diff --git a/content/commands/rest.toml b/content/commands/rest.toml
new file mode 100644
index 0000000..ef89096
--- /dev/null
+++ b/content/commands/rest.toml
@@ -0,0 +1,4 @@
+name = "rest"
+help = "restore stamina by resting"
+mode = "normal"
+handler = "mudlib.commands.rest:cmd_rest"
diff --git a/src/mudlib/commands/rest.py b/src/mudlib/commands/rest.py
new file mode 100644
index 0000000..71d3ef2
--- /dev/null
+++ b/src/mudlib/commands/rest.py
@@ -0,0 +1,33 @@
+"""Rest command for restoring stamina."""
+
+from mudlib.commands.movement import send_nearby_message
+from mudlib.player import Player
+
+
+async def cmd_rest(player: Player, args: str) -> None:
+    """Toggle resting state to restore stamina over time.
+
+    Cannot rest if stamina is already full.
+    Broadcasts to nearby players when beginning and ending rest.
+    Stamina restoration happens via the game loop while resting.
+    """
+    # Check if stamina is already full
+    if player.stamina >= player.max_stamina:
+        await player.send("You're not tired.\r\n")
+        return
+
+    # Toggle resting state
+    if player.resting:
+        # Stop resting
+        player.resting = False
+        await player.send("You stop resting.\r\n")
+        await send_nearby_message(
+            player, player.x, player.y, f"{player.name} stops resting.\r\n"
+        )
+    else:
+        # Start resting
+        player.resting = True
+        await player.send("You begin to rest.\r\n")
+        await send_nearby_message(
+            player, player.x, player.y, f"{player.name} begins to rest.\r\n"
+        )
diff --git a/src/mudlib/entity.py b/src/mudlib/entity.py
index a5dedd6..ae04ba1 100644
--- a/src/mudlib/entity.py
+++ b/src/mudlib/entity.py
@@ -15,6 +15,7 @@ class Entity:
     stamina: float = 100.0  # current stamina
     max_stamina: float = 100.0  # stamina ceiling
     defense_locked_until: float = 0.0  # monotonic time when defense recovery ends
+    resting: bool = False  # whether this entity is currently resting
 
     async def send(self, message: str) -> None:
         """Send a message to this entity. Base implementation is a no-op."""
diff --git a/src/mudlib/resting.py b/src/mudlib/resting.py
new file mode 100644
index 0000000..df618d6
--- /dev/null
+++ b/src/mudlib/resting.py
@@ -0,0 +1,31 @@
+"""Resting system for stamina regeneration."""
+
+from mudlib.commands.movement import send_nearby_message
+from mudlib.player import players
+
+# Stamina regeneration rate: 2.0 per second
+# At 10 ticks/sec, that's 0.2 per tick
+STAMINA_PER_TICK = 0.2
+
+
+async def process_resting() -> None:
+    """Process stamina regeneration for all resting players.
+
+    Called once per game loop tick (10 times per second).
+    Adds STAMINA_PER_TICK stamina to each resting player.
+    Auto-stops resting when stamina reaches max.
+    """
+    for player in list(players.values()):
+        if not player.resting:
+            continue
+
+        # Add stamina for this tick
+        player.stamina = min(player.stamina + STAMINA_PER_TICK, player.max_stamina)
+
+        # Check if we reached max stamina
+        if player.stamina >= player.max_stamina:
+            player.resting = False
+            await player.send("You feel fully rested.\r\n")
+            await send_nearby_message(
+                player, player.x, player.y, f"{player.name} stops resting.\r\n"
+            )
diff --git a/src/mudlib/server.py b/src/mudlib/server.py
index 52ec5f8..642bab8 100644
--- a/src/mudlib/server.py
+++ b/src/mudlib/server.py
@@ -24,6 +24,7 @@ from mudlib.combat.engine import process_combat
 from mudlib.content import load_commands
 from mudlib.effects import clear_expired
 from mudlib.player import Player, players
+from mudlib.resting import process_resting
 from mudlib.store import (
     PlayerData,
     account_exists,
@@ -64,6 +65,7 @@ async def game_loop() -> None:
         t0 = asyncio.get_event_loop().time()
         clear_expired()
         await process_combat()
+        await process_resting()
 
         # Periodic auto-save (every 60 seconds)
         current_time = time.monotonic()
diff --git a/tests/test_rest.py b/tests/test_rest.py
new file mode 100644
index 0000000..40a5407
--- /dev/null
+++ b/tests/test_rest.py
@@ -0,0 +1,186 @@
+"""Tests for rest command."""
+
+from unittest.mock import AsyncMock, MagicMock
+
+import pytest
+
+import mudlib.commands.movement as movement_mod
+from mudlib.commands.rest import cmd_rest
+from mudlib.player import Player, players
+from mudlib.resting import process_resting
+
+
+@pytest.fixture(autouse=True)
+def clear_state():
+    """Clear players before and after each test."""
+    players.clear()
+    yield
+    players.clear()
+
+
+@pytest.fixture(autouse=True)
+def mock_world():
+    """Inject a mock world for send_nearby_message."""
