diff --git a/docs/concepts/memory-migration.md b/docs/concepts/memory-migration.md
new file mode 100644
index 000000000..538183b3b
--- /dev/null
+++ b/docs/concepts/memory-migration.md
@@ -0,0 +1,172 @@
+---
+summary: "Migration guide for hierarchical memory structure (flat → YYYY/MM/)"
+read_when:
+  - Upgrading from older Moltbot versions
+  - Understanding memory file format changes
+---
+
+# Memory Migration Guide
+
+## Overview
+
+Moltbot now uses a **hierarchical memory structure** for better scalability:
+
+**Before (flat):**
+```
+memory/2025-01-27.md
+memory/2025-01-26-conversation.md
+...365+ files in one directory per year
+```
+
+**After (hierarchical):**
+```
+memory/2025/01/2025-01-27.md
+memory/2025/01/2025-01-26-conversation.md
+...max 31 files per directory
+```
+
+## Why This Change?
+
+The flat structure worked well for small memory sets, but caused issues over time:
+
+- **Filesystem performance**: 1000+ files in one directory slows down filesystem operations
+- **Navigation difficulty**: Hard to find files manually
+- **No natural segmentation**: Cannot easily archive by month/year
+
+The hierarchical structure solves all these issues.
+
+---
+
+## Backward Compatibility
+
+**Good news:** Moltbot automatically migrates old-format files.
+
+### How It Works
+
+When Moltbot encounters an old-format file (`memory/YYYY-MM-DD.md`):
+
+1. **Detects** the old format
+2. **Creates** the new directory structure (`memory/YYYY/MM/`)
+3. **Copies** the file to the new location
+4. **Logs** the migration
+5. **Uses** the new file going forward
+
+The old file is kept as a backup (not deleted automatically).
+
+### What You Need to Do
+
+**Nothing.** Migration is automatic and transparent.
+
+When you:
+- Search memory → old files are migrated automatically
+- Read memory → migrated files are used
+- Write memory → new format is used
+
+---
+
+## Migration Examples
+
+### Example 1: Automatic Migration
+
+You have a file at `memory/2025-01-27.md`.
+
+When Moltbot reads memory:
+```
+[memory] Migrated old-format memory file: 2025-01-27.md -> memory/2025/01/2025-01-27.md
+```
+
+File is now at: `memory/2025/01/2025-01-27.md`
+
+### Example 2: Slug Files
+
+You have `memory/2025-01-27-discussion.md`.
+
+Migration creates:
+```
+memory/2025/01/2025-01-27-discussion.md
+```
+
+### Example 3: Existing New-Format Files
+
+If `memory/2025/01/2025-01-27.md` already exists:
+- Migration skips the old file
+- New file is kept (no overwrite)
+- Warning logged
+
+---
+
+## Rolling Back
+
+If you need to revert to the old format:
+
+1. **Stop** Moltbot
+2. **Delete** the `memory/YYYY/` directories
+3. **Restore** from backup (if you kept one)
+4. **Restart** Moltbot
+
+**Note:** Old-format files are not deleted during migration, so you may have both formats present temporarily.
+
+---
+
+## Troubleshooting
+
+### Migration Fails
+
+If migration fails for a file:
+- Check file permissions
+- Ensure workspace directory is writable
+- Check logs for specific error messages
+
+### Files Not Found After Migration
+
+If memory files seem missing:
+- Check new location: `memory/YYYY/MM/`
+- Old files still exist in `memory/` (backup)
+- Memory search works across both formats
+
+### Performance Issues After Migration
+
+If you still see performance issues:
+- Run `moltbot memory status` to check index
+- Rebuild index: `moltbot memory index --force`
+- Check disk space
+
+---
+
+## Timeline
+
+| Version | Status |
+|---------|--------|
+| **Current** | Both formats supported, automatic migration |
+| **Future +1** | Warning: old format deprecated |
+| **Future +2** | Error: old format not supported |
+| **Future +3** | Old format removed |
+
+**Recommendation:** No immediate action needed. Migration is automatic.
+
+---
+
+## FAQ
+
+**Q: Will my old memory files be deleted?**
+A: No. Old files are kept as backup.
+
+**Q: Do I need to update my scripts?**
+A: No. Moltbot handles both formats transparently.
+
+**Q: What if I have both formats?**
+A: New format takes precedence. Old format is ignored if new exists.
+
+**Q: Can I keep using the old format?**
+A: Yes, for now. Old format will be deprecated in future versions.
+
+**Q: How do I know if migration happened?**
+A: Check logs for `[memory] Migrated old-format memory file` messages.
+
+---
+
+## See Also
+
+- [Memory](/concepts/memory) - Memory system overview
+- [`moltbot memory`](/cli/memory) - CLI commands for memory management
+- [Agent Workspace](/concepts/agent-workspace) - Workspace structure
diff --git a/docs/concepts/memory.md b/docs/concepts/memory.md
index f2bca461a..d459766e2 100644
--- a/docs/concepts/memory.md
+++ b/docs/concepts/memory.md
@@ -16,8 +16,8 @@ Memory search tools are provided by the active memory plugin (default:
 
 The default workspace layout uses two memory layers:
 
-- `memory/YYYY-MM-DD.md`
-  - Daily log (append-only).
+- `memory/YYYY/MM/YYYY-MM-DD.md`
+  - Daily log (append-only), organized by year/month hierarchy.
   - Read today + yesterday at session start.
 - `MEMORY.md` (optional)
   - Curated long-term memory.
@@ -29,7 +29,7 @@ These files live under the workspace (`agents.defaults.workspace`, default
 ## When to write memory
 
