diff --git a/env.example b/env.example
index bae667b..f44c613 100644
--- a/env.example
+++ b/env.example
@@ -49,6 +49,9 @@ CLOUDFLARE_ACCOUNT_ID=your_cloudflare_account_id_here
 LINK_BUILDER_API_URL=http://localhost:8001/api
 LINK_BUILDER_API_KEY=your_link_builder_api_key_here
 
+# fal.ai Image Generation API
+FAL_API_KEY=your_fal_api_key_here
+
 # Application Configuration
 LOG_LEVEL=INFO
 ENVIRONMENT=development
diff --git a/requirements.txt b/requirements.txt
index 4162c00..4798c60 100644
--- a/requirements.txt
+++ b/requirements.txt
@@ -32,7 +32,7 @@ beautifulsoup4==4.14.2
 
 # AI/ML
 openai==2.5.0
-
+fal-client==0.9.1
 # Testing
 pytest==8.4.2
 pytest-asyncio==0.21.1
diff --git a/scripts/migrate_add_image_fields.py b/scripts/migrate_add_image_fields.py
new file mode 100644
index 0000000..39b9839
--- /dev/null
+++ b/scripts/migrate_add_image_fields.py
@@ -0,0 +1,101 @@
+"""
+Migration script to add image fields to projects and generated_content tables
+Story 7.1: Generate and Insert Images into Articles
+"""
+
+import sys
+from pathlib import Path
+sys.path.insert(0, str(Path(__file__).parent.parent))
+
+from src.database.session import db_manager
+from sqlalchemy import text
+
+
+def migrate():
+    """Add image fields to projects and generated_content tables"""
+    
+    session = db_manager.get_session()
+    
+    try:
+        print("Starting migration: Add image fields...")
+        
+        print("  Adding image_theme_prompt to projects table...")
+        session.execute(text("""
+            ALTER TABLE projects 
+            ADD COLUMN image_theme_prompt TEXT NULL
+        """))
+        
+        print("  Adding hero_image_url to generated_content table...")
+        session.execute(text("""
+            ALTER TABLE generated_content 
+            ADD COLUMN hero_image_url TEXT NULL
+        """))
+        
+        print("  Adding content_images to generated_content table...")
+        session.execute(text("""
+            ALTER TABLE generated_content 
+            ADD COLUMN content_images JSON NULL
+        """))
+        
+        session.commit()
+        
+        print("Migration completed successfully!")
+        print("\nNew fields added:")
+        print("  - projects.image_theme_prompt (TEXT, nullable)")
+        print("  - generated_content.hero_image_url (TEXT, nullable)")
+        print("  - generated_content.content_images (JSON, nullable)")
+        
+    except Exception as e:
+        session.rollback()
+        print(f"Migration failed: {e}")
+        raise
+    
+    finally:
+        session.close()
+
+
+def rollback():
+    """Rollback migration (remove image fields)"""
+    
+    session = db_manager.get_session()
+    
+    try:
+        print("Rolling back migration: Remove image fields...")
+        
+        print("  Removing content_images column...")
+        session.execute(text("""
+            ALTER TABLE generated_content 
+            DROP COLUMN content_images
+        """))
+        
+        print("  Removing hero_image_url column...")
+        session.execute(text("""
+            ALTER TABLE generated_content 
+            DROP COLUMN hero_image_url
+        """))
+        
+        print("  Removing image_theme_prompt column...")
+        session.execute(text("""
+            ALTER TABLE projects 
+            DROP COLUMN image_theme_prompt
+        """))
+        
+        session.commit()
+        
+        print("Rollback completed successfully!")
+        
+    except Exception as e:
+        session.rollback()
+        print(f"Rollback failed: {e}")
+        raise
+    
+    finally:
+        session.close()
+
+
+if __name__ == "__main__":
+    if len(sys.argv) > 1 and sys.argv[1] == "rollback":
+        rollback()
+    else:
+        migrate()
+
diff --git a/scripts/test_image_generation.py b/scripts/test_image_generation.py
new file mode 100644
index 0000000..d427524
--- /dev/null
+++ b/scripts/test_image_generation.py
@@ -0,0 +1,288 @@
+"""
+Test script to generate images for existing articles
+Tests image generation on project 23: first 2 T1 articles and first 3 T2 articles
+"""
+
+import sys
+from pathlib import Path
+sys.path.insert(0, str(Path(__file__).parent.parent))
+
+from src.database.session import db_manager
+from src.database.repositories import (
+    ProjectRepository,
+    GeneratedContentRepository,
+    SiteDeploymentRepository
+)
+from src.generation.service import ContentGenerator
+from src.generation.ai_client import AIClient, PromptManager
+from src.generation.image_generator import ImageGenerator, truncate_title, slugify
+from src.generation.image_injection import insert_hero_after_h1, insert_content_images_after_h2s, generate_alt_text
+from src.generation.image_upload import upload_image_to_storage
+from src.deployment.bunny_storage import BunnyStorageClient
+from src.core.config import get_config
+import click
+import random
+from pathlib import Path
+
+
+def test_image_generation(project_id: int):
+    """Test image generation on existing articles"""
+    
+    # Create output directory for test images
+    output_dir = Path("test_images")
+    output_dir.mkdir(exist_ok=True)
+    click.echo(f"Test images will be saved to: {output_dir.absolute()}\n")
+    
+    session = db_manager.get_session()
+    
+    try:
+        # Get repositories
+        project_repo = ProjectRepository(session)
+        content_repo = GeneratedContentRepository(session)
+        site_repo = SiteDeploymentRepository(session)
+        
+        # Get project
+        project = project_repo.get_by_id(project_id)
+        if not project:
+            click.echo(f"Project {project_id} not found")
+            return
+        
+        click.echo(f"\n{'='*60}")
