diff --git a/apps/api/package.json b/apps/api/package.json
index a7c8876..8c9b6be 100644
--- a/apps/api/package.json
+++ b/apps/api/package.json
@@ -24,8 +24,7 @@
     "nodemailer": "^6.9.16",
     "stripe": "^22.0.0",
     "telnyx": "^1.23.0",
-    "uuid": "^11.0.5",
-
+    "uuid": "^11.1.1",
     "zod": "^4.3.6"
   },
   "devDependencies": {
diff --git a/apps/api/src/index.ts b/apps/api/src/index.ts
index 1ed08f2..4dfdb8c 100644
--- a/apps/api/src/index.ts
+++ b/apps/api/src/index.ts
@@ -29,6 +29,7 @@ import { devRouter } from "./routes/dev.js";
 import { adminSeedRouter } from "./routes/admin/seed.js";
 import { startReminderScheduler } from "./services/reminders.js";
 import { webhooksRouter } from "./routes/stripe-webhooks.js";
+import { telnyxWebhooksRouter } from "./routes/webhooks/telnyx.js";
 
 const app = new Hono();
 
@@ -69,6 +70,9 @@ app.route("/api/portal", portalRouter);
 // Public Stripe webhook endpoint — signature-verified, no auth required
 app.route("/api/webhooks/stripe", webhooksRouter);
 
+// Public Telnyx messaging webhook — signature-verified, no auth required
+app.route("/api/webhooks/telnyx", telnyxWebhooksRouter);
+
 // Dev/demo routes — config is always public, users endpoint is guarded internally
 app.route("/api/dev", devRouter);
 
diff --git a/apps/api/src/routes/webhooks/telnyx.ts b/apps/api/src/routes/webhooks/telnyx.ts
new file mode 100644
index 0000000..369461d
--- /dev/null
+++ b/apps/api/src/routes/webhooks/telnyx.ts
@@ -0,0 +1,59 @@
+import { Hono } from "hono";
+import { validateTelnyxSignature } from "../../services/sms.js";
+import {
+  handleMessageReceived,
+  handleMessageFinalized,
+  TelnyxMessageReceivedPayload,
+} from "../../services/messaging/inbound.js";
+
+export const telnyxWebhooksRouter = new Hono();
+
+telnyxWebhooksRouter.post("/messaging", async (c) => {
+  const signature = c.req.header("telnyx-signature");
+
+  let rawBody: string;
+  try {
+    rawBody = await c.req.text();
+  } catch {
+    return c.json({ error: "Could not read body" }, 400);
+  }
+
+  if (!validateTelnyxSignature(rawBody, signature)) {
+    return c.json({ error: "Invalid signature" }, 401);
+  }
+
+  let payload: TelnyxMessageReceivedPayload;
+  try {
+    payload = JSON.parse(rawBody) as TelnyxMessageReceivedPayload;
+  } catch {
+    return c.json({ error: "Invalid JSON" }, 400);
+  }
+
+  const eventType = payload.data?.event_type;
+  if (!eventType) {
+    return c.json({ error: "Missing event_type" }, 400);
+  }
+
+  if (eventType === "message.received") {
+    try {
+      await handleMessageReceived(payload);
+    } catch (err) {
+      const msg = err instanceof Error ? err.message : "Unknown error";
+      if (msg.startsWith("No business owns")) {
+        return c.json({ error: "Unknown messaging number" }, 404);
+      }
+      return c.json({ error: msg }, 500);
+    }
+    return c.json({ received: true });
+  }
+
+  if (eventType === "message.finalized") {
+    const result = await handleMessageFinalized(payload);
+    if (result) {
+      return c.json({ received: true, messageId: result.messageId, status: result.newStatus });
+    }
+    return c.json({ received: true, messageId: null });
+  }
+
+  return c.json({ received: true });
+});
diff --git a/apps/api/src/services/messaging/__tests__/inbound.test.ts b/apps/api/src/services/messaging/__tests__/inbound.test.ts
new file mode 100644
index 0000000..b905824
--- /dev/null
+++ b/apps/api/src/services/messaging/__tests__/inbound.test.ts
@@ -0,0 +1,313 @@
+import { describe, it, expect, vi, beforeEach } from "vitest";
+import {
+  findOrCreateConversation,
+  upsertMessage,
+  handleMessageReceived,
+  handleMessageFinalized,
