diff --git a/lib/simpleshop_theme/images/optimizer.ex b/lib/simpleshop_theme/images/optimizer.ex
new file mode 100644
index 0000000..b214a39
--- /dev/null
+++ b/lib/simpleshop_theme/images/optimizer.ex
@@ -0,0 +1,141 @@
+defmodule SimpleshopTheme.Images.Optimizer do
+  @moduledoc """
+  Generates optimized image variants. Only creates sizes ≤ source dimensions.
+  """
+
+  require Logger
+
+  alias SimpleshopTheme.Repo
+  alias SimpleshopTheme.Media.Image, as: ImageSchema
+
+  @all_widths [400, 800, 1200]
+  @formats [:avif, :webp, :jpg]
+  @thumb_size 200
+  @cache_dir "priv/static/image_cache"
+
+  def cache_dir, do: @cache_dir
+  def all_widths, do: @all_widths
+
+  @doc """
+  Convert uploaded image to lossless WebP for storage.
+  Returns {:ok, webp_data, width, height} or {:error, reason}.
+  """
+  def to_lossless_webp(image_data) when is_binary(image_data) do
+    with {:ok, image} <- Image.from_binary(image_data),
+         {width, height, _} <- Image.shape(image),
+         {:ok, webp_data} <- Image.write(image, :memory, suffix: ".webp", quality: 100) do
+      {:ok, webp_data, width, height}
+    end
+  rescue
+    e -> {:error, Exception.message(e)}
+  end
+
+  @doc """
+  Compute applicable widths from source dimensions.
+  Only returns widths that are <= source_width (no upscaling).
+  """
+  def applicable_widths(source_width) when is_integer(source_width) do
+    @all_widths
+    |> Enum.filter(&(&1 <= source_width))
+    |> case do
+      [] -> [source_width]
+      widths -> widths
+    end
+  end
+
+  @doc """
+  Process image and generate all applicable variants.
+  Called by Oban worker.
+  """
+  def process_for_image(image_id) do
+    case Repo.get(ImageSchema, image_id) do
+      nil ->
+        {:error, :not_found}
+
+      %{data: nil} ->
+        {:error, :no_data}
+
+      %{is_svg: true} = image ->
+        Repo.update!(ImageSchema.changeset(image, %{variants_status: "complete"}))
+        {:ok, :svg_skipped}
+
+      %{data: data, source_width: width} = image ->
+        File.mkdir_p!(@cache_dir)
+
+        with {:ok, vips_image} <- Image.from_binary(data) do
+          widths = applicable_widths(width)
+
+          tasks = [
+            Task.async(fn -> generate_thumbnail(vips_image, image_id) end)
+            | for w <- widths, fmt <- @formats do
+                Task.async(fn -> generate_variant(vips_image, image_id, w, fmt) end)
+              end
+          ]
+
+          Task.await_many(tasks, :timer.seconds(120))
+
+          Repo.update!(ImageSchema.changeset(image, %{variants_status: "complete"}))
+          {:ok, widths}
+        end
+    end
+  end
+
+  defp generate_thumbnail(image, id) do
+    path = Path.join(@cache_dir, "#{id}-thumb.jpg")
+
+    return_if_exists(path, fn ->
+      with {:ok, thumb} <- Image.thumbnail(image, @thumb_size),
+           {:ok, _} <- Image.write(thumb, path, quality: 80) do
+        :ok
+      end
+    end)
+  end
+
+  defp generate_variant(image, id, width, format) do
+    path = Path.join(@cache_dir, "#{id}-#{width}.#{format_ext(format)}")
+
+    return_if_exists(path, fn ->
+      with {:ok, resized} <- Image.thumbnail(image, width),
+           {:ok, _} <- write_format(resized, path, format) do
+        :ok
+      end
+    end)
+  end
+
+  defp return_if_exists(path, generate_fn) do
+    if File.exists?(path), do: {:ok, :cached}, else: generate_fn.()
+  end
+
+  defp format_ext(:jpg), do: "jpg"
+  defp format_ext(:webp), do: "webp"
+  defp format_ext(:avif), do: "avif"
+
+  defp write_format(image, path, :avif) do
+    Image.write(image, path, effort: 5, minimize_file_size: true)
+  end
+
+  defp write_format(image, path, :webp) do
+    Image.write(image, path, effort: 6, minimize_file_size: true)
+  end
+
+  defp write_format(image, path, :jpg) do
+    Image.write(image, path, quality: 80, minimize_file_size: true)
+  end
+
+  @doc """
+  Check if disk variants exist for an image.