+        click.echo(f"Testing Image Generation for Project {project_id}")
+        click.echo(f"Project: {project.name}")
+        click.echo(f"Main Keyword: {project.main_keyword}")
+        click.echo(f"{'='*60}\n")
+        
+        # Get articles
+        t1_articles = content_repo.get_by_project_and_tier(project_id, "tier1", require_site=False)
+        t2_articles = content_repo.get_by_project_and_tier(project_id, "tier2", require_site=False)
+        
+        click.echo(f"Found {len(t1_articles)} T1 articles, using first 2")
+        click.echo(f"Found {len(t2_articles)} T2 articles, using first 3\n")
+        
+        # Initialize AI client and image generator
+        import os
+        from dotenv import load_dotenv
+        load_dotenv()
+        
+        api_key = os.getenv("OPENROUTER_API_KEY")
+        if not api_key:
+            click.echo("Error: OPENROUTER_API_KEY not set in environment", err=True)
+            return
+        
+        fal_api_key = os.getenv("FAL_API_KEY")
+        if not fal_api_key:
+            click.echo("\n[WARN] FAL_API_KEY not set - image generation will fail")
+            click.echo("   Set FAL_API_KEY in your .env file to test image generation\n")
+        
+        ai_client = AIClient(
+            api_key=api_key,
+            model=os.getenv("AI_MODEL", "gpt-4o-mini")
+        )
+        prompt_manager = PromptManager()
+        
+        image_generator = ImageGenerator(
+            ai_client=ai_client,
+            prompt_manager=prompt_manager,
+            project_repo=project_repo
+        )
+        
+        storage_client = BunnyStorageClient()
+        
+        # Test T1 articles (first 2)
+        click.echo(f"\n{'='*60}")
+        click.echo("T1 ARTICLES")
+        click.echo(f"{'='*60}\n")
+        
+        for i, article in enumerate(t1_articles[:2], 1):
+            click.echo(f"\n--- T1 Article {i}: {article.title[:60]}... ---")
+            
+            if not article.site_deployment_id:
+                click.echo("  [WARN] No site assigned, skipping image upload")
+                site = None
+            else:
+                site = site_repo.get_by_id(article.site_deployment_id)
+                if not site:
+                    click.echo("  [WARN] Site not found, skipping image upload")
+                    site = None
+            
+            # Generate theme prompt (if not exists)
+            click.echo("\n1. Theme Prompt:")
+            if project.image_theme_prompt:
+                click.echo(f"   (Using cached): {project.image_theme_prompt}")
+            else:
+                click.echo("   Generating theme prompt...")
+                theme = image_generator.get_theme_prompt(project_id)
+                click.echo(f"   Generated: {theme}")
+            
+            # Generate hero image
+            click.echo("\n2. Hero Image:")
+            try:
+                # Show the prompt that will be used
+                theme = image_generator.get_theme_prompt(project_id)
+                title_short = truncate_title(article.title, 4)
+                hero_prompt = f"{theme} Text: '{title_short}' in clean simple uppercase letters, positioned in middle of image."
+                click.echo(f"   Prompt: {hero_prompt}")
+                
+                hero_image = image_generator.generate_hero_image(
+                    project_id=project_id,
+                    title=article.title,
+                    width=1280,
+                    height=720
+                )
+                
+                if hero_image:
+                    click.echo(f"   [OK] Generated ({len(hero_image):,} bytes)")
+                    
+                    # Save to local file
+                    main_keyword_slug = slugify(project.main_keyword)
+                    local_file = output_dir / f"hero-t1-{main_keyword_slug}-{i}.jpg"
+                    local_file.write_bytes(hero_image)
+                    click.echo(f"   [OK] Saved to: {local_file}")
+                    
+                    if site:
+                        file_path = f"images/{main_keyword_slug}.jpg"
+                        hero_url = upload_image_to_storage(storage_client, site, hero_image, file_path)
+                        if hero_url:
+                            click.echo(f"   [OK] Uploaded: {hero_url}")
+                        else:
+                            click.echo("   [FAIL] Upload failed")
+                    else:
+                        click.echo("   (Skipped upload - no site)")
+                else:
+                    click.echo("   [FAIL] Generation failed")
+            except Exception as e:
+                click.echo(f"   [ERROR] {str(e)[:200]}")
+            
+            # Generate content images (1-3 for T1)
+            click.echo("\n3. Content Images:")
+            num_content_images = random.randint(1, 3)
+            click.echo(f"   Generating {num_content_images} content image(s)...")
+            
+            entities = project.entities or []
+            related_searches = project.related_searches or []
+            
+            if not entities or not related_searches:
+                click.echo("   [WARN] No entities/related_searches, skipping")
+            else:
+                for j in range(num_content_images):
+                    entity = random.choice(entities)
+                    related_search = random.choice(related_searches)
+                    
+                    click.echo(f"\n   Image {j+1}/{num_content_images}:")
+                    click.echo(f"   Entity: {entity}")
+                    click.echo(f"   Related Search: {related_search}")
+                    
+                    try:
