diff --git a/src/components/ui/rich-text-editor.tsx b/src/components/ui/rich-text-editor.tsx
index 3f4b470..db1a11c 100644
--- a/src/components/ui/rich-text-editor.tsx
+++ b/src/components/ui/rich-text-editor.tsx
@@ -1,7 +1,8 @@
 import * as React from "react";
 import { cn } from "./utils";
 import { Button } from "./button";
-import { Bold, Italic, Underline, List, ListOrdered, Heading1, Heading2, Heading3, AlignLeft, AlignCenter, AlignRight } from "lucide-react";
+import { Bold, Italic, Underline, List, ListOrdered, Heading1, Heading2, Heading3, AlignLeft, AlignCenter, AlignRight, Highlighter, X, Type } from "lucide-react";
+import { Popover, PopoverContent, PopoverTrigger } from "./popover";
 
 interface RichTextEditorProps extends Omit<React.HTMLAttributes<HTMLDivElement>, 'onChange'> {
   value: string;
@@ -11,6 +12,23 @@ interface RichTextEditorProps extends Omit<React.HTMLAttributes<HTMLDivElement>,
   minHeight?: string;
 }
 
+// Predefined highlight colors - 12 major colors in 2 rows (6 columns x 2 rows)
+// "No Color" is first for easy access (standard pattern)
+const HIGHLIGHT_COLORS = [
+  { name: 'No Color', value: 'transparent', class: 'bg-gray-200 border-2 border-gray-400', icon: '×' },
+  { name: 'Yellow', value: '#FFEB3B', class: 'bg-yellow-400' },
+  { name: 'Green', value: '#4CAF50', class: 'bg-green-400' },
+  { name: 'Blue', value: '#2196F3', class: 'bg-blue-400' },
+  { name: 'Red', value: '#F44336', class: 'bg-red-400' },
+  { name: 'Orange', value: '#FF9800', class: 'bg-orange-400' },
+  { name: 'Purple', value: '#9C27B0', class: 'bg-purple-400' },
+  { name: 'Pink', value: '#E91E63', class: 'bg-pink-400' },
+  { name: 'Cyan', value: '#00BCD4', class: 'bg-cyan-400' },
+  { name: 'Teal', value: '#009688', class: 'bg-teal-400' },
+  { name: 'Amber', value: '#FFC107', class: 'bg-amber-400' },
+  { name: 'Indigo', value: '#3F51B5', class: 'bg-indigo-400' },
+];
+
 /**
  * RichTextEditor Component
  * 
@@ -28,6 +46,12 @@ export function RichTextEditor({
   const editorRef = React.useRef<HTMLDivElement>(null);
   const [isFocused, setIsFocused] = React.useState(false);
   const [activeFormats, setActiveFormats] = React.useState<Set<string>>(new Set());
+  const [highlightColorOpen, setHighlightColorOpen] = React.useState(false);
+  const [currentHighlightColor, setCurrentHighlightColor] = React.useState<string | null>(null);
+  const [customColor, setCustomColor] = React.useState<string>('#FFEB3B');
+  const [textColorOpen, setTextColorOpen] = React.useState(false);
+  const [currentTextColor, setCurrentTextColor] = React.useState<string | null>(null);
+  const [customTextColor, setCustomTextColor] = React.useState<string>('#000000');
 
   // Sync external value to editor
   React.useEffect(() => {
@@ -249,6 +273,84 @@ export function RichTextEditor({
         if (style.textAlign === 'right') formats.add('right');
         if (style.textAlign === 'left') formats.add('left');
         
+          // Convert RGB/RGBA to hex for comparison
+          const colorToHex = (color: string): string | null => {
+            // If already hex format
+            if (color.startsWith('#')) {
+              return color.toUpperCase();
+            }
+            // If RGB/RGBA format
+            const result = color.match(/\d+/g);
+            if (!result || result.length < 3) return null;
+            const r = result[0];
+            const g = result[1];
+            const b = result[2];
+            if (!r || !g || !b) return null;
+            const rHex = parseInt(r).toString(16).padStart(2, '0');
+            const gHex = parseInt(g).toString(16).padStart(2, '0');
+            const bHex = parseInt(b).toString(16).padStart(2, '0');
+            return `#${rHex}${gHex}${bHex}`.toUpperCase();
+          };
+        
+        // Check for background color (highlight)
+        const bgColor = style.backgroundColor;
+        // Check if background color is set and not transparent/default
+        if (bgColor && 
+            bgColor !== 'rgba(0, 0, 0, 0)' && 
+            bgColor !== 'transparent' && 
+            bgColor !== 'rgb(255, 255, 255)' && 
+            bgColor !== '#ffffff' &&
+            bgColor !== '#FFFFFF') {
+          formats.add('highlight');
+          const hexColor = colorToHex(bgColor);
+          if (hexColor) {
+            // Find matching color from our palette (allowing for slight variations)
+            const matchedColor = HIGHLIGHT_COLORS.find(c => {
+              if (c.value === 'transparent') return false;
+              // Compare hex values (case-insensitive)