+  TelnyxMessageReceivedPayload,
+} from "../inbound.js";
+import * as schema from "@groombook/db";
+
+vi.mock("@groombook/db", () => ({
+  getDb: vi.fn(),
+  conversations: { id: "", businessId: "", clientId: "", externalNumber: "", businessNumber: "", channel: "", lastMessageAt: null, status: "", createdAt: null, updatedAt: null },
+  messages: { id: "", conversationId: "", direction: "", body: "", status: "", providerMessageId: "", sentByStaffId: null, createdAt: null, deliveredAt: null, readByClientAt: null },
+  businessSettings: { id: "", messagingPhoneNumber: "" },
+  clients: { id: "", name: "", email: "", phone: "", status: "" },
+  eq: vi.fn(),
+  and: vi.fn(),
+  sql: vi.fn(),
+}));
+
+const mockDb = {
+  select: vi.fn().mockReturnThis(),
+  from: vi.fn().mockReturnThis(),
+  where: vi.fn().mockReturnThis(),
+  limit: vi.fn().mockReturnThis(),
+  insert: vi.fn().mockReturnThis(),
+  update: vi.fn().mockReturnThis(),
+  returning: vi.fn().mockReturnThis(),
+};
+
+vi.mocked(schema.getDb).mockReturnValue(mockDb as unknown as ReturnType<typeof schema.getDb>);
+
+const makePayload = (
+  eventType: "message.received" | "message.sent" | "message.finalized",
+  messageId: string,
+  fromPhone: string,
+  toPhone: string,
+  body = "Hello"
+): TelnyxMessageReceivedPayload => ({
+  data: {
+    id: "evt-1",
+    event_type: eventType,
+    payload: {
+      message: {
+        id: messageId,
+        from: { phone: fromPhone, carrier: "carrier" },
+        to: [{ phone: toPhone }],
+        body,
+      },
+    },
+  },
+});
+
+describe("signature validation via route", () => {
+  beforeEach(() => {
+    vi.resetModules();
+  });
+
+  it("returns 401 when telnyx-signature header is missing", async () => {
+    const { telnyxWebhooksRouter } = await import("../../../routes/webhooks/telnyx.js");
+    const payload = JSON.stringify(makePayload("message.received", "msg-123", "+1555111", "+1555222"));
+    const req = new Request("http://localhost/messaging", {
+      method: "POST",
+      headers: { "Content-Type": "application/json" },
+      body: payload,
+    });
+    const res = await telnyxWebhooksRouter.fetch(req);
+    expect(res.status).toBe(401);
+  });
+
+  it("returns 401 when signature does not match", async () => {
+    process.env.TELNYX_WEBHOOK_SECRET = "test-secret";
+    const { telnyxWebhooksRouter } = await import("../../../routes/webhooks/telnyx.js");
+    const payload = JSON.stringify(makePayload("message.received", "msg-123", "+1555111", "+1555222"));
+    const req = new Request("http://localhost/messaging", {
+      method: "POST",
+      headers: {
+        "Content-Type": "application/json",
+        "telnyx-signature": "sha256=bad",
+      },
+      body: payload,
+    });
+    const res = await telnyxWebhooksRouter.fetch(req);
+    expect(res.status).toBe(401);
+  });
+});
+
+describe("findOrCreateConversation", () => {
+  beforeEach(() => {
+    vi.clearAllMocks();
+    mockDb.select.mockReset();
+    mockDb.from.mockReset();
+    mockDb.where.mockReset();
+    mockDb.limit.mockReset();
+    mockDb.insert.mockReset();
+    mockDb.update.mockReset();
+    mockDb.returning.mockReset();
+  });
+
+  it("returns existing conversation when found", async () => {
+    mockDb.select.mockReturnValue({
+      from: vi.fn().mockReturnValue({
+        where: vi.fn().mockReturnValue({
+          limit: vi.fn().mockReturnValue([{ id: "conv-1", clientId: "client-1" }]),
+        }),
+      }),
+    });
+
+    const result = await findOrCreateConversation("biz-1", "+1555111", "+1555222");
+    expect(result.id).toBe("conv-1");
+  });
+
+  it("creates new conversation when none exists", async () => {
