diff --git a/authdaemon/host_linux.go b/authdaemon/host_linux.go
new file mode 100644
index 0000000..4416dd1
--- /dev/null
+++ b/authdaemon/host_linux.go
@@ -0,0 +1,269 @@
+//go:build linux
+
+package authdaemon
+
+import (
+	"bufio"
+	"encoding/json"
+	"fmt"
+	"os"
+	"os/exec"
+	"os/user"
+	"path/filepath"
+	"strconv"
+	"strings"
+
+	"github.com/fosrl/newt/logger"
+)
+
+// writeCACertIfNotExists writes contents to path only if the file does not exist.
+func writeCACertIfNotExists(path, contents string) error {
+	if _, err := os.Stat(path); err == nil {
+		logger.Debug("auth-daemon: CA cert already exists at %s, skipping write", path)
+		return nil
+	}
+	dir := filepath.Dir(path)
+	if err := os.MkdirAll(dir, 0755); err != nil {
+		return fmt.Errorf("mkdir %s: %w", dir, err)
+	}
+	contents = strings.TrimSpace(contents)
+	if contents != "" && !strings.HasSuffix(contents, "\n") {
+		contents += "\n"
+	}
+	if err := os.WriteFile(path, []byte(contents), 0644); err != nil {
+		return fmt.Errorf("write CA cert: %w", err)
+	}
+	logger.Info("auth-daemon: wrote CA cert to %s", path)
+	return nil
+}
+
+// ensureSSHDTrustedUserCAKeys ensures sshd_config contains TrustedUserCAKeys caCertPath.
+func ensureSSHDTrustedUserCAKeys(sshdConfigPath, caCertPath string) error {
+	if sshdConfigPath == "" {
+		sshdConfigPath = "/etc/ssh/sshd_config"
+	}
+	data, err := os.ReadFile(sshdConfigPath)
+	if err != nil {
+		return fmt.Errorf("read sshd_config: %w", err)
+	}
+	directive := "TrustedUserCAKeys " + caCertPath
+	lines := strings.Split(string(data), "\n")
+	found := false
+	for i, line := range lines {
+		trimmed := strings.TrimSpace(line)
+		// strip inline comment
+		if idx := strings.Index(trimmed, "#"); idx >= 0 {
+			trimmed = strings.TrimSpace(trimmed[:idx])
+		}
+		if trimmed == "" {
+			continue
+		}
+		if strings.HasPrefix(trimmed, "TrustedUserCAKeys") {
+			if strings.TrimSpace(trimmed) == directive {
+				logger.Debug("auth-daemon: sshd_config already has TrustedUserCAKeys %s", caCertPath)
+				return nil
+			}
+			lines[i] = directive
+			found = true
+			break
+		}
+	}
+	if !found {
+		lines = append(lines, directive)
+	}
+	out := strings.Join(lines, "\n")
+	if !strings.HasSuffix(out, "\n") {
+		out += "\n"
+	}
+	if err := os.WriteFile(sshdConfigPath, []byte(out), 0644); err != nil {
+		return fmt.Errorf("write sshd_config: %w", err)
+	}
+	logger.Info("auth-daemon: updated %s with TrustedUserCAKeys %s", sshdConfigPath, caCertPath)
+	return nil
+}
+
+// reloadSSHD runs the given shell command to reload sshd (e.g. "systemctl reload sshd").
+func reloadSSHD(reloadCmd string) error {
+	if reloadCmd == "" {
+		return nil
+	}
+	cmd := exec.Command("sh", "-c", reloadCmd)
+	if out, err := cmd.CombinedOutput(); err != nil {
+		return fmt.Errorf("reload sshd %q: %w (output: %s)", reloadCmd, err, string(out))
+	}
+	logger.Info("auth-daemon: reloaded sshd")
+	return nil
+}
+
+// writePrincipals updates the principals file at path: JSON object keyed by username, value is array of principals. Adds username and niceId to that user's list (deduped).
