diff --git a/ts_web/elements/wysiwyg/dees-input-wysiwyg.ts b/ts_web/elements/wysiwyg/dees-input-wysiwyg.ts
index 8119b44..6023602 100644
--- a/ts_web/elements/wysiwyg/dees-input-wysiwyg.ts
+++ b/ts_web/elements/wysiwyg/dees-input-wysiwyg.ts
@@ -17,7 +17,8 @@ import {
   WysiwygConverters,
   WysiwygShortcuts,
   WysiwygBlocks,
-  type ISlashMenuItem
+  type ISlashMenuItem,
+  WysiwygFormatting
 } from './index.js';
 
 declare global {
@@ -69,9 +70,19 @@ export class DeesInputWysiwyg extends DeesInputBase<string> {
   @state()
   private dragOverPosition: 'before' | 'after' | null = null;
 
+  @state()
+  private showFormattingMenu: boolean = false;
+
+  @state()
+  private formattingMenuPosition: { x: number; y: number } = { x: 0, y: 0 };
+
+  @state()
+  private selectedText: string = '';
+
   private editorContentRef: HTMLDivElement;
   private isComposing: boolean = false;
   private saveTimeout: any = null;
+  private selectionChangeHandler = () => this.handleSelectionChange();
 
   public static styles = [
     ...DeesInputBase.baseStyles,
@@ -79,9 +90,24 @@ export class DeesInputWysiwyg extends DeesInputBase<string> {
     wysiwygStyles
   ];
 
+  async connectedCallback() {
+    await super.connectedCallback();
+  }
+
+  async disconnectedCallback() {
+    await super.disconnectedCallback();
+    // Remove selection listener
+    document.removeEventListener('selectionchange', this.selectionChangeHandler);
+  }
+
   async firstUpdated() {
     this.updateValue();
     this.editorContentRef = this.shadowRoot!.querySelector('.editor-content') as HTMLDivElement;
+    
+    // Add global selection listener
+    console.log('Adding selectionchange listener');
+    document.addEventListener('selectionchange', this.selectionChangeHandler);
+    
     // Set initial content for blocks after a brief delay to ensure DOM is ready
     await this.updateComplete;
     setTimeout(() => {
@@ -116,6 +142,9 @@ export class DeesInputWysiwyg extends DeesInputBase<string> {
           if (isEmpty && block.content) {
             if (block.type === 'list') {
               blockElement.innerHTML = WysiwygBlocks.renderListContent(block.content, block.metadata);
+            } else if (block.content.includes('<') && block.content.includes('>')) {
+              // Content contains HTML formatting
+              blockElement.innerHTML = block.content;
             } else {
               blockElement.textContent = block.content;
             }
@@ -140,6 +169,7 @@ export class DeesInputWysiwyg extends DeesInputBase<string> {
           ${this.blocks.map(block => this.renderBlock(block))}
         </div>
         ${this.showSlashMenu ? this.renderSlashMenu() : ''}
+        ${this.showFormattingMenu ? this.renderFormattingMenu() : ''}
       </div>
     `;
   }
@@ -172,6 +202,7 @@ export class DeesInputWysiwyg extends DeesInputBase<string> {
           onBlur: () => this.handleBlockBlur(block),
           onCompositionStart: () => this.isComposing = true,
           onCompositionEnd: () => this.isComposing = false,
+          onMouseUp: (e: MouseEvent) => this.handleTextSelection(e),
         })}
       </div>
     `;
@@ -207,6 +238,13 @@ export class DeesInputWysiwyg extends DeesInputBase<string> {
     `;
   }
 
+  private renderFormattingMenu(): TemplateResult {
+    return WysiwygFormatting.renderFormattingMenu(
+      this.formattingMenuPosition,
+      (command) => this.applyFormat(command)
+    );
+  }
+
   private handleBlockInput(e: InputEvent, block: IBlock) {
     if (this.isComposing) return;
     
@@ -327,6 +365,28 @@ export class DeesInputWysiwyg extends DeesInputBase<string> {
       return;
     }
 
+    // Handle formatting shortcuts
+    if (e.metaKey || e.ctrlKey) {
+      switch (e.key.toLowerCase()) {
+        case 'b':
+          e.preventDefault();
+          this.applyFormat('bold');
+          return;
+        case 'i':
+          e.preventDefault();
+          this.applyFormat('italic');
+          return;
+        case 'u':