+    mockDb.select.mockReturnValue({
+      from: vi.fn().mockReturnValue({
+        where: vi.fn().mockReturnValue({
+          limit: vi.fn().mockReturnValue([]),
+        }),
+      }),
+    });
+    mockDb.insert.mockReturnValue({
+      values: vi.fn().mockReturnValue({
+        returning: vi.fn().mockReturnValue([{ id: "conv-2", clientId: "client-2" }]),
+      }),
+    });
+
+    const result = await findOrCreateConversation("biz-1", "+1555111", "+1555222");
+    expect(result.id).toBe("conv-2");
+  });
+
+  it("creates placeholder client for unknown phone then creates conversation", async () => {
+    mockDb.select
+      .mockReturnValueOnce({
+        from: vi.fn().mockReturnValue({
+          where: vi.fn().mockReturnValue({
+            limit: vi.fn().mockReturnValue([]),
+          }),
+        }),
+      })
+      .mockReturnValueOnce({
+        from: vi.fn().mockReturnValue({
+          where: vi.fn().mockReturnValue({
+            limit: vi.fn().mockReturnValue([]),
+          }),
+        }),
+      });
+    mockDb.insert.mockReturnValue({
+      values: vi.fn().mockReturnValue({
+        returning: vi.fn().mockReturnValue([{ id: "conv-3", clientId: "client-3" }]),
+      }),
+    });
+
+    const result = await findOrCreateConversation("biz-1", "+1555111", "+1555222");
+    expect(result.id).toBe("conv-3");
+    expect(result.clientId).toBe("client-3");
+  });
+});
+
+describe("upsertMessage", () => {
+  beforeEach(() => {
+    vi.clearAllMocks();
+  });
+
+  it("returns isNew=false when message with providerMessageId already exists", async () => {
+    mockDb.select.mockReturnValue({
+      from: vi.fn().mockReturnValue({
+        where: vi.fn().mockReturnValue({
+          limit: vi.fn().mockReturnValue([{ id: "msg-existing" }]),
+        }),
+      }),
+    });
+
+    const result = await upsertMessage("msg-123", "conv-1", "inbound", "Hello", "received");
+    expect(result.isNew).toBe(false);
+    expect(result.id).toBe("msg-existing");
+  });
+
+  it("inserts new message and returns isNew=true", async () => {
+    mockDb.select.mockReturnValue({
+      from: vi.fn().mockReturnValue({
+        where: vi.fn().mockReturnValue({
+          limit: vi.fn().mockReturnValue([]),
+        }),
+      }),
+    });
+    mockDb.insert.mockReturnValue({
+      values: vi.fn().mockReturnValue({
+        returning: vi.fn().mockReturnValue([{ id: "msg-new" }]),
+      }),
+    });
+
+    const result = await upsertMessage("msg-new-123", "conv-1", "inbound", "New message", "queued");
+    expect(result.isNew).toBe(true);
+    expect(result.id).toBe("msg-new");
+  });
+});
+
+describe("handleMessageReceived", () => {
+  beforeEach(() => {
+    vi.clearAllMocks();
+    mockDb.select.mockReset();
+    mockDb.from.mockReset();
+    mockDb.where.mockReset();
+    mockDb.limit.mockReset();
+    mockDb.insert.mockReset();
+    mockDb.update.mockReset();
+    mockDb.returning.mockReset();
+    mockDb.select.mockImplementation(() => ({
+      from: vi.fn().mockReturnValue({
+        where: vi.fn().mockReturnValue({
+          limit: vi.fn().mockReturnValue([]),
+        }),
+      }),
+    }));
+  });
+
+  it("returns 404 when no business owns the to number", async () => {
+    const payload = makePayload("message.received", "msg-123", "+1555111", "+1555000");
+    await expect(handleMessageReceived(payload)).rejects.toThrow("No business owns messaging number");
+  });
+
+  it("creates conversation and message for valid inbound", async () => {
+    mockDb.select
+      .mockReturnValueOnce({
+        from: vi.fn().mockReturnValue({
+          where: vi.fn().mockReturnValue({
+            limit: vi.fn().mockReturnValue([{ id: "biz-1" }]),
