diff --git a/app/page.tsx b/app/page.tsx
index cfbef70..d0c9bed 100644
--- a/app/page.tsx
+++ b/app/page.tsx
@@ -1,24 +1,53 @@
 'use client';
 
+import * as React from 'react';
+import { Settings } from 'lucide-react';
 import { FileConverter } from '@/components/converter/FileConverter';
 import { ConversionHistory } from '@/components/converter/ConversionHistory';
 import { ThemeToggle } from '@/components/layout/ThemeToggle';
+import { Button } from '@/components/ui/Button';
+import { SettingsModal } from '@/components/ui/SettingsModal';
 import { ToastProvider } from '@/components/ui/Toast';
+import { getSettings } from '@/lib/storage/settings';
 
 export default function Home() {
+  const [showSettings, setShowSettings] = React.useState(false);
+  const [settings, setSettings] = React.useState(getSettings());
+
+  // Listen for settings updates
+  React.useEffect(() => {
+    const handleSettingsUpdate = (e: Event) => {
+      const customEvent = e as CustomEvent;
+      setSettings(customEvent.detail);
+    };
+
+    window.addEventListener('settingsUpdated', handleSettingsUpdate);
+    return () => window.removeEventListener('settingsUpdated', handleSettingsUpdate);
+  }, []);
+
   return (
     <ToastProvider>
       <div className="min-h-screen bg-background">
         {/* Header */}
         <header className="border-b border-border">
           <div className="container mx-auto px-3 sm:px-4 py-3 sm:py-4 flex items-center justify-between gap-2">
-            <div className="min-w-0">
+            <div className="min-w-0 flex-1">
               <h1 className="text-xl sm:text-2xl font-bold text-foreground">Convert UI</h1>
               <p className="text-xs sm:text-sm text-muted-foreground">
                 File conversion in your browser
               </p>
             </div>
-            <ThemeToggle />
+            <div className="flex items-center gap-2">
+              <Button
+                variant="ghost"
+                size="icon"
+                onClick={() => setShowSettings(true)}
+                title="Settings"
+              >
+                <Settings className="h-5 w-5" />
+              </Button>
+              <ThemeToggle />
+            </div>
           </div>
         </header>
 
@@ -26,10 +55,13 @@ export default function Home() {
         <main className="container mx-auto px-3 sm:px-4 py-6 sm:py-8 md:py-16">
           <div className="space-y-6 sm:space-y-8">
             <FileConverter />
-            <ConversionHistory />
+            {settings.showConversionHistory && <ConversionHistory />}
           </div>
         </main>
 
+        {/* Settings Modal */}
+        <SettingsModal isOpen={showSettings} onClose={() => setShowSettings(false)} />
+
         {/* Footer */}
         <footer className="border-t border-border mt-8 sm:mt-12 md:mt-16">
           <div className="container mx-auto px-3 sm:px-4 py-6 text-center text-xs sm:text-sm text-muted-foreground">
diff --git a/components/ui/SettingsModal.tsx b/components/ui/SettingsModal.tsx
new file mode 100644
index 0000000..d060968
--- /dev/null
+++ b/components/ui/SettingsModal.tsx
@@ -0,0 +1,186 @@
+'use client';
+
+import * as React from 'react';
+import { X, Settings as SettingsIcon, RotateCcw } from 'lucide-react';
+import { Button } from './Button';
+import { Card } from './Card';
+import { Select } from './Select';
+import { getSettings, saveSettings, resetSettings, type UserSettings } from '@/lib/storage/settings';
+
+interface SettingsModalProps {
+  isOpen: boolean;
+  onClose: () => void;
+}
+
+export function SettingsModal({ isOpen, onClose }: SettingsModalProps) {
+  const [settings, setSettings] = React.useState<UserSettings>(getSettings());
+
+  // Load settings when modal opens
+  React.useEffect(() => {
+    if (isOpen) {
+      setSettings(getSettings());
+    }
+  }, [isOpen]);
+
+  const handleSettingChange = (key: keyof UserSettings, value: any) => {
+    const updated = { ...settings, [key]: value };
+    setSettings(updated);
+    saveSettings({ [key]: value });
+  };
+
+  const handleReset = () => {
+    if (confirm('Are you sure you want to reset all settings to defaults?')) {
+      resetSettings();
+      setSettings(getSettings());
+    }
+  };
+
+  if (!isOpen) return null;
+
+  return (
+    <>