+          e.preventDefault();
+          this.applyFormat('underline');
+          return;
+        case 'k':
+          e.preventDefault();
+          this.applyFormat('link');
+          return;
+      }
+    }
+
     // Handle Tab key for indentation
     if (e.key === 'Tab') {
       if (block.type === 'code') {
@@ -756,4 +816,172 @@ export class DeesInputWysiwyg extends DeesInputBase<string> {
       }
     }, 100);
   }
+
+
+  private handleTextSelection(e: MouseEvent): void {
+    // Stop event to prevent it from bubbling up
+    e.stopPropagation();
+    
+    console.log('handleTextSelection called from mouseup on contenteditable');
+    
+    // Small delay to ensure selection is complete
+    setTimeout(() => {
+      // Alternative approach: check selection directly within the target element
+      const target = e.target as HTMLElement;
+      const selection = window.getSelection();
+      
+      if (selection && selection.rangeCount > 0) {
+        const selectedText = selection.toString();
+        console.log('Direct selection check in handleTextSelection:', {
+          selectedText: selectedText.substring(0, 50),
+          hasText: selectedText.length > 0,
+          target: target.tagName + '.' + target.className
+        });
+        
+        if (selectedText.length > 0) {
+          // We know this came from a mouseup on our contenteditable, so it's definitely our selection
+          console.log('✅ Text selected via mouseup:', selectedText);
+          this.selectedText = selectedText;
+          this.updateFormattingMenuPosition();
+        } else if (this.showFormattingMenu) {
+          this.hideFormattingMenu();
+        }
+      }
+    }, 50);
+  }
+
+  private handleSelectionChange(): void {
+    // Try to get selection from shadow root first, then fall back to window
+    const shadowSelection = (this.shadowRoot as any).getSelection ? (this.shadowRoot as any).getSelection() : null;
+    const windowSelection = window.getSelection();
+    const editorContent = this.shadowRoot?.querySelector('.editor-content') as HTMLElement;
+    
+    // Check both shadow and window selections
+    let selection = shadowSelection;
+    let selectedText = shadowSelection?.toString() || '';
+    
+    // If no shadow selection, check window selection
+    if (!selectedText && windowSelection) {
+      selection = windowSelection;
+      selectedText = windowSelection.toString() || '';
+    }
+    
+    console.log('Selection change:', {
+      hasText: selectedText.length > 0,
+      selectedText: selectedText.substring(0, 50),
+      shadowSelection: !!shadowSelection,
+      windowSelection: !!windowSelection,
+      rangeCount: selection?.rangeCount,
+      editorContent: !!editorContent
+    });
+    
+    if (!selection || selection.rangeCount === 0 || !editorContent) {
+      console.log('No selection or editor content');
+      return;
+    }
+    
+    // If we have selected text, show the formatting menu
+    if (selectedText.length > 0) {
+      console.log('✅ Text selected:', selectedText);
+      
+      if (selectedText !== this.selectedText) {
+        this.selectedText = selectedText;
+        this.updateFormattingMenuPosition();
+      }
+    } else if (this.showFormattingMenu) {
+      console.log('No text selected, hiding menu');
+      this.hideFormattingMenu();
+    }
+  }
+  
+  private getRootNodeOfNode(node: Node): Node {
+    let current: Node = node;
+    while (current.parentNode) {
+      current = current.parentNode;
+    }
+    return current;
+  }
+
+  private updateFormattingMenuPosition(): void {
+    console.log('updateFormattingMenuPosition called');
+    const coords = WysiwygFormatting.getSelectionCoordinates(this.shadowRoot as ShadowRoot);
+    console.log('Selection coordinates:', coords);
+    
+    if (coords) {
+      const container = this.shadowRoot!.querySelector('.wysiwyg-container');
+      if (!container) {
+        console.error('Container not found!');
+        return;
+      }
+      