+          }),
+        }),
+      })
+      .mockReturnValueOnce({
+        from: vi.fn().mockReturnValue({
+          where: vi.fn().mockReturnValue({
+            limit: vi.fn().mockReturnValue([]),
+          }),
+        }),
+      });
+    mockDb.insert
+      .mockReturnValueOnce({
+        values: vi.fn().mockReturnValue({
+          returning: vi.fn().mockReturnValue([{ id: "client-new" }]),
+        }),
+      })
+      .mockReturnValueOnce({
+        values: vi.fn().mockReturnValue({
+          returning: vi.fn().mockReturnValue([{ id: "conv-new", clientId: "client-new" }]),
+        }),
+      });
+    mockDb.update.mockReturnValueOnce({
+      set: vi.fn().mockReturnValue({
+        where: vi.fn().mockReturnValue({}),
+      }),
+    });
+    mockDb.insert.mockReturnValueOnce({
+      values: vi.fn().mockReturnValue({
+        returning: vi.fn().mockReturnValue([{ id: "msg-new" }]),
+      }),
+    });
+
+    const payload = makePayload("message.received", "msg-abc", "+1555111", "+1555222", "Test message");
+    const result = await handleMessageReceived(payload);
+    expect(result.messageId).toBe("msg-new");
+  });
+});
+
+describe("handleMessageFinalized", () => {
+  beforeEach(() => {
+    vi.clearAllMocks();
+    mockDb.select.mockReset();
+    mockDb.from.mockReset();
+    mockDb.where.mockReset();
+    mockDb.limit.mockReset();
+    mockDb.insert.mockReset();
+    mockDb.update.mockReset();
+    mockDb.returning.mockReset();
+  });
+
+  it("returns null when message not found", async () => {
+    mockDb.select.mockReturnValue({
+      from: vi.fn().mockReturnValue({
+        where: vi.fn().mockReturnValue({
+          limit: vi.fn().mockReturnValue([]),
+        }),
+      }),
+    });
+
+    const payload = makePayload("message.finalized", "msg-unknown", "+1555111", "+1555222");
+    const result = await handleMessageFinalized(payload);
+    expect(result).toBeNull();
+  });
+
+  it("updates status to delivered for finalized inbound", async () => {
+    mockDb.select.mockReturnValue({
+      from: vi.fn().mockReturnValue({
+        where: vi.fn().mockReturnValue({
+          limit: vi.fn().mockReturnValue([{ id: "msg-1", status: "sent" }]),
+        }),
+      }),
+    });
+    mockDb.update.mockReturnValue({
+      set: vi.fn().mockReturnValue({
+        where: vi.fn().mockReturnValue({
+          returning: vi.fn().mockReturnValue([{ id: "msg-1" }]),
+        }),
+      }),
+    });
+
+    const payload = makePayload("message.finalized", "msg-1", "+1555111", "+1555222");
+    const result = await handleMessageFinalized(payload);
+    expect(result?.newStatus).toBe("delivered");
+  });
+});
diff --git a/apps/api/src/services/messaging/inbound.ts b/apps/api/src/services/messaging/inbound.ts
new file mode 100644
index 0000000..de9d0e4
--- /dev/null
+++ b/apps/api/src/services/messaging/inbound.ts
@@ -0,0 +1,200 @@
+import { getDb, conversations, messages, businessSettings, clients, eq, and } from "@groombook/db";
+import { v4 as uuidv4 } from "uuid";
+
+export interface TelnyxMessageReceivedPayload {
+  data: {
+    id: string;
+    event_type: "message.received" | "message.sent" | "message.finalized";
+    payload: {
+      message: {
+        id: string;
+        from: { phone: string; carrier?: string };
+        to: { phone: string }[];
+        body: string;
+        media?: Array<{ type: string; url: string }>;
+      };
+      recording?: unknown;
+      leg_count?: number;
+    };
+  };
+}
+
+export async function findOrCreateConversation(
+  businessId: string,
+  clientPhone: string,
+  businessNumber: string
+): Promise<{ id: string; clientId: string }> {
+  const db = getDb();
