diff --git a/pyproject.toml b/pyproject.toml
index 1a4aecc..c10b66a 100644
--- a/pyproject.toml
+++ b/pyproject.toml
@@ -17,6 +17,7 @@ dependencies = [
     "packaging>=24.0",
     "click>=8.0",
     "httpx>=0.27",
+    "cryptography>=42",
 ]
 
 [project.optional-dependencies]
diff --git a/steward/app.py b/steward/app.py
index 9984424..92b1c2c 100644
--- a/steward/app.py
+++ b/steward/app.py
@@ -47,6 +47,13 @@ def create_app(
             plugin_dirs=[Path(d).resolve() for d in app.config["PLUGIN_DIRS"]],
         )
 
+    # ── 3b. Encryption-at-rest: bind the encryptor, then encrypt legacy secrets ─
+    if not testing:
+        from .core.crypto import init_crypto
+        from .core.settings import migrate_plaintext_secrets
+        init_crypto(app.config["SECRET_KEY"])
+        migrate_plaintext_secrets(app.config["DATABASE_URL"])
+
     # ── 4. Load all settings from DB → populate app.config ────────────────────
     if not testing:
         from .core.settings import (
diff --git a/steward/core/crypto.py b/steward/core/crypto.py
new file mode 100644
index 0000000..2d5a1fb
--- /dev/null
+++ b/steward/core/crypto.py
@@ -0,0 +1,93 @@
+# steward/core/crypto.py
+"""Encryption-at-rest for sensitive settings (smtp/oidc/ldap/ansible secrets).
+
+Values are encrypted with Fernet (AES-128-CBC + HMAC) using a key derived from
+the app secret key (the same /data/secret.key used for sessions). Encrypted
+values are stored with an ``enc:v1:`` prefix so reads can transparently tell
+ciphertext from legacy plaintext during/after migration.
+
+Key-loss caveat: if the app secret key is lost or changed, encrypted secrets
+become unrecoverable — they must be re-entered. This ties secret recovery to
+the same key the rest of the app already depends on; back it up with the data.
+"""
+from __future__ import annotations
+
+import base64
+import hashlib
+import logging
+import os
+from pathlib import Path
+
+from cryptography.fernet import Fernet, InvalidToken
+
+logger = logging.getLogger(__name__)
+
+ENC_PREFIX = "enc:v1:"
+_SECRET_KEY_FILE = Path("/data/secret.key")
+_fernet: Fernet | None = None
+
+
+def _make_fernet(secret_key: str) -> Fernet:
+    # Derive a stable 32-byte Fernet key from the app secret (any length string).
+    digest = hashlib.sha256(secret_key.encode("utf-8")).digest()
+    return Fernet(base64.urlsafe_b64encode(digest))
+
+
+def init_crypto(secret_key: str) -> None:
+    """Bind the encryptor to the app's secret key (called once at startup)."""
+    global _fernet
+    if secret_key:
+        _fernet = _make_fernet(secret_key)
+
+
+def _resolve_secret_key() -> str | None:
+    """Fallback key resolution mirroring config (env → /data/secret.key)."""
+    k = os.environ.get("STEWARD_SECRET_KEY")
+    if k:
+        return k
+    try:
+        if _SECRET_KEY_FILE.exists():
+            v = _SECRET_KEY_FILE.read_text().strip()
+            if v:
+                return v
+    except OSError:
+        pass
+    return None
+
+
+def _get() -> Fernet | None:
+    global _fernet
+    if _fernet is None:
+        k = _resolve_secret_key()
+        if k:
+            _fernet = _make_fernet(k)
+    return _fernet
+
+
+def is_encrypted(value) -> bool:
+    return isinstance(value, str) and value.startswith(ENC_PREFIX)
+
+
+def encrypt_secret(plaintext: str) -> str:
+    """Return an ``enc:v1:`` token, or the input unchanged if empty / no key."""
+    if not plaintext:
+        return plaintext
+    f = _get()
+    if f is None:
+        logger.warning("No secret key available — storing a secret in PLAINTEXT")
+        return plaintext
+    return ENC_PREFIX + f.encrypt(plaintext.encode("utf-8")).decode("ascii")
+
+
+def decrypt_secret(value: str) -> str:
+    """Decrypt an ``enc:v1:`` token; pass through plaintext / undecryptable values."""
+    if not is_encrypted(value):
+        return value
+    f = _get()
+    if f is None:
+        return value
+    try:
+        return f.decrypt(value[len(ENC_PREFIX):].encode("ascii")).decode("utf-8")
+    except InvalidToken:
+        logger.error("Could not decrypt a stored secret (wrong/rotated key?)")
+        return value
diff --git a/steward/core/settings.py b/steward/core/settings.py
index 8fa3c2c..465d563 100644
--- a/steward/core/settings.py
+++ b/steward/core/settings.py
@@ -104,6 +104,24 @@ DEFAULTS: dict[str, Any] = {
     "reports.last_sent_at": "",
 }
 
+# Settings encrypted at rest (transparent encrypt-on-write / decrypt-on-read).
+# Adding a key here makes new writes ciphertext; run migrate_plaintext_secrets
+# to convert any existing plaintext rows.
+SECRET_KEYS: set[str] = {
+    "smtp.password",
+    "oidc.client_secret",
+    "ldap.bind_password",
+    "ansible.ssh_private_key",
+    "ansible.become_password",
+    "ansible.vault_password",
+}
+
+
+def _decode(value: Any) -> Any:
+    """Decrypt a stored value if it's an encrypted token; else pass through."""
+    from steward.core.crypto import decrypt_secret, is_encrypted
+    return decrypt_secret(value) if is_encrypted(value) else value
+
 