+                        # Show the prompt that will be used
+                        theme = image_generator.get_theme_prompt(project_id)
+                        content_prompt = f"{theme} Focus on {entity} and {related_search}, professional illustration style."
+                        click.echo(f"   Prompt: {content_prompt}")
+                        
+                        content_image = image_generator.generate_content_image(
+                            project_id=project_id,
+                            entity=entity,
+                            related_search=related_search,
+                            width=512,
+                            height=512
+                        )
+                        
+                        if content_image:
+                            click.echo(f"   [OK] Generated ({len(content_image):,} bytes)")
+                            
+                            # Save to local file
+                            main_keyword_slug = slugify(project.main_keyword)
+                            entity_slug = slugify(entity)
+                            related_slug = slugify(related_search)
+                            local_file = output_dir / f"content-{main_keyword_slug}-{i}-{j+1}-{entity_slug}-{related_slug}.jpg"
+                            local_file.write_bytes(content_image)
+                            click.echo(f"   [OK] Saved to: {local_file}")
+                            
+                            if site:
+                                file_path = f"images/{main_keyword_slug}-{entity_slug}-{related_slug}.jpg"
+                                img_url = upload_image_to_storage(storage_client, site, content_image, file_path)
+                                if img_url:
+                                    click.echo(f"   [OK] Uploaded: {img_url}")
+                                else:
+                                    click.echo("   [FAIL] Upload failed")
+                            else:
+                                click.echo("   (Skipped upload - no site)")
+                        else:
+                            click.echo("   [FAIL] Generation failed")
+                    except Exception as e:
+                        click.echo(f"   [ERROR] {str(e)[:200]}")
+        
+        # Test T2 articles (first 3)
+        click.echo(f"\n\n{'='*60}")
+        click.echo("T2 ARTICLES")
+        click.echo(f"{'='*60}\n")
+        
+        for i, article in enumerate(t2_articles[:3], 1):
+            click.echo(f"\n--- T2 Article {i}: {article.title[:60]}... ---")
+            
+            if not article.site_deployment_id:
+                click.echo("  [WARN] No site assigned, skipping image upload")
+                site = None
+            else:
+                site = site_repo.get_by_id(article.site_deployment_id)
+                if not site:
+                    click.echo("  [WARN] Site not found, skipping image upload")
+                    site = None
+            
+            # Generate hero image only (T2 doesn't get content images by default)
+            click.echo("\n1. Hero Image:")
+            try:
+                # Show the prompt that will be used
+                theme = image_generator.get_theme_prompt(project_id)
+                title_short = truncate_title(article.title, 4)
+                hero_prompt = f"{theme} Text: '{title_short}' in clean simple uppercase letters, positioned in middle of image."
+                click.echo(f"   Prompt: {hero_prompt}")
+                
+                hero_image = image_generator.generate_hero_image(
+                    project_id=project_id,
+                    title=article.title,
+                    width=1280,
+                    height=720
+                )
+                
+                if hero_image:
+                    click.echo(f"   [OK] Generated ({len(hero_image):,} bytes)")
+                    
+                    # Save to local file
+                    main_keyword_slug = slugify(project.main_keyword)
+                    local_file = output_dir / f"hero-t2-{main_keyword_slug}-{i}.jpg"
+                    local_file.write_bytes(hero_image)
+                    click.echo(f"   [OK] Saved to: {local_file}")
+                    
+                    if site:
+                        file_path = f"images/{main_keyword_slug}.jpg"
+                        hero_url = upload_image_to_storage(storage_client, site, hero_image, file_path)
+                        if hero_url:
+                            click.echo(f"   [OK] Uploaded: {hero_url}")
+                        else:
+                            click.echo("   [FAIL] Upload failed")
+                    else:
+                        click.echo("   (Skipped upload - no site)")
+                else:
+                    click.echo("   [FAIL] Generation failed")
+            except Exception as e:
+                click.echo(f"   [ERROR] {str(e)[:200]}")
+            
+            click.echo("\n2. Content Images:")
+            click.echo("   (Skipped - T2 articles don't get content images by default)")
+        
+        click.echo(f"\n\n{'='*60}")
+        click.echo("TEST COMPLETE")
+        click.echo(f"{'='*60}\n")
+        
+    except Exception as e:
+        click.echo(f"Error: {e}", err=True)
+        import traceback
+        traceback.print_exc()
+    finally:
+        session.close()
+
+
+if __name__ == "__main__":
+    test_image_generation(23)
+
diff --git a/src/database/models.py b/src/database/models.py
index 0f6f317..69cefd2 100644
--- a/src/database/models.py
+++ b/src/database/models.py
@@ -109,6 +109,7 @@ class Project(Base):
     custom_anchor_text: Mapped[Optional[list]] = mapped_column(JSON, nullable=True)
     