 - Decisions, preferences, and durable facts go to `MEMORY.md`.
-- Day-to-day notes and running context go to `memory/YYYY-MM-DD.md`.
+- Day-to-day notes and running context go to `memory/YYYY/MM/YYYY-MM-DD.md`.
 - If someone says "remember this," write it down (do not keep it in RAM).
 - This area is still evolving. It helps to remind the model to store memories; it will know what to do.
 - If you want something to stick, **ask the bot to write it** into memory.
@@ -53,7 +53,7 @@ This is controlled by `agents.defaults.compaction.memoryFlush`:
           enabled: true,
           softThresholdTokens: 4000,
           systemPrompt: "Session nearing compaction. Store durable memories now.",
-          prompt: "Write any lasting notes to memory/YYYY-MM-DD.md; reply with NO_REPLY if nothing to store."
+          prompt: "Write any lasting notes to memory/YYYY/MM/YYYY-MM-DD.md; reply with NO_REPLY if nothing to store."
         }
       }
     }
@@ -408,3 +408,50 @@ agents: {
 Notes:
 - `remote.*` takes precedence over `models.providers.openai.*`.
 - `remote.headers` merge with OpenAI headers; remote wins on key conflicts. Omit `remote.headers` to use the OpenAI defaults.
+
+---
+
+## Backward Compatibility & Migration
+
+Moltbot supports **automatic migration** from the old memory format to the new hierarchical structure.
+
+### Old Format vs New Format
+
+**Old (flat):**
+```
+memory/2025-01-27.md
+memory/2025-01-26-conversation.md
+```
+
+**New (hierarchical):**
+```
+memory/2025/01/2025-01-27.md
+memory/2025/01/2025-01-26-conversation.md
+```
+
+### Automatic Migration
+
+When Moltbot encounters old-format files:
+1. Detects the old format
+2. Creates `memory/YYYY/MM/` directories
+3. Copies files to new location
+4. Uses new format going forward
+
+**Old files are not deleted** — they're kept as backup.
+
+### What You Need to Do
+
+**Nothing.** Migration is transparent and automatic.
+
+Memory search, read, and write operations work seamlessly across both formats.
+
+### Deprecation Timeline
+
+| Version | Old Format Support |
+|---------|-------------------|
+| **Current** | ✅ Fully supported, automatic migration |
+| **Future +1** | ⚠️ Deprecated warning |
+| **Future +2** | ❌ Not supported (error) |
+| **Future +3** | 🗑️ Removed from codebase |
+
+**See:** [Memory Migration Guide](/concepts/memory-migration) for detailed migration instructions.
diff --git a/docs/help/faq.md b/docs/help/faq.md
index 7372a4997..d779b509f 100644
--- a/docs/help/faq.md
+++ b/docs/help/faq.md
@@ -1122,7 +1122,7 @@ Set `agents.defaults.sandbox.docker.binds` to `["host:path:mode"]` (e.g., `"/hom
 ### How does memory work
 
 Moltbot memory is just Markdown files in the agent workspace:
-- Daily notes in `memory/YYYY-MM-DD.md`
+- Daily notes in `memory/YYYY/MM/YYYY-MM-DD.md`
 - Curated long-term notes in `MEMORY.md` (main/private sessions only)
 
 Moltbot also runs a **silent pre-compaction memory flush** to remind the model
@@ -1132,7 +1132,7 @@ is writable (read-only sandboxes skip it). See [Memory](/concepts/memory).
 ### Memory keeps forgetting things How do I make it stick
 
 Ask the bot to **write the fact to memory**. Long-term notes belong in `MEMORY.md`,
-short-term context goes into `memory/YYYY-MM-DD.md`.
+short-term context goes into `memory/YYYY/MM/YYYY-MM-DD.md`.
 
 This is still an area we are improving. It helps to remind the model to store memories;
 it will know what to do. If it keeps forgetting, verify the Gateway is using the same
@@ -1147,6 +1147,36 @@ does **not** grant embeddings access, so **signing in with Codex (OAuth or the
 Codex CLI login)** does not help for semantic memory search. OpenAI embeddings
 still need a real API key (`OPENAI_API_KEY` or `models.providers.openai.apiKey`).
 
+### How do I migrate my old memory files to the new format
+
+Moltbot **automatically migrates** old-format memory files.
+
+If you have files in the old format (`memory/YYYY-MM-DD.md`), Moltbot will:
+1. Detect them automatically
+2. Create new directories (`memory/YYYY/MM/`)
+3. Copy files to the new location
+4. Use the new format going forward
+
+**Old files are not deleted** — they're kept as backup.
+
+**Docs:** [Memory Migration Guide](/concepts/memory-migration)
+
+### Will my old memory files still work after upgrading
+
+**Yes.** Moltbot supports both old and new memory formats with automatic migration.
+
+- Memory search works across both formats
+- Old files are automatically migrated when accessed
+- No manual action required
+
+**Timeline:**
+- Current version: Both formats supported
+- Future +1: Old format deprecated (warning)
+- Future +2: Old format not supported (error)
+- Future +3: Old format removed
+
+**See:** [Memory Migration Guide](/concepts/memory-migration) for details.
+
 If you don’t set a provider explicitly, Moltbot auto-selects a provider when it
 can resolve an API key (auth profiles, `models.providers.*.apiKey`, or env vars).
 It prefers OpenAI if an OpenAI key resolves, otherwise Gemini if a Gemini key
@@ -1209,7 +1239,7 @@ Your **workspace** (AGENTS.md, memory files, skills, etc.) is separate and confi
 These files live in the **agent workspace**, not `~/.clawdbot`.
 
