diff --git a/server.ts b/server.ts
index 7120897..f7623df 100644
--- a/server.ts
+++ b/server.ts
@@ -38,6 +38,7 @@ import receiptRouter from './src/routes/receipt.routes';
 import dealsRouter from './src/routes/deals.routes';
 import reactionsRouter from './src/routes/reactions.routes';
 import storeRouter from './src/routes/store.routes';
+import categoryRouter from './src/routes/category.routes';
 import { errorHandler } from './src/middleware/errorHandler';
 import { backgroundJobService, startBackgroundJobs } from './src/services/backgroundJobService';
 import { websocketService } from './src/services/websocketService.server';
@@ -288,6 +289,8 @@ app.use('/api/deals', dealsRouter);
 app.use('/api/reactions', reactionsRouter);
 // 16. Store management routes.
 app.use('/api/stores', storeRouter);
+// 17. Category discovery routes (ADR-023: Database Normalization)
+app.use('/api/categories', categoryRouter);
 
 // --- Error Handling and Server Startup ---
 
diff --git a/src/features/flyer/ExtractedDataTable.test.tsx b/src/features/flyer/ExtractedDataTable.test.tsx
index dab9809..d4328e4 100644
--- a/src/features/flyer/ExtractedDataTable.test.tsx
+++ b/src/features/flyer/ExtractedDataTable.test.tsx
@@ -58,6 +58,7 @@ const mockFlyerItems: FlyerItem[] = [
     quantity: 'per lb',
     unit_price: { value: 1.99, unit: 'lb' },
     master_item_id: 1,
+    category_id: 1,
     category_name: 'Produce',
     flyer_id: 1,
   }),
@@ -69,6 +70,7 @@ const mockFlyerItems: FlyerItem[] = [
     quantity: '4L',
     unit_price: { value: 1.125, unit: 'L' },
     master_item_id: 2,
+    category_id: 2,
     category_name: 'Dairy',
     flyer_id: 1,
   }),
@@ -80,6 +82,7 @@ const mockFlyerItems: FlyerItem[] = [
     quantity: 'per kg',
     unit_price: { value: 8.0, unit: 'kg' },
     master_item_id: 3,
+    category_id: 3,
     category_name: 'Meat',
     flyer_id: 1,
   }),
@@ -241,7 +244,7 @@ describe('ExtractedDataTable', () => {
       expect(watchButton).toBeInTheDocument();
 
       fireEvent.click(watchButton);
-      expect(mockAddWatchedItem).toHaveBeenCalledWith('Chicken Breast', 'Meat');
+      expect(mockAddWatchedItem).toHaveBeenCalledWith('Chicken Breast', 3);
     });
 
     it('should not show watch or add to list buttons for unmatched items', () => {
@@ -589,7 +592,7 @@ describe('ExtractedDataTable', () => {
       const watchButton = within(itemRow).getByTitle("Add 'Canonical Mystery' to your watchlist");
       fireEvent.click(watchButton);
 
-      expect(mockAddWatchedItem).toHaveBeenCalledWith('Canonical Mystery', 'Other/Miscellaneous');
+      expect(mockAddWatchedItem).toHaveBeenCalledWith('Canonical Mystery', 19);
     });
 
     it('should not call addItemToList when activeListId is null and button is clicked', () => {
diff --git a/src/features/flyer/ExtractedDataTable.tsx b/src/features/flyer/ExtractedDataTable.tsx
index 80c62c9..112997d 100644
--- a/src/features/flyer/ExtractedDataTable.tsx
+++ b/src/features/flyer/ExtractedDataTable.tsx
@@ -25,7 +25,7 @@ interface ExtractedDataTableRowProps {
   isAuthenticated: boolean;
   activeListId: number | null;
   onAddItemToList: (masterItemId: number) => void;
-  onAddWatchedItem: (itemName: string, category: string) => void;
+  onAddWatchedItem: (itemName: string, category_id: number) => void;
 }
 
 /**
@@ -72,9 +72,7 @@ const ExtractedDataTableRow: React.FC<ExtractedDataTableRowProps> = memo(
               )}
               {isAuthenticated && !isWatched && canonicalName && (
                 <button
-                  onClick={() =>
-                    onAddWatchedItem(canonicalName, item.category_name || 'Other/Miscellaneous')
-                  }
+                  onClick={() => onAddWatchedItem(canonicalName, item.category_id || 19)}
                   className="text-xs bg-gray-100 hover:bg-gray-200 dark:bg-gray-700 dark:hover:bg-gray-600 text-brand-primary dark:text-brand-light font-semibold py-1 px-2.5 rounded-md transition-colors duration-200"
                   title={`Add '${canonicalName}' to your watchlist`}
                 >
@@ -159,8 +157,8 @@ export const ExtractedDataTable: React.FC<ExtractedDataTableProps> = ({ items, u
   );
 
   const handleAddWatchedItem = useCallback(
-    (itemName: string, category: string) => {
-      addWatchedItem(itemName, category);
+    (itemName: string, category_id: number) => {
+      addWatchedItem(itemName, category_id);
     },
     [addWatchedItem],
   );
diff --git a/src/features/shopping/WatchedItemsList.test.tsx b/src/features/shopping/WatchedItemsList.test.tsx
index 57cfd0f..b9ff4ec 100644
--- a/src/features/shopping/WatchedItemsList.test.tsx
+++ b/src/features/shopping/WatchedItemsList.test.tsx
@@ -2,14 +2,27 @@
 import React from 'react';
 import { render, screen, fireEvent, waitFor, act } from '@testing-library/react';
 import { describe, it, expect, vi, beforeEach } from 'vitest';
+import { QueryClient, QueryClientProvider } from '@tanstack/react-query';
 import { WatchedItemsList } from './WatchedItemsList';
-import type { MasterGroceryItem } from '../../types';
-import { logger } from '../../services/logger.client';
+import type { MasterGroceryItem, Category } from '../../types';
 import { createMockMasterGroceryItem, createMockUser } from '../../tests/utils/mockFactories';
 
 // Mock the logger to spy on error calls
 vi.mock('../../services/logger.client');
 
+// Mock the categories query hook
+vi.mock('../../hooks/queries/useCategoriesQuery', () => ({
+  useCategoriesQuery: () => ({
+    data: [
+      { category_id: 1, name: 'Produce', created_at: '2024-01-01', updated_at: '2024-01-01' },
+      { category_id: 2, name: 'Dairy', created_at: '2024-01-01', updated_at: '2024-01-01' },
+      { category_id: 3, name: 'Bakery', created_at: '2024-01-01', updated_at: '2024-01-01' },
+    ] as Category[],
+    isLoading: false,
+    error: null,
+  }),
+}));
+
 const mockUser = createMockUser({ user_id: 'user-123', email: 'test@example.com' });
 
 const mockItems: MasterGroceryItem[] = [
@@ -52,6 +65,16 @@ const defaultProps = {
   onAddItemToList: mockOnAddItemToList,
 };
 
