diff --git a/api/src/index.test.ts b/api/src/index.test.ts
index 2cd626e..7be1b27 100644
--- a/api/src/index.test.ts
+++ b/api/src/index.test.ts
@@ -1,80 +1,10 @@
-import { beforeAll, describe, expect, it } from "bun:test";
-import { migrate } from "drizzle-orm/bun-sql/migrator";
+import { describe, expect, it } from "bun:test";
 import app from ".";
-import { db } from "./db";
-import { auth } from "./lib/auth";
-import { buildHeaders } from "./test/utils";
 
-beforeAll(async () => {
-	await migrate(db, { migrationsFolder: "./drizzle" });
-});
-
-describe("First Test", () => {
+describe("API Health Check", () => {
 	it("should return 200 Response", async () => {
 		const req = new Request("http://localhost:3000/");
 		const res = await app.fetch(req);
 		expect(res.status).toBe(200);
 	});
 });
-
-describe("Auth", () => {
-	const user = {
-		email: "yadunand@yadunut.com",
-		password: "password123",
-		name: "Yadunand Prem",
-		username: "yadunut",
-	};
-
-	let authHeaders: Headers;
-
-	it("creates a new user", async () => {
-		const res = await auth.api.signUpEmail({
-			body: {
-				...user,
-			},
-		});
-		expect(res.user.email).toBe("yadunand@yadunut.com");
-		const foundUser = await db.query.user.findFirst();
-		expect(foundUser).not.toBeNull();
-		expect(foundUser?.email).toBe(user.email);
-	});
-
-	it("logs in user and stores auth headers", async () => {
-		const { headers: signInHeaders, response: signInRes } =
-			await auth.api.signInEmail({
-				body: {
-					email: user.email,
-					password: user.password,
-				},
-				returnHeaders: true,
-			});
-		expect(signInRes.token).not.toBeNull();
-		expect(signInRes.user.name).toBe(user.name);
-
-		// Store the auth headers for subsequent tests
-		authHeaders = buildHeaders(signInHeaders);
-
-		// Verify session works with stored headers
-		const res = await auth.api.getSession({ headers: authHeaders });
-		expect(res?.user.username).toBe(user.username);
-	});
-
-	it("creates auth token using stored headers", async () => {
-		const data = await auth.api.createApiKey({
-			headers: authHeaders,
-			body: {},
-		});
-		// Add expectations based on what createApiKey should return
-		expect(data).toBeDefined();
-	});
-
-	it("deletes user using stored headers", async () => {
-		const deleteRes = await auth.api.deleteUser({
-			headers: authHeaders,
-			body: {
-				password: user.password,
-			},
-		});
-		expect(deleteRes.success).toBe(true);
-	});
-});
diff --git a/api/src/index.ts b/api/src/index.ts
index 93b7adb..6a042d9 100644
--- a/api/src/index.ts
+++ b/api/src/index.ts
@@ -1,6 +1,6 @@
 import { Hono } from "hono";
 import { logger } from "hono/logger";
-import { auth } from "./lib/auth";
+import { auth } from "@/lib/auth";
 
 const app = new Hono();
 
diff --git a/api/src/test/auth/apikey.test.ts b/api/src/test/auth/apikey.test.ts
new file mode 100644
index 0000000..99fc966
--- /dev/null
+++ b/api/src/test/auth/apikey.test.ts
@@ -0,0 +1,304 @@
+import { afterEach, beforeEach, describe, expect, it } from "bun:test";
+import { auth } from "@/lib/auth";
+import { AuthTestHelper, buildHeaders } from "../utils";
+
+describe("API Key Management", () => {
+	const user = {
+		email: "apikey-test@example.com",
+		password: "password123",
+		name: "API Key Test User",
+		username: "apikeyuser",
+	};
+
+	let authHeaders: Headers;
+	let userId: string;
+
+	let authHelper: AuthTestHelper;
+
+	beforeEach(async () => {
+		// Create user and sign in for each test
+		authHelper = new AuthTestHelper();
+		const authUser = await authHelper.createAuthenticatedUser();
+		authHeaders = authUser.authHeaders;
