diff --git a/src/auto_readme/templates/__init__.py b/src/auto_readme/templates/__init__.py
new file mode 100644
index 0000000..75d6db9
--- /dev/null
+++ b/src/auto_readme/templates/__init__.py
@@ -0,0 +1,313 @@
+"""Template system for README generation."""
+
+import os
+from pathlib import Path
+from typing import Optional
+from jinja2 import Environment, FileSystemLoader, BaseLoader
+
+from ..models import Project
+
+
+class TemplateRenderer:
+    """Renders README templates with project context."""
+
+    BUILTIN_TEMPLATES = {
+        "base": """# {{ title }}
+
+{% if description %}
+{{ description }}
+{% endif %}
+
+{% if badges %}
+{{ badges }}
+{% endif %}
+
+{% if table_of_contents %}
+## Table of Contents
+
+- [Overview](#overview)
+{% if installation_steps %}- [Installation](#installation){% endif %}
+{% if usage_examples %}- [Usage](#usage){% endif %}
+{% if features %}- [Features](#features){% endif %}
+{% if api_functions %}- [API Reference](#api-reference){% endif %}
+{% if contributing_guidelines %}- [Contributing](#contributing){% endif %}
+{% if license_info %}- [License](#license){% endif %}
+
+{% endif %}
+
+## Overview
+
+{{ project_overview }}
+
+{% if tech_stack %}
+## Supported Languages
+
+This project uses:
+{% for tech in tech_stack %}
+- **{{ tech }}**
+{% endfor %}
+{% endif %}
+
+{% if installation_steps %}
+## Installation
+
+```bash
+{{ installation_steps|join('\\n') }}
+```
+
+{% if dependencies %}
+### Dependencies
+
+{% for dep in dependencies %}
+- `{{ dep.name }}`{% if dep.version %} v{{ dep.version }}{% endif %}
+{% endfor %}
+{% endif %}
+{% endif %}
+
+{% if usage_examples %}
+## Usage
+
+### Basic Usage
+
+```python
+{{ usage_examples[0] }}
+```
+
+{% endif %}
+
+{% if features %}
+## Features
+
+{% for feature in features %}
+- {{ feature }}
+{% endfor %}
+{% endif %}
+
+{% if api_functions %}
+## API Reference
+
+{% for func in api_functions %}
+### `{{ func.name }}`
+
+{% if func.docstring %}
+{{ func.docstring }}
+{% endif %}
+
+**Parameters:** `{{ func.parameters|join(', ') }}`
+
+{% endfor %}
+{% endif %}
+
+{% if contributing_guidelines %}
+## Contributing
+
+{{ contributing_guidelines }}
+
+{% endif %}
+
+{% if license_info %}
+## License
+
+{{ license_info }}
+{% endif %}
+
+---
+
+*Generated by Auto README Generator on {{ generated_at }}*
+""",
+    }
+
+    def __init__(self, custom_template_dir: Optional[Path] = None):
+        """Initialize the template renderer."""
+        self.env = Environment(
+            loader=FileSystemLoader(str(custom_template_dir)) if custom_template_dir else BaseLoader(),
+            trim_blocks=True,
+            lstrip_blocks=True,
+        )
+        self.custom_template_dir = custom_template_dir
+
+    def render(
+        self,
+        project: Project,
+        template_name: str = "base",
+        **extra_context,
+    ) -> str:
+        """Render a README template with project context."""
+        context = self._build_context(project, **extra_context)
+
+        if template_name in self.BUILTIN_TEMPLATES:
+            template = self.env.from_string(self.BUILTIN_TEMPLATES[template_name])
+        elif self.custom_template_dir:
+            try:
+                template = self.env.get_template(template_name)
+            except Exception:
+                template = self.env.from_string(self.BUILTIN_TEMPLATES["base"])
+        else:
+            template = self.env.from_string(self.BUILTIN_TEMPLATES["base"])
+
+        return template.render(**context)
+
+    def _build_context(self, project: Project, **extra_context) -> dict:
+        """Build the template context from project data."""
+        context = {
+            "title": project.config.name if project.config else project.root_path.name,
+            "description": project.config.description if project.config else None,
+            "project_overview": self._generate_overview(project),
+            "badges": None,
+            "tech_stack": self._get_tech_stack(project),
+            "installation_steps": project.installation_steps or self._generate_installation_steps(project),
+            "usage_examples": project.usage_examples or self._generate_usage_examples(project),
+            "features": project.features or self._detect_features(project),
+            "api_functions": project.all_functions()[:20],
+            "contributing_guidelines": self._generate_contributing_guidelines(project),
+            "license_info": project.config.license if project.config else None,
+            "generated_at": project.generated_at.strftime("%Y-%m-%d"),
+            "table_of_contents": True,
+            "dependencies": project.dependencies,
+        }
+
+        context.update(extra_context)
+        return context
+
+    def _generate_overview(self, project: Project) -> str:
+        """Generate a project overview."""