+func writePrincipals(path, username, niceId string) error {
+	if path == "" {
+		return nil
+	}
+	username = strings.TrimSpace(username)
+	niceId = strings.TrimSpace(niceId)
+	if username == "" {
+		return nil
+	}
+	data := make(map[string][]string)
+	if raw, err := os.ReadFile(path); err == nil {
+		_ = json.Unmarshal(raw, &data)
+	}
+	list := data[username]
+	seen := make(map[string]struct{}, len(list)+2)
+	for _, p := range list {
+		seen[p] = struct{}{}
+	}
+	for _, p := range []string{username, niceId} {
+		if p == "" {
+			continue
+		}
+		if _, ok := seen[p]; !ok {
+			seen[p] = struct{}{}
+			list = append(list, p)
+		}
+	}
+	data[username] = list
+	body, err := json.Marshal(data)
+	if err != nil {
+		return fmt.Errorf("marshal principals: %w", err)
+	}
+	dir := filepath.Dir(path)
+	if err := os.MkdirAll(dir, 0755); err != nil {
+		return fmt.Errorf("mkdir %s: %w", dir, err)
+	}
+	if err := os.WriteFile(path, body, 0644); err != nil {
+		return fmt.Errorf("write principals: %w", err)
+	}
+	logger.Debug("auth-daemon: wrote principals to %s", path)
+	return nil
+}
+
+// sudoGroup returns the name of the sudo group (wheel or sudo) that exists on the system. Prefers wheel.
+func sudoGroup() string {
+	f, err := os.Open("/etc/group")
+	if err != nil {
+		return "sudo"
+	}
+	defer f.Close()
+	sc := bufio.NewScanner(f)
+	hasWheel := false
+	hasSudo := false
+	for sc.Scan() {
+		line := sc.Text()
+		if strings.HasPrefix(line, "wheel:") {
+			hasWheel = true
+		}
+		if strings.HasPrefix(line, "sudo:") {
+			hasSudo = true
+		}
+	}
+	if hasWheel {
+		return "wheel"
+	}
+	if hasSudo {
+		return "sudo"
+	}
+	return "sudo"
+}
+
+// ensureUser creates the system user if missing, or reconciles sudo and homedir to match meta.
+func ensureUser(username string, meta ConnectionMetadata) error {
+	if username == "" {
+		return nil
+	}
+	u, err := user.Lookup(username)
+	if err != nil {
+		if _, ok := err.(user.UnknownUserError); !ok {
+			return fmt.Errorf("lookup user %s: %w", username, err)
+		}
+		return createUser(username, meta)
+	}
+	return reconcileUser(u, meta)
+}
+
+func createUser(username string, meta ConnectionMetadata) error {
+	args := []string{}
+	if meta.Homedir {
+		args = append(args, "-m")
+	} else {
+		args = append(args, "-M")
+	}
+	args = append(args, username)
+	cmd := exec.Command("useradd", args...)
+	if out, err := cmd.CombinedOutput(); err != nil {
+		return fmt.Errorf("useradd %s: %w (output: %s)", username, err, string(out))
+	}
+	logger.Info("auth-daemon: created user %s (homedir=%v)", username, meta.Homedir)
+	if meta.Sudo {
+		group := sudoGroup()
+		cmd := exec.Command("usermod", "-aG", group, username)
+		if out, err := cmd.CombinedOutput(); err != nil {
+			logger.Warn("auth-daemon: usermod -aG %s %s: %v (output: %s)", group, username, err, string(out))
+		} else {
+			logger.Info("auth-daemon: added %s to %s", username, group)
+		}
+	}
+	return nil
+}
+
+func mustAtoi(s string) int {
+	n, _ := strconv.Atoi(s)
+	return n
+}
+
+func reconcileUser(u *user.User, meta ConnectionMetadata) error {
+	group := sudoGroup()
+	inGroup, err := userInGroup(u.Username, group)
+	if err != nil {
+		logger.Warn("auth-daemon: check group %s: %v", group, err)
+		inGroup = false
+	}