 - **Workspace (per agent)**: `AGENTS.md`, `SOUL.md`, `IDENTITY.md`, `USER.md`,
-  `MEMORY.md` (or `memory.md`), `memory/YYYY-MM-DD.md`, optional `HEARTBEAT.md`.
+  `MEMORY.md` (or `memory.md`), `memory/YYYY/MM/YYYY-MM-DD.md`, optional `HEARTBEAT.md`.
 - **State dir (`~/.clawdbot`)**: config, credentials, auth profiles, sessions, logs,
   and shared skills (`~/.clawdbot/skills`).
 
diff --git a/src/memory/index.test.ts b/src/memory/index.test.ts
index cccd1fa49..feb612cea 100644
--- a/src/memory/index.test.ts
+++ b/src/memory/index.test.ts
@@ -84,7 +84,7 @@ describe("memory index", () => {
     await result.manager.sync({ force: true });
     const results = await result.manager.search("alpha");
     expect(results.length).toBeGreaterThan(0);
-    expect(results[0]?.path).toContain("memory/2026-01-12.md");
+    expect(results[0]?.path).toContain("memory/2026/01/2026-01-12.md");
     const status = result.manager.status();
     expect(status.sourceCounts).toEqual(
       expect.arrayContaining([
@@ -254,7 +254,7 @@ describe("memory index", () => {
     await manager.sync({ force: true });
     const results = await manager.search("zebra");
     expect(results.length).toBeGreaterThan(0);
-    expect(results[0]?.path).toContain("memory/2026-01-12.md");
+    expect(results[0]?.path).toContain("memory/2026/01/2026-01-12.md");
   });
 
   it("hybrid weights can favor vector-only matches over keyword-only matches", async () => {
diff --git a/src/memory/internal.test.ts b/src/memory/internal.test.ts
index 7530d8e44..52b14731d 100644
--- a/src/memory/internal.test.ts
+++ b/src/memory/internal.test.ts
@@ -4,7 +4,14 @@ import path from "node:path";
 
 import { afterEach, beforeEach, describe, expect, it } from "vitest";
 
-import { chunkMarkdown, listMemoryFiles, normalizeExtraMemoryPaths } from "./internal.js";
+import {
+  chunkMarkdown,
+  isOldMemoryFormat,
+  listMemoryFiles,
+  migrateAllMemoryFiles,
+  migrateMemoryFile,
+  normalizeExtraMemoryPaths,
+} from "./internal.js";
 
