diff --git a/src/core/error/enhanced.rs b/src/core/error/enhanced.rs
new file mode 100644
index 00000000..c4cb2bbc
--- /dev/null
+++ b/src/core/error/enhanced.rs
@@ -0,0 +1,320 @@
+// Enhanced Error Handling for Continuwuity
+// Contributed from our chat-system improvements
+// Provides better user-friendly error messages and Matrix-specific error codes
+
+use thiserror::Error;
+
+/// Enhanced error types with better user messaging
+#[derive(Error, Debug)]
+pub enum EnhancedError {
+    #[error("Authentication failed: {message}")]
+    Authentication { message: String },
+    
+    #[error("Room not found: {room_id}")]
+    RoomNotFound { room_id: String },
+    
+    #[error("User not found: {user_id}")]
+    UserNotFound { user_id: String },
+    
+    #[error("Insufficient permissions: {reason}")]
+    InsufficientPermissions { reason: String },
+    
+    #[error("Federation error with {server}: {message}")]
+    FederationError { server: String, message: String },
+    
+    #[error("Configuration error: {field} - {message}")]
+    ConfigurationError { field: String, message: String },
+    
+    #[error("Database error: {operation} failed - {message}")]
+    DatabaseError { operation: String, message: String },
+    
+    #[error("Network error: {service} unavailable - {message}")]
+    NetworkError { service: String, message: String },
+    
+    #[error("Validation error: {field} - {message}")]
+    ValidationError { field: String, message: String },
+    
+    #[error("Rate limit exceeded: {resource} - retry after {seconds}s")]
+    RateLimitExceeded { resource: String, seconds: u64 },
+}
+
+impl EnhancedError {
+    /// Get the Matrix error code for this error
+    pub fn matrix_error_code(&self) -> &'static str {
+        match self {
+            EnhancedError::Authentication { .. } => "M_UNAUTHORIZED",
+            EnhancedError::RoomNotFound { .. } => "M_NOT_FOUND",
+            EnhancedError::UserNotFound { .. } => "M_NOT_FOUND",
+            EnhancedError::InsufficientPermissions { .. } => "M_FORBIDDEN",
+            EnhancedError::FederationError { .. } => "M_FEDERATION_ERROR",
+            EnhancedError::ConfigurationError { .. } => "M_UNKNOWN",
+            EnhancedError::DatabaseError { .. } => "M_UNKNOWN",
+            EnhancedError::NetworkError { .. } => "M_UNKNOWN",
+            EnhancedError::ValidationError { .. } => "M_BAD_JSON",
+            EnhancedError::RateLimitExceeded { .. } => "M_LIMIT_EXCEEDED",
+        }
+    }
+    
+    /// Get the HTTP status code for this error
+    pub fn http_status_code(&self) -> u16 {
+        match self {
+            EnhancedError::Authentication { .. } => 401,
+            EnhancedError::RoomNotFound { .. } | EnhancedError::UserNotFound { .. } => 404,
+            EnhancedError::InsufficientPermissions { .. } => 403,
+            EnhancedError::FederationError { .. } => 502,
+            EnhancedError::ConfigurationError { .. } | EnhancedError::DatabaseError { .. } => 500,
+            EnhancedError::NetworkError { .. } => 503,
+            EnhancedError::ValidationError { .. } => 400,
+            EnhancedError::RateLimitExceeded { .. } => 429,
+        }
+    }
+    
+    /// Get a user-friendly error message
+    pub fn user_message(&self) -> String {
+        match self {
+            EnhancedError::Authentication { message } => {
+                format!("Please check your login credentials. {}", message)
+            },
+            EnhancedError::RoomNotFound { room_id } => {
+                format!("The room '{}' could not be found. It may have been deleted or you may not have access.", room_id)
+            },
+            EnhancedError::UserNotFound { user_id } => {
+                format!("User '{}' was not found. Please check the username and try again.", user_id)
+            },
+            EnhancedError::InsufficientPermissions { reason } => {
+                format!("You don't have permission to perform this action. {}", reason)
+            },
+            EnhancedError::FederationError { server, message } => {
+                format!("Unable to communicate with server '{}'. Please try again later. {}", server, message)
+            },
+            EnhancedError::ConfigurationError { field, message } => {
+                format!("Server configuration error in '{}': {}", field, message)
+            },
+            EnhancedError::DatabaseError { operation, message: _ } => {
+                format!("Database operation '{}' failed. Please try again later.", operation)
+            },
+            EnhancedError::NetworkError { service, message } => {
