diff --git a/packages/diagrams/src/dependency.ts b/packages/diagrams/src/dependency.ts
new file mode 100644
index 0000000..15e5889
--- /dev/null
+++ b/packages/diagrams/src/dependency.ts
@@ -0,0 +1,48 @@
+import type { FileNode, DependencyEdge } from "@codeboard/shared";
+
+function sanitizeId(path: string): string {
+  return path.replace(/[^a-zA-Z0-9]/g, "_");
+}
+
+function shortenPath(path: string): string {
+  const parts = path.split("/");
+  if (parts.length <= 2) return path;
+  return parts.slice(-2).join("/");
+}
+
+export function generateDependencyGraph(
+  files: FileNode[],
+  deps: DependencyEdge[]
+): string {
+  if (files.length === 0) {
+    return "graph LR\n  empty[No files detected]";
+  }
+
+  const maxFiles = 30;
+  const topFiles = files.slice(0, maxFiles);
+  const topPaths = new Set(topFiles.map((f) => f.path));
+
+  const lines: string[] = ["graph LR"];
+
+  for (const file of topFiles) {
+    const id = sanitizeId(file.path);
+    const label = shortenPath(file.path);
+    lines.push(`  ${id}["${label}"]`);
+  }
+
+  const edgeSet = new Set<string>();
+  for (const dep of deps) {
+    if (!topPaths.has(dep.source) || !topPaths.has(dep.target)) continue;
+    if (dep.source === dep.target) continue;
+
+    const edgeKey = `${dep.source}-${dep.target}`;
+    if (edgeSet.has(edgeKey)) continue;
+    edgeSet.add(edgeKey);
+
+    const sourceId = sanitizeId(dep.source);
+    const targetId = sanitizeId(dep.target);
+    lines.push(`  ${sourceId} --> ${targetId}`);
+  }
+
+  return lines.join("\n");
+}