+      const containerRect = container.getBoundingClientRect();
+      this.formattingMenuPosition = {
+        x: coords.x - containerRect.left,
+        y: coords.y - containerRect.top
+      };
+      
+      console.log('Setting menu position:', this.formattingMenuPosition);
+      this.showFormattingMenu = true;
+      console.log('showFormattingMenu set to:', this.showFormattingMenu);
+      
+      // Force update
+      this.requestUpdate();
+      
+      // Check if menu exists in DOM after update
+      setTimeout(() => {
+        const menu = this.shadowRoot?.querySelector('.formatting-menu');
+        console.log('Menu in DOM after update:', menu);
+        if (menu) {
+          console.log('Menu style:', menu.getAttribute('style'));
+        }
+      }, 100);
+    } else {
+      console.log('No coordinates found');
+    }
+  }
+
+  private hideFormattingMenu(): void {
+    this.showFormattingMenu = false;
+    this.selectedText = '';
+  }
+
+  private applyFormat(command: string): void {
+    // Save current selection before applying format
+    const selection = window.getSelection();
+    if (!selection || selection.rangeCount === 0) return;
+
+    // Get the current block to update its content
+    const anchorNode = selection.anchorNode;
+    const blockElement = anchorNode?.nodeType === Node.TEXT_NODE 
+      ? anchorNode.parentElement?.closest('.block')
+      : (anchorNode as Element)?.closest('.block');
+    
+    if (!blockElement) return;
+
+    const blockId = blockElement.closest('.block-wrapper')?.getAttribute('data-block-id');
+    const block = this.blocks.find(b => b.id === blockId);
+    
+    if (!block) return;
+
+    // Apply the format
+    WysiwygFormatting.applyFormat(command);
+
+    // Update block content after format is applied
+    setTimeout(() => {
+      if (block.type === 'list') {
+        const listItems = blockElement.querySelectorAll('li');
+        block.content = Array.from(listItems).map(li => li.textContent || '').join('\n');
+      } else {
+        // For other blocks, preserve HTML formatting
+        block.content = blockElement.innerHTML;
+      }
+      
+      this.updateValue();
+      
+      // Keep selection active
+      if (command !== 'link') {
+        this.updateFormattingMenuPosition();
+      }
+    }, 10);
+  }
 }
\ No newline at end of file
diff --git a/ts_web/elements/wysiwyg/index.ts b/ts_web/elements/wysiwyg/index.ts
index 087411d..7ddd84e 100644
--- a/ts_web/elements/wysiwyg/index.ts
+++ b/ts_web/elements/wysiwyg/index.ts
@@ -2,4 +2,5 @@ export * from './wysiwyg.types.js';
 export * from './wysiwyg.styles.js';
 export * from './wysiwyg.converters.js';
 export * from './wysiwyg.shortcuts.js';
-export * from './wysiwyg.blocks.js';
\ No newline at end of file
+export * from './wysiwyg.blocks.js';
+export * from './wysiwyg.formatting.js';
\ No newline at end of file
diff --git a/ts_web/elements/wysiwyg/wysiwyg.blocks.ts b/ts_web/elements/wysiwyg/wysiwyg.blocks.ts
index 68b1c94..0f5f972 100644
--- a/ts_web/elements/wysiwyg/wysiwyg.blocks.ts
+++ b/ts_web/elements/wysiwyg/wysiwyg.blocks.ts
@@ -20,6 +20,7 @@ export class WysiwygBlocks {
       onBlur: () => void;
       onCompositionStart: () => void;
       onCompositionEnd: () => void;
+      onMouseUp?: (e: MouseEvent) => void;
     }
   ): TemplateResult {
     if (block.type === 'divider') {
@@ -45,6 +46,10 @@ export class WysiwygBlocks {
           @blur="${handlers.onBlur}"
           @compositionstart="${handlers.onCompositionStart}"
           @compositionend="${handlers.onCompositionEnd}"
+          @mouseup="${(e: MouseEvent) => {
+          console.log('Block mouseup event fired');
+          if (handlers.onMouseUp) handlers.onMouseUp(e);
+        }}"
           .innerHTML="${this.renderListContent(block.content, block.metadata)}"
         ></div>
       `;
@@ -60,6 +65,10 @@ export class WysiwygBlocks {
         @blur="${handlers.onBlur}"
         @compositionstart="${handlers.onCompositionStart}"