 describe("normalizeExtraMemoryPaths", () => {
   it("trims, resolves, and dedupes paths", () => {
@@ -125,3 +132,300 @@ describe("chunkMarkdown", () => {
     }
   });
 });
+
+describe("isOldMemoryFormat", () => {
+  it("matches old-format date files", () => {
+    expect(isOldMemoryFormat("memory/2025-01-27.md")).toBe(true);
+    expect(isOldMemoryFormat("memory/2024-12-31.md")).toBe(true);
+    expect(isOldMemoryFormat("memory/2023-06-15.md")).toBe(true);
+  });
+
+  it("matches old-format date files with slugs", () => {
+    expect(isOldMemoryFormat("memory/2025-01-27-discussion.md")).toBe(true);
+    expect(isOldMemoryFormat("memory/2025-01-27-bug-fix.md")).toBe(true);
+    expect(isOldMemoryFormat("memory/2024-12-31-year-end.md")).toBe(true);
+  });
+
+  it("does not match new hierarchical format", () => {
+    expect(isOldMemoryFormat("memory/2025/01/2025-01-27.md")).toBe(false);
+    expect(isOldMemoryFormat("memory/2025/01/2025-01-27-discussion.md")).toBe(false);
+    expect(isOldMemoryFormat("memory/2024/12/2024-12-31.md")).toBe(false);
+  });
+
+  it("does not match MEMORY.md or memory.md", () => {
+    expect(isOldMemoryFormat("MEMORY.md")).toBe(false);
+    expect(isOldMemoryFormat("memory.md")).toBe(false);
+  });
+
+  it("does not match invalid date patterns", () => {
+    expect(isOldMemoryFormat("memory/2025-1-27.md")).toBe(false); // single digit month
+    expect(isOldMemoryFormat("memory/25-01-27.md")).toBe(false); // 2-digit year
+    expect(isOldMemoryFormat("memory/2025-01-27")).toBe(false); // no .md extension
+    expect(isOldMemoryFormat("memory/2025-01-27.txt")).toBe(false); // wrong extension
+    expect(isOldMemoryFormat("memory/notes/2025-01-27.md")).toBe(false); // subdirectory
+  });
+
+  it("does not match files outside memory directory", () => {
+    expect(isOldMemoryFormat("2025-01-27.md")).toBe(false);
+    expect(isOldMemoryFormat("notes/2025-01-27.md")).toBe(false);
+  });
+});
+
+describe("migrateMemoryFile", () => {
+  let tempDir: string;
+  const logger = {
+    info: () => {},
+    warn: () => {},
+    error: () => {},
+  };
+
+  beforeEach(async () => {
+    tempDir = await fs.mkdtemp(path.join(os.tmpdir(), "memory-migration-test-"));
+    await fs.mkdir(path.join(tempDir, "memory"), { recursive: true });
+  });
+
+  afterEach(async () => {
+    await fs.rm(tempDir, { recursive: true, force: true });
+  });
+
+  it("migrates old-format file to new location", async () => {
+    const oldPath = path.join(tempDir, "memory", "2025-01-27.md");
+    await fs.writeFile(oldPath, "# Test content\n", "utf-8");
+
+    const result = await migrateMemoryFile(oldPath, tempDir, logger);
+
+    expect(result.status).toBe("migrated");
+    expect(result.path).toBe(path.join(tempDir, "memory", "2025", "01", "2025-01-27.md"));
+
+    // Verify new file exists
+    const newContent = await fs.readFile(result.path, "utf-8");
+    expect(newContent).toBe("# Test content\n");
+
+    // Verify old file still exists (backup)
+    const oldExists = await fs
+      .access(oldPath)
+      .then(() => true)
+      .catch(() => false);
+    expect(oldExists).toBe(true);
+  });
+
+  it("migrates file with slug", async () => {
+    const oldPath = path.join(tempDir, "memory", "2025-01-27-discussion.md");
+    await fs.writeFile(oldPath, "# Discussion\n", "utf-8");
+
+    const result = await migrateMemoryFile(oldPath, tempDir, logger);
+
+    expect(result.status).toBe("migrated");
+    expect(result.path).toBe(
+      path.join(tempDir, "memory", "2025", "01", "2025-01-27-discussion.md"),
+    );
+  });
+
+  it("skips migration if new file already exists", async () => {
+    const oldPath = path.join(tempDir, "memory", "2025-01-27.md");
+    const newPath = path.join(tempDir, "memory", "2025", "01", "2025-01-27.md");
+
+    await fs.writeFile(oldPath, "# Old content\n", "utf-8");
+    await fs.mkdir(path.join(tempDir, "memory", "2025", "01"), { recursive: true });
+    await fs.writeFile(newPath, "# New content\n", "utf-8");
+
+    const result = await migrateMemoryFile(oldPath, tempDir, logger);
+
+    expect(result.status).toBe("skipped");
+    expect(result.path).toBe(newPath);
+
+    // Verify new file was not overwritten
+    const content = await fs.readFile(newPath, "utf-8");
+    expect(content).toBe("# New content\n");
+  });
+
+  it("fails for invalid filename format", async () => {
+    const oldPath = path.join(tempDir, "memory", "invalid-file.md");
+    await fs.writeFile(oldPath, "# Content\n", "utf-8");
+
+    const result = await migrateMemoryFile(oldPath, tempDir, logger);
+
+    expect(result.status).toBe("failed");
+  });
+
+  it("fails for invalid date", async () => {
+    const oldPath = path.join(tempDir, "memory", "2025-13-40.md");
+    await fs.writeFile(oldPath, "# Content\n", "utf-8");
+
+    const result = await migrateMemoryFile(oldPath, tempDir, logger);
+
+    expect(result.status).toBe("failed");
+  });
+
+  it("handles multiple migrations to same target gracefully (race condition)", async () => {
+    const oldPath1 = path.join(tempDir, "memory", "2025-01-27.md");
+    const oldPath2 = path.join(tempDir, "memory-copy", "2025-01-27.md");
+
+    await fs.writeFile(oldPath1, "# First\n", "utf-8");
+    await fs.mkdir(path.join(tempDir, "memory-copy"), { recursive: true });
+    await fs.writeFile(oldPath2, "# Second\n", "utf-8");
+
+    // Simulate concurrent migrations
+    const [result1, result2] = await Promise.all([
+      migrateMemoryFile(oldPath1, tempDir, logger),
+      migrateMemoryFile(oldPath2, tempDir, logger),
+    ]);
+
+    // One should succeed, one should skip or fail
+    const statuses = [result1.status, result2.status].sort();
+    expect(statuses).toContain("migrated");
+    expect(statuses.some((s) => s === "skipped" || s === "failed")).toBe(true);
+  });
+});
+
+describe("migrateAllMemoryFiles", () => {
+  let tempDir: string;
+  const logger = {
+    info: () => {},
+    warn: () => {},
+    error: () => {},
+  };
+
+  beforeEach(async () => {
+    tempDir = await fs.mkdtemp(path.join(os.tmpdir(), "memory-migration-all-test-"));
+    await fs.mkdir(path.join(tempDir, "memory"), { recursive: true });
+  });
+
+  afterEach(async () => {
+    await fs.rm(tempDir, { recursive: true, force: true });
+  });
+
+  it("migrates all old-format files", async () => {
+    // Create old-format files
+    await fs.writeFile(path.join(tempDir, "memory", "2025-01-27.md"), "# Day 1\n", "utf-8");
+    await fs.writeFile(path.join(tempDir, "memory", "2025-01-28.md"), "# Day 2\n", "utf-8");
+    await fs.writeFile(
+      path.join(tempDir, "memory", "2025-01-29-discussion.md"),
+      "# Discussion\n",
+      "utf-8",
+    );
+
+    const result = await migrateAllMemoryFiles(tempDir, { logger });
+
+    expect(result.migrated).toBe(3);
+    expect(result.skipped).toBe(0);
+    expect(result.failed).toBe(0);
+    expect(result.migratedFiles).toHaveLength(3);
+    expect(result.totalBytes).toBeGreaterThan(0);
+    expect(result.durationMs).toBeGreaterThanOrEqual(0);
+
+    // Verify new files exist
+    const file1Exists = await fs
+      .access(path.join(tempDir, "memory", "2025", "01", "2025-01-27.md"))
+      .then(() => true)
+      .catch(() => false);
+    const file2Exists = await fs
+      .access(path.join(tempDir, "memory", "2025", "01", "2025-01-28.md"))
+      .then(() => true)
+      .catch(() => false);
+    const file3Exists = await fs
+      .access(path.join(tempDir, "memory", "2025", "01", "2025-01-29-discussion.md"))
+      .then(() => true)
+      .catch(() => false);
+    expect(file1Exists).toBe(true);
+    expect(file2Exists).toBe(true);
+    expect(file3Exists).toBe(true);
+  });
+
+  it("only migrates files directly in memory/ not in subdirectories", async () => {
+    // Create files: one in memory/ root (old format), one in subdirectory (user custom, should not migrate)
+    await fs.mkdir(path.join(tempDir, "memory", "archive"), { recursive: true });
+    await fs.writeFile(path.join(tempDir, "memory", "2025-01-27.md"), "# Root\n", "utf-8");
+    await fs.writeFile(
+      path.join(tempDir, "memory", "archive", "2024-12-31.md"),
+      "# Archived\n",
+      "utf-8",
+    );
+
+    const result = await migrateAllMemoryFiles(tempDir, { logger });
+
+    // Only the root file should be migrated
+    expect(result.migrated).toBe(1);
+    expect(result.migratedFiles).toContain("memory/2025/01/2025-01-27.md");
+    expect(result.migratedFiles).not.toContain("memory/2024/12/2024-12-31.md");
+
+    // Archived file should still exist in original location
+    const archivedExists = await fs
+      .access(path.join(tempDir, "memory", "archive", "2024-12-31.md"))
+      .then(() => true)
+      .catch(() => false);
+    expect(archivedExists).toBe(true);
+  });
+
+  it("skips year directories (new format)", async () => {
+    // Create new-format files (should be skipped)
+    await fs.mkdir(path.join(tempDir, "memory", "2025", "01"), { recursive: true });
+    await fs.writeFile(
+      path.join(tempDir, "memory", "2025", "01", "2025-01-27.md"),
+      "# New format\n",
+      "utf-8",
+    );
+
+    // Create old-format file
+    await fs.writeFile(path.join(tempDir, "memory", "2025-01-28.md"), "# Old format\n", "utf-8");
+
+    const result = await migrateAllMemoryFiles(tempDir, { logger });
+
+    expect(result.migrated).toBe(1);
+    expect(result.migratedFiles).toEqual(["memory/2025/01/2025-01-28.md"]);
+  });
+
+  it("handles dry-run mode without actual migration", async () => {
+    await fs.writeFile(path.join(tempDir, "memory", "2025-01-27.md"), "# Test\n", "utf-8");
+
+    const result = await migrateAllMemoryFiles(tempDir, { dryRun: true, logger });
+
+    expect(result.migrated).toBe(1);
+    expect(result.skipped).toBe(0);
+
+    // Verify file was NOT migrated
+    const newExists = await fs
+      .access(path.join(tempDir, "memory", "2025", "01", "2025-01-27.md"))
+      .then(() => true)
+      .catch(() => false);
+    expect(newExists).toBe(false);
+  });
+
+  it("returns empty result if no memory directory", async () => {
+    const emptyDir = await fs.mkdtemp(path.join(os.tmpdir(), "empty-"));
+
+    const result = await migrateAllMemoryFiles(emptyDir, { logger });
+
+    expect(result.migrated).toBe(0);
+    expect(result.skipped).toBe(0);
+    expect(result.failed).toBe(0);
+    expect(result.migratedFiles).toEqual([]);
+
+    await fs.rm(emptyDir, { recursive: true, force: true });
+  });
+
+  it("tracks failed migrations", async () => {
+    // Create invalid date file
+    await fs.writeFile(path.join(tempDir, "memory", "2025-99-99.md"), "# Invalid\n", "utf-8");
+
+    const result = await migrateAllMemoryFiles(tempDir, { logger });
+
+    expect(result.failed).toBe(1);
+    expect(result.failedFiles).toHaveLength(1);
+    expect(result.failedFiles[0]?.path).toBe("memory/2025-99-99.md");
+  });
+
+  it("calculates total bytes migrated", async () => {
+    const content1 = "# Content 1\n".repeat(100);
+    const content2 = "# Content 2\n".repeat(200);
+
+    await fs.writeFile(path.join(tempDir, "memory", "2025-01-27.md"), content1, "utf-8");
+    await fs.writeFile(path.join(tempDir, "memory", "2025-01-28.md"), content2, "utf-8");
+
+    const result = await migrateAllMemoryFiles(tempDir, { logger });
+
+    const expectedBytes =
+      Buffer.byteLength(content1, "utf-8") + Buffer.byteLength(content2, "utf-8");
+    expect(result.totalBytes).toBe(expectedBytes);
+  });
+});
diff --git a/src/memory/internal.ts b/src/memory/internal.ts
index b2ab8c0a4..9172cf5ef 100644
--- a/src/memory/internal.ts
+++ b/src/memory/internal.ts
@@ -48,24 +48,161 @@ export function isMemoryPath(relPath: string): boolean {
   return normalized.startsWith("memory/");
 }
 
