diff --git a/scripts/fixtures/sample-settings.json b/scripts/fixtures/sample-settings.json
new file mode 100644
index 0000000..e32fdf3
--- /dev/null
+++ b/scripts/fixtures/sample-settings.json
@@ -0,0 +1,16 @@
+{
+  "theme": "dark",
+  "editorMode": "vscode",
+  "statusLine": "compact",
+  "enabledPlugins": {
+    "old-plugin@old-marketplace": true
+  },
+  "permissions": {
+    "allow": ["Bash(old:*)"],
+    "deny": [],
+    "ask": []
+  },
+  "hooks": {
+    "SessionStart": []
+  }
+}
diff --git a/scripts/lib/merge-settings.sh b/scripts/lib/merge-settings.sh
new file mode 100644
index 0000000..569e946
--- /dev/null
+++ b/scripts/lib/merge-settings.sh
@@ -0,0 +1,42 @@
+#!/usr/bin/env bash
+# Merge brain settings-fragment.json into consumer's settings.json
+# Replaces: enabledPlugins, permissions, hooks
+# Preserves: theme, editorMode, statusLine, all other keys
+#
+# Usage: merge-settings.sh <consumer-settings.json> <brain-fragment.json>
+set -euo pipefail
+
+SCRIPT_DIR="$(cd "$(dirname "$0")" && pwd)"
+source "$SCRIPT_DIR/common.sh"
+
+target="$1"
+fragment="$2"
+
+require_cmd jq || exit 1
+[ -f "$fragment" ] || { log_error "Fragment not found: $fragment"; exit 1; }
+
+# If target doesn't exist, just copy fragment
+if [ ! -f "$target" ]; then
+    log_info "Target settings.json missing, creating from fragment"
+    cp "$fragment" "$target"
+    exit 0
+fi
+
+# Backup
+backup="${target}.bak.$(date +%s)"
+cp "$target" "$backup"
+
+# Merge: target.* keys preserved EXCEPT enabledPlugins/permissions/hooks — those are REPLACED
+# (not deep-merged) from fragment. Use --slurpfile to load fragment into $frag.
+tmp="${target}.tmp"
+jq --slurpfile frag "$fragment" \
+   '.enabledPlugins = $frag[0].enabledPlugins
+    | .permissions  = $frag[0].permissions
+    | .hooks        = $frag[0].hooks' \
+    "$target" > "$tmp"
+
+# Validate output JSON
+jq empty "$tmp" || { log_error "Merge produced invalid JSON"; rm "$tmp"; exit 1; }
+
+mv "$tmp" "$target"
+log_info "settings.json merged (backup: $backup)"
diff --git a/scripts/tests/merge-settings-test.sh b/scripts/tests/merge-settings-test.sh
new file mode 100644
index 0000000..214b25d
--- /dev/null
+++ b/scripts/tests/merge-settings-test.sh
@@ -0,0 +1,64 @@
+#!/usr/bin/env bash
+set -u
+SCRIPT_DIR="$(cd "$(dirname "$0")/.." && pwd)"
+source "$SCRIPT_DIR/lib/common.sh"
+
+FAILURES=0
+assert_eq() {
+    local expected="$1" actual="$2" name="$3"
+    if [ "$expected" = "$actual" ]; then
+        echo "PASS: $name"
+    else
+        echo "FAIL: $name (expected '$expected', got '$actual')"
+        FAILURES=$((FAILURES + 1))
+    fi
+}
+
+# Setup: temp consumer settings + brain fragment
+tmpdir=$(mktemp -d)
+cp "$SCRIPT_DIR/fixtures/sample-settings.json" "$tmpdir/settings.json"
+cat > "$tmpdir/fragment.json" <<EOF2
+{
+  "enabledPlugins": {
+    "new-plugin@new-mp": true
+  },
+  "permissions": {
+    "allow": ["Bash(new:*)"],
+    "deny": ["Bash(rm:*)"],
+    "ask": []
+  },
+  "hooks": {
+    "SessionStart": [{"hooks": [{"type": "command", "command": "echo new"}]}]
+  }
+}
+EOF2
+
+# Run merge
+bash "$SCRIPT_DIR/lib/merge-settings.sh" "$tmpdir/settings.json" "$tmpdir/fragment.json"
+
+# Test 1: theme preserved
+theme=$(jq -r '.theme' "$tmpdir/settings.json")
+assert_eq "dark" "$theme" "theme preserved"
+
+# Test 2: editorMode preserved
+em=$(jq -r '.editorMode' "$tmpdir/settings.json")
+assert_eq "vscode" "$em" "editorMode preserved"
+
+# Test 3: enabledPlugins replaced (not merged)
+plugins=$(jq -r '.enabledPlugins | keys[]' "$tmpdir/settings.json")
+assert_eq "new-plugin@new-mp" "$plugins" "enabledPlugins replaced with brain version"
+
+# Test 4: permissions.deny populated from fragment
+deny=$(jq -r '.permissions.deny[0]' "$tmpdir/settings.json")
+assert_eq "Bash(rm:*)" "$deny" "permissions.deny from fragment"
+
+# Test 5: hooks replaced
+hook_cmd=$(jq -r '.hooks.SessionStart[0].hooks[0].command' "$tmpdir/settings.json")
+assert_eq "echo new" "$hook_cmd" "hooks replaced with brain version"
+
+# Cleanup
+rm -rf "$tmpdir"
+
+echo "---"
+echo "Failures: $FAILURES"
+exit $FAILURES