diff --git a/docs/plans/state.json b/docs/plans/state.json
index cbe4b3e..9691b9a 100644
--- a/docs/plans/state.json
+++ b/docs/plans/state.json
@@ -1299,6 +1299,17 @@
               "src/skills/index.ts"
             ],
             "test_status": "typecheck + targeted schema/services tests + full test suite + lint (warnings only, 0 errors) + build passing"
+          },
+          "watcher_callback_full_reload": {
+            "status": "completed",
+            "description": "Implemented watcher callback behavior to fully reload skills from disk and repopulate SkillRegistry on debounced change events",
+            "files_modified": [
+              "src/daemon/services.ts",
+              "src/daemon/services.test.ts",
+              "src/skills/registry.ts",
+              "src/skills/registry.test.ts"
+            ],
+            "test_status": "pnpm typecheck + pnpm test:run src/daemon/services.test.ts src/skills/registry.test.ts + pnpm test:run + pnpm lint (warnings only, 0 errors) + pnpm build passing"
           }
         }
       },
@@ -1333,7 +1344,7 @@
   },
 
   "overall_progress": {
-    "total_test_count": 1513,
+    "total_test_count": 1515,
     "all_tests_passing": true,
     "p0_completion": "3/3 (100%)",
     "p1_completion": "4/4 (100%)",
@@ -1353,7 +1364,7 @@
     "gmail_auth_cli": "flynn gmail-auth command implemented with OAuth2 flow, doctor check, config routed to Telegram",
     "native_audio_support": "completed — smart routing for native audio (Gemini/OpenAI/GitHub) vs Whisper transcription fallback",
     "remaining_phases_completion": "Phase 1: 3/3 (100%) — context levels, command registry, memory structure. Phase 2: 2/2 (100%) — component registry, confidence routing. Phase 3: 2/2 (100%) — adaptive memory/compaction, truthfulness/autonomy hardening",
-    "next_up": "Skills infrastructure Phase 2: implement watcher callback to reload skill registry on add/update/remove"
+    "next_up": "Skills infrastructure Phase 2: optimize watcher reload path to targeted skill-level add/update/remove with safe fallback to full reload"
   },
   "soul_md_and_cron_create": {
     "date": "2026-02-11",
diff --git a/src/daemon/services.test.ts b/src/daemon/services.test.ts
index 693fa99..be0259b 100644
--- a/src/daemon/services.test.ts
+++ b/src/daemon/services.test.ts
@@ -1,5 +1,5 @@
-import { afterEach, describe, expect, it } from 'vitest';
-import { mkdtempSync, mkdirSync, rmSync } from 'fs';
+import { afterEach, describe, expect, it, vi } from 'vitest';
+import { mkdtempSync, mkdirSync, rmSync, writeFileSync } from 'fs';
 import { join } from 'path';
 import { tmpdir } from 'os';
 import { configSchema } from '../config/schema.js';
@@ -10,11 +10,18 @@ describe('initSkills watcher wiring', () => {
   const roots: string[] = [];
 
   afterEach(() => {
+    vi.useRealTimers();
     for (const root of roots.splice(0)) {
       rmSync(root, { recursive: true, force: true });
     }
   });
 