-async function walkDir(dir: string, files: string[]) {
+async function exists(filePath: string): Promise<boolean> {
+  try {
+    await fs.access(filePath);
+    return true;
+  } catch {
+    return false;
+  }
+}
+
+async function walkDir(
+  dir: string,
+  files: string[],
+  workspaceDir: string,
+  logger?: {
+    info: (msg: string) => void;
+    warn: (msg: string) => void;
+    error: (msg: string, err?: unknown) => void;
+  },
+) {
   const entries = await fs.readdir(dir, { withFileTypes: true });
   for (const entry of entries) {
     const full = path.join(dir, entry.name);
     if (entry.isSymbolicLink()) continue;
     if (entry.isDirectory()) {
-      await walkDir(full, files);
+      await walkDir(full, files, workspaceDir, logger);
       continue;
     }
     if (!entry.isFile()) continue;
     if (!entry.name.endsWith(".md")) continue;
+
+    // Check if this is an old-format file in memory/ root
+    const relPath = path.relative(workspaceDir, full).replace(/\\/g, "/");
+    if (isOldMemoryFormat(relPath)) {
+      // Auto-migrate to new format
+      const result = await migrateMemoryFile(full, workspaceDir, logger);
+      if (result.status !== "failed") {
+        files.push(result.path);
+      }
+      continue;
+    }
+
     files.push(full);
   }
 }
 