+	if meta.Sudo && !inGroup {
+		cmd := exec.Command("usermod", "-aG", group, u.Username)
+		if out, err := cmd.CombinedOutput(); err != nil {
+			logger.Warn("auth-daemon: usermod -aG %s %s: %v (output: %s)", group, u.Username, err, string(out))
+		} else {
+			logger.Info("auth-daemon: added %s to %s", u.Username, group)
+		}
+	} else if !meta.Sudo && inGroup {
+		cmd := exec.Command("gpasswd", "-d", u.Username, group)
+		if out, err := cmd.CombinedOutput(); err != nil {
+			logger.Warn("auth-daemon: gpasswd -d %s %s: %v (output: %s)", u.Username, group, err, string(out))
+		} else {
+			logger.Info("auth-daemon: removed %s from %s", u.Username, group)
+		}
+	}
+	if meta.Homedir && u.HomeDir != "" {
+		if st, err := os.Stat(u.HomeDir); err != nil || !st.IsDir() {
+			if err := os.MkdirAll(u.HomeDir, 0755); err != nil {
+				logger.Warn("auth-daemon: mkdir %s: %v", u.HomeDir, err)
+			} else {
+				uid, gid := mustAtoi(u.Uid), mustAtoi(u.Gid)
+				_ = os.Chown(u.HomeDir, uid, gid)
+				logger.Info("auth-daemon: created home %s for %s", u.HomeDir, u.Username)
+			}
+		}
+	}
+	return nil
+}
+
+func userInGroup(username, groupName string) (bool, error) {
+	// getent group wheel returns "wheel:x:10:user1,user2"
+	cmd := exec.Command("getent", "group", groupName)
+	out, err := cmd.Output()
+	if err != nil {
+		return false, err
+	}
+	parts := strings.SplitN(strings.TrimSpace(string(out)), ":", 4)
+	if len(parts) < 4 {
+		return false, nil
+	}
+	members := strings.Split(parts[3], ",")
+	for _, m := range members {
+		if strings.TrimSpace(m) == username {
+			return true, nil
+		}
+	}
+	return false, nil
+}
diff --git a/authdaemon/host_stub.go b/authdaemon/host_stub.go
new file mode 100644
index 0000000..dfd09a5
--- /dev/null
+++ b/authdaemon/host_stub.go
@@ -0,0 +1,32 @@
+//go:build !linux
+
+package authdaemon
+
+import "fmt"
+
+var errLinuxOnly = fmt.Errorf("auth-daemon PAM agent is only supported on Linux")
+
+// writeCACertIfNotExists returns an error on non-Linux.
+func writeCACertIfNotExists(path, contents string) error {
+	return errLinuxOnly
+}
+
+// ensureSSHDTrustedUserCAKeys returns an error on non-Linux.
+func ensureSSHDTrustedUserCAKeys(sshdConfigPath, caCertPath string) error {
+	return errLinuxOnly
+}
+
+// reloadSSHD returns an error on non-Linux.
+func reloadSSHD(reloadCmd string) error {
+	return errLinuxOnly
+}
+
+// ensureUser returns an error on non-Linux.
+func ensureUser(username string, meta ConnectionMetadata) error {
+	return errLinuxOnly
+}
+
+// writePrincipals returns an error on non-Linux.
+func writePrincipals(path, username, niceId string) error {
+	return errLinuxOnly
+}
diff --git a/authdaemon/principals.go b/authdaemon/principals.go
new file mode 100644
index 0000000..cbfca80
--- /dev/null
+++ b/authdaemon/principals.go
@@ -0,0 +1,28 @@
+package authdaemon
+
+import (
+	"encoding/json"
+	"fmt"
+	"os"
+)
+
+// GetPrincipals reads the principals data file at path, looks up the given user, and returns that user's principals as a string slice.
+// The file format is JSON: object with username keys and array-of-principals values, e.g. {"alice":["alice","usr-123"],"bob":["bob","usr-456"]}.
+// If the user is not found or the file is missing, returns nil and nil.