+      {/* Backdrop */}
+      <div
+        className="fixed inset-0 bg-black/50 z-40 animate-fadeIn"
+        onClick={onClose}
+      />
+
+      {/* Modal */}
+      <div className="fixed inset-0 z-50 flex items-center justify-center p-4">
+        <Card className="w-full max-w-md max-h-[80vh] overflow-y-auto animate-fadeIn">
+          <div className="p-6">
+            {/* Header */}
+            <div className="flex items-center justify-between mb-6">
+              <div className="flex items-center gap-2">
+                <SettingsIcon className="h-5 w-5 text-primary" />
+                <h2 className="text-lg font-semibold">Settings</h2>
+              </div>
+              <Button variant="ghost" size="icon" onClick={onClose}>
+                <X className="h-4 w-4" />
+              </Button>
+            </div>
+
+            {/* Settings */}
+            <div className="space-y-6">
+              {/* Quality Preferences */}
+              <div>
+                <h3 className="text-sm font-semibold mb-3">Quality Preferences</h3>
+                <Select
+                  label="Default Quality Preset"
+                  value={settings.defaultQualityPreset}
+                  onValueChange={(value) =>
+                    handleSettingChange('defaultQualityPreset', value as UserSettings['defaultQualityPreset'])
+                  }
+                  options={[
+                    { value: 'high-quality', label: 'High Quality' },
+                    { value: 'balanced', label: 'Balanced' },
+                    { value: 'small-file', label: 'Small File' },
+                    { value: 'web-optimized', label: 'Web Optimized' },
+                  ]}
+                />
+              </div>
+
+              {/* Behavior Preferences */}
+              <div>
+                <h3 className="text-sm font-semibold mb-3">Behavior</h3>
+                <div className="space-y-3">
+                  <label className="flex items-center gap-2 cursor-pointer">
+                    <input
+                      type="checkbox"
+                      checked={settings.autoStartConversion}
+                      onChange={(e) => handleSettingChange('autoStartConversion', e.target.checked)}
+                      className="w-4 h-4 rounded border-border text-primary focus:ring-2 focus:ring-primary"
+                    />
+                    <span className="text-sm">Auto-start conversion when files are selected</span>
+                  </label>
+
+                  <label className="flex items-center gap-2 cursor-pointer">
+                    <input
+                      type="checkbox"
+                      checked={settings.showConversionHistory}
+                      onChange={(e) => handleSettingChange('showConversionHistory', e.target.checked)}
+                      className="w-4 h-4 rounded border-border text-primary focus:ring-2 focus:ring-primary"
+                    />
+                    <span className="text-sm">Show conversion history</span>
+                  </label>
+
+                  <label className="flex items-center gap-2 cursor-pointer">
+                    <input
+                      type="checkbox"
+                      checked={settings.clearHistoryOnReset}
+                      onChange={(e) => handleSettingChange('clearHistoryOnReset', e.target.checked)}
+                      className="w-4 h-4 rounded border-border text-primary focus:ring-2 focus:ring-primary"
+                    />
+                    <span className="text-sm">Clear history when resetting converter</span>
+                  </label>
+                </div>
+              </div>
+
+              {/* Default Formats */}
+              <div>
+                <h3 className="text-sm font-semibold mb-3">Default Output Formats</h3>
+                <div className="space-y-3">
+                  <Select
+                    label="Video"
+                    value={settings.defaultVideoFormat || 'none'}
+                    onValueChange={(value) =>
+                      handleSettingChange('defaultVideoFormat', value === 'none' ? undefined : value)
+                    }
+                    options={[
+                      { value: 'none', label: 'No default' },
+                      { value: 'mp4', label: 'MP4' },