+/**
+ * Check if a path matches old memory format (memory/YYYY-MM-DD.md)
+ * Old format = files directly in memory/ directory, not in subdirectories
+ */
+export function isOldMemoryFormat(relPath: string): boolean {
+  // Matches: memory/2025-01-27.md or memory/2025-01-27-slug.md
+  // But NOT: memory/2025/01/2025-01-27.md (new hierarchical format)
+  // But NOT: memory/notes/2025-01-27.md (user subdirectory)
+  const oldFormatRegex = /^memory\/\d{4}-\d{2}-\d{2}(?:-[^./]+)?\.md$/;
+  return oldFormatRegex.test(relPath);
+}
+
+/**
+ * Result of migrating a memory file
+ */
+export type MigrationResult =
+  | { status: "migrated"; path: string }
+  | { status: "skipped"; path: string }
+  | { status: "failed" };
+
+/**
+ * Migrate an old-format memory file to new hierarchical structure
+ * @param oldPath Absolute path to old-format file
+ * @param workspaceDir Workspace directory
+ * @param logger Optional logger for migration messages
+ * @returns MigrationResult with status and path
+ */
+export async function migrateMemoryFile(
+  oldPath: string,
+  workspaceDir: string,
+  logger?: {
+    info: (msg: string) => void;
+    warn: (msg: string) => void;
+    error: (msg: string, err?: unknown) => void;
+  },
+): Promise<MigrationResult> {
+  const log = logger || { info: console.log, warn: console.warn, error: console.error };
+
+  try {
+    const filename = path.basename(oldPath);
+    const match = filename.match(/^(\d{4})-(\d{2})-(\d{2})(?:-.*)?\.md$/);
+
+    if (!match) {
+      log.error(`[memory] Invalid filename format for migration: ${filename}`);
+      return { status: "failed" };
+    }
+
+    const [, year, month, day] = match;
+
+    // Validate date (prevent invalid dates like 2025-99-99)
+    const dateStr = `${year}-${month}-${day}`;
+    const parsedDate = new Date(dateStr);
+    if (isNaN(parsedDate.getTime()) || parsedDate.toISOString().split("T")[0] !== dateStr) {
+      log.error(`[memory] Invalid date in filename: ${filename} (parsed: ${dateStr})`);
+      return { status: "failed" };
+    }
+
+    const newDir = path.join(workspaceDir, "memory", year, month);
+
+    // Ensure new directory exists
+    await fs.mkdir(newDir, { recursive: true });
+
+    const newPath = path.join(newDir, filename);
+
+    // Check if new file already exists
+    if (await exists(newPath)) {
+      // New file exists, keep it and skip migration
+      log.warn(`[memory] New format file exists, skipping migration: ${filename}`);
+      return { status: "skipped", path: newPath };
+    }
+
+    // Atomic file creation with exclusive flag to prevent race conditions
+    let fileHandle;
+    try {
+      // Try to open file exclusively (fails if exists)
+      fileHandle = await fs.open(newPath, "wx");
+      await fileHandle.close();
+    } catch (err: any) {
+      if (err.code === "EEXIST") {
+        // Another process created it first
+        log.warn(`[memory] File created by another process, skipping: ${filename}`);
+        return { status: "skipped", path: newPath };
+      }
+      throw err;
+    }
+
+    // Copy file content to new location
+    await fs.copyFile(oldPath, newPath);
+
+    // Optional: Remove old file after successful migration
+    // For now, keep both as backup
+    log.info(
+      `[memory] Migrated old-format memory file: ${filename} -> memory/${year}/${month}/${filename}`,
+    );
+
+    return { status: "migrated", path: newPath };
+  } catch (err) {
+    log.error(`[memory] Failed to migrate memory file: ${path.basename(oldPath)}`, err);
+    return { status: "failed" };
+  }
+}
+
 export async function listMemoryFiles(
   workspaceDir: string,
   extraPaths?: string[],
+  logger?: {
+    info: (msg: string) => void;
+    warn: (msg: string) => void;
+    error: (msg: string, err?: unknown) => void;
+  },
 ): Promise<string[]> {
   const result: string[] = [];
   const memoryFile = path.join(workspaceDir, "MEMORY.md");
@@ -86,7 +223,7 @@ export async function listMemoryFiles(
   try {
     const dirStat = await fs.lstat(memoryDir);
     if (!dirStat.isSymbolicLink() && dirStat.isDirectory()) {
-      await walkDir(memoryDir, result);
+      await walkDir(memoryDir, result, workspaceDir, logger);
     }
   } catch {}
 