+              return c.value.toUpperCase() === hexColor;
+            });
+            if (matchedColor) {
+              setCurrentHighlightColor(matchedColor.value);
+            } else {
+              // Store the actual color even if not in our palette
+              setCurrentHighlightColor(hexColor);
+            }
+          }
+        } else if (!formats.has('highlight')) {
+          // Only reset if we haven't found a highlight yet
+          setCurrentHighlightColor(null);
+        }
+        
+        // Check for text color
+        const textColor = style.color;
+        // Convert to hex for comparison
+        const hexTextColor = colorToHex(textColor);
+        // Check if text color is set and not default black
+        if (textColor && hexTextColor && 
+            textColor !== 'rgba(0, 0, 0, 0)' && 
+            hexTextColor !== '#000000') {
+          formats.add('textColor');
+          // Find matching color from our palette
+          const matchedColor = HIGHLIGHT_COLORS.find(c => {
+            if (c.value === 'transparent') return false;
+            return c.value.toUpperCase() === hexTextColor;
+          });
+          if (matchedColor) {
+            setCurrentTextColor(matchedColor.value);
+          } else {
+            // Store the actual color even if not in our palette
+            setCurrentTextColor(hexTextColor);
+          }
+        } else if (!formats.has('textColor')) {
+          // Only reset if we haven't found a text color yet (default to black)
+          if (hexTextColor === '#000000' || !hexTextColor) {
+            setCurrentTextColor('#000000');
+          } else {
+            setCurrentTextColor(null);
+          }
+        }
+        
         element = element.parentElement;
       }
     }
@@ -285,6 +387,265 @@ export function RichTextEditor({
     setTimeout(checkActiveFormats, 10);
   }, [isFocused, onChange, checkActiveFormats]);
 
+  // Apply highlight color
+  const applyHighlight = React.useCallback((color: string) => {
+    if (!editorRef.current) return;
+    
+    // Restore focus if needed
+    if (!isFocused) {
+      editorRef.current.focus();
+    }
+    
+    // Save current selection
+    const selection = window.getSelection();
+    if (!selection || selection.rangeCount === 0) {
+      // If no selection, focus the editor
+      editorRef.current.focus();
+      return;
+    }
+    
+    // Check if this color is already applied by checking the selection's style
+    let isAlreadyApplied = false;
+    if (selection.rangeCount > 0) {
+      const range = selection.getRangeAt(0);
+      const commonAncestor = range.commonAncestorContainer;
+      let element: HTMLElement | null = null;
+      
+      if (commonAncestor.nodeType === Node.TEXT_NODE) {
+        element = commonAncestor.parentElement;
+      } else {
+        element = commonAncestor as HTMLElement;
+      }
+      
+      // Check if the selected element has the same background color
+      while (element && element !== editorRef.current) {
+        const style = window.getComputedStyle(element);
+        const bgColor = style.backgroundColor;
+        if (bgColor && bgColor !== 'rgba(0, 0, 0, 0)' && bgColor !== 'transparent' && 
+            bgColor !== 'rgb(255, 255, 255)' && bgColor !== '#ffffff' && bgColor !== '#FFFFFF') {
+          // Convert to hex and compare
+          const colorToHex = (c: string): string | null => {
+            if (c.startsWith('#')) return c.toUpperCase();
+            const result = c.match(/\d+/g);
+            if (!result || result.length < 3) return null;
+            const r = result[0];
+            const g = result[1];
+            const b = result[2];
+            if (!r || !g || !b) return null;
+            const rHex = parseInt(r).toString(16).padStart(2, '0');
+            const gHex = parseInt(g).toString(16).padStart(2, '0');
+            const bHex = parseInt(b).toString(16).padStart(2, '0');
+            return `#${rHex}${gHex}${bHex}`.toUpperCase();
+          };
+          const hexBgColor = colorToHex(bgColor);
+          if (hexBgColor && hexBgColor === color.toUpperCase()) {
+            isAlreadyApplied = true;
+            break;
+          }
+        }
+        element = element.parentElement;
+      }
+    }
+    
+    // Use backColor command for highlight (background color)
+    if (color === 'transparent' || isAlreadyApplied) {
+      // Remove highlight - use a more aggressive approach to fully remove
+      const range = selection.getRangeAt(0);
+      if (!range.collapsed) {
+        // Store the range before manipulation
+        const contents = range.extractContents();
