: ${data.id}`)
+  },
+})
+
 export const createBookmarkFolder = defineTool<
   z.ZodRawShape,
   Context,
   Response
 >({
   name: 'browser_create_bookmark_folder',
-  description: 'Create a new bookmark folder',
+  description:
+    'Create a new bookmark folder. Returns folderId to use as parentId when creating or moving bookmarks into this folder.',
   annotations: {
     category: ToolCategories.BOOKMARKS,
     readOnlyHint: false,
@@ -214,14 +258,20 @@ export const getBookmarkChildren = defineTool<z.ZodRawShape, Context, Response>(
 
 export const moveBookmark = defineTool<z.ZodRawShape, Context, Response>({
   name: 'browser_move_bookmark',
-  description: 'Move a bookmark or folder to a new location',
+  description:
+    'Move a bookmark or folder into a different folder (existing or newly created).',
   annotations: {
     category: ToolCategories.BOOKMARKS,
     readOnlyHint: false,
   },
   schema: {
     bookmarkId: z.string().describe('Bookmark or folder ID to move'),
-    parentId: z.string().optional().describe('New parent folder ID'),
+    parentId: z
+      .string()
+      .optional()
+      .describe(
+        'Destination folder ID (from browser_get_bookmarks or browser_create_bookmark_folder)',
+      ),
     index: z
       .number()
       .int()
diff --git a/apps/server/tests/tools/controller-based/bookmarks.test.ts b/apps/server/tests/tools/controller-based/bookmarks.test.ts
index 0666fa9f..87d985dc 100644
--- a/apps/server/tests/tools/controller-based/bookmarks.test.ts
+++ b/apps/server/tests/tools/controller-based/bookmarks.test.ts
@@ -366,6 +366,190 @@ describe('MCP Controller Bookmark Tools', () => {
     }, 30000)
   })
 
+  describe('browser_update_bookmark - Success Cases', () => {
+    it('tests that updating bookmark title succeeds', async () => {
+      await withMcpServer(async (client) => {
+        // First create a bookmark
+        const createResult = await client.callTool({
+          name: 'browser_create_bookmark',
+          arguments: {
+            title: 'Original Title',
+            url: 'https://update.example.com',
+          },
+        })
+
+        const createText = createResult.content.find((c) => c.type === 'text')
+        const idMatch = createText.text.match(/ID: (\d+)/)
+        const bookmarkId = idMatch ? idMatch[1] : '1'
+
+        // Update the title
+        const result = await client.callTool({
+          name: 'browser_update_bookmark',
+          arguments: {
+            bookmarkId,
+            title: 'Updated Title',
+          },
+        })
+
+        console.log('\n=== Update Bookmark Title Response ===')
+        console.log(JSON.stringify(result, null, 2))
+
+        assert.ok(!result.isError, 'Should succeed')
+
+        const textContent = result.content.find((c) => c.type === 'text')
+        assert.ok(textContent, 'Should have text content')
+        assert.ok(
+          textContent.text.includes('Updated bookmark'),
+          'Should confirm update',
+        )
+        assert.ok(
+          textContent.text.includes('Updated Title'),
+          'Should include new title',
+        )
+
+        // Cleanup
+        await client.callTool({
+          name: 'browser_remove_bookmark',
+          arguments: { bookmarkId },
+        })
+      })
+    }, 30000)
+
+    it('tests that updating bookmark URL succeeds', async () => {
+      await withMcpServer(async (client) => {
+        // First create a bookmark
+        const createResult = await client.callTool({
+          name: 'browser_create_bookmark',
+          arguments: {
+            title: 'URL Test',
+            url: 'https://old-url.example.com',
+          },
+        })
+
+        const createText = createResult.content.find((c) => c.type === 'text')
+        const idMatch = createText.text.match(/ID: (\d+)/)
+        const bookmarkId = idMatch ? idMatch[1] : '1'
+
+        // Update the URL
+        const result = await client.callTool({
+          name: 'browser_update_bookmark',
+          arguments: {
+            bookmarkId,
+            url: 'https://new-url.example.com',
+          },
+        })
+
+        console.log('\n=== Update Bookmark URL Response ===')
+        console.log(JSON.stringify(result, null, 2))
+
+        assert.ok(!result.isError, 'Should succeed')
+
+        const textContent = result.content.find((c) => c.type === 'text')
+        assert.ok(textContent, 'Should have text content')
+        assert.ok(
+          textContent.text.includes('https://new-url.example.com'),
+          'Should include new URL',
+        )
+
+        // Cleanup
+        await client.callTool({
+          name: 'browser_remove_bookmark',
+          arguments: { bookmarkId },
+        })
+      })
+    }, 30000)
+
+    it('tests that updating both title and URL succeeds', async () => {
+      await withMcpServer(async (client) => {
+        // First create a bookmark
+        const createResult = await client.callTool({
+          name: 'browser_create_bookmark',
+          arguments: {
+            title: 'Original',
+            url: 'https://original.example.com',
+          },
+        })
+
+        const createText = createResult.content.find((c) => c.type === 'text')
+        const idMatch = createText.text.match(/ID: (\d+)/)
+        const bookmarkId = idMatch ? idMatch[1] : '1'
+
+        // Update both
+        const result = await client.callTool({
+          name: 'browser_update_bookmark',
+          arguments: {
+            bookmarkId,
+            title: 'New Title',
+            url: 'https://new.example.com',
+          },
+        })
+
+        console.log('\n=== Update Bookmark Both Response ===')
+        console.log(JSON.stringify(result, null, 2))
+
+        assert.ok(!result.isError, 'Should succeed')
+
+        const textContent = result.content.find((c) => c.type === 'text')
+        assert.ok(textContent, 'Should have text content')
+        assert.ok(
+          textContent.text.includes('New Title'),
+          'Should include new title',
+        )
+        assert.ok(
+          textContent.text.includes('https://new.example.com'),
+          'Should include new URL',
+        )
+
+        // Cleanup
+        await client.callTool({
+          name: 'browser_remove_bookmark',
+          arguments: { bookmarkId },
+        })
+      })
+    }, 30000)
+  })
+
+  describe('browser_update_bookmark - Error Handling', () => {
+    it('tests that missing bookmarkId is rejected', async () => {
+      await withMcpServer(async (client) => {
+        try {
+          await client.callTool({
+            name: 'browser_update_bookmark',
+            arguments: { title: 'Test' },
+          })
+          assert.fail('Should have thrown validation error')
+        } catch (error) {
+          console.log('\n=== Update Bookmark Missing ID Error ===')
+          console.log(error.message)
+
+          assert.ok(
+            error.message.includes('Invalid arguments') ||
+              error.message.includes('Required'),
+            'Should reject with validation error',
+          )
+        }
+      })
+    }, 30000)
+
+    it('tests that invalid bookmarkId is handled', async () => {
+      await withMcpServer(async (client) => {
+        const result = await client.callTool({
+          name: 'browser_update_bookmark',
+          arguments: {
+            bookmarkId: '999999999',
+            title: 'Test',
+          },
+        })
+
+        console.log('\n=== Update Invalid Bookmark Response ===')
+        console.log(JSON.stringify(result, null, 2))
+
+        // Should error with invalid ID
+        assert.ok(result, 'Should return a result')
+      })
+    }, 30000)
+  })
+
   describe('Bookmark Tools - Response Structure Validation', () => {
     it('tests that bookmark tools return valid MCP response structure', async () => {
       await withMcpServer(async (client) => {