@@ -97,7 +234,7 @@ export async function listMemoryFiles(
         const stat = await fs.lstat(inputPath);
         if (stat.isSymbolicLink()) continue;
         if (stat.isDirectory()) {
-          await walkDir(inputPath, result);
+          await walkDir(inputPath, result, workspaceDir, logger);
           continue;
         }
         if (stat.isFile() && inputPath.endsWith(".md")) {
@@ -106,6 +243,7 @@ export async function listMemoryFiles(
       } catch {}
     }
   }
+
   if (result.length <= 1) return result;
   const seen = new Set<string>();
   const deduped: string[] = [];
@@ -239,3 +377,190 @@ export function cosineSimilarity(a: number[], b: number[]): number {
   if (normA === 0 || normB === 0) return 0;
   return dot / (Math.sqrt(normA) * Math.sqrt(normB));
 }
+
+export type MigrateAllOptions = {
+  /** If true, only simulate migration without actual file operations */
+  dryRun?: boolean;
+  /** Optional logger for migration messages */
+  logger?: {
+    info: (msg: string) => void;
+    warn: (msg: string) => void;
+    error: (msg: string, err?: unknown) => void;
+  };
+};
+
+export type MigrateAllResult = {
+  migrated: number;
+  skipped: number;
+  failed: number;
+  /** Total bytes migrated */
+  totalBytes: number;
+  /** Migration duration in milliseconds */
+  durationMs: number;
+  /** List of migrated file paths (relative to workspace) */
+  migratedFiles: string[];
+  /** List of failed file paths with error messages */
+  failedFiles: Array<{ path: string; error: string }>;
+};
+
+/**
+ * Recursively find all old-format memory files in a directory
+ */
+async function findOldFormatFiles(
+  dir: string,
+  workspaceDir: string,
+  results: string[] = [],
+): Promise<string[]> {
+  try {
+    const entries = await fs.readdir(dir, { withFileTypes: true });
+    const memoryDir = path.join(workspaceDir, "memory");
+
+    for (const entry of entries) {
+      const fullPath = path.join(dir, entry.name);
+
+      if (entry.isDirectory()) {
+        // Skip year directories (already new format) only in memory/ root
+        const isMemoryRoot = path.normalize(dir) === path.normalize(memoryDir);
+        if (isMemoryRoot && /^\d{4}$/.test(entry.name)) {
+          continue;
+        }
+        // Recurse into all other subdirectories
+        await findOldFormatFiles(fullPath, workspaceDir, results);
+        continue;
+      }
+
+      if (entry.isFile() && entry.name.endsWith(".md")) {
+        const relPath = path.relative(workspaceDir, fullPath).replace(/\\/g, "/");
+        if (isOldMemoryFormat(relPath)) {
+          results.push(fullPath);
+        }
+      }
+    }
+  } catch {
+    // Ignore permission errors and continue
+  }
+  return results;
+}
+
+/**
+ * Migrate all old-format memory files in a workspace
+ * @param workspaceDir Workspace directory
+ * @param options Migration options (dry-run, logger)
+ * @returns Object with detailed migration results
+ */
+export async function migrateAllMemoryFiles(
+  workspaceDir: string,
+  options: MigrateAllOptions = {},
+): Promise<MigrateAllResult> {
+  const { dryRun = false, logger } = options;
+  const log = logger || { info: console.log, warn: console.warn, error: console.error };
+
+  const startTime = Date.now();
+  const memoryDir = path.join(workspaceDir, "memory");
+
+  if (!(await exists(memoryDir))) {
+    return {
+      migrated: 0,
+      skipped: 0,
+      failed: 0,
+      totalBytes: 0,
+      durationMs: Date.now() - startTime,
+      migratedFiles: [],
+      failedFiles: [],
+    };
+  }
+
+  // Find all old-format files recursively
+  const oldFiles = await findOldFormatFiles(memoryDir, workspaceDir);
+
+  if (oldFiles.length === 0) {
+    log.info(`[memory] No old-format files found in ${memoryDir}`);
+    return {
+      migrated: 0,
+      skipped: 0,
+      failed: 0,
+      totalBytes: 0,
+      durationMs: Date.now() - startTime,
+      migratedFiles: [],
+      failedFiles: [],
+    };
+  }
+
+  log.info(`[memory] Found ${oldFiles.length} old-format file(s) to migrate`);
+  if (dryRun) {
+    log.info(`[memory] DRY RUN: No files will be actually migrated`);
+  }
+
+  let migrated = 0;
+  let skipped = 0;
+  let failed = 0;
+  let totalBytes = 0;
+  const migratedFiles: string[] = [];
+  const failedFiles: Array<{ path: string; error: string }> = [];
+
+  for (const fullPath of oldFiles) {
+    const relPath = path.relative(workspaceDir, fullPath).replace(/\\/g, "/");
+
+    if (dryRun) {
+      // In dry-run mode, just check if target exists
+      const filename = path.basename(fullPath);
+      const match = filename.match(/^(\d{4})-(\d{2})-(\d{2})(?:-.*)?\.md$/);
+      if (match) {
+        const [, year, month] = match;
+        const newPath = path.join(workspaceDir, "memory", year, month, filename);
+        if (await exists(newPath)) {
+          log.info(`[memory] [DRY RUN] Would skip (exists): ${relPath}`);
+          skipped++;
+        } else {
+          log.info(
+            `[memory] [DRY RUN] Would migrate: ${relPath} -> memory/${year}/${month}/${filename}`,
+          );
+          migrated++;
+          try {
+            const stat = await fs.stat(fullPath);
+            totalBytes += stat.size;
+          } catch {}
+        }
+      }
+      continue;
+    }
+
+    // Actual migration
+    try {
+      const stat = await fs.stat(fullPath);
+      const result = await migrateMemoryFile(fullPath, workspaceDir, logger);
+
+      if (result.status === "skipped") {
+        skipped++;
+      } else if (result.status === "migrated") {
+        migrated++;
+        totalBytes += stat.size;
+        migratedFiles.push(path.relative(workspaceDir, result.path).replace(/\\/g, "/"));
+      } else {
+        failed++;
+        failedFiles.push({ path: relPath, error: "Migration failed" });
+      }
+    } catch (err) {
+      failed++;
+      const errorMsg = err instanceof Error ? err.message : String(err);
+      failedFiles.push({ path: relPath, error: errorMsg });
+      log.error(`[memory] Failed to migrate ${relPath}:`, err);
+    }
+  }
+
+  const durationMs = Date.now() - startTime;
+
+  log.info(
+    `[memory] Migration complete: ${migrated} migrated, ${skipped} skipped, ${failed} failed (${durationMs}ms, ${totalBytes} bytes)`,
+  );
+
+  return {
+    migrated,
+    skipped,
+    failed,
+    totalBytes,
+    durationMs,
+    migratedFiles,
+    failedFiles,
+  };
+}
diff --git a/src/memory/manager.batch.test.ts b/src/memory/manager.batch.test.ts
index 31327cbc8..f3103e91c 100644
--- a/src/memory/manager.batch.test.ts
+++ b/src/memory/manager.batch.test.ts
@@ -266,7 +266,9 @@ describe("memory indexing with OpenAI batches", () => {
 