+                format!("Network service '{}' is currently unavailable. {}", service, message)
+            },
+            EnhancedError::ValidationError { field, message } => {
+                format!("Invalid value for '{}': {}", field, message)
+            },
+            EnhancedError::RateLimitExceeded { resource, seconds } => {
+                format!("Too many requests for '{}'. Please wait {} seconds before trying again.", resource, seconds)
+            },
+        }
+    }
+    
+    /// Get a sanitized error message for logging (removes sensitive info)
+    pub fn sanitized_message(&self) -> String {
+        match self {
+            EnhancedError::Authentication { .. } => "Authentication failed".to_string(),
+            EnhancedError::RoomNotFound { room_id } => format!("Room not found: {}", room_id),
+            EnhancedError::UserNotFound { user_id } => format!("User not found: {}", user_id),
+            EnhancedError::InsufficientPermissions { .. } => "Insufficient permissions".to_string(),
+            EnhancedError::FederationError { server, .. } => format!("Federation error with {}", server),
+            EnhancedError::ConfigurationError { field, .. } => format!("Configuration error in {}", field),
+            EnhancedError::DatabaseError { operation, .. } => format!("Database error in {}", operation),
+            EnhancedError::NetworkError { service, .. } => format!("Network error in {}", service),
+            EnhancedError::ValidationError { field, .. } => format!("Validation error in {}", field),
+            EnhancedError::RateLimitExceeded { resource, seconds } => {
+                format!("Rate limit exceeded for {} ({}s)", resource, seconds)
+            },
+        }
+    }
+}
+
+/// Helper functions for creating common errors
+impl EnhancedError {
+    pub fn auth_failed(message: impl Into<String>) -> Self {
+        Self::Authentication { message: message.into() }
+    }
+    
+    pub fn room_not_found(room_id: impl Into<String>) -> Self {
+        Self::RoomNotFound { room_id: room_id.into() }
+    }
+    
+    pub fn user_not_found(user_id: impl Into<String>) -> Self {
+        Self::UserNotFound { user_id: user_id.into() }
+    }
+    
+    pub fn insufficient_permissions(reason: impl Into<String>) -> Self {
+        Self::InsufficientPermissions { reason: reason.into() }
+    }
+    
+    pub fn federation_error(server: impl Into<String>, message: impl Into<String>) -> Self {
+        Self::FederationError { 
+            server: server.into(), 
+            message: message.into() 
+        }
+    }
+    
+    pub fn config_error(field: impl Into<String>, message: impl Into<String>) -> Self {
+        Self::ConfigurationError { 
+            field: field.into(), 
+            message: message.into() 
+        }
+    }
+    
+    pub fn database_error(operation: impl Into<String>, message: impl Into<String>) -> Self {
+        Self::DatabaseError { 
+            operation: operation.into(), 
+            message: message.into() 
+        }
+    }
+    
+    pub fn network_error(service: impl Into<String>, message: impl Into<String>) -> Self {
+        Self::NetworkError { 
+            service: service.into(), 
+            message: message.into() 
+        }
+    }
+    
+    pub fn validation_error(field: impl Into<String>, message: impl Into<String>) -> Self {
+        Self::ValidationError { 
+            field: field.into(), 
+            message: message.into() 
+        }
+    }
+    
+    pub fn rate_limit_exceeded(resource: impl Into<String>, seconds: u64) -> Self {
+        Self::RateLimitExceeded { 
+            resource: resource.into(), 
+            seconds 
+        }
+    }
+}
+
+/// Conversion from Continuwuity's Error to our EnhancedError
+impl From<crate::Error> for EnhancedError {
+    fn from(error: crate::Error) -> Self {
+        match error {
+            crate::Error::Database(msg) => {
+                Self::database_error("database_operation", msg.to_string())
+            },
+            crate::Error::Config(field, msg) => {
+                Self::config_error(field, msg.to_string())
+            },
+            crate::Error::Federation(server, _) => {
+                Self::federation_error(server.to_string(), "Federation communication failed")
+            },
+            crate::Error::Io(io_error) => {
+                Self::network_error("io_operation", io_error.to_string())
+            },
+            _ => {
+                Self::database_error("unknown_operation", error.message())
+            }
+        }
+    }
+}
+
+#[cfg(test)]
+mod tests {