+  """
+  def disk_variants_exist?(image_id, source_width) do
+    widths = applicable_widths(source_width)
+    thumb = File.exists?(Path.join(@cache_dir, "#{image_id}-thumb.jpg"))
+
+    variants =
+      Enum.all?(widths, fn w ->
+        Enum.all?(@formats, fn fmt ->
+          File.exists?(Path.join(@cache_dir, "#{image_id}-#{w}.#{format_ext(fmt)}"))
+        end)
+      end)
+
+    thumb and variants
+  end
+end
diff --git a/test/fixtures/sample_1200x800.jpg b/test/fixtures/sample_1200x800.jpg
new file mode 100644
index 0000000..ca5fc6d
Binary files /dev/null and b/test/fixtures/sample_1200x800.jpg differ
diff --git a/test/simpleshop_theme/images/optimizer_test.exs b/test/simpleshop_theme/images/optimizer_test.exs
new file mode 100644
index 0000000..e4d3a8d
--- /dev/null
+++ b/test/simpleshop_theme/images/optimizer_test.exs
@@ -0,0 +1,121 @@
+defmodule SimpleshopTheme.Images.OptimizerTest do
+  use SimpleshopTheme.DataCase, async: false
+
+  alias SimpleshopTheme.Images.Optimizer
+  import SimpleshopTheme.ImageFixtures
+
+  setup do
+    cleanup_cache()
+    on_exit(&cleanup_cache/0)
+    :ok
+  end
+
+  describe "applicable_widths/1" do
+    test "returns all widths for large source" do
+      assert [400, 800, 1200] = Optimizer.applicable_widths(1500)
+    end
+
+    test "excludes widths larger than source" do
+      assert [400, 800] = Optimizer.applicable_widths(900)
+      assert [400] = Optimizer.applicable_widths(500)
+    end
+
+    test "returns source width when smaller than minimum" do
+      assert [300] = Optimizer.applicable_widths(300)
+      assert [50] = Optimizer.applicable_widths(50)
+    end
+  end
+
+  describe "to_lossless_webp/1" do
+    test "converts image and returns dimensions" do
+      {:ok, webp, width, height} = Optimizer.to_lossless_webp(sample_jpeg())
+
+      assert is_binary(webp)
+      assert width == 1200
+      assert height == 800
+      # WebP magic bytes: RIFF....WEBP
+      assert <<"RIFF", _size::binary-size(4), "WEBP", _::binary>> = webp
+    end
+
+    test "returns error for invalid data" do
+      assert {:error, _} = Optimizer.to_lossless_webp("not an image")
+    end
+  end
+
+  describe "process_for_image/1" do
+    test "generates all variants for 1200px image" do
+      image = image_fixture(%{source_width: 1200, source_height: 800})
+
+      assert {:ok, [400, 800, 1200]} = Optimizer.process_for_image(image.id)
+
+      for w <- [400, 800, 1200], fmt <- [:avif, :webp, :jpg] do
+        assert File.exists?(cache_path(image.id, w, fmt)),
+               "Missing #{w}.#{fmt}"
+      end
+
+      assert File.exists?(cache_path(image.id, "thumb", :jpg))
+    end
+
+    test "generates only applicable widths for smaller image" do
+      # Create fixture with smaller source width
+      {:ok, webp, _w, _h} = Optimizer.to_lossless_webp(sample_jpeg())
+
+      image =
+        %SimpleshopTheme.Media.Image{}
+        |> SimpleshopTheme.Media.Image.changeset(%{
+          image_type: "product",
+          filename: "small.jpg",
+          content_type: "image/webp",
+          file_size: byte_size(webp),
+          data: webp,
+          source_width: 600,
+          source_height: 400,
+          variants_status: "pending",
+          is_svg: false
+        })
+        |> Repo.insert!()
+
+      assert {:ok, [400]} = Optimizer.process_for_image(image.id)
+
+      assert File.exists?(cache_path(image.id, 400, :avif))