+        
+        // Create a new text node or span without background color
+        const fragment = document.createDocumentFragment();
+        
+        // Process extracted contents to remove background colors
+        const processNode = (node: Node) => {
+          if (node.nodeType === Node.TEXT_NODE) {
+            return node.cloneNode(true);
+          } else if (node.nodeType === Node.ELEMENT_NODE) {
+            const el = node as HTMLElement;
+            const newEl = document.createElement(el.tagName.toLowerCase());
+            
+            // Copy all attributes except style-related ones
+            Array.from(el.attributes).forEach(attr => {
+              if (attr.name !== 'style' && attr.name !== 'class') {
+                newEl.setAttribute(attr.name, attr.value);
+              }
+            });
+            
+            // Process children and copy without background color
+            Array.from(el.childNodes).forEach(child => {
+              const processed = processNode(child);
+              if (processed) {
+                newEl.appendChild(processed);
+              }
+            });
+            
+            // Remove background color if present
+            if (el.style.backgroundColor) {
+              newEl.style.backgroundColor = '';
+            }
+            
+            return newEl;
+          }
+          return null;
+        };
+        
+        Array.from(contents.childNodes).forEach(child => {
+          const processed = processNode(child);
+          if (processed) {
+            fragment.appendChild(processed);
+          }
+        });
+        
+        // Insert the cleaned fragment
+        range.insertNode(fragment);
+        
+        // Also use execCommand to ensure removal
+        document.execCommand('removeFormat', false);
+      } else {
+        // No selection - remove format from current position
+        document.execCommand('removeFormat', false);
+      }
+      setCurrentHighlightColor(null);
+      setCustomColor('#FFEB3B'); // Reset to default
+    } else {
+      // Apply new highlight color - only if there's a selection
+      if (selection.rangeCount > 0 && !selection.getRangeAt(0).collapsed) {
+        document.execCommand('backColor', false, color);
+        setCurrentHighlightColor(color);
+        // Update custom color input if it's a valid hex color (not transparent)
+        if (color !== 'transparent' && /^#[0-9A-Fa-f]{6}$/i.test(color)) {
+          setCustomColor(color);
+        }
+      } else {
+        // No selection - don't apply (prevents sticky mode where it applies to next typed text)
+        return;
+      }
+    }
+    
+    // Clear selection immediately after applying to prevent "sticky" highlight mode
+    const sel = window.getSelection();
+    if (sel) {
+      sel.removeAllRanges();
+    }
+    
+    // Update content
+    if (editorRef.current) {
+      onChange(editorRef.current.innerHTML);
+    }
+    
+    // Close popover
+    setHighlightColorOpen(false);
+    
+    // Refocus editor after a short delay and check formats
+    setTimeout(() => {
+      if (editorRef.current) {
+        editorRef.current.focus();
+      }
+      checkActiveFormats();
+    }, 50);
+  }, [isFocused, onChange, checkActiveFormats]);
+
+  // Apply text color
+  const applyTextColor = React.useCallback((color: string) => {
+    if (!editorRef.current) return;
+    
+    // Restore focus if needed
+    if (!isFocused) {
+      editorRef.current.focus();
+    }
+    
+    // Save current selection
+    const selection = window.getSelection();
+    if (!selection || selection.rangeCount === 0) {
+      // If no selection, focus the editor
+      editorRef.current.focus();
+      return;
+    }
+    
+    // Check if this color is already applied by checking the selection's style
+    let isAlreadyApplied = false;
+    if (selection.rangeCount > 0) {
+      const range = selection.getRangeAt(0);
+      const commonAncestor = range.commonAncestorContainer;
+      let element: HTMLElement | null = null;
+      
+      if (commonAncestor.nodeType === Node.TEXT_NODE) {
+        element = commonAncestor.parentElement;
+      } else {
+        element = commonAncestor as HTMLElement;
+      }
+      
+      // Check if the selected element has the same text color
+      while (element && element !== editorRef.current) {
+        const style = window.getComputedStyle(element);
+        const textColor = style.color;
+        if (textColor) {
+          // Convert to hex and compare
+          const colorToHex = (c: string): string | null => {
