diff --git a/src/skill_seekers/cli/incremental_updater.py b/src/skill_seekers/cli/incremental_updater.py
new file mode 100644
index 0000000..f9ec00c
--- /dev/null
+++ b/src/skill_seekers/cli/incremental_updater.py
@@ -0,0 +1,448 @@
+#!/usr/bin/env python3
+"""
+Incremental Updates for Skills
+
+Provides smart change detection and partial updates to avoid full rebuilds.
+Tracks document versions and generates delta packages.
+"""
+
+import json
+import hashlib
+from pathlib import Path
+from typing import Optional, Dict, List, Set
+from dataclasses import dataclass, asdict
+from datetime import datetime
+import difflib
+
+
+@dataclass
+class DocumentVersion:
+    """Version information for a document."""
+    file_path: str
+    content_hash: str
+    size_bytes: int
+    last_modified: float
+    version: int
+
+
+@dataclass
+class ChangeSet:
+    """Set of changes detected."""
+    added: List[DocumentVersion]
+    modified: List[DocumentVersion]
+    deleted: List[str]
+    unchanged: List[DocumentVersion]
+
+    @property
+    def has_changes(self) -> bool:
+        """Check if there are any changes."""
+        return len(self.added) > 0 or len(self.modified) > 0 or len(self.deleted) > 0
+
+    @property
+    def total_changes(self) -> int:
+        """Count total changes."""
+        return len(self.added) + len(self.modified) + len(self.deleted)
+
+
+@dataclass
+class UpdateMetadata:
+    """Metadata for an incremental update."""
+    timestamp: str
+    previous_version: str
+    new_version: str
+    change_summary: Dict[str, int]
+    total_documents: int
+
+
+class IncrementalUpdater:
+    """
+    Manages incremental updates for skill documentation.
+
+    Tracks document versions, detects changes, and generates
+    delta packages for efficient updates.
+    """
+
+    def __init__(self, skill_dir: Path, version_file: str = ".skill_version.json"):
+        """
+        Initialize incremental updater.
+
+        Args:
+            skill_dir: Path to skill directory
+            version_file: Name of version tracking file
+        """
+        self.skill_dir = Path(skill_dir)
+        self.version_file = self.skill_dir / version_file
+        self.current_versions: Dict[str, DocumentVersion] = {}
+        self.previous_versions: Dict[str, DocumentVersion] = {}
+
+    def _compute_file_hash(self, file_path: Path) -> str:
+        """
+        Compute SHA256 hash of file content.
+
+        Args:
+            file_path: Path to file
+
+        Returns:
+            Hex digest of SHA256 hash
+        """
+        sha256 = hashlib.sha256()
+
+        try:
+            with open(file_path, 'rb') as f:
+                while chunk := f.read(8192):
+                    sha256.update(chunk)
+            return sha256.hexdigest()
+        except Exception as e:
+            print(f"⚠️  Warning: Failed to hash {file_path}: {e}")
+            return ""
+
+    def _scan_documents(self) -> Dict[str, DocumentVersion]:
+        """
+        Scan skill directory and build version map.
+
+        Returns:
+            Dictionary mapping file paths to versions
+        """
+        versions = {}
+
+        # Scan SKILL.md
+        skill_md = self.skill_dir / "SKILL.md"
+        if skill_md.exists():
+            versions["SKILL.md"] = DocumentVersion(
+                file_path="SKILL.md",
+                content_hash=self._compute_file_hash(skill_md),
+                size_bytes=skill_md.stat().st_size,
+                last_modified=skill_md.stat().st_mtime,
+                version=1
+            )
+
+        # Scan references
+        refs_dir = self.skill_dir / "references"
+        if refs_dir.exists():
+            for ref_file in refs_dir.glob("*.md"):
+                if ref_file.is_file() and not ref_file.name.startswith("."):
+                    rel_path = f"references/{ref_file.name}"
+                    versions[rel_path] = DocumentVersion(
+                        file_path=rel_path,
+                        content_hash=self._compute_file_hash(ref_file),
+                        size_bytes=ref_file.stat().st_size,
+                        last_modified=ref_file.stat().st_mtime,
+                        version=1
+                    )
+
+        return versions
+
+    def load_previous_versions(self) -> bool:
+        """
+        Load previous version information from disk.