         @compositionend="${handlers.onCompositionEnd}"
+        @mouseup="${(e: MouseEvent) => {
+          console.log('Block mouseup event fired');
+          if (handlers.onMouseUp) handlers.onMouseUp(e);
+        }}"
       ></div>
     `;
   }
diff --git a/ts_web/elements/wysiwyg/wysiwyg.converters.ts b/ts_web/elements/wysiwyg/wysiwyg.converters.ts
index 542ec39..023e4c0 100644
--- a/ts_web/elements/wysiwyg/wysiwyg.converters.ts
+++ b/ts_web/elements/wysiwyg/wysiwyg.converters.ts
@@ -9,17 +9,22 @@ export class WysiwygConverters {
 
   static getHtmlOutput(blocks: IBlock[]): string {
     return blocks.map(block => {
+      // Check if content already contains HTML formatting
+      const content = block.content.includes('<') && block.content.includes('>') 
+        ? block.content // Already contains HTML formatting
+        : this.escapeHtml(block.content);
+      
       switch (block.type) {
         case 'paragraph':
-          return block.content ? `<p>${this.escapeHtml(block.content)}</p>` : '';
+          return block.content ? `<p>${content}</p>` : '';
         case 'heading-1':
-          return `<h1>${this.escapeHtml(block.content)}</h1>`;
+          return `<h1>${content}</h1>`;
         case 'heading-2':
-          return `<h2>${this.escapeHtml(block.content)}</h2>`;
+          return `<h2>${content}</h2>`;
         case 'heading-3':
-          return `<h3>${this.escapeHtml(block.content)}</h3>`;
+          return `<h3>${content}</h3>`;
         case 'quote':
-          return `<blockquote>${this.escapeHtml(block.content)}</blockquote>`;
+          return `<blockquote>${content}</blockquote>`;
         case 'code':
           return `<pre><code>${this.escapeHtml(block.content)}</code></pre>`;
         case 'list':
@@ -32,7 +37,7 @@ export class WysiwygConverters {
         case 'divider':
           return '<hr>';
         default:
-          return `<p>${this.escapeHtml(block.content)}</p>`;
+          return `<p>${content}</p>`;
       }
     }).filter(html => html !== '').join('\n');
   }
@@ -88,35 +93,35 @@ export class WysiwygConverters {
             blocks.push({
               id: `block-${Date.now()}-${Math.random().toString(36).substring(2, 9)}`,
               type: 'paragraph',
-              content: element.textContent || '',
+              content: element.innerHTML || '',
             });
             break;
           case 'h1':
             blocks.push({
               id: `block-${Date.now()}-${Math.random().toString(36).substring(2, 9)}`,
               type: 'heading-1',
-              content: element.textContent || '',
+              content: element.innerHTML || '',
             });
             break;
           case 'h2':
             blocks.push({
               id: `block-${Date.now()}-${Math.random().toString(36).substring(2, 9)}`,
               type: 'heading-2',
-              content: element.textContent || '',
+              content: element.innerHTML || '',
             });
             break;
           case 'h3':
             blocks.push({
               id: `block-${Date.now()}-${Math.random().toString(36).substring(2, 9)}`,
               type: 'heading-3',
-              content: element.textContent || '',
+              content: element.innerHTML || '',
             });
             break;
           case 'blockquote':
             blocks.push({
               id: `block-${Date.now()}-${Math.random().toString(36).substring(2, 9)}`,
               type: 'quote',
-              content: element.textContent || '',
+              content: element.innerHTML || '',
             });
             break;
           case 'pre':
diff --git a/ts_web/elements/wysiwyg/wysiwyg.formatting.ts b/ts_web/elements/wysiwyg/wysiwyg.formatting.ts
new file mode 100644
index 0000000..ebc6478
--- /dev/null
+++ b/ts_web/elements/wysiwyg/wysiwyg.formatting.ts
@@ -0,0 +1,149 @@
+import { html, type TemplateResult } from '@design.estate/dees-element';
+
+export interface IFormatButton {
+  command: string;
+  icon: string;