   it("falls back to non-batch on failure and resets failures after success", async () => {
     const content = ["flaky", "batch"].join("\n\n");
-    await fs.writeFile(path.join(workspaceDir, "memory", "2026-01-09.md"), content);
+    // Create file in new format to avoid migration during sync
+    await fs.mkdir(path.join(workspaceDir, "memory", "2026", "01"), { recursive: true });
+    await fs.writeFile(path.join(workspaceDir, "memory", "2026", "01", "2026-01-09.md"), content);
 
     let uploadedRequests: Array<{ custom_id?: string }> = [];
     let mode: "fail" | "ok" = "fail";
@@ -363,8 +365,10 @@ describe("memory indexing with OpenAI batches", () => {
 
     embedBatch.mockClear();
     mode = "ok";
+    // Create file in new format to avoid migration during sync
+    await fs.mkdir(path.join(workspaceDir, "memory", "2026", "01"), { recursive: true });
     await fs.writeFile(
-      path.join(workspaceDir, "memory", "2026-01-09.md"),
+      path.join(workspaceDir, "memory", "2026", "01", "2026-01-09.md"),
       ["flaky", "batch", "recovery"].join("\n\n"),
     );
     await manager.sync({ force: true });
@@ -376,7 +380,9 @@ describe("memory indexing with OpenAI batches", () => {
 
   it("disables batch after repeated failures and skips batch thereafter", async () => {
     const content = ["repeat", "failures"].join("\n\n");
-    await fs.writeFile(path.join(workspaceDir, "memory", "2026-01-10.md"), content);
+    // Create file in new format to avoid migration during sync
+    await fs.mkdir(path.join(workspaceDir, "memory", "2026", "01"), { recursive: true });
+    await fs.writeFile(path.join(workspaceDir, "memory", "2026", "01", "2026-01-10.md"), content);
 
     let uploadedRequests: Array<{ custom_id?: string }> = [];
     const fetchMock = vi.fn(async (input: RequestInfo | URL, init?: RequestInit) => {
@@ -459,7 +465,7 @@ describe("memory indexing with OpenAI batches", () => {
 
     embedBatch.mockClear();
     await fs.writeFile(
-      path.join(workspaceDir, "memory", "2026-01-10.md"),
+      path.join(workspaceDir, "memory", "2026", "01", "2026-01-10.md"),
       ["repeat", "failures", "again"].join("\n\n"),
     );
     await manager.sync({ force: true });
@@ -470,7 +476,7 @@ describe("memory indexing with OpenAI batches", () => {
     const fetchCalls = fetchMock.mock.calls.length;
     embedBatch.mockClear();
     await fs.writeFile(
-      path.join(workspaceDir, "memory", "2026-01-10.md"),
+      path.join(workspaceDir, "memory", "2026", "01", "2026-01-10.md"),
       ["repeat", "failures", "fallback"].join("\n\n"),
     );
     await manager.sync({ force: true });