+
+        Returns:
+            True if versions loaded, False if no previous versions
+        """
+        if not self.version_file.exists():
+            return False
+
+        try:
+            data = json.loads(self.version_file.read_text())
+
+            for file_path, version_dict in data.get("documents", {}).items():
+                self.previous_versions[file_path] = DocumentVersion(**version_dict)
+
+            return True
+        except Exception as e:
+            print(f"⚠️  Warning: Failed to load versions: {e}")
+            return False
+
+    def save_current_versions(self) -> None:
+        """Save current version information to disk."""
+        data = {
+            "timestamp": datetime.now().isoformat(),
+            "version": "1.0.0",
+            "documents": {
+                file_path: asdict(version)
+                for file_path, version in self.current_versions.items()
+            }
+        }
+
+        self.version_file.write_text(json.dumps(data, indent=2))
+
+    def detect_changes(self) -> ChangeSet:
+        """
+        Detect changes between previous and current versions.
+
+        Returns:
+            ChangeSet describing all changes
+        """
+        # Scan current state
+        self.current_versions = self._scan_documents()
+
+        # Load previous state
+        has_previous = self.load_previous_versions()
+
+        if not has_previous:
+            # First time - all files are "added"
+            return ChangeSet(
+                added=list(self.current_versions.values()),
+                modified=[],
+                deleted=[],
+                unchanged=[]
+            )
+
+        # Detect changes
+        added = []
+        modified = []
+        deleted = []
+        unchanged = []
+
+        current_files = set(self.current_versions.keys())
+        previous_files = set(self.previous_versions.keys())
+
+        # Added files
+        for file_path in current_files - previous_files:
+            added.append(self.current_versions[file_path])
+
+        # Deleted files
+        for file_path in previous_files - current_files:
+            deleted.append(file_path)
+
+        # Check for modifications
+        for file_path in current_files & previous_files:
+            current = self.current_versions[file_path]
+            previous = self.previous_versions[file_path]
+
+            if current.content_hash != previous.content_hash:
+                # Increment version
+                current.version = previous.version + 1
+                modified.append(current)
+            else:
+                unchanged.append(current)
+
+        return ChangeSet(
+            added=added,
+            modified=modified,
+            deleted=deleted,
+            unchanged=unchanged
+        )
+
+    def generate_update_package(
+        self,
+        change_set: ChangeSet,
+        output_path: Path,
+        include_content: bool = True
+    ) -> Path:
+        """
+        Generate incremental update package.
+
+        Args:
+            change_set: Changes to include
+            output_path: Output path for package
+            include_content: Include full document content
+
+        Returns:
+            Path to created package
+        """
+        output_path = Path(output_path)
+
+        # Build update package
+        update_data = {
+            "metadata": {
+                "timestamp": datetime.now().isoformat(),
+                "skill_name": self.skill_dir.name,
+                "change_summary": {
+                    "added": len(change_set.added),
+                    "modified": len(change_set.modified),
+                    "deleted": len(change_set.deleted),
+                    "unchanged": len(change_set.unchanged)
+                },
+                "total_changes": change_set.total_changes
+            },
+            "changes": {}
+        }
+
+        # Include changed documents
+        if include_content:
+            # Added documents
+            for doc in change_set.added:
+                file_path = self.skill_dir / doc.file_path
+                update_data["changes"][doc.file_path] = {
+                    "action": "add",
+                    "version": doc.version,
+                    "content": file_path.read_text(encoding="utf-8"),
+                    "hash": doc.content_hash,
+                    "size": doc.size_bytes
+                }
+
+            # Modified documents
+            for doc in change_set.modified:
+                file_path = self.skill_dir / doc.file_path
+                update_data["changes"][doc.file_path] = {
+                    "action": "modify",
+                    "version": doc.version,
+                    "content": file_path.read_text(encoding="utf-8"),
+                    "hash": doc.content_hash,
+                    "size": doc.size_bytes
+                }
+
+            # Deleted documents
+            for file_path in change_set.deleted:
+                update_data["changes"][file_path] = {
+                    "action": "delete"
+                }
+
+        # Write package
+        output_path.parent.mkdir(parents=True, exist_ok=True)
+        output_path.write_text(json.dumps(update_data, indent=2, ensure_ascii=False))
+
+        return output_path
+
+    def generate_diff_report(self, change_set: ChangeSet) -> str:
+        """
+        Generate human-readable diff report.