+func GetPrincipals(path, user string) ([]string, error) {
+	if path == "" {
+		return nil, fmt.Errorf("principals file path is required")
+	}
+	data, err := os.ReadFile(path)
+	if err != nil {
+		if os.IsNotExist(err) {
+			return nil, nil
+		}
+		return nil, fmt.Errorf("read principals file: %w", err)
+	}
+	var m map[string][]string
+	if err := json.Unmarshal(data, &m); err != nil {
+		return nil, fmt.Errorf("parse principals file: %w", err)
+	}
+	return m[user], nil
+}
diff --git a/authdaemon/routes.go b/authdaemon/routes.go
new file mode 100644
index 0000000..d7ce880
--- /dev/null
+++ b/authdaemon/routes.go
@@ -0,0 +1,92 @@
+package authdaemon
+
+import (
+	"encoding/json"
+	"net/http"
+
+	"github.com/fosrl/newt/logger"
+)
+
+// registerRoutes registers all API routes. Add new endpoints here.
+func (s *Server) registerRoutes() {
+	s.mux.HandleFunc("/health", s.handleHealth)
+	s.mux.HandleFunc("/connection", s.handleConnection)
+}
+
+// ConnectionMetadata is the metadata object in POST /connection.
+type ConnectionMetadata struct {
+	Sudo    bool `json:"sudo"`
+	Homedir bool `json:"homedir"`
+}
+
+// ConnectionRequest is the JSON body for POST /connection.
+type ConnectionRequest struct {
+	CaCert   string             `json:"caCert"`
+	NiceId   string             `json:"niceId"`
+	Username string             `json:"username"`
+	Metadata ConnectionMetadata `json:"metadata"`
+}
+
+// healthResponse is the JSON body for GET /health.
+type healthResponse struct {
+	Status string `json:"status"`
+}
+
+// handleHealth responds with 200 and {"status":"ok"}.
+func (s *Server) handleHealth(w http.ResponseWriter, r *http.Request) {
+	if r.Method != http.MethodGet {
+		http.Error(w, "Method Not Allowed", http.StatusMethodNotAllowed)
+		return
+	}
+	w.Header().Set("Content-Type", "application/json")
+	_ = json.NewEncoder(w).Encode(healthResponse{Status: "ok"})
+}
+
+// ProcessConnection runs the same logic as POST /connection: CA cert, sshd config, user create/reconcile, principals.
+// Use this when DisableHTTPS is true (e.g. embedded in Newt) instead of calling the API.
+func (s *Server) ProcessConnection(req ConnectionRequest) {
+	logger.Info("connection: niceId=%q username=%q metadata.sudo=%v metadata.homedir=%v",
+		req.NiceId, req.Username, req.Metadata.Sudo, req.Metadata.Homedir)
+
+	cfg := &s.cfg
+	if cfg.CACertPath != "" {
+		if err := writeCACertIfNotExists(cfg.CACertPath, req.CaCert); err != nil {
+			logger.Warn("auth-daemon: write CA cert: %v", err)
+		}
+		sshdConfig := cfg.SSHDConfigPath
+		if sshdConfig == "" {
+			sshdConfig = "/etc/ssh/sshd_config"
+		}
+		if err := ensureSSHDTrustedUserCAKeys(sshdConfig, cfg.CACertPath); err != nil {
+			logger.Warn("auth-daemon: sshd_config: %v", err)
+		}
+		if cfg.ReloadSSHCommand != "" {
+			if err := reloadSSHD(cfg.ReloadSSHCommand); err != nil {
+				logger.Warn("auth-daemon: reload sshd: %v", err)
+			}
+		}
+	}
+	if err := ensureUser(req.Username, req.Metadata); err != nil {
+		logger.Warn("auth-daemon: ensure user: %v", err)
+	}
+	if cfg.PrincipalsFilePath != "" {
+		if err := writePrincipals(cfg.PrincipalsFilePath, req.Username, req.NiceId); err != nil {
+			logger.Warn("auth-daemon: write principals: %v", err)
+		}
+	}
+}
+
+// handleConnection accepts POST with connection payload and delegates to ProcessConnection.
