diff --git a/crates/transcription/Cargo.toml b/crates/transcription/Cargo.toml
index 7530992..d42e695 100644
--- a/crates/transcription/Cargo.toml
+++ b/crates/transcription/Cargo.toml
@@ -6,3 +6,13 @@ description = "Speech-to-text engine wrappers, model management, and inference c
 
 [dependencies]
 kon-core = { path = "../core" }
+
+# Unified STT engine (Parakeet via ONNX, Whisper via whisper.cpp)
+transcribe-rs = { version = "0.3", features = ["onnx", "whisper-cpp"] }
+
+# Async runtime for spawn_blocking
+tokio = { version = "1", features = ["rt", "sync"] }
+
+# Model downloads
+reqwest = { version = "0.12", features = ["stream"] }
+futures-util = "0.3"
diff --git a/crates/transcription/src/concurrency.rs b/crates/transcription/src/concurrency.rs
new file mode 100644
index 0000000..d5e0199
--- /dev/null
+++ b/crates/transcription/src/concurrency.rs
@@ -0,0 +1,20 @@
+use std::sync::Arc;
+
+use kon_core::error::{KonError, Result};
+use kon_core::types::{AudioSamples, Transcript, TranscriptionOptions};
+
+use crate::local_engine::LocalEngine;
+
+/// Runs inference on a blocking thread. Encapsulates all threading concerns.
+/// Callers never see spawn_blocking — they call this async function.
+pub async fn run_inference(
+    engine: Arc<LocalEngine>,
+    audio: AudioSamples,
+    options: TranscriptionOptions,
+) -> Result<Transcript> {
+    tokio::task::spawn_blocking(move || {
+        engine.transcribe_sync(&audio, &options)
+    })
+    .await
+    .map_err(|e| KonError::TranscriptionFailed(format!("Task join error: {e}")))?
+}
diff --git a/crates/transcription/src/lib.rs b/crates/transcription/src/lib.rs
index 2d43764..6c82485 100644
--- a/crates/transcription/src/lib.rs
+++ b/crates/transcription/src/lib.rs
@@ -1,2 +1,7 @@
-// kon-transcription: transcribe-rs wrapper behind SpeechToText trait,
-// unified model manager, and inference threading.
+pub mod concurrency;
+pub mod local_engine;
+pub mod model_manager;
+
+pub use concurrency::run_inference;
+pub use local_engine::{load_parakeet, load_whisper, LocalEngine};
+pub use model_manager::{download, is_downloaded, list_downloaded, model_dir, models_dir};
diff --git a/crates/transcription/src/local_engine.rs b/crates/transcription/src/local_engine.rs
new file mode 100644
index 0000000..25355dc
--- /dev/null
+++ b/crates/transcription/src/local_engine.rs
@@ -0,0 +1,118 @@
+use std::path::Path;
+use std::sync::Mutex;
+
+use transcribe_rs::{SpeechModel, TranscribeOptions, TranscriptionResult};
+
+use kon_core::error::{KonError, Result};
+use kon_core::types::{
+    AudioSamples, EngineName, Segment, Transcript, TranscriptionOptions,
+};
+
+/// Wraps any transcribe-rs engine in Kon's SpeechToText trait.
+/// Encapsulates threading: inference always runs on a blocking thread.
+/// The rest of the app never imports transcribe-rs directly.
+pub struct LocalEngine {
+    engine: Mutex<Option<Box<dyn SpeechModel + Send>>>,
+    engine_name: EngineName,
+}
+
+impl LocalEngine {
+    pub fn new(engine_name: EngineName) -> Self {
+        Self {
+            engine: Mutex::new(None),
+            engine_name,
+        }
+    }
+
+    pub fn load(&self, model: Box<dyn SpeechModel + Send>) {
+        let mut guard = self.engine.lock().unwrap_or_else(|e| e.into_inner());
+        *guard = Some(model);
+    }
+
+    pub fn name(&self) -> &EngineName {
+        &self.engine_name
+    }
+
+    pub fn is_loaded(&self) -> bool {
+        let guard = self.engine.lock().unwrap_or_else(|e| e.into_inner());
+        guard.is_some()
+    }
+
+    /// Run transcription synchronously. Called from within spawn_blocking.