     spintax_related_search_terms: Mapped[Optional[str]] = mapped_column(Text, nullable=True)
+    image_theme_prompt: Mapped[Optional[str]] = mapped_column(Text, nullable=True)
     
     created_at: Mapped[datetime] = mapped_column(DateTime, default=datetime.utcnow, nullable=False)
     updated_at: Mapped[datetime] = mapped_column(
@@ -140,6 +141,8 @@ class GeneratedContent(Base):
     site_deployment_id: Mapped[Optional[int]] = mapped_column(Integer, ForeignKey('site_deployments.id'), nullable=True, index=True)
     deployed_url: Mapped[Optional[str]] = mapped_column(Text, nullable=True)
     deployed_at: Mapped[Optional[datetime]] = mapped_column(DateTime, nullable=True, index=True)
+    hero_image_url: Mapped[Optional[str]] = mapped_column(Text, nullable=True)
+    content_images: Mapped[Optional[list]] = mapped_column(JSON, nullable=True)
     created_at: Mapped[datetime] = mapped_column(DateTime, default=datetime.utcnow, nullable=False)
     updated_at: Mapped[datetime] = mapped_column(
         DateTime, 
diff --git a/src/database/repositories.py b/src/database/repositories.py
index 13e3de2..f4fb9cc 100644
--- a/src/database/repositories.py
+++ b/src/database/repositories.py
@@ -411,7 +411,9 @@ class GeneratedContentRepository:
         content: str,
         word_count: int,
         status: str,
-        site_deployment_id: Optional[int] = None
+        site_deployment_id: Optional[int] = None,
+        hero_image_url: Optional[str] = None,
+        content_images: Optional[list] = None
     ) -> GeneratedContent:
         """
         Create a new generated content record
@@ -439,7 +441,9 @@ class GeneratedContentRepository:
             content=content,
             word_count=word_count,
             status=status,
-            site_deployment_id=site_deployment_id
+            site_deployment_id=site_deployment_id,
+            hero_image_url=hero_image_url,
+            content_images=content_images
         )
         
