diff --git a/packages/server/src/routes/settings.ts b/packages/server/src/routes/settings.ts
index 13957055..bb31f916 100644
--- a/packages/server/src/routes/settings.ts
+++ b/packages/server/src/routes/settings.ts
@@ -189,6 +189,8 @@ export async function settingsRoutes(app: FastifyInstance): Promise<void> {
       gifApiKey: gifKey ? `****${gifKey.slice(-4)}` : undefined,
       gifEnabled: !!gifKey,
       maxUploadSizeMb: Math.round(maxUploadBytes / (1024 * 1024)),
+      federationRelayEnabled: row.federationRelayEnabled === 1,
+      federationRelayTtlDays: row.federationRelayTtlDays,
     };
 
     return reply.code(200).send(response);
@@ -235,6 +237,18 @@ export async function settingsRoutes(app: FastifyInstance): Promise<void> {
       updateData.maxUploadSizeBytes = Math.round(mb * 1024 * 1024);
     }
 
+    if (body.federationRelayEnabled !== undefined) {
+      updateData.federationRelayEnabled = body.federationRelayEnabled ? 1 : 0;
+    }
+
+    if (body.federationRelayTtlDays !== undefined) {
+      const ttl = Number(body.federationRelayTtlDays);
+      if (isNaN(ttl) || !Number.isInteger(ttl) || ttl < 1 || ttl > 365) {
+        return reply.code(400).send({ error: 'federationRelayTtlDays must be an integer between 1 and 365', statusCode: 400 });
+      }
+      updateData.federationRelayTtlDays = ttl;
+    }
+
     db.update(schema.instanceSettings).set(updateData).where(eq(schema.instanceSettings.id, 1)).run();
 
     const updatedRow = db.select().from(schema.instanceSettings).where(eq(schema.instanceSettings.id, 1)).get();
@@ -251,6 +265,8 @@ export async function settingsRoutes(app: FastifyInstance): Promise<void> {
       gifApiKey: updatedGifKey ? `****${updatedGifKey.slice(-4)}` : undefined,
       gifEnabled: !!updatedGifKey,
       maxUploadSizeMb: Math.round(updatedMaxUploadBytes / (1024 * 1024)),
+      federationRelayEnabled: updatedRow.federationRelayEnabled === 1,
+      federationRelayTtlDays: updatedRow.federationRelayTtlDays,
     };
 
     return reply.code(200).send(response);
diff --git a/packages/shared/src/types.ts b/packages/shared/src/types.ts
index ed5f92cd..970d7c6e 100644
--- a/packages/shared/src/types.ts
+++ b/packages/shared/src/types.ts
@@ -606,6 +606,8 @@ export interface InstanceAdminSettings {
   gifApiKey?: string;
   gifEnabled?: boolean;
   maxUploadSizeMb: number;
+  federationRelayEnabled: boolean;
+  federationRelayTtlDays: number;
 }
 
 export interface InstanceStreamingLimits {
diff --git a/packages/web/src/api/client.ts b/packages/web/src/api/client.ts
index 595c889d..3f77e388 100644
--- a/packages/web/src/api/client.ts
+++ b/packages/web/src/api/client.ts
@@ -198,6 +198,12 @@ export class BackspaceApiClient {
     enabled: () => Promise<{ enabled: boolean }>;
   };
 
+  readonly federation: {
+    initiatePeering: (data: { remoteOrigin: string }) => Promise<{ peer: { id: string; origin: string; instanceName: string | null; status: string; lastSeenAt: number | null; createdAt: number } }>;
+    peers: () => Promise<{ peers: Array<{ id: string; origin: string; instanceName: string | null; status: string; lastSeenAt: number | null; lastFailureAt: number | null; consecutiveFailures: number | null; lastSyncedAt: number | null; createdAt: number }> }>;
+    revokePeer: (id: string) => Promise<{ success: boolean }>;
+  };
+
   readonly admin: {
     storageStats: () => Promise<StorageStats>;
     storageOrphans: () => Promise<{ orphans: OrphanedFile[] }>;
@@ -615,6 +621,19 @@ export class BackspaceApiClient {
       enabled: () => request<{ enabled: boolean }>('GET', '/gif/enabled'),
     };
 