+		userId = authUser.userId;
+	});
+
+	afterEach(async () => {
+		// Clean up: delete user and associated data
+		authHelper.cleanupUser(authHeaders, user.password);
+	});
+
+	describe("API Key Creation", () => {
+		it("creates an API key successfully", async () => {
+			const res = await auth.api.createApiKey({
+				headers: authHeaders,
+				body: {
+					name: "Test API Key",
+				},
+			});
+
+			expect(res).toBeDefined();
+			expect(res.id).toBeDefined();
+			expect(res.name).toBe("Test API Key");
+			expect(res.key).toBeDefined();
+			expect(res.userId).toBe(userId);
+			expect(res.enabled).toBe(true);
+		});
+
+		it("creates an API key with custom name", async () => {
+			const res = await auth.api.createApiKey({
+				headers: authHeaders,
+				body: {
+					name: "Custom API Key",
+				},
+			});
+
+			expect(res).toBeDefined();
+			expect(res.name).toBe("Custom API Key");
+			expect(res.key).toBeDefined();
+			expect(res.userId).toBe(userId);
+		});
+
+		it("rejects API key creation without authentication", async () => {
+			try {
+				await auth.api.createApiKey({
+					headers: new Headers(),
+					body: {
+						name: "Unauthorized Key",
+					},
+				});
+				expect(true).toBe(false); // Should not reach here
+			} catch (error) {
+				expect(error).toBeDefined();
+			}
+		});
+	});
+
+	describe("API Key Listing", () => {
+		it("lists user's API keys", async () => {
+			// Create multiple API keys
+			await auth.api.createApiKey({
+				headers: authHeaders,
+				body: { name: "Key 1" },
+			});
+			await auth.api.createApiKey({
+				headers: authHeaders,
+				body: { name: "Key 2" },
+			});
+
+			const res = await auth.api.listApiKeys({
+				headers: authHeaders,
+			});
+
+			expect(res).toBeDefined();
+			expect(Array.isArray(res)).toBe(true);
+			expect(res.length).toBe(2);
+			expect(res.some((key) => key.name === "Key 1")).toBe(true);
+			expect(res.some((key) => key.name === "Key 2")).toBe(true);
+		});
+
+		it("returns empty list for user with no API keys", async () => {
+			const res = await auth.api.listApiKeys({
+				headers: authHeaders,
+			});
+
+			expect(res).toBeDefined();
+			expect(Array.isArray(res)).toBe(true);
+			expect(res.length).toBe(0);
+		});
+
+		it("rejects listing without authentication", async () => {
+			try {
+				await auth.api.listApiKeys({
+					headers: new Headers(),
+				});
+				expect(true).toBe(false); // Should not reach here
+			} catch (error) {
+				expect(error).toBeDefined();
+			}
+		});
+	});
+
+	describe("API Key Deletion", () => {
+		let apiKeyId: string;
+
+		beforeEach(async () => {
+			const res = await auth.api.createApiKey({
+				headers: authHeaders,
+				body: { name: "Key to Revoke" },
+			});
+			apiKeyId = res.id;
+		});
+
+		it("deletes an API key successfully", async () => {
+			const res = await auth.api.deleteApiKey({
+				headers: authHeaders,
+				body: { keyId: apiKeyId },
+			});
+
+			expect(res.success).toBe(true);
+
+			// Verify the key is no longer in the list
+			const keys = await auth.api.listApiKeys({
+				headers: authHeaders,
+			});
+			expect(keys.find((key) => key.id === apiKeyId)).toBeUndefined();
+		});
+
+		it("rejects deleting non-existent API key", async () => {
+			try {
+				await auth.api.deleteApiKey({
+					headers: authHeaders,
+					body: { keyId: "non-existent-key-id" },
+				});
+				expect(true).toBe(false); // Should not reach here
+			} catch (error) {
+				expect(error).toBeDefined();
+			}
+		});
+
+		it("rejects deleting API key without authentication", async () => {
+			try {
+				await auth.api.deleteApiKey({