         self.session.add(content_record)
diff --git a/src/generation/batch_processor.py b/src/generation/batch_processor.py
index 7690eac..52bf97e 100644
--- a/src/generation/batch_processor.py
+++ b/src/generation/batch_processor.py
@@ -21,6 +21,11 @@ from src.generation.site_assignment import assign_sites_to_batch
 from src.deployment.bunny_storage import BunnyStorageClient
 from src.deployment.deployment_service import DeploymentService
 from src.deployment.url_logger import URLLogger
+from src.generation.image_generator import ImageGenerator
+from src.generation.image_injection import insert_hero_after_h1, insert_content_images_after_h2s, generate_alt_text
+from src.generation.image_upload import upload_image_to_storage
+from src.generation.image_generator import slugify
+import random
 
 
 class BatchProcessor:
@@ -352,6 +357,17 @@ class BatchProcessor:
             status = "augmented"
             self.stats["augmented_articles"] += 1
         
+        # Generate and insert images
+        content, hero_url, content_image_urls = self._generate_and_insert_images(
+            project_id=project_id,
+            tier_name=tier_name,
+            tier_config=tier_config,
+            title=title,
+            content=content,
+            site_deployment_id=site_deployment_id,
+            prefix=prefix
+        )
+        
         saved_content = self.content_repo.create(
             project_id=project_id,
             tier=tier_name,
@@ -361,11 +377,128 @@ class BatchProcessor:
             content=content,
             word_count=word_count,
             status=status,
-            site_deployment_id=site_deployment_id
+            site_deployment_id=site_deployment_id,
+            hero_image_url=hero_url,
+            content_images=content_image_urls if content_image_urls else None
         )
         
         click.echo(f"{prefix} Saved (ID: {saved_content.id}, Status: {status})")
     
+    def _generate_and_insert_images(
+        self,
+        project_id: int,
+        tier_name: str,
+        tier_config: TierConfig,
+        title: str,
+        content: str,
+        site_deployment_id: Optional[int],
+        prefix: str
+    ) -> tuple[str, Optional[str], List[str]]:
+        """
+        Generate images and insert into HTML content
+        
+        Note: image_config is always created by job config parser (with defaults if not in JSON).
+        Defaults: hero images for all tiers (1280x720), content images for T1 only (1-3 images).
+        """
+        if not tier_config.image_config:
+            return content, None, []
+        
+        project = self.project_repo.get_by_id(project_id)
+        if not project:
+            return content, None, []
+        
+        # Initialize image generator
+        image_generator = ImageGenerator(
+            ai_client=self.generator.ai_client,
+            prompt_manager=self.generator.prompt_manager,
+            project_repo=self.project_repo
+        )
+        
+        storage_client = BunnyStorageClient()
+        hero_url = None
+        content_image_urls = []
+        
+        # Generate hero image (all tiers if enabled)
+        if tier_config.image_config.hero:
+            try:
+                click.echo(f"{prefix} Generating hero image...")
+                hero_image = image_generator.generate_hero_image(
+                    project_id=project_id,
+                    title=title,
+                    width=tier_config.image_config.hero.width,
+                    height=tier_config.image_config.hero.height
+                )
+                
+                if hero_image and site_deployment_id:
+                    site = self.site_deployment_repo.get_by_id(site_deployment_id) if self.site_deployment_repo else None
+                    if site:
+                        main_keyword_slug = slugify(project.main_keyword)
+                        file_path = f"images/{main_keyword_slug}.jpg"
+                        hero_url = upload_image_to_storage(storage_client, site, hero_image, file_path)
+                        if hero_url:
+                            click.echo(f"{prefix} Hero image uploaded: {hero_url}")
+                        else:
+                            click.echo(f"{prefix} Hero image upload failed")
+            except Exception as e:
+                click.echo(f"{prefix} Hero image generation failed: {e}")
+        
+        # Generate content images (T1 only, if enabled)
+        if tier_config.image_config.content and tier_config.image_config.content.max_num_images > 0:
+            try:
+                num_images = random.randint(
+                    tier_config.image_config.content.min_num_images,
+                    tier_config.image_config.content.max_num_images
+                )
+                
+                if num_images > 0:
+                    click.echo(f"{prefix} Generating {num_images} content image(s)...")
+                    
+                    entities = project.entities or []
+                    related_searches = project.related_searches or []
+                    
+                    if not entities or not related_searches:
+                        click.echo(f"{prefix} Skipping content images (no entities/related_searches)")
+                    else:
+                        for i in range(num_images):
+                            try:
+                                entity = random.choice(entities)
+                                related_search = random.choice(related_searches)
+                                
+                                content_image = image_generator.generate_content_image(
+                                    project_id=project_id,
+                                    entity=entity,
+                                    related_search=related_search,
+                                    width=tier_config.image_config.content.width,
+                                    height=tier_config.image_config.content.height
+                                )
+                                
+                                if content_image and site_deployment_id:
+                                    site = self.site_deployment_repo.get_by_id(site_deployment_id) if self.site_deployment_repo else None
+                                    if site:
+                                        main_keyword_slug = slugify(project.main_keyword)
+                                        entity_slug = slugify(entity)
+                                        related_slug = slugify(related_search)
+                                        file_path = f"images/{main_keyword_slug}-{entity_slug}-{related_slug}.jpg"
+                                        img_url = upload_image_to_storage(storage_client, site, content_image, file_path)
+                                        if img_url:
+                                            content_image_urls.append(img_url)
+                                            click.echo(f"{prefix} Content image {i+1}/{num_images} uploaded")
+                            except Exception as e:
+                                click.echo(f"{prefix} Content image {i+1} generation failed: {e}")
+            except Exception as e:
+                click.echo(f"{prefix} Content image generation failed: {e}")
+        
+        # Insert images into HTML
+        if hero_url:
+            alt_text = generate_alt_text(project)
+            content = insert_hero_after_h1(content, hero_url, alt_text)
+        
+        if content_image_urls:
+            alt_texts = [generate_alt_text(project) for _ in content_image_urls]
+            content = insert_content_images_after_h2s(content, content_image_urls, alt_texts)
+        
+        return content, hero_url, content_image_urls
+    
     def _process_articles_concurrent(
         self,
         article_tasks: List[Dict[str, Any]],
@@ -547,6 +680,17 @@ class BatchProcessor:
                 with self.stats_lock:
                     self.stats["augmented_articles"] += 1
             