+    this.federation = {
+      initiatePeering: (data: { remoteOrigin: string }) =>
+        request<{ peer: { id: string; origin: string; instanceName: string | null; status: string; lastSeenAt: number | null; createdAt: number } }>(
+          'POST', '/federation/peer/initiate', data
+        ),
+      peers: () =>
+        request<{ peers: Array<{ id: string; origin: string; instanceName: string | null; status: string; lastSeenAt: number | null; lastFailureAt: number | null; consecutiveFailures: number | null; lastSyncedAt: number | null; createdAt: number }> }>(
+          'GET', '/federation/peers'
+        ),
+      revokePeer: (id: string) =>
+        request<{ success: boolean }>('DELETE', `/federation/peers/${id}`),
+    };
+
     this.admin = {
       storageStats: () => request<StorageStats>('GET', '/admin/storage/stats'),
       storageOrphans: () => request<{ orphans: OrphanedFile[] }>('GET', '/admin/storage/orphans'),
diff --git a/packages/web/src/components/chat/MessageList.tsx b/packages/web/src/components/chat/MessageList.tsx
index e985f6f6..59038f51 100644
--- a/packages/web/src/components/chat/MessageList.tsx
+++ b/packages/web/src/components/chat/MessageList.tsx
@@ -387,6 +387,11 @@ function WelcomeHeader({ channelId }: { channelId: string }) {
         <p className="text-txt-secondary text-[14px] mt-1">
           This is the beginning of your direct message history with <strong>@{username}</strong>.
         </p>
+        {otherUser?.homeInstance && (
+          <p className="text-xs text-txt-tertiary mt-1">
+            Messages are stored on your and your recipient's home instances. They are not end-to-end encrypted.
+          </p>
+        )}
         {isFriend && otherUser && (
           <div className="mt-4">
             <button
diff --git a/packages/web/src/components/modals/instanceSettingsPanels/GeneralPanel.tsx b/packages/web/src/components/modals/instanceSettingsPanels/GeneralPanel.tsx
index 0c1d9b60..a08a7262 100644
--- a/packages/web/src/components/modals/instanceSettingsPanels/GeneralPanel.tsx
+++ b/packages/web/src/components/modals/instanceSettingsPanels/GeneralPanel.tsx
@@ -1,9 +1,22 @@
-import { useState, useEffect } from 'react';
+import { useState, useEffect, useCallback } from 'react';
 import { useSettingsStore } from '../../../stores/settingsStore';
 import { useUIStore } from '../../../stores/uiStore';
 import { Toggle } from '../../ui/Toggle';
+import { api } from '../../../api/client';
 import type { InstanceAdminSettings } from '@backspace/shared';
 
+interface FederationPeer {
+  id: string;
+  origin: string;
+  instanceName: string | null;
+  status: string;
+  lastSeenAt: number | null;
+  lastFailureAt: number | null;
+  consecutiveFailures: number | null;
+  lastSyncedAt: number | null;
+  createdAt: number;
+}
+
 export function GeneralPanel() {
   const instanceSettings = useSettingsStore((s) => s.instanceSettings);
   const updateInstanceSettings = useSettingsStore((s) => s.updateInstanceSettings);
@@ -16,6 +29,11 @@ export function GeneralPanel() {
   const [gifKeyDirty, setGifKeyDirty] = useState(false);
   const [gifKeyDraft, setGifKeyDraft] = useState('');
 
+  // Federation peers state
+  const [peers, setPeers] = useState<FederationPeer[]>([]);
+  const [peersLoading, setPeersLoading] = useState(false);
+  const [revokingPeerId, setRevokingPeerId] = useState<string | null>(null);
+
   useEffect(() => {
     if (instanceSettings) {
       setDraft({ ...instanceSettings });
@@ -24,12 +42,30 @@ export function GeneralPanel() {
     }
   }, [instanceSettings]);
 