+
+        Args:
+            change_set: Changes to report
+
+        Returns:
+            Formatted report string
+        """
+        lines = ["=" * 60]
+        lines.append("INCREMENTAL UPDATE REPORT")
+        lines.append("=" * 60)
+        lines.append("")
+
+        # Summary
+        lines.append("📊 Summary:")
+        lines.append(f"   Added: {len(change_set.added)} files")
+        lines.append(f"   Modified: {len(change_set.modified)} files")
+        lines.append(f"   Deleted: {len(change_set.deleted)} files")
+        lines.append(f"   Unchanged: {len(change_set.unchanged)} files")
+        lines.append(f"   Total changes: {change_set.total_changes}")
+        lines.append("")
+
+        # Added files
+        if change_set.added:
+            lines.append("➕ Added Files:")
+            for doc in change_set.added:
+                lines.append(f"   + {doc.file_path} ({doc.size_bytes:,} bytes)")
+            lines.append("")
+
+        # Modified files
+        if change_set.modified:
+            lines.append("📝 Modified Files:")
+            for doc in change_set.modified:
+                prev = self.previous_versions.get(doc.file_path)
+                if prev:
+                    size_diff = doc.size_bytes - prev.size_bytes
+                    size_str = f"{size_diff:+,} bytes" if size_diff != 0 else "same size"
+                    lines.append(f"   ~ {doc.file_path} (v{prev.version} → v{doc.version}, {size_str})")
+                else:
+                    lines.append(f"   ~ {doc.file_path} (v{doc.version})")
+            lines.append("")
+
+        # Deleted files
+        if change_set.deleted:
+            lines.append("🗑️  Deleted Files:")
+            for file_path in change_set.deleted:
+                lines.append(f"   - {file_path}")
+            lines.append("")
+
+        # Content diffs for modified files
+        if change_set.modified:
+            lines.append("📄 Content Changes:")
+            for doc in change_set.modified:
+                prev = self.previous_versions.get(doc.file_path)
+                if prev:
+                    lines.append(f"\n   File: {doc.file_path}")
+
+                    # Read current content
+                    current_path = self.skill_dir / doc.file_path
+                    current_content = current_path.read_text(encoding="utf-8").splitlines()
+
+                    # Generate diff (simplified)
+                    lines.append(f"   Size: {prev.size_bytes:,} → {doc.size_bytes:,} bytes")
+                    lines.append(f"   Hash: {prev.content_hash[:8]}... → {doc.content_hash[:8]}...")
+            lines.append("")
+
+        lines.append("=" * 60)
+
+        return "\n".join(lines)
+
+    def apply_update_package(self, package_path: Path) -> bool:
+        """
+        Apply an incremental update package.
+
+        Args:
+            package_path: Path to update package
+
+        Returns:
+            True if successful
+        """
+        try:
+            update_data = json.loads(Path(package_path).read_text())
+
+            print("📦 Applying incremental update...")
+            print(f"   Timestamp: {update_data['metadata']['timestamp']}")
+            print(f"   Changes: {update_data['metadata']['total_changes']}")
+
+            # Apply changes
+            for file_path, change in update_data["changes"].items():
+                action = change["action"]
+                full_path = self.skill_dir / file_path
+
+                if action == "add":
+                    print(f"   ➕ Adding: {file_path}")
+                    full_path.parent.mkdir(parents=True, exist_ok=True)
+                    full_path.write_text(change["content"], encoding="utf-8")
+
+                elif action == "modify":
+                    print(f"   📝 Modifying: {file_path}")
+                    full_path.write_text(change["content"], encoding="utf-8")
+
+                elif action == "delete":
+                    print(f"   🗑️  Deleting: {file_path}")
+                    if full_path.exists():
+                        full_path.unlink()
+
+            print("✅ Update applied successfully!")