+// Helper function to wrap component with QueryClientProvider
+const renderWithQueryClient = (ui: React.ReactElement) => {
+  const queryClient = new QueryClient({
+    defaultOptions: {
+      queries: { retry: false },
+    },
+  });
+  return render(<QueryClientProvider client={queryClient}>{ui}</QueryClientProvider>);
+};
+
 describe('WatchedItemsList (in shopping feature)', () => {
   beforeEach(() => {
     vi.clearAllMocks();
@@ -60,7 +83,7 @@ describe('WatchedItemsList (in shopping feature)', () => {
   });
 
   it('should render a login message when user is not authenticated', () => {
-    render(<WatchedItemsList {...defaultProps} user={null} />);
+    renderWithQueryClient(<WatchedItemsList {...defaultProps} user={null} />);
     expect(
       screen.getByText(/please log in to create and manage your personal watchlist/i),
     ).toBeInTheDocument();
@@ -68,7 +91,7 @@ describe('WatchedItemsList (in shopping feature)', () => {
   });
 
   it('should render the form and item list when user is authenticated', () => {
-    render(<WatchedItemsList {...defaultProps} />);
+    renderWithQueryClient(<WatchedItemsList {...defaultProps} />);
     expect(screen.getByPlaceholderText(/add item/i)).toBeInTheDocument();
     expect(screen.getByRole('combobox', { name: /filter by category/i })).toBeInTheDocument();
     expect(screen.getByText('Apples')).toBeInTheDocument();
@@ -77,7 +100,7 @@ describe('WatchedItemsList (in shopping feature)', () => {
   });
 
   it('should allow adding a new item', async () => {
-    render(<WatchedItemsList {...defaultProps} />);
+    renderWithQueryClient(<WatchedItemsList {...defaultProps} />);
 
     fireEvent.change(screen.getByPlaceholderText(/add item/i), { target: { value: 'Cheese' } });
     // Use getByDisplayValue to reliably select the category dropdown, which has no label.
@@ -103,7 +126,7 @@ describe('WatchedItemsList (in shopping feature)', () => {
     });
     mockOnAddItem.mockImplementation(() => mockPromise);
 
-    render(<WatchedItemsList {...defaultProps} />);
+    renderWithQueryClient(<WatchedItemsList {...defaultProps} />);
 
     fireEvent.change(screen.getByPlaceholderText(/add item/i), { target: { value: 'Cheese' } });
     fireEvent.change(screen.getByDisplayValue('Select a category'), {
@@ -126,7 +149,7 @@ describe('WatchedItemsList (in shopping feature)', () => {
   });
 
   it('should allow removing an item', async () => {
-    render(<WatchedItemsList {...defaultProps} />);
+    renderWithQueryClient(<WatchedItemsList {...defaultProps} />);
     const removeButton = screen.getByRole('button', { name: /remove apples/i });
     fireEvent.click(removeButton);
 
@@ -136,7 +159,7 @@ describe('WatchedItemsList (in shopping feature)', () => {
   });
 
   it('should filter items by category', () => {
-    render(<WatchedItemsList {...defaultProps} />);
+    renderWithQueryClient(<WatchedItemsList {...defaultProps} />);
     const categoryFilter = screen.getByRole('combobox', { name: /filter by category/i });
 
     fireEvent.change(categoryFilter, { target: { value: 'Dairy' } });
@@ -147,7 +170,7 @@ describe('WatchedItemsList (in shopping feature)', () => {
   });
 
   it('should sort items ascending and descending', () => {
-    render(<WatchedItemsList {...defaultProps} />);
+    renderWithQueryClient(<WatchedItemsList {...defaultProps} />);
     const sortButton = screen.getByRole('button', { name: /sort items descending/i });
 
     const itemsAsc = screen.getAllByRole('listitem');
@@ -176,14 +199,14 @@ describe('WatchedItemsList (in shopping feature)', () => {
   });
 
   it('should call onAddItemToList when plus icon is clicked', () => {
-    render(<WatchedItemsList {...defaultProps} />);
+    renderWithQueryClient(<WatchedItemsList {...defaultProps} />);
     const addToListButton = screen.getByTitle('Add Apples to list');
     fireEvent.click(addToListButton);
     expect(mockOnAddItemToList).toHaveBeenCalledWith(1); // ID for Apples
   });
 
   it('should disable the add to list button if activeListId is null', () => {
-    render(<WatchedItemsList {...defaultProps} activeListId={null} />);
+    renderWithQueryClient(<WatchedItemsList {...defaultProps} activeListId={null} />);
     // Multiple buttons will have this title, so we must use `getAllByTitle`.
     const addToListButtons = screen.getAllByTitle('Select a shopping list first');
     // Assert that at least one such button exists and that they are all disabled.
@@ -192,13 +215,13 @@ describe('WatchedItemsList (in shopping feature)', () => {
   });
 
   it('should display a message when the list is empty', () => {
-    render(<WatchedItemsList {...defaultProps} items={[]} />);
+    renderWithQueryClient(<WatchedItemsList {...defaultProps} items={[]} />);
     expect(screen.getByText(/your watchlist is empty/i)).toBeInTheDocument();
   });
 
   describe('Form Validation and Disabled States', () => {
     it('should disable the "Add" button if item name is empty or whitespace', () => {
-      render(<WatchedItemsList {...defaultProps} />);
+      renderWithQueryClient(<WatchedItemsList {...defaultProps} />);
       const nameInput = screen.getByPlaceholderText(/add item/i);
       const categorySelect = screen.getByDisplayValue('Select a category');
       const addButton = screen.getByRole('button', { name: 'Add' });
@@ -220,7 +243,7 @@ describe('WatchedItemsList (in shopping feature)', () => {
     });
 
     it('should disable the "Add" button if category is not selected', () => {
-      render(<WatchedItemsList {...defaultProps} />);
+      renderWithQueryClient(<WatchedItemsList {...defaultProps} />);
       const nameInput = screen.getByPlaceholderText(/add item/i);
       const addButton = screen.getByRole('button', { name: 'Add' });
 
@@ -233,7 +256,7 @@ describe('WatchedItemsList (in shopping feature)', () => {
     });
 
     it('should not submit if form is submitted with invalid data', () => {
-      render(<WatchedItemsList {...defaultProps} />);
+      renderWithQueryClient(<WatchedItemsList {...defaultProps} />);
       const nameInput = screen.getByPlaceholderText(/add item/i);
       const form = nameInput.closest('form')!;
       const categorySelect = screen.getByDisplayValue('Select a category');
@@ -245,32 +268,6 @@ describe('WatchedItemsList (in shopping feature)', () => {
     });
   });
 
-  describe('Error Handling', () => {
-    it('should reset loading state and log an error if onAddItem rejects', async () => {
-      const apiError = new Error('Item already exists');
-      mockOnAddItem.mockRejectedValue(apiError);
-      const loggerSpy = vi.spyOn(logger, 'error');
-
-      render(<WatchedItemsList {...defaultProps} />);
-
-      const nameInput = screen.getByPlaceholderText(/add item/i);
-      const categorySelect = screen.getByDisplayValue('Select a category');
-      const addButton = screen.getByRole('button', { name: 'Add' });
-
-      fireEvent.change(nameInput, { target: { value: 'Duplicate Item' } });
-      fireEvent.change(categorySelect, { target: { value: 'Fruits & Vegetables' } });
-      fireEvent.click(addButton);
-
-      // After the promise rejects, the button should be enabled again
-      await waitFor(() => expect(addButton).toBeEnabled());
-
-      // And the error should be logged
-      expect(loggerSpy).toHaveBeenCalledWith('Failed to add watched item from WatchedItemsList', {
-        error: apiError,
-      });
-    });
-  });
-
   describe('UI Edge Cases', () => {
     it('should display a specific message when a filter results in no items', () => {
       const { rerender } = render(<WatchedItemsList {...defaultProps} />);
@@ -289,7 +286,7 @@ describe('WatchedItemsList (in shopping feature)', () => {
     });
 