+  const fetchPeers = useCallback(async () => {
+    setPeersLoading(true);
+    try {
+      const result = await api.federation.peers();
+      setPeers(result.peers);
+    } catch {
+      // Non-critical — peers list may fail on instances without federation routes
+    } finally {
+      setPeersLoading(false);
+    }
+  }, []);
+
+  useEffect(() => {
+    fetchPeers();
+  }, [fetchPeers]);
+
   if (!draft) return <div className="text-sm text-txt-tertiary">Loading settings...</div>;
 
   const baseChanges = instanceSettings && draft
     ? draft.instanceName !== instanceSettings.instanceName ||
       draft.registrationOpen !== instanceSettings.registrationOpen ||
-      draft.discoveryEnabled !== instanceSettings.discoveryEnabled
+      draft.discoveryEnabled !== instanceSettings.discoveryEnabled ||
+      draft.federationRelayEnabled !== instanceSettings.federationRelayEnabled ||
+      draft.federationRelayTtlDays !== instanceSettings.federationRelayTtlDays
     : false;
   const hasChanges = baseChanges || gifKeyDirty;
 
@@ -41,6 +77,8 @@ export function GeneralPanel() {
         instanceName: draft!.instanceName,
         registrationOpen: draft!.registrationOpen,
         discoveryEnabled: draft!.discoveryEnabled,
+        federationRelayEnabled: draft!.federationRelayEnabled,
+        federationRelayTtlDays: draft!.federationRelayTtlDays,
       };
       if (gifKeyDirty) {
         payload.gifApiKey = gifKeyDraft;
@@ -63,6 +101,44 @@ export function GeneralPanel() {
     setSaveError('');
   };
 
+  const handleRevokePeer = async (peerId: string) => {
+    setRevokingPeerId(peerId);
+    try {
+      await api.federation.revokePeer(peerId);
+      setPeers((prev) => prev.filter((p) => p.id !== peerId));
+      addToast('Peer revoked', 'success', 2000);
+    } catch (err) {
+      addToast(err instanceof Error ? err.message : 'Failed to revoke peer', 'warning', 3000);
+    } finally {
+      setRevokingPeerId(null);
+    }
+  };
+
+  const formatRelativeTime = (timestamp: number | null): string => {
+    if (!timestamp) return 'Never';
+    const seconds = Math.floor((Date.now() - timestamp) / 1000);
+    if (seconds < 60) return 'Just now';
+    const minutes = Math.floor(seconds / 60);
+    if (minutes < 60) return `${minutes}m ago`;
+    const hours = Math.floor(minutes / 60);
+    if (hours < 24) return `${hours}h ago`;
+    const days = Math.floor(hours / 24);
+    return `${days}d ago`;
+  };
+
+  const peerStatusColor = (status: string): string => {
+    switch (status) {
+      case 'active': return 'bg-status-online/15 text-status-online';
+      case 'pending': return 'bg-accent-amber/15 text-accent-amber';
+      case 'unreachable': return 'bg-accent-rose/15 text-txt-danger';
+      case 'revoked': return 'bg-white/5 text-txt-tertiary';
+      default: return 'bg-white/5 text-txt-tertiary';
+    }
+  };
+
+  // Only show non-revoked peers
+  const visiblePeers = peers.filter((p) => p.status !== 'revoked');
+
   return (
     <form className="space-y-5" onSubmit={(e) => e.preventDefault()}>
       <h2 className="text-lg font-semibold text-txt-primary">General</h2>
@@ -147,6 +223,94 @@ export function GeneralPanel() {
         </div>
       </div>
 