+            # Generate and insert images
+            content, hero_url, content_image_urls = self._generate_and_insert_images(
+                project_id=project_id,
+                tier_name=tier_name,
+                tier_config=tier_config,
+                title=title,
+                content=content,
+                site_deployment_id=site_deployment_id,
+                prefix=prefix
+            )
+            
             saved_content = thread_content_repo.create(
                 project_id=project_id,
                 tier=tier_name,
@@ -556,7 +700,9 @@ class BatchProcessor:
                 content=content,
                 word_count=word_count,
                 status=status,
-                site_deployment_id=site_deployment_id
+                site_deployment_id=site_deployment_id,
+                hero_image_url=hero_url,
+                content_images=content_image_urls if content_image_urls else None
             )
             
             thread_session.commit()
diff --git a/src/generation/image_generator.py b/src/generation/image_generator.py
new file mode 100644
index 0000000..6fb913f
--- /dev/null
+++ b/src/generation/image_generator.py
@@ -0,0 +1,222 @@
+"""
+Image generation using fal.ai FLUX.1 schnell API
+"""
+
+import os
+import re
+import random
+import logging
+import requests
+from typing import Optional, Tuple
+from concurrent.futures import ThreadPoolExecutor, as_completed
+import fal_client
+from src.generation.ai_client import AIClient, PromptManager
+from src.database.repositories import ProjectRepository
+
+logger = logging.getLogger(__name__)
+
+
+def truncate_title(title: str, max_words: int = 4) -> str:
+    """Truncate title to max_words and convert to UPPERCASE"""
+    words = title.split()[:max_words]
+    return " ".join(words).upper()
+
+
+def slugify(text: str) -> str:
+    """Convert text to URL-friendly slug"""
+    text = text.lower()
+    text = re.sub(r'[^a-z0-9]+', '-', text)
+    text = text.strip('-')
+    return text
+
+
+class ImageGenerator:
+    """Generate images using fal.ai API"""
+    
+    def __init__(
+        self,
+        ai_client: AIClient,
+        prompt_manager: PromptManager,
+        project_repo: ProjectRepository
+    ):
+        self.ai_client = ai_client
+        self.prompt_manager = prompt_manager
+        self.project_repo = project_repo
+        # fal_client library expects FAL_KEY, but we use FAL_API_KEY in our env
+        # Set both for compatibility
+        self.fal_key = os.getenv("FAL_API_KEY") or os.getenv("FAL_KEY")
+        if self.fal_key and not os.getenv("FAL_KEY"):
+            os.environ["FAL_KEY"] = self.fal_key
+        if not self.fal_key:
+            logger.warning("FAL_API_KEY not set, image generation will fail")
+        self.max_concurrent = 5
+        self.executor = ThreadPoolExecutor(max_workers=self.max_concurrent)
+    
+    def get_theme_prompt(self, project_id: int) -> str:
+        """Get or generate theme prompt for project"""
+        project = self.project_repo.get_by_id(project_id)
+        if not project:
+            raise ValueError(f"Project {project_id} not found")
+        
+        if project.image_theme_prompt:
+            return project.image_theme_prompt
+        
+        # Generate theme prompt using AI
+        entities_str = ", ".join(project.entities or [])
+        related_str = ", ".join(project.related_searches or [])
+        
+        system_msg, user_prompt = self.prompt_manager.format_prompt(
+            "image_theme_generation",
+            main_keyword=project.main_keyword,
+            entities=entities_str,
+            related_searches=related_str
+        )
+        
+        theme_prompt, _ = self.ai_client.generate_completion(
+            prompt=user_prompt,
+            system_message=system_msg,
+            max_tokens=200,
+            temperature=0.7
+        )
+        
+        # Save to project
+        project.image_theme_prompt = theme_prompt.strip()
+        self.project_repo.session.commit()
+        
+        logger.info(f"Generated theme prompt for project {project_id}")
+        return project.image_theme_prompt
+    
+    def generate_hero_image(
+        self,
+        project_id: int,
+        title: str,
+        width: int = 1280,
+        height: int = 720
+    ) -> Optional[bytes]:
+        """Generate hero image with title text"""
+        if not self.fal_key:
+            logger.error("FAL_API_KEY not set")
+            return None
+        
+        try:
+            theme = self.get_theme_prompt(project_id)
+            title_short = truncate_title(title, 4)
+            prompt = f"{theme} Text: '{title_short}' in clean simple uppercase letters, positioned in middle of image."
+            
+            logger.info(f"Generating hero image with prompt: {prompt}")
+            
+            result = fal_client.subscribe(
+                "fal-ai/flux-1/schnell",
+                arguments={
+                    "prompt": prompt,
+                    "image_size": {"width": width, "height": height},
+                    "num_inference_steps": 4,
+                    "guidance_scale": 3.5,
+                    "output_format": "jpeg"
+                },
+                with_logs=True
+            )
+            
+            logger.debug(f"API response keys: {result.keys() if result else 'None'}")
+            logger.debug(f"API response type: {type(result)}")
+            
+            # Check different possible response structures
+            images = None
+            if result:
+                if "images" in result:
+                    images = result["images"]
+                elif "data" in result and "images" in result["data"]:
+                    images = result["data"]["images"]
+                elif isinstance(result, dict) and len(result) == 1 and "images" in list(result.values())[0]:
+                    images = list(result.values())[0]["images"]
+            
+            if images and len(images) > 0:
+                image_data = images[0]
+                image_url = image_data.get("url")
+                
+                if not image_url:
+                    logger.error(f"No URL in image response. Image data keys: {image_data.keys() if isinstance(image_data, dict) else 'not a dict'}")
+                    return None
+                
+                logger.info(f"Downloading hero image from URL: {image_url}")
+                response = requests.get(image_url, timeout=30)
+                response.raise_for_status()
+                return response.content
+            
+            logger.error(f"No image returned from fal.ai. Response: {result}")
+            return None
+            
+        except Exception as e:
+            logger.error(f"Failed to generate hero image: {e}", exc_info=True)
+            logger.error(f"Exception type: {type(e).__name__}")
+            if hasattr(e, 'response'):
+                logger.error(f"Response: {e.response}")
+            return None
+    
+    def generate_content_image(
+        self,
+        project_id: int,
+        entity: str,
+        related_search: str,
+        width: int = 512,
+        height: int = 512
+    ) -> Optional[bytes]:
+        """Generate content image with entity and related search"""
+        if not self.fal_key:
+            logger.error("FAL_API_KEY not set")
+            return None
+        
+        try:
+            theme = self.get_theme_prompt(project_id)
+            prompt = f"{theme} Focus on {entity} and {related_search}, professional illustration style."
+            
+            logger.info(f"Generating content image with prompt: {prompt}")
+            
+            result = fal_client.subscribe(
+                "fal-ai/flux-1/schnell",
+                arguments={
+                    "prompt": prompt,
+                    "image_size": {"width": width, "height": height},
+                    "num_inference_steps": 4,
+                    "guidance_scale": 3.5,
+                    "output_format": "jpeg"
+                },
+                with_logs=True
+            )
+            
+            logger.debug(f"API response keys: {result.keys() if result else 'None'}")