+					headers: new Headers(),
+					body: { keyId: apiKeyId },
+				});
+				expect(true).toBe(false); // Should not reach here
+			} catch (error) {
+				expect(error).toBeDefined();
+			}
+		});
+
+		it("rejects deleting another user's API key", async () => {
+			// Create another user
+			const otherUser = {
+				email: "other-user@example.com",
+				password: "password123",
+				name: "Other User",
+				username: "otheruser",
+			};
+
+			await auth.api.signUpEmail({
+				body: otherUser,
+			});
+
+			const { headers: otherHeaders } = await auth.api.signInEmail({
+				body: {
+					email: otherUser.email,
+					password: otherUser.password,
+				},
+				returnHeaders: true,
+			});
+
+			try {
+				await auth.api.deleteApiKey({
+					headers: buildHeaders(otherHeaders),
+					body: { keyId: apiKeyId },
+				});
+				expect(true).toBe(false); // Should not reach here
+			} catch (error) {
+				expect(error).toBeDefined();
+			}
+
+			// Clean up other user
+			await auth.api.deleteUser({
+				headers: buildHeaders(otherHeaders),
+				body: { password: otherUser.password },
+			});
+		});
+	});
+
+	describe("API Key Verification", () => {
+		let apiKey: string;
+		let apiKeyId: string;
+
+		beforeEach(async () => {
+			const res = await auth.api.createApiKey({
+				headers: authHeaders,
+				body: { name: "Test Auth Key" },
+			});
+			apiKey = res.key;
+			apiKeyId = res.id;
+		});
+
+		it("verifies valid API key", async () => {
+			const res = await auth.api.verifyApiKey({
+				body: { key: apiKey },
+			});
+
+			expect(res).toBeDefined();
+			expect(res.valid).toBe(true);
+		});
+
+		it("rejects invalid API key", async () => {
+			const res = await auth.api.verifyApiKey({
+				body: { key: "invalid-key" },
+			});
+
+			expect(res.valid).toBe(false);
+		});
+
+		it("gets API key details", async () => {
+			const res = await auth.api.getApiKey({
+				headers: authHeaders,
+				query: { id: apiKeyId },
+			});
+
+			expect(res).toBeDefined();
+			expect(res.id).toBe(apiKeyId);
+			expect(res.name).toBe("Test Auth Key");
+			expect(res.userId).toBe(userId);
+		});
+
+		it("updates API key", async () => {
+			const res = await auth.api.updateApiKey({
+				headers: authHeaders,
+				body: {
+					keyId: apiKeyId,
+					name: "Updated API Key Name",
+				},
+			});
+
+			expect(res).toBeDefined();
+			expect(res.name).toBe("Updated API Key Name");
+		});
+	});
+
+	describe("API Key Management", () => {
+		it("manages multiple API keys correctly", async () => {
+			// Create multiple keys
+			const key1 = await auth.api.createApiKey({
+				headers: authHeaders,
+				body: { name: "Key 1" },
+			});
+
+			const key2 = await auth.api.createApiKey({
+				headers: authHeaders,
+				body: { name: "Key 2" },
+			});
+
+			// List keys
+			const keys = await auth.api.listApiKeys({
+				headers: authHeaders,
+			});
+
+			expect(keys.length).toBeGreaterThanOrEqual(2);
+			expect(keys.find((k) => k.id === key1.id)).toBeDefined();
+			expect(keys.find((k) => k.id === key2.id)).toBeDefined();
+
+			// Delete one key
+			await auth.api.deleteApiKey({
+				headers: authHeaders,
+				body: { keyId: key1.id },
+			});
+
+			// Verify it's removed
+			const updatedKeys = await auth.api.listApiKeys({
+				headers: authHeaders,
+			});
+
+			expect(updatedKeys.find((k) => k.id === key1.id)).toBeUndefined();
+			expect(updatedKeys.find((k) => k.id === key2.id)).toBeDefined();
+		});
+	});
+});
diff --git a/api/src/test/auth/integration.test.ts b/api/src/test/auth/integration.test.ts
new file mode 100644
index 0000000..1ec6be9
--- /dev/null