+            if (c.startsWith('#')) return c.toUpperCase();
+            const result = c.match(/\d+/g);
+            if (!result || result.length < 3) return null;
+            const r = result[0];
+            const g = result[1];
+            const b = result[2];
+            if (!r || !g || !b) return null;
+            const rHex = parseInt(r).toString(16).padStart(2, '0');
+            const gHex = parseInt(g).toString(16).padStart(2, '0');
+            const bHex = parseInt(b).toString(16).padStart(2, '0');
+            return `#${rHex}${gHex}${bHex}`.toUpperCase();
+          };
+          const hexTextColor = colorToHex(textColor);
+          // For black, also check if it's the default (no custom color)
+          if (color === '#000000') {
+            // If it's black and matches, or if no custom color is set (default black)
+            if (hexTextColor === '#000000' || !hexTextColor) {
+              isAlreadyApplied = true;
+              break;
+            }
+          } else if (hexTextColor && hexTextColor === color.toUpperCase()) {
+            isAlreadyApplied = true;
+            break;
+          }
+        }
+        element = element.parentElement;
+      }
+    }
+    
+    // Use foreColor command for text color
+    if (color === 'transparent' || color === 'default' || isAlreadyApplied) {
+      // Remove text color by removing format or setting to default
+      // If clicking black when it's already default, do nothing or reset
+      if (color === '#000000' && isAlreadyApplied) {
+        // Already default, no need to change
+        setTextColorOpen(false);
+        return;
+      }
+      document.execCommand('removeFormat', false);
+      setCurrentTextColor(null);
+      setCustomTextColor('#000000'); // Reset to default black
+    } else {
+      document.execCommand('foreColor', false, color);
+      setCurrentTextColor(color);
+      // Update custom text color input if it's a valid hex color
+      if (color !== 'transparent' && /^#[0-9A-Fa-f]{6}$/i.test(color)) {
+        setCustomTextColor(color);
+      }
+    }
+    
+    // Update content
+    if (editorRef.current) {
+      onChange(editorRef.current.innerHTML);
+    }
+    
+    // Close popover
+    setTextColorOpen(false);
+    
+    // Check active formats after a short delay
+    setTimeout(checkActiveFormats, 10);
+  }, [isFocused, onChange, checkActiveFormats]);
+
   // Handle input changes
   const handleInput = React.useCallback(() => {
     if (editorRef.current) {
@@ -387,6 +748,424 @@ export function RichTextEditor({
           >
             <Underline className="h-4 w-4" />
           </Button>
+          
+          {/* Highlight Color Picker */}
+          <Popover open={highlightColorOpen} onOpenChange={setHighlightColorOpen}>
+            <PopoverTrigger asChild>
+              <Button
+                type="button"
+                variant="ghost"
+                size="sm"
+                className={cn(
+                  "h-7 w-7 p-0",
+                  activeFormats.has('highlight') && "bg-blue-100 text-blue-700"
+                )}
+                title="Text Highlight"
+              >
+                <Highlighter className="h-4 w-4" />
+              </Button>
+            </PopoverTrigger>
+            <PopoverContent 
+              className="w-auto p-2" 
+              align="start"
+              onPointerDownOutside={(e) => {
+                // Prevent closing when clicking inside popover
+                const target = e.target as HTMLElement;
+                if (target.closest('[data-popover-content]')) {
+                  e.preventDefault();
+                }
+              }}
+            >
+              <div className="space-y-2 relative" onClick={(e) => e.stopPropagation()}>
+                {/* Cancel Button */}
+                <Button
+                  type="button"
+                  variant="ghost"
+                  size="sm"
+                  className="absolute top-0 right-0 h-6 w-6 p-0 hover:bg-gray-100"
+                  onClick={(e) => {
+                    e.stopPropagation();
+                    setHighlightColorOpen(false);
+                  }}
+                  title="Close"
+                >
+                  <X className="h-4 w-4 text-gray-500" />
+                </Button>
+                
+                <div className="text-xs font-semibold text-gray-700 mb-2 pr-6">Highlight Color</div>
+                <div className="grid grid-cols-6 gap-1.5 pr-1 mb-2">
+                  {HIGHLIGHT_COLORS.map((color) => {