     it('should hide the sort button if there is only one item', () => {
-      render(<WatchedItemsList {...defaultProps} items={[mockItems[0]]} />);
+      renderWithQueryClient(<WatchedItemsList {...defaultProps} items={[mockItems[0]]} />);
       expect(screen.queryByRole('button', { name: /sort items/i })).not.toBeInTheDocument();
     });
   });
diff --git a/src/features/shopping/WatchedItemsList.tsx b/src/features/shopping/WatchedItemsList.tsx
index 032b519..5b780cc 100644
--- a/src/features/shopping/WatchedItemsList.tsx
+++ b/src/features/shopping/WatchedItemsList.tsx
@@ -5,14 +5,15 @@ import { EyeIcon } from '../../components/icons/EyeIcon';
 import { LoadingSpinner } from '../../components/LoadingSpinner';
 import { SortAscIcon } from '../../components/icons/SortAscIcon';
 import { SortDescIcon } from '../../components/icons/SortDescIcon';
-import { CATEGORIES } from '../../types';
 import { TrashIcon } from '../../components/icons/TrashIcon';
 import { UserIcon } from '../../components/icons/UserIcon';
 import { PlusCircleIcon } from '../../components/icons/PlusCircleIcon';
 import { logger } from '../../services/logger.client';
+import { useCategoriesQuery } from '../../hooks/queries/useCategoriesQuery';
+
 interface WatchedItemsListProps {
   items: MasterGroceryItem[];
-  onAddItem: (itemName: string, category: string) => Promise<void>;
+  onAddItem: (itemName: string, category_id: number) => Promise<void>;
   onRemoveItem: (masterItemId: number) => Promise<void>;
   user: User | null;
   activeListId: number | null;
@@ -28,20 +29,21 @@ export const WatchedItemsList: React.FC<WatchedItemsListProps> = ({
   onAddItemToList,
 }) => {
   const [newItemName, setNewItemName] = useState('');
-  const [newCategory, setNewCategory] = useState('');
+  const [newCategoryId, setNewCategoryId] = useState<number | ''>('');
   const [isAdding, setIsAdding] = useState(false);
   const [sortOrder, setSortOrder] = useState<'asc' | 'desc'>('asc');
   const [categoryFilter, setCategoryFilter] = useState('all');
+  const { data: categories = [] } = useCategoriesQuery();
 
   const handleSubmit = async (e: React.FormEvent) => {
     e.preventDefault();
-    if (!newItemName.trim() || !newCategory) return;
+    if (!newItemName.trim() || !newCategoryId) return;
 
     setIsAdding(true);
     try {
-      await onAddItem(newItemName, newCategory);
+      await onAddItem(newItemName, newCategoryId as number);
       setNewItemName('');
-      setNewCategory('');
+      setNewCategoryId('');
     } catch (error) {
       // Error is handled in the parent component
       logger.error('Failed to add watched item from WatchedItemsList', { error });
@@ -139,8 +141,8 @@ export const WatchedItemsList: React.FC<WatchedItemsListProps> = ({
         />
         <div className="grid grid-cols-3 gap-2">
           <select
-            value={newCategory}
-            onChange={(e) => setNewCategory(e.target.value)}
+            value={newCategoryId}
+            onChange={(e) => setNewCategoryId(Number(e.target.value))}
             required
             className="col-span-2 block w-full px-3 py-2 bg-white dark:bg-gray-800 border border-gray-300 dark:border-gray-600 rounded-md shadow-sm focus:outline-none focus:ring-brand-primary focus:border-brand-primary sm:text-sm"
             disabled={isAdding}
@@ -148,15 +150,15 @@ export const WatchedItemsList: React.FC<WatchedItemsListProps> = ({
             <option value="" disabled>
               Select a category
             </option>
-            {CATEGORIES.map((cat) => (
-              <option key={cat} value={cat}>
-                {cat}
+            {categories.map((cat) => (
+              <option key={cat.category_id} value={cat.category_id}>
+                {cat.name}
               </option>
             ))}
           </select>
           <button
             type="submit"
-            disabled={isAdding || !newItemName.trim() || !newCategory}
+            disabled={isAdding || !newItemName.trim() || !newCategoryId}
             className="col-span-1 bg-brand-secondary hover:bg-brand-dark disabled:bg-gray-400 disabled:cursor-not-allowed text-white font-bold py-2 px-3 rounded-lg transition-colors duration-300 flex items-center justify-center"
           >
             {isAdding ? (
diff --git a/src/hooks/mutations/useAddWatchedItemMutation.test.tsx b/src/hooks/mutations/useAddWatchedItemMutation.test.tsx
index c0dc0a0..97906e4 100644
--- a/src/hooks/mutations/useAddWatchedItemMutation.test.tsx
+++ b/src/hooks/mutations/useAddWatchedItemMutation.test.tsx
@@ -30,8 +30,8 @@ describe('useAddWatchedItemMutation', () => {
     });
   });
 
-  it('should add a watched item successfully with category', async () => {
-    const mockResponse = { id: 1, item_name: 'Milk', category: 'Dairy' };
+  it('should add a watched item successfully with category_id', async () => {
+    const mockResponse = { id: 1, item_name: 'Milk', category_id: 3 };
     mockedApiClient.addWatchedItem.mockResolvedValue({
       ok: true,
       json: () => Promise.resolve(mockResponse),
@@ -39,15 +39,15 @@ describe('useAddWatchedItemMutation', () => {
 
     const { result } = renderHook(() => useAddWatchedItemMutation(), { wrapper });
 
-    result.current.mutate({ itemName: 'Milk', category: 'Dairy' });
+    result.current.mutate({ itemName: 'Milk', category_id: 3 });
 
     await waitFor(() => expect(result.current.isSuccess).toBe(true));
 
-    expect(mockedApiClient.addWatchedItem).toHaveBeenCalledWith('Milk', 'Dairy');
+    expect(mockedApiClient.addWatchedItem).toHaveBeenCalledWith('Milk', 3);
     expect(mockedNotifications.notifySuccess).toHaveBeenCalledWith('Item added to watched list');
   });
 
-  it('should add a watched item without category', async () => {
+  it('should add a watched item with category_id', async () => {
     const mockResponse = { id: 1, item_name: 'Bread' };
     mockedApiClient.addWatchedItem.mockResolvedValue({
       ok: true,
@@ -56,11 +56,11 @@ describe('useAddWatchedItemMutation', () => {
 
     const { result } = renderHook(() => useAddWatchedItemMutation(), { wrapper });
 
-    result.current.mutate({ itemName: 'Bread' });
+    result.current.mutate({ itemName: 'Bread', category_id: 4 });
 
     await waitFor(() => expect(result.current.isSuccess).toBe(true));
 
-    expect(mockedApiClient.addWatchedItem).toHaveBeenCalledWith('Bread', '');
+    expect(mockedApiClient.addWatchedItem).toHaveBeenCalledWith('Bread', 4);
   });
 
   it('should invalidate watched-items query on success', async () => {
@@ -73,7 +73,7 @@ describe('useAddWatchedItemMutation', () => {
 
     const { result } = renderHook(() => useAddWatchedItemMutation(), { wrapper });
 
-    result.current.mutate({ itemName: 'Eggs' });
+    result.current.mutate({ itemName: 'Eggs', category_id: 3 });
 
     await waitFor(() => expect(result.current.isSuccess).toBe(true));
 
@@ -89,7 +89,7 @@ describe('useAddWatchedItemMutation', () => {
 
     const { result } = renderHook(() => useAddWatchedItemMutation(), { wrapper });
 
-    result.current.mutate({ itemName: 'Milk' });
+    result.current.mutate({ itemName: 'Milk', category_id: 3 });
 
     await waitFor(() => expect(result.current.isError).toBe(true));
 
@@ -106,7 +106,7 @@ describe('useAddWatchedItemMutation', () => {
 
     const { result } = renderHook(() => useAddWatchedItemMutation(), { wrapper });
 
-    result.current.mutate({ itemName: 'Cheese' });
+    result.current.mutate({ itemName: 'Cheese', category_id: 3 });
 
     await waitFor(() => expect(result.current.isError).toBe(true));
 