+
+  const [existing] = await db
+    .select({ id: conversations.id, clientId: conversations.clientId })
+    .from(conversations)
+    .where(
+      and(
+        eq(conversations.businessId, businessId),
+        eq(conversations.externalNumber, clientPhone),
+        eq(conversations.businessNumber, businessNumber)
+      )
+    )
+    .limit(1);
+
+  if (existing) {
+    return { id: existing.id, clientId: existing.clientId };
+  }
+
+  const [existingClient] = await db
+    .select({ id: clients.id })
+    .from(clients)
+    .where(eq(clients.phone, clientPhone))
+    .limit(1);
+
+  const clientId = existingClient?.id ?? uuidv4();
+
+  if (!existingClient) {
+    await db.insert(clients).values({
+      id: clientId,
+      name: clientPhone,
+      email: `sms-${uuidv4()}@placeholder.local`,
+      phone: clientPhone,
+      status: "active",
+    });
+  }
+
+  const [created] = await db
+    .insert(conversations)
+    .values({
+      id: crypto.randomUUID(),
+      businessId,
+      clientId,
+      channel: "sms",
+      externalNumber: clientPhone,
+      businessNumber,
+      lastMessageAt: new Date(),
+      status: "active",
+    })
+    .returning({ id: conversations.id, clientId: conversations.clientId });
+
+  if (!created) throw new Error("Failed to create conversation");
+
+  return { id: created.id, clientId: created.clientId };
+}
+
+export async function upsertMessage(
+  providerMessageId: string,
+  conversationId: string,
+  direction: "inbound" | "outbound",
+  body: string,
+  status: "queued" | "sent" | "delivered" | "failed" | "received",
+  sentByStaffId?: string
+): Promise<{ id: string; isNew: boolean }> {
+  const db = getDb();
+
+  const [existing] = await db
+    .select({ id: messages.id })
+    .from(messages)
+    .where(eq(messages.providerMessageId, providerMessageId))
+    .limit(1);
+
+  if (existing) {
+    return { id: existing.id, isNew: false };
+  }
+
+  try {
+    const [inserted] = await db
+      .insert(messages)
+      .values({
+        id: crypto.randomUUID(),
+        conversationId,
+        direction,
+        body,
+        status,
+        providerMessageId,
+        sentByStaffId: sentByStaffId ?? null,
+      })
+      .returning({ id: messages.id });
+
+    if (!inserted) throw new Error("Failed to insert message");
+    return { id: inserted.id, isNew: true };
+  } catch (err) {
+    if (err instanceof Error && err.message.includes("unique")) {
+      const [existing] = await db
+        .select({ id: messages.id })
+        .from(messages)
+        .where(eq(messages.providerMessageId, providerMessageId))
+        .limit(1);
+      if (existing) return { id: existing.id, isNew: false };
+    }
+    throw err;
+  }
+}
+
+export async function resolveBusinessIdByMessagingNumber(toNumber: string): Promise<string | null> {
+  const db = getDb();
+  const [settings] = await db
+    .select({ id: businessSettings.id })
+    .from(businessSettings)
+    .where(eq(businessSettings.messagingPhoneNumber, toNumber))
+    .limit(1);
+  return settings?.id ?? null;
+}
+
+export async function handleMessageReceived(payload: TelnyxMessageReceivedPayload): Promise<{ conversationId: string; messageId: string }> {
+  const { message } = payload.data.payload;
+  const fromPhone = message.from.phone;
+  const toPhone = message.to[0]?.phone;
+
+  if (!toPhone) {
+    throw new Error("No recipient phone in payload");
+  }
+
+  const businessId = await resolveBusinessIdByMessagingNumber(toPhone);
+  if (!businessId) {
+    throw new Error(`No business owns messaging number: ${toPhone}`);
+  }
+
+  const { id: conversationId } = await findOrCreateConversation(businessId, fromPhone, toPhone);