+                    const isActive = currentHighlightColor === color.value;
+                    const isNoColor = color.value === 'transparent';
+                    return (
+                      <button
+                        key={color.value}
+                        type="button"
+                        onClick={(e) => {
+                          e.preventDefault();
+                          e.stopPropagation();
+                          // Standard toggle: if clicking the same color, remove it
+                          if (isActive && !isNoColor) {
+                            applyHighlight('transparent');
+                          } else {
+                            applyHighlight(color.value);
+                          }
+                        }}
+                        className={cn(
+                          "w-6 h-6 rounded border-2 transition-all hover:scale-110 hover:shadow-md relative",
+                          color.class,
+                          isActive && "ring-2 ring-blue-600 ring-offset-1 border-blue-600",
+                          isNoColor && "border-gray-400 bg-white",
+                          !isNoColor && !isActive && "border-gray-300"
+                        )}
+                        title={isActive && !isNoColor ? `${color.name} (Click to remove)` : color.name}
+                        style={!isNoColor ? { backgroundColor: color.value } : {}}
+                      >
+                        {isNoColor && (
+                          <span className="text-[10px] text-gray-600 font-bold">×</span>
+                        )}
+                        {isActive && !isNoColor && (
+                          <span className="absolute inset-0 flex items-center justify-center">
+                            <span className="w-2 h-2 bg-white rounded-full shadow-sm"></span>
+                          </span>
+                        )}
+                      </button>
+                    );
+                  })}
+                </div>
+                
+                {/* Remove Highlight Button - Standard pattern */}
+                {currentHighlightColor && currentHighlightColor !== 'transparent' && (
+                  <div className="mb-2">
+                    <Button
+                      type="button"
+                      variant="outline"
+                      size="sm"
+                      className="w-full h-7 text-xs"
+                      onClick={(e) => {
+                        e.stopPropagation();
+                        applyHighlight('transparent');
+                      }}
+                      title="Remove highlight color"
+                    >
+                      Remove Highlight
+                    </Button>
+                  </div>
+                )}
+                
+                {/* Custom Color Picker */}
+                <div className="border-t border-gray-200 pt-2 mt-2">
+                  <div className="text-xs font-semibold text-gray-700 mb-1.5">Custom Color</div>
+                  <div className="flex items-center gap-2">
+                    <input
+                      type="color"
+                      value={currentHighlightColor && currentHighlightColor !== 'transparent' ? currentHighlightColor : customColor}
+                      onChange={(e) => {
+                        const color = e.target.value;
+                        setCustomColor(color);
+                        // Only apply if there's selected text
+                        const selection = window.getSelection();
+                        if (selection && selection.rangeCount > 0 && !selection.getRangeAt(0).collapsed) {
+                          applyHighlight(color);
+                        }
+                      }}
+                      className="w-8 h-8 rounded border border-gray-300 cursor-pointer"
+                      title="Pick a custom color"
+                    />
+                    <input
+                      type="text"
+                      value={currentHighlightColor && currentHighlightColor !== 'transparent' ? currentHighlightColor : customColor}
+                      onChange={(e) => {
+                        e.stopPropagation();
+                        const color = e.target.value;
+                        // Allow typing freely - don't restrict input
+                        setCustomColor(color);
+                      }}
+                      onKeyDown={(e) => {
+                        // Prevent popover from closing
+                        e.stopPropagation();
+                        // Allow all keys including backspace, delete, etc.