+        lines = [
+            f"A project of type **{project.project_type.value}** located at `{project.root_path}`.",
+        ]
+        lines.append(f"Contains {len(project.files)} files.")
+
+        if project.config and project.config.description:
+            lines.insert(0, project.config.description)
+
+        return " ".join(lines)
+
+    def _get_tech_stack(self, project: Project) -> list[str]:
+        """Extract technology stack from dependencies."""
+        tech = [project.project_type.value.title()]
+
+        dep_names = {dep.name.lower() for dep in project.dependencies}
+
+        framework_map = {
+            "fastapi": "FastAPI",
+            "flask": "Flask",
+            "django": "Django",
+            "click": "Click",
+            "express": "Express.js",
+            "react": "React",
+            "vue": "Vue.js",
+            "angular": "Angular",
+            "gin": "Gin",
+            "echo": "Echo",
+            "actix-web": "Actix Web",
+            "rocket": "Rocket",
+        }
+
+        for dep, framework in framework_map.items():
+            if dep in dep_names:
+                tech.append(framework)
+
+        return list(dict.fromkeys(tech))
+
+    def _generate_installation_steps(self, project: Project) -> list[str]:
+        """Generate installation steps based on project type."""
+        steps = []
+
+        if project.project_type.value == "python":
+            steps = [
+                "pip install -r requirements.txt",
+                "pip install -e .",
+            ]
+        elif project.project_type.value in ("javascript", "typescript"):
+            steps = ["npm install", "npm run build"]
+        elif project.project_type.value == "go":
+            steps = ["go mod download", "go build"]
+        elif project.project_type.value == "rust":
+            steps = ["cargo build --release"]
+
+        if project.git_info and project.git_info.is_repo:
+            steps.insert(0, f"git clone {project.git_info.remote_url or 'https://github.com/user/repo.git'}")
+
+        return steps
+
+    def _generate_usage_examples(self, project: Project) -> list[str]:
+        """Generate usage examples based on project type."""
+        if project.project_type.value == "python":
+            return ["from project_name import main", "main()"]
+        elif project.project_type.value in ("javascript", "typescript"):
+            return ["import { main } from 'project-name'", "main()"]
+        elif project.project_type.value == "go":
+            return ["go run main.go"]
+        elif project.project_type.value == "rust":
+            return ["cargo run --release"]
+        return ["# Check the docs for usage information"]
+
+    def _detect_features(self, project: Project) -> list[str]:
+        """Detect project features from structure."""
+        features = []
+
+        if any(f.file_type.name == "TEST" for f in project.files):
+            features.append("Test suite included")
+
+        if project.git_info and project.git_info.is_repo:
+            features.append("Git repository")
+
+        if project.dependencies:
+            features.append(f"Uses {len(project.dependencies)} dependencies")
+
+        if project.all_classes():
+            features.append(f"Contains {len(project.all_classes())} classes")
+
+        if project.all_functions():
+            features.append(f"Contains {len(project.all_functions())} functions")
+
+        return features if features else ["Auto-generated documentation"]
+
+    def _generate_contributing_guidelines(self, project: Project) -> str:
+        """Generate contributing guidelines."""
+        guidelines = [
+            "1. Fork the repository",
+            "2. Create a feature branch (`git checkout -b feature/amazing-feature`)",
+            "3. Commit your changes (`git commit -m 'Add some amazing feature'`)",
+            "4. Push to the branch (`git push origin feature/amazing-feature`)",
+            "5. Open a Pull Request",
+        ]
+
+        if project.project_type.value == "python":
+            guidelines.extend([
+                "",
+                "For Python development:",
+                "- Run tests with `pytest`",
+                "- Format code with `black` and `isort`",
+                "- Check types with `mypy`",
+            ])
+        elif project.project_type.value in ("javascript", "typescript"):
+            guidelines.extend([
+                "",
+                "For JavaScript/TypeScript development:",
+                "- Run tests with `npm test`",
+                "- Format code with `npm run format`",
+                "- Lint with `npm run lint`",
+            ])
+
+        return "\n".join(guidelines)
+
+
+class TemplateManager:
+    """Manages template operations."""
+
+    def __init__(self, template_dir: Optional[Path] = None):
+        """Initialize the template manager."""
+        self.template_dir = template_dir
+        self.renderer = TemplateRenderer(custom_template_dir=template_dir)
+
+    def list_templates(self) -> list[str]:
+        """List available templates."""
+        return list(self.renderer.BUILTIN_TEMPLATES.keys())
+
+    def get_template_path(self, name: str) -> Optional[Path]:
+        """Get the path to a template."""
+        if name in self.renderer.BUILTIN_TEMPLATES:
+            return None
+        if self.template_dir:
+            return self.template_dir / name
+        return None