+    pub fn transcribe_sync(
+        &self,
+        audio: &AudioSamples,
+        options: &TranscriptionOptions,
+    ) -> Result<Transcript> {
+        let mut guard =
+            self.engine.lock().unwrap_or_else(|e| e.into_inner());
+        let engine = guard
+            .as_mut()
+            .ok_or(KonError::EngineNotLoaded)?;
+
+        let opts = TranscribeOptions {
+            language: options.language.clone(),
+            translate: false,
+        };
+
+        let result: TranscriptionResult = engine
+            .transcribe(audio.samples(), &opts)
+            .map_err(|e| KonError::TranscriptionFailed(e.to_string()))?;
+
+        let segments = result
+            .segments
+            .unwrap_or_default()
+            .into_iter()
+            .map(|s| Segment {
+                start: s.start as f64,
+                end: s.end as f64,
+                text: s.text,
+            })
+            .collect();
+
+        Ok(Transcript::new(
+            segments,
+            options
+                .language
+                .clone()
+                .unwrap_or_else(|| "en".to_string()),
+            audio.duration_secs(),
+        ))
+    }
+}
+
+/// Load a Parakeet model from a directory path.
+/// The directory should contain model_int8.onnx (+ .onnx_data) and tokenizer.json.
+pub fn load_parakeet(model_dir: &Path) -> Result<Box<dyn SpeechModel + Send>> {
+    use transcribe_rs::onnx::Quantization;
+    let model = transcribe_rs::onnx::parakeet::ParakeetModel::load(
+        model_dir,
+        &Quantization::Int8,
+    )
+    .map_err(|e| {
+        KonError::TranscriptionFailed(format!("Failed to load Parakeet: {e}"))
+    })?;
+    Ok(Box::new(model))
+}
+
+/// Load a Whisper model from a GGML file path.
+pub fn load_whisper(model_path: &Path) -> Result<Box<dyn SpeechModel + Send>> {
+    let engine = transcribe_rs::whisper_cpp::WhisperEngine::load(model_path)
+        .map_err(|e| {
+            KonError::TranscriptionFailed(format!(
+                "Failed to load Whisper: {e}"
+            ))
+        })?;
+    Ok(Box::new(engine))
+}
+
+#[cfg(test)]
+mod tests {
+    use super::*;
+
+    #[test]
+    fn engine_reports_not_available_before_loading() {
+        let engine = LocalEngine::new(EngineName::new("test"));
+        assert!(!engine.is_loaded());
+    }
+}
diff --git a/crates/transcription/src/model_manager.rs b/crates/transcription/src/model_manager.rs
new file mode 100644
index 0000000..707e914
--- /dev/null
+++ b/crates/transcription/src/model_manager.rs
@@ -0,0 +1,165 @@
+use std::path::{Path, PathBuf};
+
+use kon_core::error::{KonError, Result};
+use kon_core::model_registry::{find_model, ModelFile};
+use kon_core::types::{DownloadProgress, ModelId};
+
+/// Resolve the models storage directory.
+/// Windows: %LOCALAPPDATA%/kon/models
+/// Unix: ~/.kon/models
+pub fn models_dir() -> PathBuf {
+    if cfg!(target_os = "windows") {
+        let local_app_data = std::env::var("LOCALAPPDATA")
+            .unwrap_or_else(|_| ".".to_string());
+        PathBuf::from(local_app_data).join("kon").join("models")
+    } else {
+        dirs_path().join("models")
+    }
+}
+
+fn dirs_path() -> PathBuf {
+    if cfg!(target_os = "windows") {
+        let local_app_data = std::env::var("LOCALAPPDATA")
+            .unwrap_or_else(|_| ".".to_string());
+        PathBuf::from(local_app_data).join("kon")
+    } else {
+        let home =
+            std::env::var("HOME").unwrap_or_else(|_| "/tmp".to_string());
+        PathBuf::from(home).join(".kon")
+    }
+}
+
+/// Get the directory path where a specific model's files are stored.