+                        if (e.key === 'Enter') {
+                          e.preventDefault();
+                          const color = e.currentTarget.value.trim();
+                          // Apply if valid hex color
+                          if (/^#[0-9A-Fa-f]{6}$/i.test(color)) {
+                            applyHighlight(color);
+                          }
+                        }
+                      }}
+                      onPaste={(e) => {
+                        e.stopPropagation();
+                        // Get pasted text from clipboard
+                        const pastedText = e.clipboardData.getData('text').trim();
+                        e.preventDefault();
+                        
+                        // Process after paste event completes
+                        setTimeout(() => {
+                          // Check if it's a valid hex color with #
+                          if (/^#[0-9A-Fa-f]{6}$/i.test(pastedText)) {
+                            setCustomColor(pastedText);
+                            // Auto-apply if text is selected in editor
+                            const selection = window.getSelection();
+                            if (selection && selection.rangeCount > 0 && !selection.getRangeAt(0).collapsed) {
+                              applyHighlight(pastedText);
+                            }
+                          } else {
+                            // Check if it's a hex color without # prefix (6 hex digits)
+                            const hexMatch = pastedText.match(/^([0-9A-Fa-f]{6})$/);
+                            if (hexMatch) {
+                              const colorWithHash = `#${hexMatch[1]}`;
+                              setCustomColor(colorWithHash);
+                              const selection = window.getSelection();
+                              if (selection && selection.rangeCount > 0 && !selection.getRangeAt(0).collapsed) {
+                                applyHighlight(colorWithHash);
+                              }
+                            } else {
+                              // If no match, allow default paste behavior (setTimeout allows default paste)
+                              // Value will be updated by onChange
+                            }
+                          }
+                        }, 0);
+                      }}
+                      onClick={(e) => {
+                        e.stopPropagation();
+                      }}
+                      onFocus={(e) => {
+                        e.stopPropagation();
+                        // Select all text on focus for easy replacement
+                        e.target.select();
+                      }}
+                      onBlur={(e) => {
+                        // On blur, if valid color, apply it
+                        const color = e.target.value.trim();
+                        if (/^#[0-9A-Fa-f]{6}$/i.test(color)) {
+                          const selection = window.getSelection();
+                          if (selection && selection.rangeCount > 0 && !selection.getRangeAt(0).collapsed) {
+                            applyHighlight(color);
+                          }
+                        } else if (color === '') {
+                          // Reset to current if cleared
+                          setCustomColor(currentHighlightColor || '#FFEB3B');
+                        } else {
+                          // Keep the typed value even if invalid (user might be typing)
+                          setCustomColor(color);
+                        }
+                      }}
+                      placeholder="#FFEB3B"
+                      className="flex-1 h-7 px-2 text-xs border border-gray-300 rounded focus:outline-none focus:ring-1 focus:ring-blue-500"
+                      title="Enter hex color code (Press Enter or click Apply). Supports copy-paste."