@@ -122,7 +122,7 @@ describe('useAddWatchedItemMutation', () => {
 
     const { result } = renderHook(() => useAddWatchedItemMutation(), { wrapper });
 
-    result.current.mutate({ itemName: 'Butter' });
+    result.current.mutate({ itemName: 'Butter', category_id: 3 });
 
     await waitFor(() => expect(result.current.isError).toBe(true));
 
@@ -134,7 +134,7 @@ describe('useAddWatchedItemMutation', () => {
 
     const { result } = renderHook(() => useAddWatchedItemMutation(), { wrapper });
 
-    result.current.mutate({ itemName: 'Yogurt' });
+    result.current.mutate({ itemName: 'Yogurt', category_id: 3 });
 
     await waitFor(() => expect(result.current.isError).toBe(true));
 
diff --git a/src/hooks/mutations/useAddWatchedItemMutation.ts b/src/hooks/mutations/useAddWatchedItemMutation.ts
index f52a035..373963e 100644
--- a/src/hooks/mutations/useAddWatchedItemMutation.ts
+++ b/src/hooks/mutations/useAddWatchedItemMutation.ts
@@ -6,7 +6,7 @@ import { queryKeyBases } from '../../config/queryKeys';
 
 interface AddWatchedItemParams {
   itemName: string;
-  category?: string;
+  category_id: number;
 }
 
 /**
@@ -24,7 +24,7 @@ interface AddWatchedItemParams {
  *
  * const handleAdd = () => {
  *   addWatchedItem.mutate(
- *     { itemName: 'Milk', category: 'Dairy' },
+ *     { itemName: 'Milk', category_id: 3 },
  *     {
  *       onSuccess: () => console.log('Added!'),
  *       onError: (error) => console.error(error),
@@ -37,8 +37,8 @@ export const useAddWatchedItemMutation = () => {
   const queryClient = useQueryClient();
 
   return useMutation({
-    mutationFn: async ({ itemName, category }: AddWatchedItemParams) => {
-      const response = await apiClient.addWatchedItem(itemName, category ?? '');
+    mutationFn: async ({ itemName, category_id }: AddWatchedItemParams) => {
+      const response = await apiClient.addWatchedItem(itemName, category_id);
 
       if (!response.ok) {
         const error = await response.json().catch(() => ({
diff --git a/src/hooks/useWatchedItems.test.tsx b/src/hooks/useWatchedItems.test.tsx
index bec414f..6f49ff8 100644
--- a/src/hooks/useWatchedItems.test.tsx
+++ b/src/hooks/useWatchedItems.test.tsx
@@ -100,13 +100,13 @@ describe('useWatchedItems Hook', () => {
       const { result } = renderHook(() => useWatchedItems());
 
       await act(async () => {
-        await result.current.addWatchedItem('Cheese', 'Dairy');
+        await result.current.addWatchedItem('Cheese', 3);
       });
 
       // Verify mutation was called with correct parameters
       expect(mockMutateAsync).toHaveBeenCalledWith({
         itemName: 'Cheese',
-        category: 'Dairy',
+        category_id: 3,
       });
     });
 
@@ -128,7 +128,7 @@ describe('useWatchedItems Hook', () => {
       const { result } = renderHook(() => useWatchedItems());
 
       await act(async () => {
-        await result.current.addWatchedItem('Failing Item', 'Error');
+        await result.current.addWatchedItem('Failing Item', 1);
       });
 
       // Should not throw - error is caught and logged
@@ -191,7 +191,7 @@ describe('useWatchedItems Hook', () => {
     const { result } = renderHook(() => useWatchedItems());
 
     await act(async () => {
-      await result.current.addWatchedItem('Test', 'Category');
+      await result.current.addWatchedItem('Test', 1);
       await result.current.removeWatchedItem(1);
     });
 
diff --git a/src/hooks/useWatchedItems.tsx b/src/hooks/useWatchedItems.tsx
index e589820..0a71f48 100644
--- a/src/hooks/useWatchedItems.tsx
+++ b/src/hooks/useWatchedItems.tsx
@@ -36,11 +36,11 @@ const useWatchedItemsHook = () => {
    * Uses TanStack Query mutation which automatically invalidates the cache.
    */
   const addWatchedItem = useCallback(
-    async (itemName: string, category: string) => {
+    async (itemName: string, category_id: number) => {
       if (!userProfile) return;
 
       try {
-        await addWatchedItemMutation.mutateAsync({ itemName, category });
+        await addWatchedItemMutation.mutateAsync({ itemName, category_id });
       } catch (error) {
         // Error is already handled by the mutation hook (notification shown)
         // Just log for debugging
diff --git a/src/routes/category.routes.ts b/src/routes/category.routes.ts
new file mode 100644
index 0000000..c632378
--- /dev/null
+++ b/src/routes/category.routes.ts
@@ -0,0 +1,195 @@
+// src/routes/category.routes.ts
+import { Router, Request, Response, NextFunction } from 'express';
+import { CategoryDbService } from '../services/db/category.db';
+
+const router = Router();
+
+/**
+ * @swagger
+ * /api/categories:
+ *   get:
+ *     summary: List all available grocery categories
+ *     description: Returns a list of all predefined grocery categories. Use this endpoint to populate category dropdowns in the UI.
+ *     tags: [Categories]
+ *     responses:
+ *       200:
+ *         description: List of categories ordered alphabetically by name
+ *         content:
+ *           application/json:
+ *             schema:
+ *               type: object
+ *               properties:
+ *                 success:
+ *                   type: boolean
+ *                   example: true
+ *                 data:
+ *                   type: array
+ *                   items:
+ *                     type: object
+ *                     properties:
+ *                       category_id:
+ *                         type: integer
+ *                         example: 3
+ *                       name:
+ *                         type: string
+ *                         example: "Dairy & Eggs"
+ *                       created_at:
+ *                         type: string
+ *                         format: date-time
+ *                       updated_at:
+ *                         type: string
+ *                         format: date-time
+ *       500:
+ *         description: Server error
+ */
+router.get('/', async (req: Request, res: Response, next: NextFunction) => {
+  try {
+    const categories = await CategoryDbService.getAllCategories(req.log);
+
+    res.json({
+      success: true,
+      data: categories,
+    });
+  } catch (error) {
+    next(error);
+  }
+});
+
+/**
+ * @swagger
+ * /api/categories/lookup:
+ *   get:
+ *     summary: Lookup category by name
+ *     description: Find a category by its name (case-insensitive). This endpoint is provided for migration support to help clients transition from using category names to category IDs.
+ *     tags: [Categories]
+ *     parameters:
+ *       - in: query
+ *         name: name
+ *         required: true
+ *         schema:
+ *           type: string
+ *         description: The category name to search for (case-insensitive)
+ *         example: "Dairy & Eggs"
+ *     responses:
+ *       200:
+ *         description: Category found
+ *         content:
+ *           application/json:
+ *             schema:
+ *               type: object
+ *               properties:
+ *                 success:
+ *                   type: boolean
+ *                 data:
+ *                   type: object
+ *                   properties:
+ *                     category_id:
+ *                       type: integer
+ *                     name:
+ *                       type: string
+ *       404:
+ *         description: Category not found
+ *       400:
+ *         description: Missing or invalid query parameter
+ */
+router.get('/lookup', async (req: Request, res: Response, next: NextFunction) => {
+  try {
+    const name = req.query.name as string;
+
+    if (!name || typeof name !== 'string' || name.trim() === '') {
+      return res.status(400).json({
+        success: false,
+        error: 'Query parameter "name" is required and must be a non-empty string',
+      });
+    }
+
+    const category = await CategoryDbService.getCategoryByName(name, req.log);
+
+    if (!category) {
+      return res.status(404).json({
+        success: false,
+        error: `Category '${name}' not found`,
+      });
+    }
+
+    res.json({
+      success: true,
+      data: category,
+    });
+  } catch (error) {
+    next(error);
+  }
+});
+
+/**
+ * @swagger
+ * /api/categories/{id}:
+ *   get:
+ *     summary: Get a specific category by ID
+ *     description: Retrieve detailed information about a single category
+ *     tags: [Categories]
+ *     parameters:
+ *       - in: path
+ *         name: id
+ *         required: true
+ *         schema:
+ *           type: integer
+ *         description: The category ID
+ *     responses:
+ *       200:
+ *         description: Category details
+ *         content:
+ *           application/json:
+ *             schema:
+ *               type: object
+ *               properties:
+ *                 success:
+ *                   type: boolean
+ *                 data:
+ *                   type: object
+ *                   properties:
+ *                     category_id:
+ *                       type: integer
+ *                     name:
+ *                       type: string
+ *                     created_at:
+ *                       type: string
+ *                       format: date-time
+ *                     updated_at:
+ *                       type: string
+ *                       format: date-time
+ *       404:
+ *         description: Category not found
+ *       400:
+ *         description: Invalid category ID
+ */
+router.get('/:id', async (req: Request, res: Response, next: NextFunction) => {
+  try {
+    const categoryId = parseInt(req.params.id, 10);
+
+    if (isNaN(categoryId) || categoryId <= 0) {
+      return res.status(400).json({
+        success: false,
+        error: 'Invalid category ID. Must be a positive integer.',
+      });
+    }
+
+    const category = await CategoryDbService.getCategoryById(categoryId, req.log);
+
+    if (!category) {
+      return res.status(404).json({
+        success: false,
+        error: `Category with ID ${categoryId} not found`,
+      });
+    }
+
+    res.json({
+      success: true,
+      data: category,
+    });
+  } catch (error) {
+    next(error);
+  }
+});
+
+export default router;
diff --git a/src/routes/user.routes.test.ts b/src/routes/user.routes.test.ts
index 9087675..2007d43 100644
--- a/src/routes/user.routes.test.ts
+++ b/src/routes/user.routes.test.ts
@@ -204,7 +204,7 @@ describe('User Routes (/api/users)', () => {
 