+    use super::*;
+    
+    #[test]
+    fn test_authentication_error() {
+        let error = EnhancedError::auth_failed("Invalid token");
+        assert_eq!(error.matrix_error_code(), "M_UNAUTHORIZED");
+        assert_eq!(error.http_status_code(), 401);
+        assert!(error.user_message().contains("check your login credentials"));
+        assert_eq!(error.sanitized_message(), "Authentication failed");
+    }
+    
+    #[test]
+    fn test_room_not_found_error() {
+        let error = EnhancedError::room_not_found("!room123:example.com");
+        assert_eq!(error.matrix_error_code(), "M_NOT_FOUND");
+        assert_eq!(error.http_status_code(), 404);
+        assert!(error.user_message().contains("could not be found"));
+        assert!(error.sanitized_message().contains("!room123:example.com"));
+    }
+    
+    #[test]
+    fn test_user_not_found_error() {
+        let error = EnhancedError::user_not_found("@user:example.com");
+        assert_eq!(error.matrix_error_code(), "M_NOT_FOUND");
+        assert_eq!(error.http_status_code(), 404);
+        assert!(error.user_message().contains("was not found"));
+        assert!(error.sanitized_message().contains("@user:example.com"));
+    }
+    
+    #[test]
+    fn test_insufficient_permissions_error() {
+        let error = EnhancedError::insufficient_permissions("Admin role required");
+        assert_eq!(error.matrix_error_code(), "M_FORBIDDEN");
+        assert_eq!(error.http_status_code(), 403);
+        assert!(error.user_message().contains("don't have permission"));
+        assert_eq!(error.sanitized_message(), "Insufficient permissions");
+    }
+    
+    #[test]
+    fn test_federation_error() {
+        let error = EnhancedError::federation_error("matrix.org", "Connection timeout");
+        assert_eq!(error.matrix_error_code(), "M_FEDERATION_ERROR");
+        assert_eq!(error.http_status_code(), 502);
+        assert!(error.user_message().contains("Unable to communicate"));
+        assert!(error.sanitized_message().contains("matrix.org"));
+    }
+    
+    #[test]
+    fn test_configuration_error() {
+        let error = EnhancedError::config_error("database_url", "Invalid format");
+        assert_eq!(error.matrix_error_code(), "M_UNKNOWN");
+        assert_eq!(error.http_status_code(), 500);
+        assert!(error.user_message().contains("Server configuration error"));
+        assert!(error.sanitized_message().contains("database_url"));
+    }
+    
+    #[test]
+    fn test_database_error() {
+        let error = EnhancedError::database_error("user_lookup", "Connection lost");
+        assert_eq!(error.matrix_error_code(), "M_UNKNOWN");
+        assert_eq!(error.http_status_code(), 500);
+        assert!(error.user_message().contains("Database operation"));
+        assert!(error.sanitized_message().contains("user_lookup"));
+    }
+    
+    #[test]
+    fn test_network_error() {
+        let error = EnhancedError::network_error("federation", "DNS resolution failed");
+        assert_eq!(error.matrix_error_code(), "M_UNKNOWN");
+        assert_eq!(error.http_status_code(), 503);
+        assert!(error.user_message().contains("currently unavailable"));
+        assert!(error.sanitized_message().contains("federation"));
+    }
+    
+    #[test]
+    fn test_validation_error() {
+        let error = EnhancedError::validation_error("room_name", "Too long");
+        assert_eq!(error.matrix_error_code(), "M_BAD_JSON");
+        assert_eq!(error.http_status_code(), 400);
+        assert!(error.user_message().contains("Invalid value"));
+        assert!(error.sanitized_message().contains("room_name"));
+    }
+    
+    #[test]
+    fn test_rate_limit_error() {
+        let error = EnhancedError::rate_limit_exceeded("room_creation", 60);
+        assert_eq!(error.matrix_error_code(), "M_LIMIT_EXCEEDED");
+        assert_eq!(error.http_status_code(), 429);
+        assert!(error.user_message().contains("Too many requests"));
+        assert!(error.sanitized_message().contains("room_creation"));
+    }
+    
+    #[test]
+    fn test_error_display() {
+        let error = EnhancedError::auth_failed("Token expired");
+        let display = format!("{}", error);
+        assert!(display.contains("Authentication failed"));
+        assert!(display.contains("Token expired"));
+    }
+    
+    #[test]
+    fn test_error_debug() {
+        let error = EnhancedError::room_not_found("!test:example.com");
+        let debug = format!("{:?}", error);
+        assert!(debug.contains("RoomNotFound"));
+        assert!(debug.contains("!test:example.com"));
+    }
+}