+func (s *Server) handleConnection(w http.ResponseWriter, r *http.Request) {
+	if r.Method != http.MethodPost {
+		http.Error(w, "Method Not Allowed", http.StatusMethodNotAllowed)
+		return
+	}
+	var req ConnectionRequest
+	if err := json.NewDecoder(r.Body).Decode(&req); err != nil {
+		http.Error(w, "Bad Request", http.StatusBadRequest)
+		return
+	}
+	s.ProcessConnection(req)
+	w.WriteHeader(http.StatusOK)
+}
diff --git a/authdaemon/server.go b/authdaemon/server.go
new file mode 100644
index 0000000..83cb480
--- /dev/null
+++ b/authdaemon/server.go
@@ -0,0 +1,174 @@
+package authdaemon
+
+import (
+	"context"
+	"crypto/ecdsa"
+	"crypto/elliptic"
+	"crypto/rand"
+	"crypto/subtle"
+	"crypto/tls"
+	"crypto/x509"
+	"crypto/x509/pkix"
+	"encoding/pem"
+	"fmt"
+	"math/big"
+	"net/http"
+	"os"
+	"runtime"
+	"strings"
+	"time"
+
+	"github.com/fosrl/newt/logger"
+)
+
+type Config struct {
+	// DisableHTTPS: when true, Run() does not start the HTTPS server (for embedded use inside Newt). Call ProcessConnection directly for connection events.
+	DisableHTTPS       bool
+	Port               int    // Listen port for the HTTPS server. Required when DisableHTTPS is false.
+	PresharedKey       string // Required when DisableHTTPS is false; used for HTTP auth (Authorization: Bearer <key> or X-Preshared-Key: <key>).
+	CACertPath         string // Where to write the CA cert (e.g. /etc/ssh/ca.pem).
+	SSHDConfigPath     string // Path to sshd_config (e.g. /etc/ssh/sshd_config). Defaults to /etc/ssh/sshd_config when CACertPath is set.
+	ReloadSSHCommand   string // Command to reload sshd after config change (e.g. "systemctl reload sshd"). Empty = no reload.
+	PrincipalsFilePath string // Path to the principals data file (JSON: username -> array of principals). Empty = do not store principals.
+}
+
+type Server struct {
+	cfg          Config
+	addr         string
+	presharedKey string
+	mux          *http.ServeMux
+	tlsCert      tls.Certificate
+}
+
+// generateTLSCert creates a self-signed certificate and key in memory (no disk).
+func generateTLSCert() (tls.Certificate, error) {
+	key, err := ecdsa.GenerateKey(elliptic.P256(), rand.Reader)
+	if err != nil {
+		return tls.Certificate{}, fmt.Errorf("generate key: %w", err)
+	}
+	serial, err := rand.Int(rand.Reader, new(big.Int).Lsh(big.NewInt(1), 128))
+	if err != nil {
+		return tls.Certificate{}, fmt.Errorf("serial: %w", err)
+	}
+	tmpl := &x509.Certificate{
+		SerialNumber: serial,
+		Subject: pkix.Name{
+			CommonName: "localhost",
+		},
+		NotBefore:             time.Now(),
+		NotAfter:              time.Now().Add(365 * 24 * time.Hour),
+		KeyUsage:              x509.KeyUsageDigitalSignature,
+		ExtKeyUsage:           []x509.ExtKeyUsage{x509.ExtKeyUsageServerAuth},
+		BasicConstraintsValid: true,
+		DNSNames:              []string{"localhost", "127.0.0.1"},
+	}
+	certDER, err := x509.CreateCertificate(rand.Reader, tmpl, tmpl, key.Public(), key)
+	if err != nil {
+		return tls.Certificate{}, fmt.Errorf("create certificate: %w", err)
+	}
+	keyDER, err := x509.MarshalECPrivateKey(key)
+	if err != nil {
+		return tls.Certificate{}, fmt.Errorf("marshal key: %w", err)
+	}
+	certPEM := pem.EncodeToMemory(&pem.Block{Type: "CERTIFICATE", Bytes: certDER})
+	keyPEM := pem.EncodeToMemory(&pem.Block{Type: "EC PRIVATE KEY", Bytes: keyDER})
+	cert, err := tls.X509KeyPair(certPEM, keyPEM)
+	if err != nil {
+		return tls.Certificate{}, fmt.Errorf("x509 key pair: %w", err)
+	}
+	return cert, nil
+}
+
+// authMiddleware wraps next and requires a valid preshared key on every request.