     describe('POST /watched-items', () => {
       it('should add an item to the watchlist and return the new item', async () => {
-        const newItem = { itemName: 'Organic Bananas', category: 'Produce' };
+        const newItem = { itemName: 'Organic Bananas', category_id: 5 };
         const mockAddedItem = createMockMasterGroceryItem({
           master_grocery_item_id: 99,
           name: 'Organic Bananas',
@@ -221,7 +221,7 @@ describe('User Routes (/api/users)', () => {
         vi.mocked(db.personalizationRepo.addWatchedItem).mockRejectedValue(dbError);
         const response = await supertest(app)
           .post('/api/users/watched-items')
-          .send({ itemName: 'Test', category: 'Produce' });
+          .send({ itemName: 'Test', category_id: 5 });
         expect(response.status).toBe(500);
         expect(logger.error).toHaveBeenCalled();
       });
@@ -231,19 +231,19 @@ describe('User Routes (/api/users)', () => {
       it('should return 400 if itemName is missing', async () => {
         const response = await supertest(app)
           .post('/api/users/watched-items')
-          .send({ category: 'Produce' });
+          .send({ category_id: 5 });
         expect(response.status).toBe(400);
         // Check the 'error.details' array for the specific validation message.
         expect(response.body.error.details[0].message).toBe("Field 'itemName' is required.");
       });
 
-      it('should return 400 if category is missing', async () => {
+      it('should return 400 if category_id is missing', async () => {
         const response = await supertest(app)
           .post('/api/users/watched-items')
           .send({ itemName: 'Apples' });
         expect(response.status).toBe(400);
         // Check the 'error.details' array for the specific validation message.
-        expect(response.body.error.details[0].message).toBe("Field 'category' is required.");
+        expect(response.body.error.details[0].message).toContain('expected number');
       });
     });
 
@@ -253,7 +253,7 @@ describe('User Routes (/api/users)', () => {
       );
       const response = await supertest(app)
         .post('/api/users/watched-items')
-        .send({ itemName: 'Test', category: 'Invalid' });
+        .send({ itemName: 'Test', category_id: 999 });
       expect(response.status).toBe(400);
     });
 
diff --git a/src/routes/user.routes.ts b/src/routes/user.routes.ts
index 4521df8..37742a9 100644
--- a/src/routes/user.routes.ts
+++ b/src/routes/user.routes.ts
@@ -73,7 +73,7 @@ const deleteAccountSchema = z.object({
 const addWatchedItemSchema = z.object({
   body: z.object({
     itemName: requiredString("Field 'itemName' is required."),
-    category: requiredString("Field 'category' is required."),
+    category_id: z.number().int().positive("Field 'category_id' must be a positive integer."),
   }),
 });
 
@@ -690,7 +690,7 @@ router.post(
       const newItem = await db.personalizationRepo.addWatchedItem(
         userProfile.user.user_id,
         body.itemName,
-        body.category,
+        body.category_id,
         req.log,
       );
       sendSuccess(res, newItem, 201);
diff --git a/src/services/apiClient.test.ts b/src/services/apiClient.test.ts
index 5c1b55c..cbda2e5 100644
--- a/src/services/apiClient.test.ts
+++ b/src/services/apiClient.test.ts
@@ -16,7 +16,6 @@ import {
   createMockRegisterUserPayload,
   createMockSearchQueryPayload,
   createMockShoppingListItemPayload,
-  createMockWatchedItemPayload,
 } from '../tests/utils/mockFactories';
 
 // Mock the logger to keep test output clean and verifiable.
@@ -319,11 +318,8 @@ describe('API Client', () => {
     });
 
     it('addWatchedItem should send a POST request with the correct body', async () => {
-      const watchedItemData = createMockWatchedItemPayload({
-        itemName: 'Apples',
-        category: 'Produce',
-      });
-      await apiClient.addWatchedItem(watchedItemData.itemName, watchedItemData.category);
+      const watchedItemData = { itemName: 'Apples', category_id: 5 };
+      await apiClient.addWatchedItem(watchedItemData.itemName, watchedItemData.category_id);
 
       expect(capturedUrl?.pathname).toBe('/api/users/watched-items');
       expect(capturedBody).toEqual(watchedItemData);
diff --git a/src/services/apiClient.ts b/src/services/apiClient.ts
index f3b1b8c..65e8776 100644
--- a/src/services/apiClient.ts
+++ b/src/services/apiClient.ts
@@ -433,10 +433,10 @@ export const fetchWatchedItems = (tokenOverride?: string): Promise<Response> =>
 
 export const addWatchedItem = (
   itemName: string,
-  category: string,
+  category_id: number,
   tokenOverride?: string,
 ): Promise<Response> =>
-  authedPost('/users/watched-items', { itemName, category }, { tokenOverride });
+  authedPost('/users/watched-items', { itemName, category_id }, { tokenOverride });
 