+            return True
+
+        except Exception as e:
+            print(f"❌ Failed to apply update: {e}")
+            return False
+
+
+def example_usage():
+    """Example usage of incremental updater."""
+    from pathlib import Path
+
+    skill_dir = Path("output/react")
+
+    # Initialize updater
+    updater = IncrementalUpdater(skill_dir)
+
+    # Detect changes
+    print("🔍 Detecting changes...")
+    change_set = updater.detect_changes()
+
+    # Generate report
+    report = updater.generate_diff_report(change_set)
+    print(report)
+
+    if change_set.has_changes:
+        # Generate update package
+        print("\n📦 Generating update package...")
+        package_path = updater.generate_update_package(
+            change_set,
+            skill_dir.parent / f"{skill_dir.name}-update.json"
+        )
+        print(f"✅ Package created: {package_path}")
+
+        # Save versions
+        updater.save_current_versions()
+        print(f"💾 Versions saved to: {updater.version_file}")
+    else:
+        print("\n✅ No changes detected - skill is up to date!")
+
+
+if __name__ == "__main__":
+    example_usage()
diff --git a/tests/test_incremental_updates.py b/tests/test_incremental_updates.py
new file mode 100644
index 0000000..ab00a65
--- /dev/null
+++ b/tests/test_incremental_updates.py
@@ -0,0 +1,340 @@
+#!/usr/bin/env python3
+"""
+Tests for incremental update functionality.
+
+Validates:
+- Change detection (add/modify/delete)
+- Version tracking
+- Update package generation
+- Diff report generation
+- Update application
+"""
+
+import pytest
+from pathlib import Path
+import sys
+import tempfile
+import json
+import time
+
+# Add src to path
+sys.path.insert(0, str(Path(__file__).parent.parent / "src"))
+
+from skill_seekers.cli.incremental_updater import (
+    IncrementalUpdater,
+    DocumentVersion,
+    ChangeSet
+)
+
+
+@pytest.fixture
+def temp_skill_dir():
+    """Create temporary skill directory for testing."""
+    with tempfile.TemporaryDirectory() as tmpdir:
+        skill_dir = Path(tmpdir) / "test_skill"
+        skill_dir.mkdir()
+
+        # Create SKILL.md
+        skill_md = skill_dir / "SKILL.md"
+        skill_md.write_text("# Test Skill\n\nInitial content")
+
+        # Create references
+        refs_dir = skill_dir / "references"
+        refs_dir.mkdir()
+
+        ref1 = refs_dir / "getting_started.md"
+        ref1.write_text("# Getting Started\n\nInitial guide")
+
+        yield skill_dir
+
+
+def test_initial_scan_all_added(temp_skill_dir):
+    """Test first scan treats all files as added."""
+    updater = IncrementalUpdater(temp_skill_dir)
+
+    change_set = updater.detect_changes()
+
+    # First scan - everything is "added"
+    assert len(change_set.added) == 2  # SKILL.md + 1 ref
+    assert len(change_set.modified) == 0
+    assert len(change_set.deleted) == 0
+    assert change_set.has_changes
+    assert change_set.total_changes == 2
+
+
+def test_no_changes_after_save(temp_skill_dir):
+    """Test no changes detected after saving versions."""
+    updater = IncrementalUpdater(temp_skill_dir)
+
+    # First scan
+    change_set1 = updater.detect_changes()
+    updater.save_current_versions()
+
+    # Second scan (no changes)
+    updater2 = IncrementalUpdater(temp_skill_dir)
+    change_set2 = updater2.detect_changes()
+
+    assert len(change_set2.added) == 0
+    assert len(change_set2.modified) == 0
+    assert len(change_set2.deleted) == 0
+    assert len(change_set2.unchanged) == 2
+    assert not change_set2.has_changes
+
+
+def test_detect_modified_file(temp_skill_dir):
+    """Test detection of modified files."""