+                      autoComplete="off"
+                      spellCheck="false"
+                    />
+                    <Button
+                      type="button"
+                      variant="ghost"
+                      size="sm"
+                      className="h-7 px-2 text-xs"
+                      onClick={() => {
+                        const color = customColor.trim();
+                        if (/^#[0-9A-Fa-f]{6}$/i.test(color)) {
+                          applyHighlight(color);
+                        } else {
+                          // If invalid, show current value or reset
+                          setCustomColor(currentHighlightColor || '#FFEB3B');
+                        }
+                      }}
+                      title="Apply custom color"
+                    >
+                      Apply
+                    </Button>
+                  </div>
+                </div>
+              </div>
+            </PopoverContent>
+          </Popover>
+          
+          {/* Text Color Picker */}
+          <Popover open={textColorOpen} onOpenChange={setTextColorOpen}>
+            <PopoverTrigger asChild>
+              <Button
+                type="button"
+                variant="ghost"
+                size="sm"
+                className={cn(
+                  "h-7 w-7 p-0",
+                  activeFormats.has('textColor') && "bg-blue-100 text-blue-700"
+                )}
+                title="Text Color"
+              >
+                <Type className="h-4 w-4" />
+              </Button>
+            </PopoverTrigger>
+            <PopoverContent 
+              className="w-auto p-2" 
+              align="start"
+              onPointerDownOutside={(e) => {
+                const target = e.target as HTMLElement;
+                if (target.closest('[data-popover-content]')) {
+                  e.preventDefault();
+                }
+              }}
+            >
+              <div className="space-y-2 relative" onClick={(e) => e.stopPropagation()}>
+                {/* Cancel Button */}
+                <Button
+                  type="button"
+                  variant="ghost"
+                  size="sm"
+                  className="absolute top-0 right-0 h-6 w-6 p-0 hover:bg-gray-100"
+                  onClick={(e) => {
+                    e.stopPropagation();
+                    setTextColorOpen(false);
+                  }}
+                  title="Close"
+                >
+                  <X className="h-4 w-4 text-gray-500" />
+                </Button>
+                
+                <div className="text-xs font-semibold text-gray-700 mb-2 pr-6">Text Color</div>
+                <div className="grid grid-cols-6 gap-1.5 pr-1 mb-2">
+                  {/* Default/Black Color Option - First position (standard) */}
+                  <button
+                    type="button"
+                    onClick={(e) => {
+                      e.preventDefault();
+                      e.stopPropagation();
+                      const isDefault = currentTextColor === '#000000' || (!currentTextColor && !activeFormats.has('textColor'));
+                      // Toggle: if already default, do nothing (or could reset to default explicitly)
+                      if (!isDefault) {
+                        applyTextColor('#000000');
+                      }
+                    }}
+                    className={cn(
+                      "w-6 h-6 rounded border-2 transition-all hover:scale-110 hover:shadow-md flex items-center justify-center bg-black",
+                      (currentTextColor === '#000000' || (!currentTextColor && !activeFormats.has('textColor'))) && "ring-2 ring-blue-600 ring-offset-1 border-blue-600",
+                      (currentTextColor !== '#000000' && (currentTextColor || activeFormats.has('textColor'))) && "border-gray-300"
+                    )}
+                    title="Default (Black)"
+                  >
+                    <span className="text-[10px] text-white font-bold">A</span>
+                    {(currentTextColor === '#000000' || (!currentTextColor && !activeFormats.has('textColor'))) && (
+                      <span className="absolute inset-0 flex items-center justify-center">
+                        <span className="w-2 h-2 bg-white rounded-full shadow-sm"></span>
+                      </span>
+                    )}
+                  </button>
+                  {HIGHLIGHT_COLORS.filter(c => c.value !== 'transparent').map((color) => {
+                    const isActive = currentTextColor === color.value;
+                    return (
+                      <button
+                        key={`text-${color.value}`}
+                        type="button"
+                        onClick={(e) => {
+                          e.preventDefault();
+                          e.stopPropagation();
+                          // Standard toggle: if clicking the same color, reset to default
+                          if (isActive) {
+                            applyTextColor('#000000');
+                          } else {
+                            applyTextColor(color.value);
+                          }
+                        }}
+                        className={cn(