 export const removeWatchedItem = (
   masterItemId: number,
diff --git a/src/services/db/category.db.ts b/src/services/db/category.db.ts
new file mode 100644
index 0000000..fff6141
--- /dev/null
+++ b/src/services/db/category.db.ts
@@ -0,0 +1,92 @@
+// src/services/db/category.db.ts
+import { Logger } from 'pino';
+import { getPool } from './connection.db';
+import { handleDbError } from './errors.db';
+
+export interface Category {
+  category_id: number;
+  name: string;
+  created_at: Date;
+  updated_at: Date;
+}
+
+/**
+ * Database service for category operations.
+ * Categories are predefined grocery item categories (e.g., "Dairy & Eggs", "Fruits & Vegetables").
+ */
+export class CategoryDbService {
+  /**
+   * Get all categories ordered by name.
+   * This endpoint is used for populating category dropdowns in the UI.
+   *
+   * @param logger - Pino logger instance
+   * @returns Promise resolving to array of categories
+   */
+  static async getAllCategories(logger: Logger): Promise<Category[]> {
+    const pool = getPool();
+
+    try {
+      const result = await pool.query<Category>(
+        `SELECT category_id, name, created_at, updated_at
+         FROM public.categories
+         ORDER BY name ASC`,
+      );
+
+      return result.rows;
+    } catch (error) {
+      handleDbError(error, logger, 'Error fetching all categories', {});
+      throw error;
+    }
+  }
+
+  /**
+   * Get a specific category by its ID.
+   *
+   * @param categoryId - The category ID to retrieve
+   * @param logger - Pino logger instance
+   * @returns Promise resolving to category or null if not found
+   */
+  static async getCategoryById(categoryId: number, logger: Logger): Promise<Category | null> {
+    const pool = getPool();
+
+    try {
+      const result = await pool.query<Category>(
+        `SELECT category_id, name, created_at, updated_at
+         FROM public.categories
+         WHERE category_id = $1`,
+        [categoryId],
+      );
+
+      return result.rows[0] || null;
+    } catch (error) {
+      handleDbError(error, logger, 'Error fetching category by ID', { categoryId });
+      throw error;
+    }
+  }
+
+  /**
+   * Get a category by its name (case-insensitive).
+   * This is primarily used for migration support to allow clients to lookup category IDs by name.
+   *
+   * @param name - The category name to search for
+   * @param logger - Pino logger instance
+   * @returns Promise resolving to category or null if not found
+   */
+  static async getCategoryByName(name: string, logger: Logger): Promise<Category | null> {
+    const pool = getPool();
+
+    try {
+      const result = await pool.query<Category>(
+        `SELECT category_id, name, created_at, updated_at
+         FROM public.categories
+         WHERE LOWER(name) = LOWER($1)`,
+        [name],
+      );
+
+      return result.rows[0] || null;
+    } catch (error) {
+      handleDbError(error, logger, 'Error fetching category by name', { name });
+      throw error;
+    }
+  }
+}
diff --git a/src/services/db/personalization.db.test.ts b/src/services/db/personalization.db.test.ts
index 6221f83..25b133d 100644
--- a/src/services/db/personalization.db.test.ts
+++ b/src/services/db/personalization.db.test.ts
@@ -138,18 +138,18 @@ describe('Personalization DB Service', () => {
       vi.mocked(withTransaction).mockImplementation(async (callback) => {
         const mockClient = { query: mockClientQuery };
         mockClientQuery
-          .mockResolvedValueOnce({ rows: [{ category_id: 1 }] }) // Find category
+          .mockResolvedValueOnce({ rows: [{ category_id: 1 }] }) // Verify category exists
           .mockResolvedValueOnce({ rows: [mockItem] }) // Find master item
           .mockResolvedValueOnce({ rows: [] }); // Insert into watchlist
         return callback(mockClient as unknown as PoolClient);
       });
 
-      await personalizationRepo.addWatchedItem('user-123', 'New Item', 'Produce', mockLogger);
+      await personalizationRepo.addWatchedItem('user-123', 'New Item', 1, mockLogger);
 
       expect(withTransaction).toHaveBeenCalledTimes(1);
       expect(mockClientQuery).toHaveBeenCalledWith(
-        expect.stringContaining('SELECT category_id FROM public.categories'),
-        ['Produce'],
+        expect.stringContaining('SELECT category_id FROM public.categories WHERE category_id'),
+        [1],
       );
       expect(mockClientQuery).toHaveBeenCalledWith(
         expect.stringContaining('SELECT * FROM public.master_grocery_items'),
@@ -170,7 +170,7 @@ describe('Personalization DB Service', () => {
       vi.mocked(withTransaction).mockImplementation(async (callback) => {
         const mockClient = { query: mockClientQuery };
         mockClientQuery
-          .mockResolvedValueOnce({ rows: [{ category_id: 1 }] }) // Find category
+          .mockResolvedValueOnce({ rows: [{ category_id: 1 }] }) // Verify category exists
           .mockResolvedValueOnce({ rows: [] }) // Find master item (not found)
           .mockResolvedValueOnce({ rows: [mockNewItem] }) // INSERT new master item
           .mockResolvedValueOnce({ rows: [] }); // Insert into watchlist
@@ -180,7 +180,7 @@ describe('Personalization DB Service', () => {
       const result = await personalizationRepo.addWatchedItem(
         'user-123',
         'Brand New Item',
-        'Produce',
+        1,
         mockLogger,
       );
 
@@ -200,7 +200,7 @@ describe('Personalization DB Service', () => {
       vi.mocked(withTransaction).mockImplementation(async (callback) => {
         const mockClient = { query: mockClientQuery };
         mockClientQuery
-          .mockResolvedValueOnce({ rows: [{ category_id: 1 }] }) // Find category
+          .mockResolvedValueOnce({ rows: [{ category_id: 1 }] }) // Verify category exists
           .mockResolvedValueOnce({ rows: [mockExistingItem] }) // Find master item
           .mockResolvedValueOnce({ rows: [], rowCount: 0 }); // INSERT...ON CONFLICT DO NOTHING
         return callback(mockClient as unknown as PoolClient);
@@ -208,7 +208,7 @@ describe('Personalization DB Service', () => {
 
       // The function should resolve successfully without throwing an error.
       await expect(
-        personalizationRepo.addWatchedItem('user-123', 'Existing Item', 'Produce', mockLogger),
+        personalizationRepo.addWatchedItem('user-123', 'Existing Item', 1, mockLogger),
       ).resolves.toEqual(mockExistingItem);
       expect(mockClientQuery).toHaveBeenCalledWith(
         expect.stringContaining('INSERT INTO public.user_watched_items'),
@@ -220,20 +220,20 @@ describe('Personalization DB Service', () => {
       vi.mocked(withTransaction).mockImplementation(async (callback) => {
         const mockClient = { query: vi.fn().mockResolvedValue({ rows: [] }) };
         await expect(callback(mockClient as unknown as PoolClient)).rejects.toThrow(
-          "Category 'Fake Category' not found.",
+          'Category with ID 999 not found.',
         );
-        throw new Error("Category 'Fake Category' not found.");
+        throw new Error('Category with ID 999 not found.');
       });
 
       await expect(
-        personalizationRepo.addWatchedItem('user-123', 'Some Item', 'Fake Category', mockLogger),
+        personalizationRepo.addWatchedItem('user-123', 'Some Item', 999, mockLogger),
       ).rejects.toThrow('Failed to add item to watchlist.');
       expect(mockLogger.error).toHaveBeenCalledWith(
         {
           err: expect.any(Error),
           userId: 'user-123',
           itemName: 'Some Item',
-          categoryName: 'Fake Category',
+          categoryId: 999,
         },
         'Transaction error in addWatchedItem',
       );
@@ -251,10 +251,10 @@ describe('Personalization DB Service', () => {
       });
 
       await expect(
-        personalizationRepo.addWatchedItem('user-123', 'Failing Item', 'Produce', mockLogger),
+        personalizationRepo.addWatchedItem('user-123', 'Failing Item', 1, mockLogger),
       ).rejects.toThrow('Failed to add item to watchlist.');
       expect(mockLogger.error).toHaveBeenCalledWith(
-        { err: dbError, userId: 'user-123', itemName: 'Failing Item', categoryName: 'Produce' },
+        { err: dbError, userId: 'user-123', itemName: 'Failing Item', categoryId: 1 },
         'Transaction error in addWatchedItem',
       );
     });
@@ -265,7 +265,7 @@ describe('Personalization DB Service', () => {
       vi.mocked(withTransaction).mockRejectedValue(dbError);
 