+            logger.debug(f"API response type: {type(result)}")
+            
+            # Check different possible response structures
+            images = None
+            if result:
+                if "images" in result:
+                    images = result["images"]
+                elif "data" in result and "images" in result["data"]:
+                    images = result["data"]["images"]
+                elif isinstance(result, dict) and len(result) == 1 and "images" in list(result.values())[0]:
+                    images = list(result.values())[0]["images"]
+            
+            if images and len(images) > 0:
+                image_data = images[0]
+                image_url = image_data.get("url")
+                
+                if not image_url:
+                    logger.error(f"No URL in image response. Image data keys: {image_data.keys() if isinstance(image_data, dict) else 'not a dict'}")
+                    return None
+                
+                logger.info(f"Downloading content image from URL: {image_url}")
+                response = requests.get(image_url, timeout=30)
+                response.raise_for_status()
+                return response.content
+            
+            logger.error(f"No image returned from fal.ai. Response: {result}")
+            return None
+            
+        except Exception as e:
+            logger.error(f"Failed to generate content image: {e}", exc_info=True)
+            logger.error(f"Exception type: {type(e).__name__}")
+            if hasattr(e, 'response'):
+                logger.error(f"Response: {e.response}")
+            return None
+
diff --git a/src/generation/image_injection.py b/src/generation/image_injection.py
new file mode 100644
index 0000000..a225b3b
--- /dev/null
+++ b/src/generation/image_injection.py
@@ -0,0 +1,94 @@
+"""
+HTML image insertion logic
+"""
+
+import re
+import random
+from typing import List, Optional
+from src.database.models import Project
+
+
+def generate_alt_text(project: Project) -> str:
+    """Generate alt text with 3 entities and 2 related searches"""
+    entities = project.entities or []
+    related_searches = project.related_searches or []
+    
+    # Pick 3 random entities (or all if less than 3)
+    selected_entities = random.sample(entities, min(3, len(entities))) if entities else []
+    # Pick 2 random related searches (or all if less than 2)
+    selected_related = random.sample(related_searches, min(2, len(related_searches))) if related_searches else []
+    
+    # Combine: entity1 related_search1 entity2 related_search2 entity3
+    parts = []
+    # Add entities and related searches in order: entity1, related1, entity2, related2, entity3
+    for i in range(max(len(selected_entities), len(selected_related))):
+        if i < len(selected_entities):
+            parts.append(selected_entities[i])
+        if i < len(selected_related):
+            parts.append(selected_related[i])
+        if len(parts) >= 5:
+            break
+    
+    return " ".join(parts[:5]) if parts else project.main_keyword
+
+
+def insert_hero_after_h1(html: str, hero_url: str, alt_text: str) -> str:
+    """Insert hero image immediately after first H1 tag"""
+    # Find first <h1>...</h1>
+    pattern = r'(<h1[^>]*>.*?</h1>)'
+    match = re.search(pattern, html, re.IGNORECASE | re.DOTALL)
+    
+    if match:
+        h1_tag = match.group(1)
+        img_tag = f'<img src="{hero_url}" alt="{alt_text}" />'
+        return html.replace(h1_tag, h1_tag + "\n" + img_tag, 1)
+    
+    # If no H1 found, insert at beginning
+    img_tag = f'<img src="{hero_url}" alt="{alt_text}" />'
+    return img_tag + "\n" + html
+
+
+def insert_content_images_after_h2s(html: str, image_urls: List[str], alt_texts: List[str]) -> str:
+    """Insert content images after H2 sections, distributed evenly"""
+    if not image_urls:
+        return html
+    
+    # Find all H2 tags
+    pattern = r'(<h2[^>]*>.*?</h2>)'
+    h2_matches = list(re.finditer(pattern, html, re.IGNORECASE | re.DOTALL))
+    
+    if not h2_matches:
+        # No H2s, insert at end
+        img_tags = [f'<img src="{url}" alt="{alt}" />' for url, alt in zip(image_urls, alt_texts)]
+        return html + "\n" + "\n".join(img_tags)
+    
+    # Distribute images across H2s
+    result = html
+    h2_positions = [(m.start(), m.end()) for m in h2_matches]
+    
+    # Insert images after H2s, evenly distributed
+    images_per_h2 = len(image_urls) / len(h2_matches) if h2_matches else 0
+    
+    inserted = 0
+    for i, (start, end) in enumerate(h2_positions):
+        if inserted >= len(image_urls):
+            break
+        
+        # Calculate which images to insert after this H2
+        start_idx = int(i * images_per_h2)
+        end_idx = int((i + 1) * images_per_h2) if i < len(h2_positions) - 1 else len(image_urls)
+        
+        if start_idx < len(image_urls):
+            h2_tag = html[start:end]
+            img_tags = []
+            for j in range(start_idx, min(end_idx, len(image_urls))):
+                img_tag = f'<img src="{image_urls[j]}" alt="{alt_texts[j] if j < len(alt_texts) else alt_texts[0]}" />'
+                img_tags.append(img_tag)
+                inserted += 1
+            
+            if img_tags:
+                replacement = h2_tag + "\n" + "\n".join(img_tags)
+                result = result.replace(h2_tag, replacement, 1)
+    
+    return result
+
diff --git a/src/generation/image_upload.py b/src/generation/image_upload.py
new file mode 100644
index 0000000..be26205
--- /dev/null
+++ b/src/generation/image_upload.py
@@ -0,0 +1,65 @@
+"""
+Image upload utilities for storage zones
+"""
+
+import logging
+import requests
+from typing import Optional
+from src.deployment.bunny_storage import BunnyStorageClient
+from src.database.models import SiteDeployment
+from src.generation.url_generator import generate_public_url
+
+logger = logging.getLogger(__name__)
+
+
+def upload_image_to_storage(
+    storage_client: BunnyStorageClient,
+    site: SiteDeployment,
+    image_bytes: bytes,
+    file_path: str
+) -> Optional[str]:
+    """
+    Upload image to storage zone and return public URL
+    
+    Args:
+        storage_client: BunnyStorageClient instance
+        site: SiteDeployment with zone info
+        image_bytes: Image file bytes
+        file_path: Path within storage zone (e.g., 'images/hero.jpg')
+    
+    Returns:
+        Public URL if successful, None if failed
+    """
+    try:
+        # Check if file exists first
+        base_url = storage_client._get_storage_url(site.storage_zone_region)
+        check_url = f"{base_url}/{site.storage_zone_name}/{file_path}"
+        headers = {"AccessKey": site.storage_zone_password}
+        
+        check_response = requests.head(check_url, headers=headers, timeout=10)
+        if check_response.status_code == 200:
+            # File exists, return existing URL
+            logger.info(f"Image {file_path} already exists, using existing")
+            return generate_public_url(site, file_path)
+        
+        # Upload image (binary data)
+        url = f"{base_url}/{site.storage_zone_name}/{file_path}"
+        headers = {
+            "AccessKey": site.storage_zone_password,
+            "Content-Type": "image/jpeg",
+            "accept": "application/json"
+        }
+        
+        response = requests.put(url, data=image_bytes, headers=headers, timeout=60)
+        
+        if response.status_code in [200, 201]:
+            logger.info(f"Uploaded image {file_path} to {site.storage_zone_name}")
+            return generate_public_url(site, file_path)
+        else:
+            logger.error(f"Failed to upload image {file_path}: {response.status_code} - {response.text}")
+            return None
+            
+    except Exception as e:
+        logger.error(f"Error uploading image {file_path}: {e}", exc_info=True)
+        return None
+
diff --git a/src/generation/job_config.py b/src/generation/job_config.py
index c082b30..d84c40f 100644
--- a/src/generation/job_config.py
+++ b/src/generation/job_config.py
@@ -67,6 +67,29 @@ class InterlinkingConfig:
     see_also_max: int = 5
 