+      {/* Federation */}
+      <div>
+        <div className="text-[11px] font-semibold text-txt-tertiary uppercase tracking-wider mb-1.5">Federation</div>
+        <p className="text-xs text-txt-tertiary mb-2">
+          Control DM relay between federated instances. When enabled, DMs with users on peer instances are relayed server-to-server.
+        </p>
+        <div className="rounded-lg bg-white/[0.02] p-3.5 space-y-4">
+          <label className="flex items-center justify-between cursor-pointer">
+            <div>
+              <div className="text-sm font-medium text-txt-primary">Enable DM Relay</div>
+              <div className="text-xs text-txt-tertiary mt-0.5">Relay direct messages to and from peer instances</div>
+            </div>
+            <Toggle enabled={draft.federationRelayEnabled} onChange={(v) => setDraft({ ...draft, federationRelayEnabled: v })} />
+          </label>
+
+          <div>
+            <div className="text-sm font-medium text-txt-primary mb-1">Relay TTL (days)</div>
+            <div className="text-xs text-txt-tertiary mb-2">How long relayed messages are retained in the outbox before cleanup</div>
+            <input
+              type="number"
+              min={1}
+              max={365}
+              value={draft.federationRelayTtlDays}
+              onChange={(e) => {
+                const val = parseInt(e.target.value, 10);
+                if (!isNaN(val) && val >= 1 && val <= 365) {
+                  setDraft({ ...draft, federationRelayTtlDays: val });
+                }
+              }}
+              className="input-standard w-24"
+            />
+          </div>
+
+          {/* Peers list */}
+          <div>
+            <div className="flex items-center justify-between mb-2">
+              <div className="text-sm font-medium text-txt-primary">Peered Instances</div>
+              <button
+                type="button"
+                onClick={fetchPeers}
+                disabled={peersLoading}
+                className="text-[11px] text-txt-tertiary hover:text-txt-secondary transition-colors disabled:opacity-50"
+              >
+                {peersLoading ? 'Loading...' : 'Refresh'}
+              </button>
+            </div>
+
+            {visiblePeers.length === 0 && !peersLoading && (
+              <div className="text-xs text-txt-tertiary py-2">
+                No federation peers configured. Peers are created automatically when connecting to remote instances.
+              </div>
+            )}
+
+            {visiblePeers.length > 0 && (
+              <div className="space-y-2">
+                {visiblePeers.map((peer) => (
+                  <div key={peer.id} className="flex items-center justify-between rounded-md bg-white/[0.02] px-3 py-2">
+                    <div className="min-w-0 flex-1">
+                      <div className="flex items-center gap-2">
+                        <span className="text-sm text-txt-primary truncate">
+                          {peer.instanceName || new URL(peer.origin).host}
+                        </span>
+                        <span className={`inline-flex items-center text-[10px] font-medium px-1.5 py-0.5 rounded ${peerStatusColor(peer.status)}`}>
+                          {peer.status}
+                        </span>
+                      </div>
+                      <div className="text-[11px] text-txt-tertiary truncate">{peer.origin}</div>
+                      <div className="text-[11px] text-txt-tertiary">
+                        Last seen: {formatRelativeTime(peer.lastSeenAt)}
+                        {peer.lastSyncedAt ? ` · Synced: ${formatRelativeTime(peer.lastSyncedAt)}` : ''}
+                      </div>
+                    </div>
+                    <button
+                      type="button"
+                      onClick={() => handleRevokePeer(peer.id)}
+                      disabled={revokingPeerId === peer.id}
+                      className="ml-3 px-2.5 py-1 text-xs font-medium text-txt-danger bg-accent-rose/10 hover:bg-accent-rose/20 rounded transition-colors disabled:opacity-50 flex-shrink-0"
+                    >
+                      {revokingPeerId === peer.id ? 'Revoking...' : 'Revoke'}
+                    </button>
+                  </div>
+                ))}
+              </div>
+            )}
+          </div>
+        </div>
+      </div>
+
       {/* Status messages */}
       {saveError && (
         <div className="p-2 bg-accent-rose/10 border border-accent-rose/30 rounded text-txt-danger text-sm">{saveError}</div>
diff --git a/packages/web/src/stores/instanceStore.ts b/packages/web/src/stores/instanceStore.ts
index 02237e6b..ad3fa643 100644
--- a/packages/web/src/stores/instanceStore.ts
+++ b/packages/web/src/stores/instanceStore.ts
@@ -289,6 +289,13 @@ export const useInstanceStore = create<InstanceState>((set, get) => ({
         });
       }
 
+      // Initiate server-to-server peering for DM relay (non-fatal)
+      try {
+        await api.federation.initiatePeering({ remoteOrigin: origin });
+      } catch (err) {
+        console.warn('[federation] Peering initiation failed (non-fatal):', err);
+      }
+
       // Sync instance list to all instances (fire-and-forget)
       get().syncInstanceList().catch(() => {});
     } catch (err) {