+    updater = IncrementalUpdater(temp_skill_dir)
+
+    # Initial scan and save
+    updater.detect_changes()
+    updater.save_current_versions()
+
+    # Modify a file
+    time.sleep(0.01)  # Ensure timestamp changes
+    skill_md = temp_skill_dir / "SKILL.md"
+    skill_md.write_text("# Test Skill\n\nModified content")
+
+    # Detect changes
+    updater2 = IncrementalUpdater(temp_skill_dir)
+    change_set = updater2.detect_changes()
+
+    assert len(change_set.modified) == 1
+    assert len(change_set.added) == 0
+    assert len(change_set.deleted) == 0
+    assert change_set.modified[0].file_path == "SKILL.md"
+    assert change_set.modified[0].version == 2  # Incremented
+
+
+def test_detect_added_file(temp_skill_dir):
+    """Test detection of new files."""
+    updater = IncrementalUpdater(temp_skill_dir)
+
+    # Initial scan and save
+    updater.detect_changes()
+    updater.save_current_versions()
+
+    # Add new file
+    refs_dir = temp_skill_dir / "references"
+    new_ref = refs_dir / "api_reference.md"
+    new_ref.write_text("# API Reference\n\nNew documentation")
+
+    # Detect changes
+    updater2 = IncrementalUpdater(temp_skill_dir)
+    change_set = updater2.detect_changes()
+
+    assert len(change_set.added) == 1
+    assert len(change_set.modified) == 0
+    assert len(change_set.deleted) == 0
+    assert change_set.added[0].file_path == "references/api_reference.md"
+
+
+def test_detect_deleted_file(temp_skill_dir):
+    """Test detection of deleted files."""
+    updater = IncrementalUpdater(temp_skill_dir)
+
+    # Initial scan and save
+    updater.detect_changes()
+    updater.save_current_versions()
+
+    # Delete a file
+    ref_file = temp_skill_dir / "references" / "getting_started.md"
+    ref_file.unlink()
+
+    # Detect changes
+    updater2 = IncrementalUpdater(temp_skill_dir)
+    change_set = updater2.detect_changes()
+
+    assert len(change_set.deleted) == 1
+    assert len(change_set.added) == 0
+    assert len(change_set.modified) == 0
+    assert "references/getting_started.md" in change_set.deleted
+
+
+def test_mixed_changes(temp_skill_dir):
+    """Test detection of multiple types of changes."""
+    updater = IncrementalUpdater(temp_skill_dir)
+
+    # Initial scan and save
+    updater.detect_changes()
+    updater.save_current_versions()
+
+    # Make mixed changes
+    time.sleep(0.01)
+
+    # Modify SKILL.md
+    (temp_skill_dir / "SKILL.md").write_text("# Test Skill\n\nModified")
+
+    # Add new file
+    refs_dir = temp_skill_dir / "references"
+    (refs_dir / "new_file.md").write_text("# New File")
+
+    # Delete existing file
+    (refs_dir / "getting_started.md").unlink()
+
+    # Detect changes
+    updater2 = IncrementalUpdater(temp_skill_dir)
+    change_set = updater2.detect_changes()
+
+    assert len(change_set.modified) == 1
+    assert len(change_set.added) == 1
+    assert len(change_set.deleted) == 1
+    assert change_set.total_changes == 3
+
+
+def test_generate_update_package(temp_skill_dir):
+    """Test update package generation."""
+    updater = IncrementalUpdater(temp_skill_dir)
+
+    # Initial scan
+    updater.detect_changes()
+    updater.save_current_versions()
+
+    # Make a change
+    time.sleep(0.01)
+    (temp_skill_dir / "SKILL.md").write_text("# Modified")
+
+    # Detect and package
+    updater2 = IncrementalUpdater(temp_skill_dir)
+    change_set = updater2.detect_changes()
+
+    with tempfile.TemporaryDirectory() as tmpdir:
+        package_path = Path(tmpdir) / "update.json"
+        result_path = updater2.generate_update_package(change_set, package_path)
+
+        assert result_path.exists()
+
+        # Validate package structure
+        package_data = json.loads(result_path.read_text())
+
+        assert "metadata" in package_data
+        assert "changes" in package_data
+        assert package_data["metadata"]["total_changes"] == 1
+        assert "SKILL.md" in package_data["changes"]
+        assert package_data["changes"]["SKILL.md"]["action"] == "modify"
+
+
+def test_diff_report_generation(temp_skill_dir):
+    """Test diff report generation."""