 
+@dataclass
+class HeroImageConfig:
+    """Configuration for hero images"""
+    width: int = 1280
+    height: int = 720
+
+
+@dataclass
+class ContentImageConfig:
+    """Configuration for content images"""
+    min_num_images: int = 0
+    max_num_images: int = 0
+    width: int = 512
+    height: int = 512
+
+
+@dataclass
+class ImageConfig:
+    """Configuration for image generation"""
+    hero: Optional[HeroImageConfig] = None
+    content: Optional[ContentImageConfig] = None
+
+
 @dataclass
 class TierConfig:
     """Configuration for a specific tier"""
@@ -79,6 +102,7 @@ class TierConfig:
     max_h3_tags: int
     anchor_text_config: Optional[AnchorTextConfig] = None
     models: Optional[ModelConfig] = None
+    image_config: Optional[ImageConfig] = None
 
 
 @dataclass
@@ -344,6 +368,60 @@ class JobConfig:
                 content=models_data["content"]
             )
         
+        # Parse image_config if present
+        image_config = None
+        if "image_config" in tier_data:
+            img_data = tier_data["image_config"]
+            if not isinstance(img_data, dict):
+                raise ValueError(f"'{tier_name}.image_config' must be an object")
+            
+            hero_config = None
+            if "hero" in img_data:
+                hero_data = img_data["hero"]
+                if not isinstance(hero_data, dict):
+                    raise ValueError(f"'{tier_name}.image_config.hero' must be an object")
+                hero_config = HeroImageConfig(
+                    width=hero_data.get("width", 1280),
+                    height=hero_data.get("height", 720)
+                )
+            else:
+                # Default hero config for all tiers
+                hero_config = HeroImageConfig()
+            
+            content_config = None
+            if "content" in img_data:
+                content_data = img_data["content"]
+                if not isinstance(content_data, dict):
+                    raise ValueError(f"'{tier_name}.image_config.content' must be an object")
+                min_imgs = content_data.get("min_num_images", 0)
+                max_imgs = content_data.get("max_num_images", 0)
+                # Defaults: T1 = 1-3, others = 0-0
+                if tier_name == "tier1" and min_imgs == 0 and max_imgs == 0:
+                    min_imgs = 1
+                    max_imgs = 3
+                content_config = ContentImageConfig(
+                    min_num_images=min_imgs,
+                    max_num_images=max_imgs,
+                    width=content_data.get("width", 512),
+                    height=content_data.get("height", 512)
+                )
+            else:
+                # Default content config based on tier
+                if tier_name == "tier1":
+                    content_config = ContentImageConfig(min_num_images=1, max_num_images=3)
+                else:
+                    content_config = ContentImageConfig(min_num_images=0, max_num_images=0)
+            
+            image_config = ImageConfig(hero=hero_config, content=content_config)
+        else:
+            # Default image config if not specified
+            hero_config = HeroImageConfig()
+            if tier_name == "tier1":
+                content_config = ContentImageConfig(min_num_images=1, max_num_images=3)
+            else:
+                content_config = ContentImageConfig(min_num_images=0, max_num_images=0)
+            image_config = ImageConfig(hero=hero_config, content=content_config)
+        
         return TierConfig(
             count=tier_data.get("count", 1),
             min_word_count=tier_data.get("min_word_count", defaults["min_word_count"]),
@@ -353,7 +431,8 @@ class JobConfig:
             min_h3_tags=tier_data.get("min_h3_tags", defaults["min_h3_tags"]),
             max_h3_tags=tier_data.get("max_h3_tags", defaults["max_h3_tags"]),
             anchor_text_config=anchor_text_config,
-            models=tier_models
+            models=tier_models,
+            image_config=image_config
         )
     
     def _parse_tier_from_array(self, tier_name: str, tier_data: dict) -> TierConfig:
@@ -379,6 +458,56 @@ class JobConfig:
                 raise ValueError(f"'{tier_name}.anchor_text_config' custom_text must be an array")
             anchor_text_config = AnchorTextConfig(mode=mode, custom_text=custom_text)
         
+        # Parse image_config if present (same logic as _parse_tier)
+        image_config = None
+        if "image_config" in tier_data:
+            img_data = tier_data["image_config"]
+            if not isinstance(img_data, dict):
+                raise ValueError(f"'{tier_name}.image_config' must be an object")
+            
+            hero_config = None
+            if "hero" in img_data:
+                hero_data = img_data["hero"]
+                if not isinstance(hero_data, dict):
+                    raise ValueError(f"'{tier_name}.image_config.hero' must be an object")
+                hero_config = HeroImageConfig(
+                    width=hero_data.get("width", 1280),
+                    height=hero_data.get("height", 720)
+                )
+            else:
+                hero_config = HeroImageConfig()
+            
+            content_config = None
+            if "content" in img_data:
+                content_data = img_data["content"]
+                if not isinstance(content_data, dict):
+                    raise ValueError(f"'{tier_name}.image_config.content' must be an object")
+                min_imgs = content_data.get("min_num_images", 0)
+                max_imgs = content_data.get("max_num_images", 0)
+                if tier_name == "tier1" and min_imgs == 0 and max_imgs == 0:
+                    min_imgs = 1
+                    max_imgs = 3
+                content_config = ContentImageConfig(
+                    min_num_images=min_imgs,
+                    max_num_images=max_imgs,
+                    width=content_data.get("width", 512),
+                    height=content_data.get("height", 512)
+                )
+            else:
+                if tier_name == "tier1":
+                    content_config = ContentImageConfig(min_num_images=1, max_num_images=3)
+                else:
+                    content_config = ContentImageConfig(min_num_images=0, max_num_images=0)
+            
+            image_config = ImageConfig(hero=hero_config, content=content_config)
+        else:
+            hero_config = HeroImageConfig()
+            if tier_name == "tier1":
+                content_config = ContentImageConfig(min_num_images=1, max_num_images=3)
+            else:
+                content_config = ContentImageConfig(min_num_images=0, max_num_images=0)
+            image_config = ImageConfig(hero=hero_config, content=content_config)
+        
         return TierConfig(
             count=count,
             min_word_count=tier_data.get("min_word_count", defaults["min_word_count"]),
@@ -387,7 +516,8 @@ class JobConfig:
             max_h2_tags=tier_data.get("max_h2_tags", defaults["max_h2_tags"]),
             min_h3_tags=tier_data.get("min_h3_tags", defaults["min_h3_tags"]),
             max_h3_tags=tier_data.get("max_h3_tags", defaults["max_h3_tags"]),
-            anchor_text_config=anchor_text_config
+            anchor_text_config=anchor_text_config,
+            image_config=image_config
         )
     
     def get_jobs(self) -> list[Job]:
diff --git a/src/generation/prompts/h2-prompts b/src/generation/prompts/h2-prompts
new file mode 100644
index 0000000..356628a
--- /dev/null
+++ b/src/generation/prompts/h2-prompts
@@ -0,0 +1,9 @@
+h2_prompts = {
+    "general": "Clean, professional illustration related to {h2_topic}, modern business style, simple geometric shapes, corporate color palette, minimalist design, high-quality vector art style",
+    
+    "technical": "Technical diagram or infographic about {h2_topic}, clean lines, professional schematic style, industrial design, blue and gray tones, modern technical illustration",
+    
+    "process": "Step-by-step process visualization for {h2_topic}, clean flowchart style, professional arrows and connections, corporate color scheme, modern infographic design",
+    
+    "benefits": "Professional icon-based illustration showing {h2_topic}, clean symbol design, business-friendly colors, modern flat design style, organized layout"
+}
\ No newline at end of file