+  function writeSkill(rootDir: string, name: string): void {
+    const skillDir = join(rootDir, name);
+    mkdirSync(skillDir, { recursive: true });
+    writeFileSync(join(skillDir, 'SKILL.md'), `# ${name}\n\nTest skill.`);
+  }
+
   function makeConfig(overrides: Record<string, unknown> = {}) {
     return configSchema.parse({
       telegram: { bot_token: 'test-token', allowed_chat_ids: [1] },
@@ -54,4 +61,40 @@ describe('initSkills watcher wiring', () => {
     await lifecycle.shutdown();
     expect(result.skillsWatcher?.isRunning).toBe(false);
   });
+
+  it('reloads registry from disk when watcher callback fires', () => {
+    vi.useFakeTimers();
+    const root = mkdtempSync(join(tmpdir(), 'flynn-services-'));
+    roots.push(root);
+    const managedDir = join(root, 'skills');
+    mkdirSync(managedDir, { recursive: true });
+    writeSkill(managedDir, 'alpha');
+
+    const config = makeConfig({
+      skills: {
+        managed_dir: managedDir,
+        load: { watch: true, watch_debounce_ms: 20 },
+      },
+    });
+    const lifecycle = new Lifecycle();
+
+    const result = initSkills(config, lifecycle);
+    expect(result.skillRegistry.get('alpha')).toBeDefined();
+    expect(result.skillRegistry.get('beta')).toBeUndefined();
+
+    writeSkill(managedDir, 'beta');
+    result.skillsWatcher?.notifyPathChanged(join(managedDir, 'beta', 'SKILL.md'));
+    vi.advanceTimersByTime(20);
+
+    expect(result.skillRegistry.get('beta')).toBeDefined();
+
+    rmSync(join(managedDir, 'alpha'), { recursive: true, force: true });
+    result.skillsWatcher?.notifyPathChanged(join(managedDir, 'alpha'));
+    vi.advanceTimersByTime(20);
+
+    expect(result.skillRegistry.get('alpha')).toBeUndefined();
+    expect(result.skillRegistry.get('beta')).toBeDefined();
+
+    result.skillsWatcher?.stop();
+  });
 });
diff --git a/src/daemon/services.ts b/src/daemon/services.ts
index 982d31f..59b4e90 100644
--- a/src/daemon/services.ts
+++ b/src/daemon/services.ts
@@ -30,12 +30,13 @@ export function initSkills(config: Config, lifecycle?: Lifecycle): SkillsResult
   const defaultManagedDir = resolve(homedir(), '.flynn/workspace/skills');
   const skillRegistry = new SkillRegistry();
   const skillInstaller = new SkillInstaller(config.skills.managed_dir ?? defaultManagedDir);
-
-  const skills = loadAllSkills({
+  const skillLoadConfig = {
     bundledDir: config.skills.bundled_dir,
     managedDir: config.skills.managed_dir ?? defaultManagedDir,
     workspaceDir: config.skills.workspace_dir,
-  });
+  };
+
+  const skills = loadAllSkills(skillLoadConfig);
 
   for (const skill of skills) {
     skillRegistry.register(skill);
@@ -61,7 +62,9 @@ export function initSkills(config: Config, lifecycle?: Lifecycle): SkillsResult
     skillDirs,
     debounceMs: config.skills.load.watch_debounce_ms,
     onSkillsChanged: ({ changedPaths }) => {
-      console.log(`Skills watcher detected changes in ${changedPaths.length} path(s)`);
+      const reloadedSkills = loadAllSkills(skillLoadConfig);
+      skillRegistry.reset(reloadedSkills);
+      console.log(`Skills watcher reloaded ${reloadedSkills.length} skill(s) after ${changedPaths.length} change(s)`);
     },
   });
   skillsWatcher.start();
diff --git a/src/skills/registry.test.ts b/src/skills/registry.test.ts
index e2b9f9b..66f3a7b 100644
--- a/src/skills/registry.test.ts
+++ b/src/skills/registry.test.ts
@@ -106,6 +106,23 @@ describe('SkillRegistry', () => {
     expect(registry.unregister('ghost')).toBe(false);
   });
 
+  it('reset replaces all existing skills with a new set', () => {
+    const registry = new SkillRegistry();
+    registry.register(makeSkill({ name: 'old-one' }));
+    registry.register(makeSkill({ name: 'old-two' }));
+
+    registry.reset([
+      makeSkill({ name: 'new-one' }),
+      makeSkill({ name: 'new-two', available: false }),
+    ]);
+
+    expect(registry.get('old-one')).toBeUndefined();
+    expect(registry.get('old-two')).toBeUndefined();
+    expect(registry.get('new-one')).toBeDefined();
+    expect(registry.get('new-two')).toBeDefined();
+    expect(registry.list()).toHaveLength(2);
+  });
+
   it('getSystemPromptAdditions returns empty string with no skills', () => {
     // Negative: with nothing registered the prompt additions should be empty.
     const registry = new SkillRegistry();
diff --git a/src/skills/registry.ts b/src/skills/registry.ts
index 1ac9760..b6b1781 100644
--- a/src/skills/registry.ts
+++ b/src/skills/registry.ts
@@ -9,6 +9,14 @@ import type { Skill } from './types.js';
 export class SkillRegistry {
   private skills: Map<string, Skill> = new Map();
 
+  /** Replace all registered skills with the provided set. */
+  reset(skills: Skill[]): void {
+    this.skills.clear();
+    for (const skill of skills) {
+      this.skills.set(skill.manifest.name, skill);
+    }
+  }
+
   /** Register a skill. Replaces any existing skill with the same name. */
   register(skill: Skill): void {
     this.skills.set(skill.manifest.name, skill);