+  label: string;
+  shortcut?: string;
+  action?: () => void;
+}
+
+export class WysiwygFormatting {
+  static readonly formatButtons: IFormatButton[] = [
+    { command: 'bold', icon: 'B', label: 'Bold', shortcut: '⌘B' },
+    { command: 'italic', icon: 'I', label: 'Italic', shortcut: '⌘I' },
+    { command: 'underline', icon: 'U', label: 'Underline', shortcut: '⌘U' },
+    { command: 'strikeThrough', icon: 'S̶', label: 'Strikethrough' },
+    { command: 'code', icon: '{ }', label: 'Inline Code' },
+    { command: 'link', icon: '🔗', label: 'Link', shortcut: '⌘K' },
+  ];
+
+  static renderFormattingMenu(
+    position: { x: number; y: number },
+    onFormat: (command: string) => void
+  ): TemplateResult {
+    return html`
+      <div 
+        class="formatting-menu" 
+        style="top: ${position.y}px; left: ${position.x}px;"
+        @mousedown="${(e: MouseEvent) => { e.preventDefault(); e.stopPropagation(); }}"
+        @click="${(e: MouseEvent) => e.stopPropagation()}"
+      >
+        ${this.formatButtons.map(button => html`
+          <button 
+            class="format-button ${button.command}"
+            @click="${() => onFormat(button.command)}"
+            title="${button.label}${button.shortcut ? ` (${button.shortcut})` : ''}"
+          >
+            <span class="${button.command === 'code' ? 'code-icon' : ''}">${button.icon}</span>
+          </button>
+        `)}
+      </div>
+    `;
+  }
+
+  static applyFormat(command: string, value?: string): void {
+    // Save current selection
+    const selection = window.getSelection();
+    if (!selection || selection.rangeCount === 0) return;
+
+    const range = selection.getRangeAt(0);
+    
+    // Apply format based on command
+    switch (command) {
+      case 'bold':
+      case 'italic':
+      case 'underline':
+      case 'strikeThrough':
+        document.execCommand(command, false);
+        break;
+      
+      case 'code':
+        // For inline code, wrap selection in <code> tags
+        const codeElement = document.createElement('code');
+        try {
+          codeElement.appendChild(range.extractContents());
+          range.insertNode(codeElement);
+          
+          // Select the newly created code element
+          range.selectNodeContents(codeElement);
+          selection.removeAllRanges();
+          selection.addRange(range);
+        } catch (e) {
+          // Fallback to execCommand if range manipulation fails
+          document.execCommand('fontName', false, 'monospace');
+        }
+        break;
+      
+      case 'link':
+        const url = value || prompt('Enter URL:');
+        if (url) {
+          document.execCommand('createLink', false, url);
+        }
+        break;
+    }
+  }
+
+  static getSelectionCoordinates(shadowRoot?: ShadowRoot): { x: number, y: number } | null {
+    // Try shadow root selection first, then window
+    let selection = shadowRoot && (shadowRoot as any).getSelection ? (shadowRoot as any).getSelection() : null;
+    if (!selection || selection.rangeCount === 0) {
+      selection = window.getSelection();
+    }
+    
+    console.log('getSelectionCoordinates - selection:', selection);
+    
+    if (!selection || selection.rangeCount === 0) {
+      console.log('No selection or no ranges');
+      return null;
+    }
+
+    const range = selection.getRangeAt(0);
+    const rect = range.getBoundingClientRect();
+    
+    console.log('Range rect:', rect);
+    
+    if (rect.width === 0) {
+      console.log('Rect width is 0');
+      return null;
+    }
+
+    const coords = {
+      x: rect.left + (rect.width / 2),
+      y: Math.max(45, rect.top - 45) // Position above selection, but ensure it's not negative
+    };
+    
+    console.log('Returning coords:', coords);
+    return coords;
+  }
+
+  static isFormattingApplied(command: string): boolean {
+    try {
+      return document.queryCommandState(command);
+    } catch {
+      return false;
+    }
+  }
+
+  static hasSelection(): boolean {