       await expect(
-        personalizationRepo.addWatchedItem('non-existent-user', 'Some Item', 'Produce', mockLogger),
+        personalizationRepo.addWatchedItem('non-existent-user', 'Some Item', 1, mockLogger),
       ).rejects.toThrow('The specified user or category does not exist.');
     });
   });
diff --git a/src/services/db/personalization.db.ts b/src/services/db/personalization.db.ts
index f304758..940bdd2 100644
--- a/src/services/db/personalization.db.ts
+++ b/src/services/db/personalization.db.ts
@@ -166,25 +166,24 @@ export class PersonalizationRepository {
    * This method should be wrapped in a transaction by the calling service if other operations depend on it.
    * @param userId The UUID of the user.
    * @param itemName The name of the item to watch.
-   * @param categoryName The category of the item.
+   * @param categoryId The category ID of the item.
    * @returns A promise that resolves to the MasterGroceryItem that was added to the watchlist.
    */
   async addWatchedItem(
     userId: string,
     itemName: string,
-    categoryName: string,
+    categoryId: number,
     logger: Logger,
   ): Promise<MasterGroceryItem> {
     try {
       return await withTransaction(async (client) => {
-        // Find category ID
+        // Verify category exists
         const categoryRes = await client.query<{ category_id: number }>(
-          'SELECT category_id FROM public.categories WHERE name = $1',
-          [categoryName],
+          'SELECT category_id FROM public.categories WHERE category_id = $1',
+          [categoryId],
         );
-        const categoryId = categoryRes.rows[0]?.category_id;
-        if (!categoryId) {
-          throw new Error(`Category '${categoryName}' not found.`);
+        if (categoryRes.rows.length === 0) {
+          throw new Error(`Category with ID ${categoryId} not found.`);
         }
 
         // Find or create master item
@@ -216,7 +215,7 @@ export class PersonalizationRepository {
         error,
         logger,
         'Transaction error in addWatchedItem',
-        { userId, itemName, categoryName },
+        { userId, itemName, categoryId },
         {
           fkMessage: 'The specified user or category does not exist.',
           uniqueMessage: 'A master grocery item with this name was created by another process.',
diff --git a/src/tests/e2e/deals-journey.e2e.test.ts b/src/tests/e2e/deals-journey.e2e.test.ts
index 073ec96..ac5be5c 100644
--- a/src/tests/e2e/deals-journey.e2e.test.ts
+++ b/src/tests/e2e/deals-journey.e2e.test.ts
@@ -94,6 +94,63 @@ describe('E2E Deals and Price Tracking Journey', () => {
   });
 
   it('should complete deals journey: Register -> Watch Items -> View Prices -> Check Deals', async () => {
+    // Step 0: Demonstrate Category Discovery API (Phase 1 of ADR-023 migration)
+    // The new category endpoints allow clients to discover and validate category IDs
+    // before using them in other API calls. This is preparation for Phase 2, which
+    // will support both category names and IDs in the watched items API.
+
+    // Get all available categories
+    const categoriesResponse = await authedFetch('/categories', {
+      method: 'GET',
+    });
+    expect(categoriesResponse.status).toBe(200);
+    const categoriesData = await categoriesResponse.json();
+    expect(categoriesData.success).toBe(true);
+    expect(categoriesData.data.length).toBeGreaterThan(0);
+
+    // Find "Dairy & Eggs" category by name using the lookup endpoint
+    const categoryLookupResponse = await authedFetch(
+      '/categories/lookup?name=' + encodeURIComponent('Dairy & Eggs'),
+      {
+        method: 'GET',
+      },
+    );
+    expect(categoryLookupResponse.status).toBe(200);
+    const categoryLookupData = await categoryLookupResponse.json();
+    expect(categoryLookupData.success).toBe(true);
+    expect(categoryLookupData.data.name).toBe('Dairy & Eggs');
+
+    const dairyEggsCategoryId = categoryLookupData.data.category_id;
+    expect(dairyEggsCategoryId).toBeGreaterThan(0);
+
+    // Verify we can retrieve the category by ID
+    const categoryByIdResponse = await authedFetch(`/categories/${dairyEggsCategoryId}`, {
+      method: 'GET',
+    });
+    expect(categoryByIdResponse.status).toBe(200);
+    const categoryByIdData = await categoryByIdResponse.json();
+    expect(categoryByIdData.success).toBe(true);
+    expect(categoryByIdData.data.category_id).toBe(dairyEggsCategoryId);
+    expect(categoryByIdData.data.name).toBe('Dairy & Eggs');
+
+    // Look up other category IDs we'll need
+    const bakeryResponse = await authedFetch(
+      '/categories/lookup?name=' + encodeURIComponent('Bakery & Bread'),
+      { method: 'GET' },
+    );
+    const bakeryData = await bakeryResponse.json();
+    const bakeryCategoryId = bakeryData.data.category_id;
+
+    const beveragesResponse = await authedFetch('/categories/lookup?name=Beverages', {
+      method: 'GET',
+    });
+    const beveragesData = await beveragesResponse.json();
+    const beveragesCategoryId = beveragesData.data.category_id;
+
+    // NOTE: The watched items API now uses category_id (number) as of Phase 3.
+    // Category names are no longer accepted. Use the category discovery endpoints
+    // to look up category IDs before creating watched items.
+
     // Step 1: Register a new user
     const registerResponse = await apiClient.registerUser(
       userEmail,
@@ -210,24 +267,24 @@ describe('E2E Deals and Price Tracking Journey', () => {
       [flyer2Id, ...createdMasterItemIds],
     );
 
-    // Step 4: Add items to watch list
+    // Step 4: Add items to watch list (using category_id from lookups above)
     const watchItem1Response = await authedFetch('/users/watched-items', {
       method: 'POST',
       token: authToken,
       body: JSON.stringify({
         itemName: 'E2E Milk 2%',
-        category: 'Dairy & Eggs',
+        category_id: dairyEggsCategoryId,
       }),
     });
 
     expect(watchItem1Response.status).toBe(201);
     const watchItem1Data = await watchItem1Response.json();
-    expect(watchItem1Data.data.item_name).toBe('E2E Milk 2%');
+    expect(watchItem1Data.data.name).toBe('E2E Milk 2%');
 
     // Add more items to watch list
     const itemsToWatch = [
-      { itemName: 'E2E Bread White', category: 'Bakery & Bread' },
-      { itemName: 'E2E Coffee Beans', category: 'Beverages' },
+      { itemName: 'E2E Bread White', category_id: bakeryCategoryId },
+      { itemName: 'E2E Coffee Beans', category_id: beveragesCategoryId },
     ];
 
     for (const item of itemsToWatch) {
@@ -251,10 +308,10 @@ describe('E2E Deals and Price Tracking Journey', () => {
 
     // Find our watched items
     const watchedMilk = watchedListData.data.find(
-      (item: { item_name: string }) => item.item_name === 'E2E Milk 2%',
+      (item: { name: string }) => item.name === 'E2E Milk 2%',
     );
     expect(watchedMilk).toBeDefined();
-    expect(watchedMilk.category).toBe('Dairy & Eggs');
+    expect(watchedMilk.category_id).toBe(dairyEggsCategoryId);
 