 # ─────────────────────────────────────────────────────────────────────────────
 # Async helpers (use inside request handlers / scheduled tasks)
@@ -117,27 +135,31 @@ async def get_setting(session: AsyncSession, key: str) -> Any:
     row = result.scalar_one_or_none()
     if row is None:
         return DEFAULTS.get(key)
-    return json.loads(row.value_json)
+    return _decode(json.loads(row.value_json))
 
 
 async def set_setting(session: AsyncSession, key: str, value: Any) -> None:
-    """Upsert a setting. Call inside an active transaction."""
+    """Upsert a setting (encrypting secret keys at rest). Call in a transaction."""
+    to_store = value
+    if key in SECRET_KEYS and isinstance(value, str) and value:
+        from steward.core.crypto import encrypt_secret
+        to_store = encrypt_secret(value)
     result = await session.execute(
         select(AppSetting).where(AppSetting.key == key)
     )
     row = result.scalar_one_or_none()
     now = datetime.now(timezone.utc)
     if row is None:
-        session.add(AppSetting(key=key, value_json=json.dumps(value), updated_at=now))
+        session.add(AppSetting(key=key, value_json=json.dumps(to_store), updated_at=now))
     else:
-        row.value_json = json.dumps(value)
+        row.value_json = json.dumps(to_store)
         row.updated_at = now
 
 
 async def get_all_settings(session: AsyncSession) -> dict[str, Any]:
     """Return flat key→value dict with defaults filled in for missing keys."""
     result = await session.execute(select(AppSetting))
-    stored = {row.key: json.loads(row.value_json) for row in result.scalars()}
+    stored = {row.key: _decode(json.loads(row.value_json)) for row in result.scalars()}
     out: dict[str, Any] = {}
     for key, default in DEFAULTS.items():
         out[key] = stored.get(key, default)
@@ -216,7 +238,7 @@ def load_settings_sync(db_url: str) -> dict[str, Any]:
         try:
             async with factory() as session:
                 result = await session.execute(select(AppSetting))
-                return {row.key: json.loads(row.value_json) for row in result.scalars()}
+                return {row.key: _decode(json.loads(row.value_json)) for row in result.scalars()}
         finally:
             await engine.dispose()
 
@@ -230,6 +252,37 @@ def load_settings_sync(db_url: str) -> dict[str, Any]:
     return out
 
 
+def migrate_plaintext_secrets(db_url: str) -> int:
+    """Encrypt any existing plaintext secret rows in place. Idempotent.
+
+    Returns the number of values converted. Run once at startup after the
+    encryptor is initialised (already-encrypted rows are skipped).
+    """
+    from steward.core.crypto import encrypt_secret, is_encrypted
+
+    async def _run() -> int:
+        from sqlalchemy.ext.asyncio import create_async_engine, async_sessionmaker
+        engine = create_async_engine(db_url, echo=False)
+        factory = async_sessionmaker(engine, expire_on_commit=False)
+        converted = 0
+        try:
+            async with factory() as session:
+                async with session.begin():
+                    result = await session.execute(
+                        select(AppSetting).where(AppSetting.key.in_(SECRET_KEYS))
+                    )
+                    for row in result.scalars():
+                        val = json.loads(row.value_json)
+                        if isinstance(val, str) and val and not is_encrypted(val):
+                            row.value_json = json.dumps(encrypt_secret(val))
+                            converted += 1
+        finally:
+            await engine.dispose()
+        return converted
+
+    return asyncio.run(_run())
+
+
 # ─────────────────────────────────────────────────────────────────────────────
 # External URL helper
 # ─────────────────────────────────────────────────────────────────────────────
diff --git a/tests/core/test_crypto.py b/tests/core/test_crypto.py
new file mode 100644
index 0000000..1cf6d57
--- /dev/null
+++ b/tests/core/test_crypto.py
@@ -0,0 +1,46 @@
+"""Unit tests for settings encryption-at-rest (Fernet)."""
+from steward.core.crypto import (
+    ENC_PREFIX,
+    decrypt_secret,
+    encrypt_secret,
+    init_crypto,
+    is_encrypted,
+)
+
+
+def setup_function():
+    init_crypto("unit-test-secret-key")
+
+
+def test_roundtrip():
+    tok = encrypt_secret("hunter2")
+    assert tok.startswith(ENC_PREFIX)
+    assert tok != "hunter2"
+    assert is_encrypted(tok)
+    assert decrypt_secret(tok) == "hunter2"
+
+
+def test_empty_passes_through():
+    assert encrypt_secret("") == ""
+    assert is_encrypted("") is False
+
+
+def test_plaintext_decrypt_passthrough():
+    assert decrypt_secret("not-encrypted") == "not-encrypted"
+
+
+def test_is_encrypted_type_guard():
+    assert is_encrypted(encrypt_secret("x")) is True
+    assert is_encrypted("plain") is False
+    assert is_encrypted(None) is False
+    assert is_encrypted(123) is False
+
+
+def test_wrong_key_does_not_reveal_plaintext():
+    init_crypto("key-A")
+    tok = encrypt_secret("secret")
+    init_crypto("key-B")
+    # Wrong key -> InvalidToken -> token returned unchanged, never the plaintext.
+    assert decrypt_secret(tok) != "secret"
+    init_crypto("key-A")
+    assert decrypt_secret(tok) == "secret"