+// Accepts Authorization: Bearer <key> or X-Preshared-Key: <key>.
+func (s *Server) authMiddleware(next http.Handler) http.Handler {
+	return http.HandlerFunc(func(w http.ResponseWriter, r *http.Request) {
+		key := ""
+		if v := r.Header.Get("Authorization"); strings.HasPrefix(v, "Bearer ") {
+			key = strings.TrimSpace(strings.TrimPrefix(v, "Bearer "))
+		}
+		if key == "" {
+			key = strings.TrimSpace(r.Header.Get("X-Preshared-Key"))
+		}
+		if key == "" || subtle.ConstantTimeCompare([]byte(key), []byte(s.presharedKey)) != 1 {
+			http.Error(w, "Unauthorized", http.StatusUnauthorized)
+			return
+		}
+		next.ServeHTTP(w, r)
+	})
+}
+
+// NewServer builds a new auth-daemon server from cfg. When DisableHTTPS is false, PresharedKey and Port are required.
+func NewServer(cfg Config) (*Server, error) {
+	if runtime.GOOS != "linux" {
+		return nil, fmt.Errorf("auth-daemon is only supported on Linux, not %s", runtime.GOOS)
+	}
+	if !cfg.DisableHTTPS {
+		if cfg.PresharedKey == "" {
+			return nil, fmt.Errorf("preshared key is required when HTTPS is enabled")
+		}
+		if cfg.Port <= 0 {
+			return nil, fmt.Errorf("port must be positive when HTTPS is enabled")
+		}
+	}
+	s := &Server{cfg: cfg}
+	if !cfg.DisableHTTPS {
+		cert, err := generateTLSCert()
+		if err != nil {
+			return nil, err
+		}
+		s.addr = fmt.Sprintf(":%d", cfg.Port)
+		s.presharedKey = cfg.PresharedKey
+		s.mux = http.NewServeMux()
+		s.tlsCert = cert
+		s.registerRoutes()
+	}
+	return s, nil
+}
+
+// Run starts the HTTPS server (unless DisableHTTPS) and blocks until ctx is cancelled or the server errors.
+// When DisableHTTPS is true, Run() blocks on ctx only and does not listen; use ProcessConnection for connection events.
+func (s *Server) Run(ctx context.Context) error {
+	if s.cfg.DisableHTTPS {
+		logger.Info("auth-daemon running (HTTPS disabled)")
+		<-ctx.Done()
+		s.cleanupPrincipalsFile()
+		return nil
+	}
+	tcfg := &tls.Config{
+		Certificates: []tls.Certificate{s.tlsCert},
+		MinVersion:   tls.VersionTLS12,
+	}
+	handler := s.authMiddleware(s.mux)
+	srv := &http.Server{
+		Addr:              s.addr,
+		Handler:           handler,
+		TLSConfig:         tcfg,
+		ReadTimeout:       10 * time.Second,
+		WriteTimeout:      10 * time.Second,
+		ReadHeaderTimeout: 5 * time.Second,
+		IdleTimeout:       60 * time.Second,
+	}
+	go func() {
+		<-ctx.Done()
+		shutdownCtx, cancel := context.WithTimeout(context.Background(), 10*time.Second)
+		defer cancel()
+		if err := srv.Shutdown(shutdownCtx); err != nil {
+			logger.Warn("auth-daemon shutdown: %v", err)
+		}
+	}()
+	logger.Info("auth-daemon listening on https://127.0.0.1%s", s.addr)
+	if err := srv.ListenAndServeTLS("", ""); err != nil && err != http.ErrServerClosed {
+		return err
+	}
+	s.cleanupPrincipalsFile()
+	return nil
+}
+
+func (s *Server) cleanupPrincipalsFile() {
+	if s.cfg.PrincipalsFilePath != "" {
+		if err := os.Remove(s.cfg.PrincipalsFilePath); err != nil && !os.IsNotExist(err) {
+			logger.Warn("auth-daemon: remove principals file: %v", err)
+		}
+	}
+}