+                          "w-6 h-6 rounded border-2 transition-all hover:scale-110 hover:shadow-md flex items-center justify-center relative",
+                          isActive && "ring-2 ring-blue-600 ring-offset-1 border-blue-600",
+                          !isActive && "border-gray-300"
+                        )}
+                        title={isActive ? `${color.name} (Click to reset to default)` : color.name}
+                        style={{ color: color.value, borderColor: isActive ? '#2563eb' : color.value }}
+                      >
+                        <span className="text-xs font-bold">A</span>
+                        {isActive && (
+                          <span className="absolute inset-0 flex items-center justify-center">
+                            <span className="w-2 h-2 bg-white rounded-full shadow-sm"></span>
+                          </span>
+                        )}
+                      </button>
+                    );
+                  })}
+                </div>
+                
+                {/* Remove Text Color Button - Standard pattern */}
+                {currentTextColor && currentTextColor !== '#000000' && (
+                  <div className="mb-2">
+                    <Button
+                      type="button"
+                      variant="outline"
+                      size="sm"
+                      className="w-full h-7 text-xs"
+                      onClick={(e) => {
+                        e.stopPropagation();
+                        applyTextColor('#000000');
+                      }}
+                      title="Reset to default black"
+                    >
+                      Reset to Default
+                    </Button>
+                  </div>
+                )}
+                
+                {/* Custom Text Color Picker */}
+                <div className="border-t border-gray-200 pt-2 mt-2">
+                  <div className="text-xs font-semibold text-gray-700 mb-1.5">Custom Color</div>
+                  <div className="flex items-center gap-2">
+                    <input
+                      type="color"
+                      value={currentTextColor || customTextColor}
+                      onChange={(e) => {
+                        const color = e.target.value;
+                        setCustomTextColor(color);
+                        applyTextColor(color);
+                      }}
+                      className="w-8 h-8 rounded border border-gray-300 cursor-pointer"
+                      title="Pick a custom text color"
+                    />
+                    <input
+                      type="text"
+                      value={currentTextColor || customTextColor}
+                      onChange={(e) => {
+                        const color = e.target.value;
+                        setCustomTextColor(color);
+                        // Don't auto-apply, let user press Apply or Enter
+                      }}
+                      onKeyDown={(e) => {
+                        if (e.key === 'Enter') {
+                          e.preventDefault();
+                          const color = e.currentTarget.value;
+                          if (/^#[0-9A-Fa-f]{6}$/.test(color)) {
+                            applyTextColor(color);
+                          }
+                        }
+                      }}
+                      onBlur={(e) => {
+                        // On blur, if valid color, apply it
+                        const color = e.target.value;
+                        if (/^#[0-9A-Fa-f]{6}$/.test(color)) {
+                          applyTextColor(color);
+                        } else if (color === '') {
+                          // Reset to current if cleared
+                          setCustomTextColor(currentTextColor || '#000000');
+                        }
+                      }}
+                      placeholder="#000000"
+                      className="flex-1 h-7 px-2 text-xs border border-gray-300 rounded focus:outline-none focus:ring-1 focus:ring-blue-500"
+                      title="Enter hex color code (Press Enter or click Apply)"
+                    />
+                    <Button
+                      type="button"
+                      variant="ghost"
+                      size="sm"
+                      className="h-7 px-2 text-xs"
+                      onClick={() => applyTextColor(customTextColor)}
+                      title="Apply custom text color"
+                    >
+                      Apply
+                    </Button>
+                  </div>
+                </div>
+              </div>
+            </PopoverContent>
+          </Popover>
         </div>
 
         {/* Headings */}
@@ -549,6 +1328,8 @@ export function RichTextEditor({
           "[&_strong]:font-bold",
           "[&_em]:italic",
           "[&_u]:underline",
+          // Highlight color styles - preserve background colors on spans
+          "[&_span[style*='background']]:px-0.5 [&_span[style*='background']]:rounded",
           "[&_h1]:text-xl [&_h1]:font-bold [&_h1]:my-2",
           "[&_h2]:text-lg [&_h2]:font-semibold [&_h2]:my-2",
           "[&_h3]:text-base [&_h3]:font-semibold [&_h3]:my-1",