+++ b/api/src/test/auth/integration.test.ts
@@ -0,0 +1,121 @@
+import { beforeEach, describe, expect, it } from "bun:test";
+import { auth } from "@/lib/auth";
+import { AuthTestHelper } from "../utils";
+
+describe("Authentication Integration Flow", () => {
+	let authHelper: AuthTestHelper;
+
+	beforeEach(() => {
+		authHelper = new AuthTestHelper();
+	});
+
+	it("completes full auth flow: signup -> signin -> create API key -> use API key -> cleanup", async () => {
+		// 1. Create and authenticate user
+		const { user, userId, authHeaders } =
+			await authHelper.createAuthenticatedUser({
+				email: `integration-${Date.now()}@example.com`,
+				name: "Integration Test User",
+				username: `integrationuser${Date.now()}`,
+			});
+
+		// 2. Create API key using session auth
+		const apiKeyRes = await authHelper.createApiKey(authHeaders, {
+			name: "Integration Test Key",
+		});
+
+		expect(apiKeyRes.id).toBeDefined();
+		expect(apiKeyRes.key).toBeDefined();
+		expect(apiKeyRes.userId).toBe(userId);
+		expect(apiKeyRes.name).toBe("Integration Test Key");
+
+		// 3. Verify API key with verification endpoint
+		const verifyRes = await auth.api.verifyApiKey({
+			body: { key: apiKeyRes.key },
+		});
+
+		expect(verifyRes.valid).toBe(true);
+
+		// 4. List API keys to verify it appears
+		const keysRes = await auth.api.listApiKeys({
+			headers: authHeaders,
+		});
+
+		expect(keysRes).toBeDefined();
+		expect(Array.isArray(keysRes)).toBe(true);
+		expect(keysRes.length).toBe(1);
+		expect(keysRes?.[0]?.id).toBe(apiKeyRes.id);
+
+		// 5. Delete API key
+		const deleteRes = await auth.api.deleteApiKey({
+			headers: authHeaders,
+			body: { keyId: apiKeyRes.id },
+		});
+
+		expect(deleteRes.success).toBe(true);
+
+		// 6. Verify API key no longer works
+		const invalidVerifyRes = await auth.api.verifyApiKey({
+			body: { key: apiKeyRes.key },
+		});
+
+		expect(invalidVerifyRes.valid).toBe(false);
+
+		// 7. Cleanup user
+		await authHelper.cleanupUser(authHeaders, user.password);
+	});
+
+	it("handles multiple concurrent API keys per user", async () => {
+		const { user, authHeaders } = await authHelper.createAuthenticatedUser();
+
+		// Create multiple API keys
+		const [key1, key2, key3] = await Promise.all([
+			authHelper.createApiKey(authHeaders, { name: "Key 1" }),
+			authHelper.createApiKey(authHeaders, { name: "Key 2" }),
+			authHelper.createApiKey(authHeaders, { name: "Key 3" }),
+		]);
+
+		// Verify all keys work
+		const [verify1, verify2, verify3] = await Promise.all([
+			auth.api.verifyApiKey({ body: { key: key1.key } }),
+			auth.api.verifyApiKey({ body: { key: key2.key } }),
+			auth.api.verifyApiKey({ body: { key: key3.key } }),
+		]);
+
+		expect(verify1.valid).toBe(true);
+		expect(verify2.valid).toBe(true);
+		expect(verify3.valid).toBe(true);
+
+		// List all keys
+		const allKeys = await auth.api.listApiKeys({ headers: authHeaders });
+		expect(allKeys.length).toBe(3);
+
+		// Delete one key
+		await auth.api.deleteApiKey({
+			headers: authHeaders,
+			body: { keyId: key2.id },
+		});
+
+		// Verify only 2 keys remain
+		const remainingKeys = await auth.api.listApiKeys({ headers: authHeaders });
+		expect(remainingKeys.length).toBe(2);
+		expect(remainingKeys.find((k) => k.id === key2.id)).toBeUndefined();
+
+		// Verify deleted key doesn't work
+		const deletedVerify = await auth.api.verifyApiKey({
+			body: { key: key2.key },
+		});
+		expect(deletedVerify.valid).toBe(false);
+
+		// Verify other keys still work
+		const [stillWorking1, stillWorking3] = await Promise.all([
+			auth.api.verifyApiKey({ body: { key: key1.key } }),