+    updater = IncrementalUpdater(temp_skill_dir)
+
+    # Initial scan and save
+    updater.detect_changes()
+    updater.save_current_versions()
+
+    # Make changes
+    time.sleep(0.01)
+    (temp_skill_dir / "SKILL.md").write_text("# Modified content")
+
+    # Generate report
+    updater2 = IncrementalUpdater(temp_skill_dir)
+    change_set = updater2.detect_changes()
+    report = updater2.generate_diff_report(change_set)
+
+    assert "INCREMENTAL UPDATE REPORT" in report
+    assert "Modified: 1 files" in report
+    assert "SKILL.md" in report
+
+
+def test_version_increment(temp_skill_dir):
+    """Test version numbers increment correctly."""
+    updater = IncrementalUpdater(temp_skill_dir)
+
+    # Initial scan
+    change_set1 = updater.detect_changes()
+    updater.save_current_versions()
+
+    # All files should be version 1
+    for doc in change_set1.added:
+        assert doc.version == 1
+
+    # Modify and check version increments
+    time.sleep(0.01)
+    (temp_skill_dir / "SKILL.md").write_text("Modified once")
+
+    updater2 = IncrementalUpdater(temp_skill_dir)
+    change_set2 = updater2.detect_changes()
+    updater2.save_current_versions()
+
+    assert change_set2.modified[0].version == 2
+
+    # Modify again
+    time.sleep(0.01)
+    (temp_skill_dir / "SKILL.md").write_text("Modified twice")
+
+    updater3 = IncrementalUpdater(temp_skill_dir)
+    change_set3 = updater3.detect_changes()
+
+    assert change_set3.modified[0].version == 3
+
+
+def test_apply_update_package(temp_skill_dir):
+    """Test applying an update package."""
+    # Create initial state
+    updater = IncrementalUpdater(temp_skill_dir)
+    updater.detect_changes()
+    updater.save_current_versions()
+
+    # Create update package manually
+    with tempfile.TemporaryDirectory() as tmpdir:
+        package_path = Path(tmpdir) / "update.json"
+
+        update_data = {
+            "metadata": {
+                "timestamp": "2026-02-05T12:00:00",
+                "skill_name": "test_skill",
+                "change_summary": {"modified": 1},
+                "total_changes": 1
+            },
+            "changes": {
+                "SKILL.md": {
+                    "action": "modify",
+                    "version": 2,
+                    "content": "# Updated Content\n\nApplied from package"
+                }
+            }
+        }
+
+        package_path.write_text(json.dumps(update_data))
+
+        # Apply update
+        success = updater.apply_update_package(package_path)
+
+        assert success
+        assert (temp_skill_dir / "SKILL.md").read_text() == "# Updated Content\n\nApplied from package"
+
+
+def test_content_hash_consistency(temp_skill_dir):
+    """Test content hash is consistent for same content."""
+    updater = IncrementalUpdater(temp_skill_dir)
+
+    # Get hash
+    skill_md = temp_skill_dir / "SKILL.md"
+    hash1 = updater._compute_file_hash(skill_md)
+
+    # Read and rewrite same content
+    content = skill_md.read_text()
+    skill_md.write_text(content)
+
+    hash2 = updater._compute_file_hash(skill_md)
+
+    # Hashes should be identical
+    assert hash1 == hash2
+
+
+def test_empty_skill_directory():
+    """Test handling empty skill directory."""
+    with tempfile.TemporaryDirectory() as tmpdir:
+        empty_dir = Path(tmpdir) / "empty"
+        empty_dir.mkdir()
+
+        updater = IncrementalUpdater(empty_dir)
+        change_set = updater.detect_changes()
+
+        assert len(change_set.added) == 0
+        assert len(change_set.modified) == 0
+        assert len(change_set.deleted) == 0
+        assert not change_set.has_changes
+
+
+if __name__ == "__main__":
+    pytest.main([__file__, "-v"])