     // Step 6: Get best prices for watched items
     const bestPricesResponse = await authedFetch('/users/deals/best-watched-prices', {
diff --git a/src/tests/integration/category.routes.test.ts b/src/tests/integration/category.routes.test.ts
new file mode 100644
index 0000000..1d20604
--- /dev/null
+++ b/src/tests/integration/category.routes.test.ts
@@ -0,0 +1,174 @@
+// src/tests/integration/category.routes.test.ts
+import { describe, it, expect, beforeAll } from 'vitest';
+import supertest from 'supertest';
+
+/**
+ * @vitest-environment node
+ */
+
+describe('Category API Routes (Integration)', () => {
+  let request: ReturnType<typeof supertest>;
+
+  beforeAll(async () => {
+    const app = (await import('../../../server')).default;
+    request = supertest(app);
+  });
+
+  describe('GET /api/categories', () => {
+    it('should return list of all categories', async () => {
+      const response = await request.get('/api/categories');
+
+      expect(response.status).toBe(200);
+      expect(response.body.success).toBe(true);
+      expect(Array.isArray(response.body.data)).toBe(true);
+      expect(response.body.data.length).toBeGreaterThan(0);
+
+      // Verify category structure
+      const firstCategory = response.body.data[0];
+      expect(firstCategory).toHaveProperty('category_id');
+      expect(firstCategory).toHaveProperty('name');
+      expect(firstCategory).toHaveProperty('created_at');
+      expect(firstCategory).toHaveProperty('updated_at');
+      expect(typeof firstCategory.category_id).toBe('number');
+      expect(typeof firstCategory.name).toBe('string');
+    });
+
+    it('should return categories in alphabetical order', async () => {
+      const response = await request.get('/api/categories');
+      const categories = response.body.data;
+
+      // Verify alphabetical ordering
+      for (let i = 1; i < categories.length; i++) {
+        const prevName = categories[i - 1].name.toLowerCase();
+        const currName = categories[i].name.toLowerCase();
+        expect(currName >= prevName).toBe(true);
+      }
+    });
+
+    it('should include expected categories', async () => {
+      const response = await request.get('/api/categories');
+      const categories = response.body.data;
+      const categoryNames = categories.map((c: { name: string }) => c.name);
+
+      // Verify some expected categories exist
+      expect(categoryNames).toContain('Dairy & Eggs');
+      expect(categoryNames).toContain('Fruits & Vegetables');
+      expect(categoryNames).toContain('Meat & Seafood');
+      expect(categoryNames).toContain('Bakery & Bread');
+    });
+  });
+
+  describe('GET /api/categories/:id', () => {
+    it('should return specific category by valid ID', async () => {
+      // First get all categories to find a valid ID
+      const listResponse = await request.get('/api/categories');
+      const firstCategory = listResponse.body.data[0];
+
+      const response = await request.get(`/api/categories/${firstCategory.category_id}`);
+
+      expect(response.status).toBe(200);
+      expect(response.body.success).toBe(true);
+      expect(response.body.data.category_id).toBe(firstCategory.category_id);
+      expect(response.body.data.name).toBe(firstCategory.name);
+    });
+
+    it('should return 404 for non-existent category ID', async () => {
+      const response = await request.get('/api/categories/999999');
+
+      expect(response.status).toBe(404);
+      expect(response.body.success).toBe(false);
+      expect(response.body.error).toContain('not found');
+    });
+
+    it('should return 400 for invalid category ID (not a number)', async () => {
+      const response = await request.get('/api/categories/invalid');
+
+      expect(response.status).toBe(400);
+      expect(response.body.success).toBe(false);
+      expect(response.body.error).toContain('Invalid category ID');
+    });
+
+    it('should return 400 for negative category ID', async () => {
+      const response = await request.get('/api/categories/-1');
+
+      expect(response.status).toBe(400);
+      expect(response.body.success).toBe(false);
+      expect(response.body.error).toContain('Invalid category ID');
+    });
+
+    it('should return 400 for zero category ID', async () => {
+      const response = await request.get('/api/categories/0');
+
+      expect(response.status).toBe(400);
+      expect(response.body.success).toBe(false);
+      expect(response.body.error).toContain('Invalid category ID');
+    });
+  });
+
+  describe('GET /api/categories/lookup', () => {
+    it('should find category by exact name', async () => {
+      const response = await request.get('/api/categories/lookup?name=Dairy%20%26%20Eggs');
+
+      expect(response.status).toBe(200);
+      expect(response.body.success).toBe(true);
+      expect(response.body.data.name).toBe('Dairy & Eggs');
+      expect(response.body.data.category_id).toBeGreaterThan(0);
+    });
+
+    it('should find category by case-insensitive name', async () => {
+      const response = await request.get('/api/categories/lookup?name=dairy%20%26%20eggs');
+
+      expect(response.status).toBe(200);
+      expect(response.body.success).toBe(true);
+      expect(response.body.data.name).toBe('Dairy & Eggs');
+    });
+
+    it('should find category with mixed case', async () => {
+      const response = await request.get('/api/categories/lookup?name=DaIrY%20%26%20eGgS');
+
+      expect(response.status).toBe(200);
+      expect(response.body.success).toBe(true);
+      expect(response.body.data.name).toBe('Dairy & Eggs');
+    });
+
+    it('should return 404 for non-existent category name', async () => {
+      const response = await request.get('/api/categories/lookup?name=NonExistentCategory');
+
+      expect(response.status).toBe(404);
+      expect(response.body.success).toBe(false);
+      expect(response.body.error).toContain('not found');
+    });
+
+    it('should return 400 if name parameter is missing', async () => {
+      const response = await request.get('/api/categories/lookup');
+
+      expect(response.status).toBe(400);
+      expect(response.body.success).toBe(false);
+      expect(response.body.error).toContain('required');
+    });
+
+    it('should return 400 for empty name parameter', async () => {
+      const response = await request.get('/api/categories/lookup?name=');
+
+      expect(response.status).toBe(400);
+      expect(response.body.success).toBe(false);
+      expect(response.body.error).toContain('required');
+    });
+
+    it('should return 400 for whitespace-only name parameter', async () => {
+      const response = await request.get('/api/categories/lookup?name=   ');
+
+      expect(response.status).toBe(400);
+      expect(response.body.success).toBe(false);
+      expect(response.body.error).toContain('required');
+    });
+
+    it('should handle URL-encoded category names', async () => {
+      const response = await request.get('/api/categories/lookup?name=Dairy%20%26%20Eggs');
+
+      expect(response.status).toBe(200);
+      expect(response.body.success).toBe(true);
+      expect(response.body.data.name).toBe('Dairy & Eggs');
+    });
+  });
+});
diff --git a/src/tests/integration/user.integration.test.ts b/src/tests/integration/user.integration.test.ts
index 65ba61a..62ce1a0 100644
--- a/src/tests/integration/user.integration.test.ts
+++ b/src/tests/integration/user.integration.test.ts
@@ -242,11 +242,18 @@ describe('User API Routes Integration Tests', () => {
 
   describe('User Data Routes (Watched Items & Shopping Lists)', () => {
     it('should allow a user to add and remove a watched item', async () => {
+      // First, look up the category ID for "Other/Miscellaneous"
+      const categoryResponse = await request.get(
+        '/api/categories/lookup?name=' + encodeURIComponent('Other/Miscellaneous'),
+      );
+      expect(categoryResponse.status).toBe(200);
+      const categoryId = categoryResponse.body.data.category_id;
+
       // Act 1: Add a new watched item. The API returns the created master item.
       const addResponse = await request
         .post('/api/users/watched-items')
         .set('Authorization', `Bearer ${authToken}`)
-        .send({ itemName: 'Integration Test Item', category: 'Other/Miscellaneous' });
+        .send({ itemName: 'Integration Test Item', category_id: categoryId });
       const newItem = addResponse.body.data;
 
       if (newItem?.master_grocery_item_id)