+			auth.api.verifyApiKey({ body: { key: key3.key } }),
+		]);
+
+		expect(stillWorking1.valid).toBe(true);
+		expect(stillWorking3.valid).toBe(true);
+
+		// Cleanup
+		await authHelper.cleanupUser(authHeaders, user.password);
+	});
+});
diff --git a/api/src/test/auth/user.test.ts b/api/src/test/auth/user.test.ts
new file mode 100644
index 0000000..27085d7
--- /dev/null
+++ b/api/src/test/auth/user.test.ts
@@ -0,0 +1,125 @@
+import { describe, expect, it } from "bun:test";
+import { db } from "@/db";
+import { auth } from "@/lib/auth";
+import { buildHeaders } from "../utils";
+
+describe("User Authentication", () => {
+	const user = {
+		email: "test-user@example.com",
+		password: "password123",
+		name: "Test User",
+		username: "testuser",
+	};
+
+	let authHeaders: Headers;
+
+	describe("User Registration", () => {
+		it("creates a new user successfully", async () => {
+			const res = await auth.api.signUpEmail({
+				body: {
+					...user,
+				},
+			});
+			expect(res.user.email).toBe(user.email);
+			expect(res.user.name).toBe(user.name);
+			// Note: Username field may not be returned in the response even if set
+
+			const foundUser = await db.query.user.findFirst({
+				where: (users, { eq }) => eq(users.email, user.email),
+			});
+			expect(foundUser).not.toBeNull();
+			expect(foundUser?.email).toBe(user.email);
+		});
+
+		it("prevents duplicate user registration", async () => {
+			try {
+				await auth.api.signUpEmail({
+					body: {
+						...user,
+					},
+				});
+				expect(true).toBe(false); // Should not reach here
+			} catch (error) {
+				expect(error).toBeDefined();
+			}
+		});
+	});
+
+	describe("User Login", () => {
+		it("logs in user with correct credentials", async () => {
+			const { headers: signInHeaders, response: signInRes } =
+				await auth.api.signInEmail({
+					body: {
+						email: user.email,
+						password: user.password,
+					},
+					returnHeaders: true,
+				});
+
+			expect(signInRes.token).not.toBeNull();
+			expect(signInRes.user.name).toBe(user.name);
+			expect(signInRes.user.email).toBe(user.email);
+
+			authHeaders = buildHeaders(signInHeaders);
+		});
+
+		it("rejects login with incorrect password", async () => {
+			try {
+				await auth.api.signInEmail({
+					body: {
+						email: user.email,
+						password: "wrongpassword",
+					},
+				});
+				expect(true).toBe(false); // Should not reach here
+			} catch (error) {
+				expect(error).toBeDefined();
+			}
+		});
+
+		it("rejects login with non-existent email", async () => {
+			try {
+				await auth.api.signInEmail({
+					body: {
+						email: "nonexistent@example.com",
+						password: user.password,
+					},
+				});
+				expect(true).toBe(false); // Should not reach here
+			} catch (error) {
+				expect(error).toBeDefined();
+			}
+		});
+	});
+
+	describe("Session Management", () => {
+		it("retrieves valid session with auth headers", async () => {
+			const res = await auth.api.getSession({ headers: authHeaders });
+			expect(res?.user.username).toBe(user.username);
+			expect(res?.user.email).toBe(user.email);
+		});
+
+		it("returns null for session without auth headers", async () => {
+			const res = await auth.api.getSession({ headers: new Headers() });
+			expect(res?.user).toBeUndefined();
+		});
+	});
+
+	describe("User Deletion", () => {
+		it("deletes user with correct password", async () => {
+			const deleteRes = await auth.api.deleteUser({
+				headers: authHeaders,
+				body: {
+					password: user.password,
+				},
+			});
+			expect(deleteRes.success).toBe(true);
+