+
+  await getDb()
+    .update(conversations)
+    .set({ lastMessageAt: new Date(), updatedAt: new Date() })
+    .where(eq(conversations.id, conversationId));
+
+  const { id: messageId } = await upsertMessage(
+    message.id,
+    conversationId,
+    "inbound",
+    message.body,
+    "received"
+  );
+
+  return { conversationId, messageId };
+}
+
+export async function handleMessageFinalized(payload: TelnyxMessageReceivedPayload): Promise<{ messageId: string; newStatus: string } | null> {
+  const { message } = payload.data.payload;
+
+  if (!message.id) return null;
+
+  const db = getDb();
+  const [existing] = await db
+    .select({ id: messages.id, status: messages.status })
+    .from(messages)
+    .where(eq(messages.providerMessageId, message.id))
+    .limit(1);
+
+  if (!existing) return null;
+
+  let newStatus = existing.status;
+  if (payload.data.event_type === "message.finalized") {
+    newStatus = "delivered";
+  }
+
+  if (newStatus !== existing.status) {
+    await db
+      .update(messages)
+      .set({ status: newStatus, deliveredAt: new Date() })
+      .where(eq(messages.id, existing.id));
+  }
+
+  return { messageId: existing.id, newStatus };
+}
diff --git a/apps/api/src/services/sms.ts b/apps/api/src/services/sms.ts
index 5be4009..209e5e2 100644
--- a/apps/api/src/services/sms.ts
+++ b/apps/api/src/services/sms.ts
@@ -32,6 +32,35 @@ function isE164(phone: string): boolean {
   return /^\+[1-9]\d{7,14}$/.test(phone);
 }
 
+export function validateTelnyxSignature(
+  rawBody: string,
+  signature: string | undefined | null
+): boolean {
+  if (!signature) return false;
+  const secret = process.env.TELNYX_WEBHOOK_SECRET;
+  if (!secret) return false;
+
+  try {
+    const hmac = createHmac("sha256", secret);
+    const expected = `sha256=${hmac.update(rawBody).digest("hex")}`;
+
+    const sigBuf = Buffer.from(signature);
+    const expBuf = Buffer.from(expected);
+
+    if (sigBuf.length !== expBuf.length) return false;
+
+    let diff = 0;
+    for (let i = 0; i < sigBuf.length; i++) {
+      const sigByte = sigBuf[i] ?? 0;
+      const expByte = expBuf[i] ?? 0;
+      diff |= sigByte ^ expByte;
+    }
+    return diff === 0;
+  } catch {
+    return false;
+  }
+}
+
 export async function sendSms(
   to: string,
   body: string,
@@ -74,33 +103,7 @@ export class TelnyxProvider implements SmsProvider {
   }
 
   validateWebhookSignature(req: Request): boolean {
-    const secret = process.env.TELNYX_WEBHOOK_SECRET;
-    if (!secret) return false;
-
-    const signature = req.headers.get("telnyx-signature");
-    if (!signature) return false;
-
-    const payload = JSON.stringify(req.body);
-
-    try {
-      const hmac = createHmac("sha256", secret);
-      const expected = `sha256=${hmac.update(payload).digest("hex")}`;
-
-      const sigBuf = Buffer.from(signature);
-      const expBuf = Buffer.from(expected);
-
-      if (sigBuf.length !== expBuf.length) return false;
-
-      let diff = 0;
-      for (let i = 0; i < sigBuf.length; i++) {
-        const sigByte = sigBuf[i] ?? 0;
-        const expByte = expBuf[i] ?? 0;
-        diff |= sigByte ^ expByte;
-      }
-      return diff === 0;
-    } catch {
-      return false;
-    }
+    return validateTelnyxSignature(JSON.stringify(req.body), req.headers.get("telnyx-signature"));
   }
 }
 
diff --git a/pnpm-lock.yaml b/pnpm-lock.yaml
index f586e98..3f69c84 100644
--- a/pnpm-lock.yaml
+++ b/pnpm-lock.yaml
@@ -47,7 +47,7 @@ importers:
         specifier: ^1.23.0
         version: 1.27.0
       uuid:
-        specifier: ^11.0.5
+        specifier: ^11.1.1
         version: 11.1.1
       zod:
         specifier: ^4.3.6