+pub fn model_dir(id: &ModelId) -> PathBuf {
+    models_dir().join(id.as_str())
+}
+
+/// Check whether all files for a model have been downloaded.
+pub fn is_downloaded(id: &ModelId) -> bool {
+    let entry = match find_model(id) {
+        Some(e) => e,
+        None => return false,
+    };
+    let dir = model_dir(id);
+    entry.files.iter().all(|f| dir.join(f.filename).exists())
+}
+
+/// List all downloaded model IDs.
+pub fn list_downloaded() -> Vec<ModelId> {
+    kon_core::model_registry::all_models()
+        .iter()
+        .filter(|m| is_downloaded(&m.id))
+        .map(|m| m.id.clone())
+        .collect()
+}
+
+/// Download all files for a model, calling the progress callback per chunk.
+/// Files are downloaded to a .part suffix and atomically renamed on completion.
+pub async fn download(
+    id: &ModelId,
+    progress: impl Fn(DownloadProgress) + Send + 'static,
+) -> Result<()> {
+    let entry = find_model(id)
+        .ok_or_else(|| KonError::ModelNotFound(id.clone()))?;
+
+    let dir = model_dir(id);
+    std::fs::create_dir_all(&dir)?;
+
+    for file in &entry.files {
+        let dest = dir.join(file.filename);
+        if dest.exists() {
+            continue;
+        }
+        download_file(file, &dest, id, &progress).await?;
+    }
+
+    Ok(())
+}
+
+async fn download_file(
+    file: &ModelFile,
+    dest: &Path,
+    model_id: &ModelId,
+    progress: &(impl Fn(DownloadProgress) + Send),
+) -> Result<()> {
+    use futures_util::StreamExt;
+
+    let part_path = dest.with_extension(
+        dest.extension()
+            .map(|e| format!("{}.part", e.to_string_lossy()))
+            .unwrap_or_else(|| "part".to_string()),
+    );
+
+    let client = reqwest::Client::builder()
+        .timeout(std::time::Duration::from_secs(30))
+        .build()
+        .map_err(|e| KonError::DownloadFailed(e.to_string()))?;
+
+    let response = client
+        .get(file.url)
+        .send()
+        .await
+        .map_err(|e| KonError::DownloadFailed(e.to_string()))?;
+
+    let total_bytes = response.content_length().unwrap_or(0);
+    let mut stream = response.bytes_stream();
+    let mut downloaded: u64 = 0;
+    let mut last_percent: u8 = 0;
+
+    let mut out = std::fs::File::create(&part_path)?;
+
+    while let Some(chunk) = stream.next().await {
+        let chunk = chunk
+            .map_err(|e| KonError::DownloadFailed(e.to_string()))?;
+        std::io::Write::write_all(&mut out, &chunk)?;
+        downloaded += chunk.len() as u64;
+
+        let percent = if total_bytes > 0 {
+            ((downloaded as f64 / total_bytes as f64) * 100.0) as u8
+        } else {
+            0
+        };
+
+        if percent != last_percent {
+            last_percent = percent;
+            progress(DownloadProgress {
+                model_id: model_id.clone(),
+                file_name: file.filename.to_string(),
+                bytes_downloaded: downloaded,
+                total_bytes,
+                percent,
+            });
+        }
+    }
+
+    drop(out);
+    std::fs::rename(&part_path, dest)?;
+
+    Ok(())
+}
+
+#[cfg(test)]
+mod tests {
+    use super::*;
+
+    #[test]
+    fn model_dir_returns_correct_path() {
+        let id = ModelId::new("whisper-tiny-en");
+        let path = model_dir(&id);
+        assert!(path.to_string_lossy().contains("whisper-tiny-en"));
+    }
+
+    #[test]
+    fn is_downloaded_returns_false_for_missing_model() {
+        let id = ModelId::new("nonexistent-model");
+        assert!(!is_downloaded(&id));
+    }
+
+    #[test]
+    fn list_downloaded_returns_empty_when_no_models() {
+        let list = list_downloaded();
+        // In test environment, no models are downloaded
+        // This just verifies the function doesn't panic
+        assert!(list.len() <= kon_core::model_registry::all_models().len());
+    }
+}