+                      { value: 'webm', label: 'WebM' },
+                      { value: 'avi', label: 'AVI' },
+                      { value: 'mov', label: 'MOV' },
+                    ]}
+                  />
+
+                  <Select
+                    label="Audio"
+                    value={settings.defaultAudioFormat || 'none'}
+                    onValueChange={(value) =>
+                      handleSettingChange('defaultAudioFormat', value === 'none' ? undefined : value)
+                    }
+                    options={[
+                      { value: 'none', label: 'No default' },
+                      { value: 'mp3', label: 'MP3' },
+                      { value: 'wav', label: 'WAV' },
+                      { value: 'ogg', label: 'OGG' },
+                      { value: 'aac', label: 'AAC' },
+                    ]}
+                  />
+
+                  <Select
+                    label="Image"
+                    value={settings.defaultImageFormat || 'none'}
+                    onValueChange={(value) =>
+                      handleSettingChange('defaultImageFormat', value === 'none' ? undefined : value)
+                    }
+                    options={[
+                      { value: 'none', label: 'No default' },
+                      { value: 'webp', label: 'WebP' },
+                      { value: 'png', label: 'PNG' },
+                      { value: 'jpg', label: 'JPG' },
+                      { value: 'gif', label: 'GIF' },
+                    ]}
+                  />
+                </div>
+              </div>
+            </div>
+
+            {/* Footer */}
+            <div className="mt-6 flex gap-3">
+              <Button onClick={handleReset} variant="outline" className="flex-1 gap-2">
+                <RotateCcw className="h-4 w-4" />
+                Reset to Defaults
+              </Button>
+              <Button onClick={onClose} className="flex-1">
+                Done
+              </Button>
+            </div>
+          </div>
+        </Card>
+      </div>
+    </>
+  );
+}
diff --git a/lib/storage/settings.ts b/lib/storage/settings.ts
new file mode 100644
index 0000000..6d84ca6
--- /dev/null
+++ b/lib/storage/settings.ts
@@ -0,0 +1,73 @@
+export interface UserSettings {
+  // Quality preferences
+  defaultQualityPreset: 'high-quality' | 'balanced' | 'small-file' | 'web-optimized';
+
+  // Behavior preferences
+  autoStartConversion: boolean;
+  showConversionHistory: boolean;
+  clearHistoryOnReset: boolean;
+
+  // Default formats (optional)
+  defaultVideoFormat?: string;
+  defaultAudioFormat?: string;
+  defaultImageFormat?: string;
+}
+
+const SETTINGS_KEY = 'convert-ui-settings';
+
+const DEFAULT_SETTINGS: UserSettings = {
+  defaultQualityPreset: 'balanced',
+  autoStartConversion: false,
+  showConversionHistory: true,
+  clearHistoryOnReset: false,
+};
+
+/**
+ * Get user settings from localStorage
+ */
+export function getSettings(): UserSettings {
+  if (typeof window === 'undefined') return DEFAULT_SETTINGS;
+
+  try {
+    const stored = localStorage.getItem(SETTINGS_KEY);
+    if (!stored) return DEFAULT_SETTINGS;
+
+    const settings = JSON.parse(stored);
+    return { ...DEFAULT_SETTINGS, ...settings };
+  } catch (error) {
+    console.error('Failed to load settings:', error);
+    return DEFAULT_SETTINGS;
+  }
+}
+
+/**
+ * Save user settings to localStorage
+ */
+export function saveSettings(settings: Partial<UserSettings>): void {
+  if (typeof window === 'undefined') return;
+
+  try {
+    const current = getSettings();
+    const updated = { ...current, ...settings };
+    localStorage.setItem(SETTINGS_KEY, JSON.stringify(updated));
+
+    // Dispatch custom event for settings updates
+    window.dispatchEvent(new CustomEvent('settingsUpdated', { detail: updated }));
+  } catch (error) {
+    console.error('Failed to save settings:', error);
+  }
+}
+
+/**
+ * Reset settings to defaults
+ */
+export function resetSettings(): void {
+  if (typeof window === 'undefined') return;
+
+  try {
+    localStorage.setItem(SETTINGS_KEY, JSON.stringify(DEFAULT_SETTINGS));
+    window.dispatchEvent(new CustomEvent('settingsUpdated', { detail: DEFAULT_SETTINGS }));
+  } catch (error) {
+    console.error('Failed to reset settings:', error);
+  }
+}