+			// Verify user is actually deleted
+			const foundUser = await db.query.user.findFirst({
+				where: (users, { eq }) => eq(users.email, user.email),
+			});
+			expect(foundUser).toBeUndefined();
+		});
+	});
+});
diff --git a/api/src/test/setup.ts b/api/src/test/setup.ts
new file mode 100644
index 0000000..c628516
--- /dev/null
+++ b/api/src/test/setup.ts
@@ -0,0 +1,17 @@
+import { afterAll, beforeAll } from "bun:test";
+import { migrate } from "drizzle-orm/bun-sql/migrator";
+import { db } from "@/db";
+
+beforeAll(async () => {
+	await migrate(db, { migrationsFolder: "./drizzle" });
+});
+
+afterAll(async () => {
+	// Clear all test data from database - note: order matters due to foreign keys
+	const { session, apikey, account, user } = await import("@/db/schema/auth");
+
+	await db.delete(session).execute();
+	await db.delete(apikey).execute();
+	await db.delete(account).execute();
+	await db.delete(user).execute();
+});
diff --git a/api/src/test/utils.ts b/api/src/test/utils.ts
index 82ba53c..8e359fb 100644
--- a/api/src/test/utils.ts
+++ b/api/src/test/utils.ts
@@ -1,3 +1,6 @@
+import { db } from "@/db";
+import { auth } from "@/lib/auth";
+
 export function buildHeaders(signInHeaders: Headers) {
 	const headers = new Headers();
 	for (const cookie of signInHeaders.getSetCookie() ?? []) {
@@ -5,3 +8,94 @@ export function buildHeaders(signInHeaders: Headers) {
 	}
 	return headers;
 }
+
+export interface TestUser {
+	email: string;
+	password: string;
+	name: string;
+	username: string;
+}
+
+export class AuthTestHelper {
+	createTestUser(userOverrides: Partial<TestUser> = {}): TestUser {
+		const defaultUser: TestUser = {
+			email: `test-${Date.now()}@example.com`,
+			password: "password123",
+			name: "Test User",
+			username: `testuser${Date.now()}`,
+		};
+
+		return { ...defaultUser, ...userOverrides };
+	}
+
+	async signUpUser(user: TestUser) {
+		return await auth.api.signUpEmail({
+			body: user,
+		});
+	}
+
+	async signInUser(user: Pick<TestUser, "email" | "password">) {
+		return await auth.api.signInEmail({
+			body: {
+				email: user.email,
+				password: user.password,
+			},
+			returnHeaders: true,
+		});
+	}
+
+	async createAuthenticatedUser(userOverrides: Partial<TestUser> = {}) {
+		const user = this.createTestUser(userOverrides);
+		const signUpRes = await this.signUpUser(user);
+		const { headers: signInHeaders } = await this.signInUser(user);
+		const authHeaders = buildHeaders(signInHeaders);
+
+		return {
+			user,
+			userId: signUpRes.user.id,
+			authHeaders,
+		};
+	}
+
+	async cleanupUser(authHeaders: Headers, password: string) {
+		try {
+			await auth.api.deleteUser({
+				headers: authHeaders,
+				body: { password },
+			});
+		} catch (_) {
+			// User might already be deleted, ignore error
+		}
+	}
+
+	async createApiKey(
+		authHeaders: Headers,
+		keyOptions: Partial<
+			Parameters<typeof auth.api.createApiKey>["0"]["body"]
+		> = {},
+	) {
+		return await auth.api.createApiKey({
+			headers: authHeaders,
+			body: {
+				name: `Test API Key ${Date.now()}`,
+				...keyOptions,
+			},
+		});
+	}
+
+	createApiKeyHeaders(apiKey: string) {
+		const headers = new Headers();
+		headers.set("Authorization", `Bearer ${apiKey}`);
+		return headers;
+	}
+
+	async clearDatabase() {
+		// Clear all test data from database - note: order matters due to foreign keys
+		const { session, apikey, account, user } = await import("@/db/schema/auth");
+
+		await db.delete(session).execute();
+		await db.delete(apikey).execute();
+		await db.delete(account).execute();
+		await db.delete(user).execute();
+	}
+}