+    fake_world = MagicMock()
+    fake_world.width = 256
+    fake_world.height = 256
+    old = movement_mod.world
+    movement_mod.world = fake_world
+    yield fake_world
+    movement_mod.world = old
+
+
+@pytest.fixture
+def mock_writer():
+    writer = MagicMock()
+    writer.write = MagicMock()
+    writer.drain = AsyncMock()
+    return writer
+
+
+@pytest.fixture
+def mock_reader():
+    return MagicMock()
+
+
+@pytest.fixture
+def player(mock_reader, mock_writer):
+    p = Player(name="Goku", x=0, y=0, reader=mock_reader, writer=mock_writer)
+    players[p.name] = p
+    return p
+
+
+@pytest.fixture
+def nearby_player(mock_reader, mock_writer):
+    p = Player(name="Vegeta", x=0, y=0, reader=mock_reader, writer=mock_writer)
+    players[p.name] = p
+    return p
+
+
+@pytest.mark.asyncio
+async def test_rest_when_full_sends_not_tired_message(player):
+    """Test resting when at full stamina sends 'not tired' message."""
+    player.stamina = 100.0
+    player.max_stamina = 100.0
+
+    await cmd_rest(player, "")
+
+    player.writer.write.assert_called_once_with("You're not tired.\r\n")
+    assert player.stamina == 100.0
+    assert not player.resting
+
+
+@pytest.mark.asyncio
+async def test_rest_when_not_resting_starts_resting(player):
+    """Test rest command when not resting starts the resting state."""
+    player.stamina = 50.0
+    player.max_stamina = 100.0
+    player.resting = False
+
+    await cmd_rest(player, "")
+
+    assert player.resting
+    messages = [call[0][0] for call in player.writer.write.call_args_list]
+    assert any("begin to rest" in msg for msg in messages)
+
+
+@pytest.mark.asyncio
+async def test_rest_when_already_resting_stops_resting(player):
+    """Test rest command when already resting stops the resting state."""
+    player.stamina = 50.0
+    player.max_stamina = 100.0
+    player.resting = True
+
+    await cmd_rest(player, "")
+
+    assert not player.resting
+    messages = [call[0][0] for call in player.writer.write.call_args_list]
+    assert any("stop resting" in msg for msg in messages)
+
+
+@pytest.mark.asyncio
+async def test_rest_broadcasts_begin_to_nearby_players(player, nearby_player):
+    """Test resting broadcasts begin message to nearby players."""
+    player.stamina = 50.0
+    player.resting = False
+
+    await cmd_rest(player, "")
+
+    nearby_messages = [call[0][0] for call in nearby_player.writer.write.call_args_list]
+    assert any("Goku begins to rest" in msg for msg in nearby_messages)
+
+
+@pytest.mark.asyncio
+async def test_rest_broadcasts_stop_to_nearby_players(player, nearby_player):
+    """Test stopping rest broadcasts stop message to nearby players."""
+    player.stamina = 50.0
+    player.resting = True
+
+    await cmd_rest(player, "")
+
+    nearby_messages = [call[0][0] for call in nearby_player.writer.write.call_args_list]
+    assert any("Goku stops resting" in msg for msg in nearby_messages)
+
+
+@pytest.mark.asyncio
+async def test_process_resting_ticks_up_stamina(player):
+    """Test process_resting increases stamina for resting players."""
+    player.stamina = 50.0
+    player.max_stamina = 100.0
+    player.resting = True
+
+    await process_resting()
+
+    assert player.stamina == 50.2  # 50 + 0.2 per tick
+
+
+@pytest.mark.asyncio
+async def test_process_resting_auto_stops_when_full(player):
+    """Test process_resting auto-stops resting when stamina reaches max."""
+    player.stamina = 99.9
+    player.max_stamina = 100.0
+    player.resting = True
+
+    await process_resting()
+
+    assert player.stamina == 100.0
+    assert not player.resting
+    messages = [call[0][0] for call in player.writer.write.call_args_list]
+    assert any("fully rested" in msg for msg in messages)
+
+
+@pytest.mark.asyncio
+async def test_process_resting_broadcasts_when_auto_stopping(player, nearby_player):
+    """Test process_resting broadcasts when auto-stopping rest."""
+    player.stamina = 99.9
+    player.max_stamina = 100.0
+    player.resting = True
+
+    await process_resting()
+
+    nearby_messages = [call[0][0] for call in nearby_player.writer.write.call_args_list]
+    assert any("Goku stops resting" in msg for msg in nearby_messages)
+
+
+@pytest.mark.asyncio
+async def test_process_resting_ignores_non_resting_players(player):
+    """Test process_resting doesn't modify stamina for non-resting players."""
+    player.stamina = 50.0
+    player.max_stamina = 100.0
+    player.resting = False
+
+    await process_resting()
+
+    assert player.stamina == 50.0  # unchanged
+
+
+@pytest.mark.asyncio
+async def test_stamina_doesnt_exceed_max(player):
+    """Test stamina doesn't exceed max_stamina during resting."""
+    player.stamina = 99.95
+    player.max_stamina = 100.0
+    player.resting = True
+
+    await process_resting()
+
+    assert player.stamina == 100.0  # capped at max