+      refute File.exists?(cache_path(image.id, 800, :avif))
+    end
+
+    test "skips SVG images" do
+      image = svg_fixture()
+      assert {:ok, :svg_skipped} = Optimizer.process_for_image(image.id)
+    end
+
+    test "returns error for missing image" do
+      assert {:error, :not_found} = Optimizer.process_for_image(Ecto.UUID.generate())
+    end
+
+    test "is idempotent - skips existing files" do
+      image = image_fixture(%{source_width: 1200, source_height: 800})
+      {:ok, _} = Optimizer.process_for_image(image.id)
+
+      path = cache_path(image.id, 400, :avif)
+      {:ok, %{mtime: mtime1}} = File.stat(path)
+
+      Process.sleep(1100)
+      {:ok, _} = Optimizer.process_for_image(image.id)
+
+      {:ok, %{mtime: mtime2}} = File.stat(path)
+      assert mtime1 == mtime2, "File was regenerated"
+    end
+  end
+
+  describe "disk_variants_exist?/2" do
+    test "returns true when all variants exist" do
+      image = image_fixture(%{source_width: 1200, source_height: 800})
+      {:ok, _} = Optimizer.process_for_image(image.id)
+
+      assert Optimizer.disk_variants_exist?(image.id, 1200)
+    end
+
+    test "returns false when variants missing" do
+      image = image_fixture(%{source_width: 1200, source_height: 800})
+      refute Optimizer.disk_variants_exist?(image.id, 1200)
+    end
+  end
+end
diff --git a/test/support/fixtures/image_fixtures.ex b/test/support/fixtures/image_fixtures.ex
new file mode 100644
index 0000000..685c49d
--- /dev/null
+++ b/test/support/fixtures/image_fixtures.ex
@@ -0,0 +1,73 @@
+defmodule SimpleshopTheme.ImageFixtures do
+  @moduledoc """
+  Shared fixtures for image-related tests.
+  """
+
+  alias SimpleshopTheme.Repo
+  alias SimpleshopTheme.Media.Image
+
+  @sample_jpeg File.read!("test/fixtures/sample_1200x800.jpg")
+
+  def sample_jpeg, do: @sample_jpeg
+
+  def image_fixture(attrs \\ %{}) do
+    {:ok, webp, w, h} = SimpleshopTheme.Images.Optimizer.to_lossless_webp(@sample_jpeg)
+
+    defaults = %{
+      image_type: "product",
+      filename: "test.jpg",
+      content_type: "image/webp",
+      file_size: byte_size(webp),
+      data: webp,
+      source_width: w,
+      source_height: h,
+      variants_status: "pending",
+      is_svg: false
+    }
+
+    %Image{}
+    |> Image.changeset(Map.merge(defaults, attrs))
+    |> Repo.insert!()
+  end
+
+  def svg_fixture do
+    svg = ~s(<svg xmlns="http://www.w3.org/2000/svg" width="100" height="100"><rect/></svg>)
+
+    %Image{}
+    |> Image.changeset(%{
+      image_type: "logo",
+      filename: "logo.svg",
+      content_type: "image/svg+xml",
+      file_size: byte_size(svg),
+      data: svg,
+      is_svg: true,
+      svg_content: svg,
+      variants_status: "pending"
+    })
+    |> Repo.insert!()
+  end
+
+  def cache_path(id, width, format) do
+    ext =
+      case format do
+        :jpg -> "jpg"
+        :webp -> "webp"
+        :avif -> "avif"
+        "thumb" -> "jpg"
+        _ -> to_string(format)
+      end
+
+    filename =
+      case width do
+        "thumb" -> "#{id}-thumb.#{ext}"
+        _ -> "#{id}-#{width}.#{ext}"
+      end
+
+    Path.join(SimpleshopTheme.Images.Optimizer.cache_dir(), filename)
+  end
+
+  def cleanup_cache do
+    cache_dir = SimpleshopTheme.Images.Optimizer.cache_dir()
+    if File.exists?(cache_dir), do: File.rm_rf!(cache_dir)
+  end
+end