+    const selection = window.getSelection();
+    if (!selection || selection.rangeCount === 0) {
+      console.log('No selection or no ranges');
+      return false;
+    }
+    
+    // Check if we actually have selected text (not just collapsed cursor)
+    const selectedText = selection.toString();
+    if (!selectedText || selectedText.length === 0) {
+      console.log('No text selected');
+      return false;
+    }
+    
+    return true;
+  }
+
+  static getSelectedText(): string {
+    const selection = window.getSelection();
+    return selection ? selection.toString() : '';
+  }
+}
\ No newline at end of file
diff --git a/ts_web/elements/wysiwyg/wysiwyg.styles.ts b/ts_web/elements/wysiwyg/wysiwyg.styles.ts
index 0724bfa..f0e9e86 100644
--- a/ts_web/elements/wysiwyg/wysiwyg.styles.ts
+++ b/ts_web/elements/wysiwyg/wysiwyg.styles.ts
@@ -26,6 +26,11 @@ export const wysiwygStyles = css`
     box-shadow: 0 0 0 3px ${cssManager.bdTheme('rgba(0, 102, 204, 0.1)', 'rgba(77, 148, 255, 0.1)')};
   }
 
+  /* Visual hint for text selection */
+  .editor-content:hover {
+    cursor: text;
+  }
+
   .editor-content {
     outline: none;
     min-height: 160px;
@@ -388,4 +393,120 @@ export const wysiwygStyles = css`
   .editor-content.dragging * {
     user-select: none;
   }
+
+  /* Text Selection Styles */
+  .block ::selection {
+    background: ${cssManager.bdTheme('rgba(0, 102, 204, 0.3)', 'rgba(77, 148, 255, 0.3)')};
+    color: inherit;
+  }
+
+  /* Formatting Menu */
+  .formatting-menu {
+    position: absolute;
+    background: ${cssManager.bdTheme('#ffffff', '#262626')};
+    border: 1px solid ${cssManager.bdTheme('#e0e0e0', '#404040')};
+    border-radius: 6px;
+    box-shadow: 0 2px 16px rgba(0, 0, 0, 0.15);
+    padding: 4px;
+    display: flex;
+    gap: 2px;
+    z-index: 1001;
+    animation: fadeInScale 0.15s ease-out;
+  }
+
+  @keyframes fadeInScale {
+    from {
+      opacity: 0;
+      transform: scale(0.95) translateY(5px);
+    }
+    to {
+      opacity: 1;
+      transform: scale(1) translateY(0);
+    }
+  }
+
+  .format-button {
+    width: 32px;
+    height: 32px;
+    border: none;
+    background: transparent;
+    cursor: pointer;
+    border-radius: 4px;
+    transition: all 0.15s ease;
+    display: flex;
+    align-items: center;
+    justify-content: center;
+    color: ${cssManager.bdTheme('#000000', '#e0e0e0')};
+    font-weight: 600;
+    font-size: 14px;
+    position: relative;
+  }
+
+  .format-button:hover {
+    background: ${cssManager.bdTheme('#f0f0f0', '#333333')};
+    color: ${cssManager.bdTheme('#0066cc', '#4d94ff')};
+  }
+
+  .format-button:active {
+    transform: scale(0.95);
+  }
+
+  .format-button.bold {
+    font-weight: 700;
+  }
+
+  .format-button.italic {
+    font-style: italic;
+  }
+
+  .format-button.underline {
+    text-decoration: underline;
+  }
+
+  .format-button .code-icon {
+    font-family: 'SF Mono', 'Monaco', 'Inconsolata', 'Fira Code', monospace;
+    font-size: 12px;
+  }
+
+  /* Applied format styles in content */
+  .block strong,
+  .block b {
+    font-weight: 600;
+    color: ${cssManager.bdTheme('#000000', '#ffffff')};
+  }
+
+  .block em,
+  .block i {
+    font-style: italic;
+  }
+
+  .block u {
+    text-decoration: underline;
+  }
+
+  .block strike,
+  .block s {
+    text-decoration: line-through;
+    opacity: 0.7;
+  }
+
+  .block code {
+    background: ${cssManager.bdTheme('rgba(0, 0, 0, 0.06)', 'rgba(255, 255, 255, 0.1)')};
+    padding: 2px 6px;
+    border-radius: 3px;
+    font-family: 'SF Mono', 'Monaco', 'Inconsolata', 'Fira Code', monospace;
+    font-size: 0.9em;
+    color: ${cssManager.bdTheme('#d14', '#ff6b6b')};
+  }
+
+  .block a {
+    color: ${cssManager.bdTheme('#0066cc', '#4d94ff')};
+    text-decoration: none;
+    border-bottom: 1px solid transparent;
+    transition: border-color 0.15s ease;
+  }
+
+  .block a:hover {
+    border-bottom-color: ${cssManager.bdTheme('#0066cc', '#4d94ff')};
+  }
 `;
\ No newline at end of file